FirstNet GM D’Agostino on potential business models: ‘Everything is on the table’

During the recent Association of Public-Safety Communications Officials (APCO) conference in Anaheim, Calif., FirstNet General Manager Bill D’Agostino spoke with UC Editor Donny Jackson one on one about issues associated with efforts to make the nationwide first-responder broadband network a reality. The following is the second in a series of articles based on the interview.

As part of the legislation that created FirstNet, Congress pledged $7 billion to the project. While this level of federal funding — $2 billion up front and $5 billion from revenues generated from spectrum auctions — is unprecedented for public-safety communications, industry sources agree that it will not be nearly enough to deploy a nationwide broadband network that meets public-safety requirements.

D’Agostino discussed some of the thought processes that FirstNet officials will be using as they evaluate potential business models that will generate the money needed to fund the much-anticipated nationwide network for first responders.

On the role that secondary and tertiary users will play in the overall success of FirstNet:

“I think they’re going to be hugely important. We’re fortunate to have access — we hope — to $7 billion, but we know the network will cost us more than that to build out, and I think the framers of the legislation understood that, as well. They said, ‘We’ll give you this spectrum, and your ability to unlock the value of that spectrum is really where you’re going to be able to fund and sustain this network.’

“Our ability to maximize the use of that spectrum — and our ability to do that with not only existing users today, but to make sure we have the capability in the future to allow new entrants that want to use that spectrum to bid for it and compete for it — I think is really, really important.

“Spectrum, over time, is going to be increasingly more valuable. Data usage is going to drive more demand. Obviously, there will be people that we don’t know about — or can anticipate — today that are going to want to be users of that spectrum, and we need to figure out ways to leverage them.”

On potential partnership options and models:

“As far as I’m concerned, everything is on the table. I think there are really three different ways that we will see partnerships come to us. There may be more, but as I think about it, I think there are three ways.

(1)     “Obviously, there are carrier partners that will be interested in providing assets in exchange for secondary use of the spectrum.

(2)     “I think there are financial partners that are going to come our way that will be looking to build out our network in exchange for the right to have some revenue from some of that excess broadband capacity.

(3)     “And then I think there will be some state partnerships with FirstNet. Maybe Mississippi’s a great example; I don’t know. We know Mississippi has a lot of assets built out, but they need to extend their coverage more, so that may be a great place where we provide some FirstNet resources — in conjunction with what Mississippi has done — and we have basically an early mover who comes into the FirstNet network that way. That may not be through a financial partner and that may not be through a carrier partner; that may be a state deal.

“So, we’ll just have to look at all of those and then figure out how that plays together for the nationwide footprint. As I’ve said in the business plan for fiscal year 2014, we’ll let the market dictate and drive these options that come our way, and any that we choose, we will vet very carefully against a standard set of criteria.

“Obviously, it has to — first and foremost — meet our standards for security and network interoperability. Second, whatever deal we strike has to support the broader national picture — it can’t be for a state or a city, we have to see how it translates [into the nationwide plan]. Third — and not in any order, because they’re all important — it’s got to meet the public-safety requirement for what their operational level needs to be.

“And then, how does it operate, from a FirstNet perspective? Are the systems and controls easy? Is it operationally efficient? Do we have a good, solid handle on how we maintain and monitor that network?

“So, we’ll run through a standard set of criteria for all of those options. And then, at the end, we’ll probably come out with a couple that seem to make sense and that we’ve vetted very thoroughly. Then, I think we’ll have a good path to move forward.”

On early builders, including recipients of Broadband Technology Opportunities Program (BTOP) grants:

“I feel comfortable that our fiscal year 2014 business plan — especially given some of the synergies with the BTOP [grants] — will give us the opportunity to turn up portions of some networks late next year. I’d like to see, obviously, as many as I can, but we have to be realistic about making sure we’ve managed our way through the process and not just pushed our way through.”

On potential synergies with early builders:

“[I think there are synergies] with the BTOP entities themselves, and I’m hopeful that we may be further down the line with some early opt-in states, as well. But I think it’s very optimistic to think that we would have networks in an opt-in state that hasn’t already started a significant portion of the build.

“[BTOP-grant recipient] LA-RICS has 234 sites — somewhere in that neighborhood—and they have done the homework to have those sites exempt from [California environmental laws], which will enable them to move quickly through those. I think — if things go well in their RFP process and our planning is dedicated and consistent with them — we can start to see things happen very, very quickly there.”

On the possibility of FirstNet building early to leverage assets in Adams County, Colo., and Charlotte, N.C. — two BTOP locations that will not be completing their planned public-safety LTE projects:

 “As disappointing as it is that we weren’t able to bring them all on board together, that doesn’t preclude us from finding a way to make those former grantees — if you will — early movers in the FirstNet process. I hope to be able to continue those discussions with them.”