Breaking the Mold
No telecom buzzword has been used — or overused — as much during the last decade as “convergence.” Whether it’s voice and data, wireline and wireless, or consumer and enterprise, the silos segregating the various sectors of the communications marketplace either have disintegrated or inevitably will do so, thanks largely to the evolutionary nature of IP technology permeating throughout.
One exception to this rule has been the wall dividing the public-safety and commercial communications sectors. Conventional wisdom has dictated that a commercial operator could never meet public safety’s staunch requirements for a primary network — ubiquitous coverage, ultimate control and redundancies that ensure reliability — and still turn a profit that would satisfy shareholders. Thus, public safety largely has relied on relatively expensive private networks separate from commercial operations.
But former Nextel Communications Co-founder Morgan O’Brien’s new company — Cyren Call Communications — has proposed an end to this division in a unique public/private partnership that promises to provide public safety with a nationwide, interoperable IP network in the 700 MHz band that would be self-sustaining and at the same time let commercial operators keep their investors happy.
“It would have struck me as counterintuitive that a public-safety-grade network and public-safety requirements can match up and share a network with commercial operations … but next-generation technologies can do that,” O’Brien said. “It’s a very amazing and encouraging thing.”
Encouragement is sorely needed in public-safety communications, which finds itself mired in an unfortunate cycle that results in the sector routinely having to pay high prices for communications equipment that often is outdated for more than a decade before it can be replaced.
There are no villains in this scenario, just a series of historical realities that have undermined the public-safety market, O’Brien said. With less than 3 million users, the public-safety market is about 1% of the size of the commercial market, meaning it lacks the economies of scale needed to secure price reductions — something that would be especially helpful because first responders have additional criteria to ensure operational functionality and the ability to communicate in difficult environments.
“This is the segment of the industry that has the most compelling requirements,” O’Brien said. “Yet, offset against those compelling requirements is the relatively small number [of users]. In today’s wireless world, that spells trouble. With so few users, how do you support the cost of the network to supply the needs [of first responders]?”
This situation is exacerbated by the fact that the public-safety market further fragments itself as each entity — including first responder agencies in the same city — often solicit bids for their own private networks, typically funded with taxpayer-supported bonds.
Such proposals require considerable planning; the ability to convince elected officials to put the item on the ballot and campaigns to educate voters on the need for a system that typically is funded over 10 to 15 years. The long lead time means the system often is outdated upon installation, and the amortization period dictates that upgrades often cannot be considered until the network is paid off and the entity is in a financial position to borrow money again.
Given these harsh realities, O’Brien’s notion of letting commercial operators assume the capital costs for initial buildouts and upgrades to networks that would require public safety to pay monthly usage fees is worthy of consideration, said Charles Werner, chief of the Charlottesville (Va.) Fire Department.
“I don’t know all of the ramifications [of the Cyren Call proposal] or if it’s the right answer,” Werner said. “All I know is that the present paradigm is broken and doesn’t work.”
To address these shortcomings, Cyren Call proposes that 30 MHz of the 60 MHz in the 700 MHz band scheduled to be auctioned in 2008 — frequencies separate from the 24 MHz already allotted to public safety in the band — instead be licensed to public safety, which would be represented by a public-safety broadband trust (see chart on this page).
However, public-safety entities would not use the spectrum to build networks themselves — an endeavor that would be impossible nationwide, given the financial limitations of public-safety entities. Instead, the broadband trust would solicit proposals from commercial providers to build regional broadband IP networks for them. The networks would have to be built to public-safety grad — with virtual command-and-control tools enabled by software solutions — and must be interoperable with one another, O’Brien said.
O’Brien envisions the secondary-lease arrangement much like a landlord/tenant relationship, with public safety serving as the landlord and a commercial operator acting as a tenant.
“Unless public safety has the preferred position, there is no way public safety could — or should — agree to share a network so that is an absolutely essential element of our proposed design,” he said. “Our proposal says, ‘It’s public safety’s license, it’s public safety’s specifications, it’s their network and they set the ground rules’ — in cooperation with their commercial partners because it does public safety no good to have a network that can’t be built.”
Although the Cyren Call proposal envisions commercial operators building and maintaining the networks to meet public-safety specifications established by the FCC and/or the broadband trust, the operators also would offer commercial services over the network.
On a day-to-day basis, public-safety users would not need a great deal of spectrum, so the commercial operator could use the remaining frequencies to support commercial services. When an incident occurs, public safety would have priority on the network, but so much spectrum is available that it’s doubtful commercial users would see little more than a degradation of service, said John Melcher, executive vice president of Cyren Call.
