FirstNet board approves $81 million operating budget, allocates money for future network investments
FirstNet board members unanimously approved an $81 million operating budget for the 2019 fiscal year, as well as putting another $81 million in a new reserve fund and $79 million in a fund designed to pay for network reinvestment as part of the organization’s sustainable business model.
“The budget that’s being presented today is the first time that we’ll be voting on more than just an operational budget, as we’ve done in past years,” FirstNet board member and Finance Committee Chairman Ed Horowitz said during the FirstNet board meeting on Monday. “It really marks the very important milestone in this, the first year of the sustainable business model.”
Under the FirstNet arrangement, AT&T gains access to the 20 MHz of Band 14 spectrum licensed to FirstNet—airwaves that were cleared of incumbent users on July 31—and has the potential to receive $6.5 billion by executing all network-deployment milestones in a timely manner. In return, AT&T must make payments to FirstNet that total more than $18 billion during the 25-year contract period.
This arrangement is designed to ensure that FirstNet will remain financial sustainable throughout the life of the contract, which was awarded to AT&T in March 2017. AT&T has told financial analysts that it expects FirstNet to use about $3 billion of these AT&T payments to fund the FirstNet organization’s operations during the 25-year contract period and that AT&T would receive the other $15 billion, although that is not guaranteed by law.
FirstNet Chairwoman Sue Swenson said that the new budget reflects a major change for FirstNet.
“I think it’s worth noting that, while we have a budget, we’re evolving from a planning organization to an operating organization,” Swenson said during the meeting. “With the fifth network in the U.S., the roles within FirstNet are shifting a bit, from planning to operating. We’ve had discussions about the new approaches and how we’re going to measure things, and those are still in process, because it’s a pretty big evolution.
“Obviously, we have the resources in place to do that, but I think there’s still further discussion that will occur post-today about how those resources are being utilized in the most effective way. This is not business as usual. I think this is a big transition for the organization.”
“As Sue said, the organization is transitioning,” he said. “The mission, however, remains the same, and that is serving public safety and getting this network up and operational as quickly and effectively as possible.”
Key features of the budget include money to fund FirstNet’s efforts to verify AT&T’s progress in deploying the nationwide public-safety broadband network (NPSBN) and enhancing public-safety engagement to ensure that first-responder entities are aware of FirstNet and its ability to aid response efforts.
FirstNet CEO Mike Poth said that it is important that FirstNet executes in a financially responsible manner.
“Our financial stewardship is key, because every dollar that we do save gives an opportunity for the board to put investments back into the network,” Poth said.
FirstNet Chief Financial Officer Kim Farington said that the organization recently earned its fifth consecutive “clean” audit of its financial status.