Urgent Matters

Wireless carriers are key to successful FirstNet RFP bid. Which are interested?


A wireless carrier may not be the prime contractor for FirstNet, but the general consensus is that a carrier (or multiple carriers) will have to be part of any winning proposal to build and operate the nationwide public-safety broadband network. Which carriers might be interested, and why?

It’s been a week since FirstNet released its request for proposal (RFP) to solicit bids from those interested in building and operating the much-anticipated nationwide public-safety broadband network. It’s still early in the process—I find something new every time I look through the 500-plus pages in the RFP, and others have relayed similar experiences to me—but there are some business-model aspects that appear to be clear.

This is not a project for the faint of heart. That should be obvious, given the fact that FirstNet is tasked with building a nationwide system to carry first responders life-and-death communications. But the commitment level also is underscored by the implied investment—estimated to be more than $20 billion by some—and the 25-year length of the proposed deal.

Such a long-term agreement gives the winning contractor plenty of time to get a return on investment, but how many companies can state with confidence that they will be around in 2041? In addition, if the FirstNet deal is not a financial success for some reason, the size and sensitive nature of the endeavor could limit future merger deals.

No one company can do this alone. Yes, some company will have to be considered the prime contractor for any bid, but the scope of the project is so great that no single company is equipped to do everything. Each offeror—FirstNet’s terminology for an entity submitting a bid—needs to include a deep team of subcontractors to get everything done with the high level of expertise that the RFP seeks.

Financially, it’s all about the spectrum. FirstNet holds the license to 20 MHz of prime Band 14 700 MHz spectrum, and monetizing the value of that spectrum is key to making the financial model work.

After all, the $6.5 billion in funding does not come close to paying for the deployment of a commercial network, much less one with the additional security and reliability characteristics that public safety and FirstNet demand. In addition, the winning contractor will end up paying FirstNet at least $5.625 billion during the life of the 25-year deal, so potential offerors have to consider the upfront money as little more than a low-interest loan.

Everyone agrees that the spectrum is extremely valuable, as less-attractive spectrum generated more than $40 billion in a recent FCC auction. But the reality is not everyone is in a position to unlock its value—something many traditional system integrators familiar with federal contracting noted when FirstNet released its draft RFP.

Those who are in the best position to monetize the spectrum are wireless carriers, which are in the business of monetizing spectrum every day. In addition, one requirement of the FirstNet RFP is that the winning contractor needs to provide nationwide coverage on non-Band 14 spectrum within six months of being awarded the contract. From a practical standpoint, that’s going to require the involvement of an existing wireless service provider (or multiple service providers on the same team).

Finally, existing carriers can also help an offeror address a potential problem associated with the FirstNet initiative—providing a spectral home for secondary commercial customers during those very rare occasions when public safety will need all of the bandwidth capacity in a particular cell sector. Being able to move those customers to other bands is crucial when public safety needs preemptive access, and existing carriers can do that.

Discuss this Blog Entry 2

on Jan 21, 2016

I enjoyed your article. I have to disagree that the carriers are key to the success of FirstNet. In actuality the carriers are a good partner to have on your team when it comes to cash on hand, but other than that the only other thing the carrier can really bring is a lessons learned to the effort. For this RFP though, having a carrier relationship won't hurt, but when it comes to the deployment their won't be enough scope for the carrier to do. In the end it depends on the model they go with.

on Jan 25, 2016

I also enjoy the articles Donny. This topic around FirstNet concerns me, as being an elected official within my State. First, no local official from any city, town, county or even a state is on the RFP Team for FirstNet. Second, I have a hard time believing that the carriers can support my communities' public safety (where they have NO local accountability to the constituents), when they don't do prioritization today or even hardening their sites (local control matters may impact this). My first responders are not always police, EMTs or Fire, but snow plow drivers or utilities when we have flooding. So now I have to call a 1-800 number to ask someone to re-prioritize my emergency where someone's life is on a line. If they can do it under "FirstNet spectrum Band 14", why can't they do it today on their own band? Devil in the details, but how are we assured that there is proper governance, local accountability, responsiveness, etc. when so far every step FirstNet has done in this process is a “top down approach” to local communities. FirstNet thinks that one shirt fits all approach will work, then if it doesn’t, blame the carrier (no accountability). We have 14,000 foot peaks, deep valleys and great plains that have their own unique challenges within our state. Lastly, having our public safety controlled remotely from someone outside of our state, in DC or in distant call center is simply alarming. Until someone who has a local focus is guiding this effort and/or organization, I cannot support the current direction of FirstNet. I absolutely believe in the thoughts and concepts, but not in the governance and approach.

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Insights from Donny Jackson concerning the most important news, trends and issues.


Donny Jackson

Donny Jackson is editor of Urgent Communications magazine. Before joining UC in 2002, he covered telecommunications for four years as a freelance writer and as news editor for Telephony magazine....
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