“We’re not talking about pre-emption of basic services,” Melcher said. “You’re really saying you may not be able to download the Rolling Stones’ greatest hits, but you’d still be able to have communications access. There would be so much capacity that you wouldn’t be choking off anyone — just some of the services might be curtailed.”
Although the network would be used for commercial offerings, O’Brien compared the proposed network to a BMW automobile — a high-end offering that’s not meant for everyone in the commercial market. In addition to public safety, O’Brien believes the network would attract customers like utilities, government agencies and other enterprises that require unprecedented levels of performance and reliability from its communications network.
“It is a more highly engineered system, and it has feature functionality that a significant part — but not a majority — of wireless users would value enough to pay more for,” O’Brien said. “John [Melcher] uses an example I love: If you are going to pull out your BlackBerry, do a business transaction on it and that’s your business, you may well pay more to have the level of encryption that’s included in the public-safety network than otherwise may be available.”
A commercial model is possible because next-generation wireless technologies — whether they are WiMAX, orthogonal frequency division multiplexing, 4G cellular or other solutions — are robust enough to meet public safety’s stringent requirements and allow for quality-of-service provisioning that would assure first responders of the access they need, O’Brien said. The vast spectrum proposed would give public safety access to the frequencies it needs during emergencies but let the channels be used for commercial purposes at other times.
But the economics of this concept only can work in the 700 MHz frequencies, which have propagation characteristics that make network deployment more affordable than in the 1.8 GHz band and higher frequencies (see chart on page 60).
O’Brien said he believes the nationwide network would consist of about 37,000 cell sites and provide coverage to geographic regions that host 99% of the U.S. population. To augment the terrestrial network, a nationwide satellite network would be used as the primary communications vehicle in extremely rural areas and as a redundant path that can be used when a portion of the terrestrial network is disabled.
Existing private networks also would be allowed to plug into the IP backbone, enabling immediate interoperable communications and a transition path for those entities not able to buy devices for the 700 MHz network in the near future.
For commercial operators, building a public-safety-grade network provides them an opportunity to access spectrum they might not be able to afford in an auction scenario, while availing themselves to a new market. For public safety, the proposal offers the ability to access state-of-the-art technology without incurring debt and to utilize broadband applications with affordable commercial devices, O’Brien said.
“This is not designed to be primarily a solution for interoperability,” he said. “This is designed to be a solution for the public-safety communications crisis and, by the way, it happens to solve interoperability.”
WHY IT WON’T WORK
Although the approach proposed by Cyren Call is new, asking federal officials to allocate an additional 30 MHz of 700 MHz spectrum for public safety is not. Last year, Lucent Technologies formally submitted such a request, and other industry giants such as Motorola and M/A-COM also have expressed interest in securing more spectrum for public-safety users and helping build nationwide IP backbones that would enable interoperable communications between first responders.
But these lobbying efforts — and those by public-safety representatives — were decidedly unsuccessful as Congress crafted legislation to clear TV broadcasters from the 700 MHz band by April 2009 (MRT, March, page 8). Under the act, public safety would receive the 24 MHz of frequencies it was promised a decade earlier, but Congress called for the other 60 MHz to be auctioned for commercial use in a $12.5 billion bidding procedure budgeted to generate $10 billion in new revenue for the U.S. Treasury.
While the act also earmarked new funds for several important tasks — including $1 billion for public-safety interoperability and another $1 billion for a program to provide low-cost converter boxes that would let analog TVs receive broadcasters’ new digital signals — the bulk of the money was allocated to reduce the nation’s deficit.
“The problem is that there was no interest at all [in granting public safety additional spectrum],” said Harlin McEwen, chairman of the International Association of Chiefs of Police communications and technology committee. “Congress … was focused on the [auction] money.”
And resolving the auction money issue is something that has to be addressed for the Cyren Call proposal to be considered seriously, O’Brien said.
“There are some serious objectives that the money has been set aside for,” O’Brien said. “I think it would be incumbent upon us to find a solution for that in order to make this go forward, and we’re working on that.”
Another possible roadblock is the attitude of public-safety entities, which are accustomed to controlling virtually every aspect of their communications networks rather than relying on commercial providers. Even O’Brien acknowledges public safety’s parochial attitude toward communications — “If it were my life depending on the system, I think I’d be a control freak, too.” — and that the first responder community would have to be convinced that the network would meet its needs.
