NTIA releases funding levels, governors have until Dec. 28 to make FirstNet ‘opt-in/opt-out’ decisions

The National Telecommunications and Information Administration (NTIA) today released construction-grant funding levels to FirstNet, which will deliver the figures to most governors tomorrow—an action that means these governors will have until Dec. 28 to make their “opt-in/opt-out” decisions.

FirstNet provided its updated state plans to governors last week, but official notification—the action needed to initiate the statutory 90-day decision period—cannot begin until governors receive the funding level determination (FLD) for a construction grant, if the state completes all tasks necessary to gain “opt-out” status.

“We are preparing the official notices, which includes NTIA’s FLDs, to send to the governors tonight, for arrival tomorrow,” according to a FirstNet spokesperson.

The Dec. 28 deadline will apply to governors in all 50 states and three U.S. territories. The deadline does not apply to the South Pacific territories of Guam, American Samoa and the Northern Mariana Islands, which still have not received initial state plans and will have a different FirstNet timeline than the rest of the country.

Governors in 21 states and two territories already have announced their “opt-in” decisions, which means their jurisdictions have accepted the deployment plan provided by FirstNet and AT&T—FirstNet’s nationwide contractor—to build and maintain the radio access network (RAN) within the state or territory for the next 25 years. FirstNet released actionable state plan that enabled such early “opt-in” decision on June 19.

As with other “opt-in” jurisdictions, these states and territories would not be eligible for funding from the NTIA construction-grant program. Only states and territories that complete the “opt-out” process—something that is estimated to take a year or two—to build and maintain the RAN within their borders would be eligible for the NTIA construction grants.

NTIA officials repeatedly have state that the construction grants likely will not be great enough to pay for buildout of the RAN in a given state. The available $5.5 billion will be allocated among the 56 states and territories, with each receiving a portion of the funding, based on the cost to construct, operate, maintain and improve the FirstNet system. However, the NTIA funding will reflect only the construction portion of the equation.

Given this, at least one federal-government source has said that the NTIA construction-funding may provide only “pennies on the dollar” when compared to the actual cost to construct the RAN within a state or territory.

Of course, a state or territory would receive NTIA construction-grant money only if it achieves “opt-out” status, which is done by executing the following tasks:

• Within 180 days of the governor’s decision to pursue the “opt-out” alternative, complete the procurement process to select a vendor to build the alternative RAN;
• Within another 60 days, submit an alternative RAN plan to the FCC, which will evaluate whether the initial plan would be interoperable with the FirstNet nationwide system. The FCC has established a 90-day “aspirational” shot clock for completing its interoperability evaluation; and
• If approved by the FCC, the state must secure comparability approval from the NTIA and negotiate a spectrum-lease agreement with FirstNet. FirstNet’s enabling statute does not dictate a timetable for these steps.

Only NTIA’s construction-grant funding figure was updated in the official notification that governors will receive tomorrow, according to a FirstNet spokesperson.

Meanwhile, multiple state officials have confirmed to IWCE’s Urgent Communications that the FirstNet state plans that were updated last week lack information about the payments that an “opt-out” state would have to make to FirstNet for access to the FirstNet LTE core and the 700 MHz Band 14 spectrum licensed to FirstNet.

Although not statutorily mandated like NTIA’s funding-level determination for official notification, these payments to FirstNet are expected to have a much greater impact on the financial feasibility of an “opt-out” initiative, according to multiple state and industry sources. Depending on the formula used to determine the payments to FirstNet, the total cost of these payments could exceed $1 billion during the 25-year period, particularly in states with attractive commercial wireless markets, according to sources.