Two jurisdictions that have made significant resource investments into public-safety LTE projects—the city of Charlotte, N.C., and Adams County, Colo.—will not be allowed to complete those efforts, as the FirstNet board today voted to end negotiations with these entities on a spectrum-lease agreement.

FirstNet board member Sue Swenson reported that FirstNet has agreed to a spectrum-lease arrangement with the state of New Mexico, which joins the Los Angeles Regional Interoperable Communications System Authority (LA-RICS) as the only entity with long-term permission to use the 20 MHz of 700 MHz broadband spectrum licensed to FirstNet. FirstNet also extended its period to negotiate spectrum-lease deals with the state of Mississippi and with Motorola Solutions—the vendor working with the Bay Area Regional Interoperable Communications Systems Authority (BayRICS)—until the end of September.

FirstNet also is continuing to pursue a spectrum-lease agreement with the state of Texas for the Harris County system, Swenson said.

But FirstNet ended LTE negotiations with three jurisdictions—Charlotte, Adams County and the New Jersey Department of Treasury—that were awarded federal Broadband Technology Opportunities Program (BTOP) grants. Swenson said it was “very disappointing for me, personally” that FirstNet was not able to reach a spectrum-lease agreement with these entities.

Although these three jurisdictions will not be able to deploy LTE systems as originally planned, they will be able to pursue other projects related to public-safety communications, Swenson said.

“I think it is important people realize there is opportunity for entities to go forward and look at projects that would benefit public safety, and they'll be working with NTIA in that regard,” Swenson said.

While there was little public progress on the New Jersey LTE project, Adams County and Charlotte were expected to be the first BTOP recipients to have public-safety LTE projects, as they were just months away from deploying their systems last year when the NTIA instituted its freeze on BTOP funding for public-safety LTE.

NTIA’s decision created difficulties for these entities, which were obligated to pay for staff and other resources—site and backhaul infrastructure, for instance—in addition to any LTE equipment already purchased. Chuck Robinson, director of shared services for the city of Charlotte, said his city has been spending about $60,000 per month to meet its obligations associated with the LTE project.

Meanwhile, the LTE landscape has changed significantly during this period.

When planning the network several years ago, Charlotte officials valued the reliability of its network—designed to survive the roughest of conditions, with priority and preemption promised to public safety—to be worth a premium of $5-10 per month per user over the $45-50 per month rate for unlimited data charged by commercial carriers, Robinson said during an interview earlier this month with Urgent Communications. But carriers have dropped their rates twice in the last 14 months, offering a “special government rate” of $34.99 per month per device for unlimited broadband data, he said.

Charlotte officials are tried to find a way to adjust its business model in a manner that will allow it to remain price-competitive with carriers, but it proved to be difficult, Robinson has said.

“You know, competition is a wonderful thing, except when you’re on the wrong end of it,” he said. “It’s a very simple strategy—when you feel threatened in your marketplace, then you price everybody else out.

“That’s the nature of business, so it’s hard to find fault with anyone, to be honest ... Even the competition between those carriers is stiff. It’s just a really tough market to get into, when you know you’re going to have to come out charging a premium, and municipal budgets are as tight as they are.”

 

This competitive reality, along with the high cost of Band 14 devices and new state building codes regarding tower modification that “significantly increased” the project cost for the city of Charlotte, created funding shortfalls, according to a statement issued yesterday by Robinson. Officials for the city of Charlotte and FirstNet agreed that they would not enter into a spectrum-lease agreement, if a successful business model could not be established, according to the statement.

“While we believe the team was successful in developing a set of strategies to overcome the deployment challenges, we were unable to overcome the operational sustainability issues,” Robinson said in the statement. “After careful consideration of the benefits and risks associated with the Charlotte Public Safety Broadband Project, FirstNet has decided not to pursue a SLMA with the city. The city’s project team will be consulting with NTIA and its partners on next steps.

“The city believes strongly in the mission of FirstNet and need for a nationwide public safety broadband network. The city’s project team looks forward to sharing the knowledge and experience it has gained over the last three years to support the State of North Carolina and FirstNet in the successful deployment of this critical communications system.”