Of course, many public-safety agencies have utilized commercial data offerings — including CDPD, GPRS and EV-DO networks provided by wireless carriers — but they are much more cautious about entrusting their primary voice communications to others, said Steve Devine, patrol frequency coordinator for the Missouri State Highway Patrol.
“Personally, I would have less problem with it if it was strictly on the data side, but you know they can’t sell that concept [to Congress],” Devine said. “They need to sell ubiquitous, nationwide [public-safety voice] interoperability — without that, it’s going to be very hard for them to sell it.”
O’Brien said he understands the challenge before him.
“I think voice is a critical functionality that has always been at the heart of these [public-safety] systems,” O’Brien said. “I think we’re going to have a very significant — but healthy — burden to demonstrate that in a 4G world, you can get push-to-talk capability that exceeds APCO 25. If we don’t do that, I don’t expect that it will be accepted.”
Many observers questioned whether the FCC would be willing to let the public-safety broadband trust determine — rather than itself — who would get access to the spectrum. Others expressed concern about Cyren Call’s potential role as the administrative entity for the trust.
Phil Burks, president of The Genesis Group and a longtime acquaintance of O’Brien — Burks was in the audience when the plan to create Nextel was unveiled — said public-safety officials are becoming more comfortable with the arms-length relationships they have with regional radio networks. However, projecting that structure to an even larger scale may result in a greater loss of control than public safety can accept, he said.
“They have told us, ‘At least I can put my arms pretty closely around the system owner [in a regional structure], and I’m on the board of directors for the control of this thing,’” Burks said. “Now, if you take this [model] nationwide with Morgan O’Brien in the top chair, nobody’s going to control him.”
Indeed, several sources privately noted that the Cyren Call proposal potentially could make O’Brien a top power broker in the wireless world — a notion that likely would be particularly disconcerting to members of the Cellular Telecommunications & Internet Association (CTIA), which frequently was at odds with O’Brien as he built Nextel. This sentiment may help explain why CTIA issued a statement in opposition to the Cyren Call proposal just a couple of hours after its release.
Given this opposition from CTIA’s strong lobbying force and the fact that Congress just finished cutting the political deals necessary to get the 700 MHz legislation passed, many question whether the Cyren Call proposal will be given significant consideration by federal officials.
“I think the problem is that people have a hard time getting past the, ‘Is this viable politically?’ question and get to the guts of it,” said one public-safety representative who requested anonymity. “There are a lot of interesting ideas — some of which may be good and some of which may not be so good — in the proposal, but it’s hard for people inside the Beltway to get past how this is going to sell on the Hill. All the political deals have been done already.”
WHY IT CAN WORK
Despite these significant obstacles, no one interviewed for this story was willing to summarily dismiss the Cyren Call proposal. Not only do many of them believe the proposal merits consideration, the fact that O’Brien — who built Nextel under trying circumstances and repeatedly forged deals with public-safety officials in potentially volatile environments — has lent his name to the effort makes the long-shot proposal realistic.
“He’s fought long odds before and come out a winner, so you don’t want to count him out,” said Alan Tilles, who represents many public-safety entities as a partner in the law firm of Shulman Rogers Gandal Pordy & Ecker.
Indeed, Genesis Group’s Burks expressed admiration for O’Brien’s power — “He’s brilliant or else he’s got naked pictures of most everyone” — and attributes the lawyer’s success to his ability to master the art of persuasion.
“I’ve always said, ‘Diplomacy is the art of letting somebody have your way,’” Burks said. “And Morgan is the artist at that particular skill.”
O’Brien acknowledged that it’s important to allay public-safety officials’ fears of using a network not controlled directly by them, but he believes it’s possible to resolve those issues in the FCC public comment period proposed to enable public debate. Similarly, commercial operators need explanations to assure them that there is a business case behind the massive investment they would need to make in the networks, he said.
“Once the capital expense has been fronted by the commercial operators, public-safety users should expect to pay their pro rata share based on utilization for the operating expenses,” O’Brien said. “We do not look at public safety as a boat anchor for the network and economics; we look at public safety as an anchor tenant on this network.”
But the biggest challenge undoubtedly will be trying to convince Congress to rewrite its spectrum-allocation plans for the 700 MHz band. With $12.5 billion in expected auction revenues already budgeted, persuading elected officials to take half the spectrum off the auction block is a difficult proposition at best.
O’Brien believes it can be done, first noting that supply-and-demand economics will work in his favor. If the amount of spectrum being auctioned is halved, the bidding on the remaining 30 MHz likely will be much more competitive and generate an additional $1 billion or more in revenue than would have been realized if the entire 60 MHz was auctioned, he reasoned.
