FirstNet Authority board approves FY 2020 budget with $145.1 million for reinvestment

FirstNet Authority board members yesterday unanimously approved the organization’s $309.3 million budget for fiscal year 2020, which includes $145.1 million for reinvestment into the FirstNet system—a figure bolstered by a one-time transfer of $46 million from the National Telecommunications and Information Administration (NTIA).

Board members approved the budget just two days after FirstNet Authority Chairman Ed Horowitz announced the release of the organization’s Roadmap document that outlines the prioritized technical areas that the FirstNet Authority hopes to address through its reinvestment initiatives.

“When you read the Roadmap, it gives you a great overview of what we are doing as an organization, how we are responding to the needs of public safety, … and directing us with a strategy for our ultimate reinvestment into the network and its enhancements,” Horowitz said during the budget meeting, which was conducted via a conference

FirstNet Authority COO and CTO Jeff Bratcher said the board is expected to have its first opportunity to approve a reinvestment action next month. That reinvestment action will involve the expenditure of a maximum of $78 million from the current-year budget, with any remaining funds would be added to the $145.1 million in reinvestment funds for fiscal year 2020.

“We look forward to presenting, at our September in-person [board] meeting, a couple of investment proposals that we’re working on,” Bratcher said. “If all goes to plan, we hope to have those votes at the next board meeting and move that forward into our next phase in investing back into the network.”

Horowitz has indicated that bolstering the FirstNet portfolio of deployable coverage solutions and upgrading the dedicated FirstNet LTE core to support 5G services when they are ready are two of the top reinvestment priorities.

As part of the new budget for fiscal year 2020—beginning on Oct. 1—the board approved $82.1 million for FirstNet Authority program and operations for the upcoming 12 months. FirstNet Authority CFO Kim Farington said that this operational budget represents a 1% increase compared to the current year and is expected to support additional market assessments and investment activities, an increase in internal agreements, and the buildout of a public-safety experience center.

Although it is a federal-government entity that is overseen by NTIA, the FirstNet Authority receives no funds from taxpayer revenues. Legislation approved in 2012 that established FirstNet allocated $7 billion in spectrum-auction proceeds to the fledgling organization, which was charged with building the NPSBN in a manner that would be financially self-sustaining.

Of the original $7 billion in FirstNet funding allocated by Congress, $6.5 billion is earmarked to pay contractor AT&T—distributed as the carrier reaches interim buildout thresholds—for completing the planned buildout of the NPSBN on 700 MHz Band 14 spectrum within a five-year period.

The vast majority of FirstNet Authority’s operating funds come from annual payments that AT&T makes back to the FirstNet Authority—in fiscal year 2020, AT&T will make a $120 million payment for this purpose. FirstNet also has $143.3 million in unexpended funds from previous years.

In addition, the FirstNet Authority will receive a financial boost in the form of a $46 million transfer from NTIA.

“The $46 million is a portion of the original $7 billion in funding from the FirstNet legislation that originally was planned to be used by NTIA to carry out its portion of the statute,” according to a statement from a FirstNet spokesperson. “Following the transfer to the FirstNet Authority, we are putting the money into the network for the benefit of public safety as part of our investments for FY20.”

FirstNet had provided a portion of its original $7 billion in federal funding to NTIA to help support NTIA’s duties outlined in the 2012 legislation, including money designed to fund the administration of a fee-review process and a potential grant program for states or territories that chose to pursue the opt-out option under the law.

However, no state or territory decided to pursue the opt-out alternative to FirstNet, and the structure of the FirstNet Authority contract with AT&T meant there is little to review—the only fee to consider is the one that AT&T pays each year to the FirstNet Authority. As a result, there is $46 million that NTIA can return to the FirstNet Authority as a one-time transfer.