CHICAGO—FirstNet should change its legal stance to allow state to share surplus revenues and provide public safety with a free-service package to make the nationwide public-safety broadband network (NPSBN) successful, Rivada Networks co-CEO Declan Ganley said during a public session this week.

Rivada Networks is leading the Rivada Mercury bidding team, one of the groups vying for the right to build and maintain the FirstNet NPSBN for the next 25 years. But Ganley said the FirstNet legal interpretation that prohibits states from keeping surplus revenues generated by the FirstNet system is incorrect.

“There is a view that has been put out there—and, obviously, people feel very strongly about that view—that the states should not be entitled to any share of the surplus revenues being generated in those states,” Ganley said during a session that can be viewed here. “And, there is another view—it’s the view that we have and that I know many states have—which is that … as long as the revenue is invested in the public-safety broadband network in that state.

“The states are essential and central to serving public safety in this network, and their ability to make decisions—hand in hand with FirstNet—to reinvest dollars into the public-safety broadband networks in these states is an issue and needs to be resolved. I know that we and FirstNet—and this is known or has been talked about between the lines—have a difference of view on this issue.”

FirstNet officials have stated that a fundamental principle of the organization’s business model is that the contractor would surplus revenue generated in densely populated states and territories would be used to fund deployment of the network in sparsely populated states.

Speaking at IWCE’s Critical LTE Communications Forum, Ganley described the hot-button topic as an “elephant in the room.” If FirstNet does not allow revenue sharing with the states, multiple states could pursue the opt-out alternative, which could undermine the economics of the overall initiative for FirstNet’s selected contractor.

“Whoever ends up winning FirstNet, is obviously going to want to make sure that all of the states are incentivized to want to move ahead and are enthusiastic about it—that they’re not being cajoled or shepherded, but that they’re enthusiastic and they want this to happen,” Ganley said.

“The risk is that there is a sort of Pyrrhic victory, insofar as, yes, you end up winning something, but you already know that there are X number of states—and I’m not going to speculate up here how many it is—that are not going to go along with this or are going to be very difficult about this, because they want to have some part in revenue share.”

Ganley said he does not believe that changing the revenue-sharing policy with states would require FirstNet to rebid the massive project.