Because the 30 MHz of spectrum licensed to public safety would be used for commercial offerings, the Cyren Call proposal would not undermine the ongoing economic impact envisioned for the spectrum. Meanwhile, if structured properly, this proposed nationwide network could fill the role of the much-debated Integrated Wireless Network, an unfunded federal wireless network project that O’Brien said would cost $10 billion to build and $1 billion annually to maintain.
“If the federal government can use this network, and this network does what we say it’s going to do, why would you need another network?” O’Brien said. “And wouldn’t it be better to have everybody on the same network when an emergency response is needed?”
In addition, the savings that could be realized nationwide because public-safety entities would not be forced to find capital to build or upgrade their private communications systems would be substantial every year. Most important, the benefits derived from equipping emergency responders with a state-of-the-art network that enables interoperable communications between federal, state and local officials certainly weigh in favor of any public-interest argument, O’Brien said.
And the long-term opportunities that would be afforded public safety by having more than 60 MHz of contiguous spectrum in the 700 MHz to 800 MHz bands also have tremendous ongoing value, O’Brien said.
“I feel like we’re debating whether to sell the Grand Canyon. I don’t doubt that the Grand Canyon would fetch a good price, but to take a unique public asset [like 700 MHz spectrum] and sell it would be short-term thinking,” he said. “We’re making the same analogous argument here. Should it be conserved for the public? Could it be preserved for the public, and what would be the benefit if you did that?”
SOUNDS OF SILENCE
With the exception of the knee-jerk opposition from CTIA and Rep. Fred Upton (R-Mich.), no one has taken a definitive stance on the merits of the Cyren Call proposal.
“It’s pretty creative and new, and I think it bears some more in-depth review,” said Stu Overby, Motorola’s director of global spectrum strategies. “But there’s not a lot of detail about the interplay between the trust, the equipment providers and the companies that would provide the service. I think there needs to be more detail provided about the vision … to judge that properly.”
Although Overby’s statement represents much less than overwhelming support, key vendors that have offered similar proposals in the past, such as Lucent and M/A-COM, declined to be interviewed on the matter. O’Brien said he’s not surprised by the lack of public support, especially from vendors.
“All of them depend on the established wireless operators as customers and can’t afford to offend them,” O’Brien said. “To go out on a limb and say, ‘This is a great idea,’ might feel good on Monday, but on Tuesday, you probably will get a call from an established customer saying, ‘Here’s the punishment we have in store for you for doing that.’ I’m very realistic about this, and I understand how sensitive these relationships are.
“I think it’s the best possible compliment to the idea to hear neither, ‘We hate it — Morgan O’Brien and his friends should burn in hell,’ or ‘This is the greatest idea we’ve ever seen.’ It’s too complex for that.”
Similarly, the FCC probably needs some political help before it can seek public comments on the proposal, even though commissioners have provided “favorable” responses to the plan in private, Cyren Call’s Melcher said.
“But they are under a mandate from Congress to auction that spectrum,” he said. “For them to open a notice of proposed rulemaking or put it out for comment, we feel like they need some cover from some key members of Congress who say, ‘We won’t hold you in contempt of Congress,’ for looking at this.”
And an FCC decision to seek comment on the proposal would result in a flurry of questions that need to be answered relatively quickly. When the 700 MHz auction should be conducted and the type of security clearance technicians would need to work on the network are just a couple of the items that would merit debate during a comment period, as well as the impact such a proceeding might have on the broadband proceeding for the 12 MHz included in the 24 MHz of 700 MHz spectrum already earmarked for public safety.
Indeed, Devine said he believes the public/private partnership notion may well become a proposal in the broadband proceeding for the existing public-safety spectrum. Wireless analyst Andrew Seybold said he believes all 60 MHz of 700 MHz should be auctioned to commercial carriers — but with the condition that they would give public safety access to a dedicated slice of the airwaves.
Such ideas are the kind of responses generated by the Cyren Call proposal that should benefit public safety in the long term, even if O’Brien’s public/private partnership notion is not realized in the manner submitted to the FCC, Werner said.
“If nothing else, this proposal has injected a whole new thought process about how we go about building this national network.”
|700 MHz propagation||1900 MHz propagation||2400 MHz propagation|
|Total network cost at $150K/cell||$150,000||$600,000||$1,500,000|
|Network cost per customer||$180||$725||$1820|
|Number of months to network cost breakeven||9||36||91|