FirstNet Authority board approves $253 million budget for upcoming fiscal year
FirstNet board members today unanimously approved a $253 million budget for fiscal year 2022 that includes $94 million allocated to support enhancements to nationwide public-safety broadband network (NPSBN) being built by contractor AT&T.
Under the new budget that becomes effective on Oct. 1, the FirstNet Authority has $79.3 million for operations, another $79.3 million in reserves for operations, and $94 million to fund enhancements to the FirstNet system. The $79.3 million in operations and $40.7 million of the network investment funds come from the $120 million annual payment from AT&T under its agreement with the FirstNet Authority. The remaining money in the budget are funds carried over from previous years.
“This budget secures the organization’s ability to plan and invest in future capabilities and services that will continue to evolve the network,” FirstNet Authority Board Chair Tip Osterthaler said in a prepared statement. “The FirstNet Authority remains steadfast in its mission to ensure FirstNet delivers what public safety asked for and needs—today and in the future.”
FirstNet Authority CEO Edward Parkinson echoed this sentiment.
“FirstNet is the only network with a dedicated organization like the FirstNet Authority providing oversight of the network and ensuring public safety’s voice continues to drive the future of the network,” Parkinson said in a prepared statement. “This streamlined budget allows us to continue important work, while also ensuring we are good stewards of our funds on behalf of public safety. FirstNet is truly public safety’s network, and we are proud to serve them as they work to keep communities safe.”
In addition to the budget approval, the FirstNet Authority board meeting featured multiple plaudits for longtime board members Ed Horowitz and Neil Cox, both of whom likely attended their last meeting after completing two three-year terms on the body. Horowitz and Cox are the last remaining members of the board that approved the FirstNet request for proposal in December 2015 that eventually resulted in AT&T being named as the nationwide contractor in March 2017.
Another announcement during the meeting came from Public Safety Advisory Committee (PSAC) Chair Todd Early, who said he will step down from the PSAC when he retires from his position with the Texas Department of Public Safety at the end of this month.
Although the fiscal year 2022 budget includes $94 million to fund FirstNet system enhancements, FirstNet Authority board members did not discuss how the money might be used in the upcoming year. Reinvestment funds to date have been used to pay for 5G upgrades to the FirstNet network core and pay for additional deployable assets.
Board decisions targeting the use of reinvestment funds are informed by the FirstNet Authority’s Roadmap, which is an ever-evolving document that outlines the key areas that the organization hopes to update in an effort to ensure that FirstNet remains technologically updated.
Under the 2012 law that established the FirstNet Authority, the FirstNet system is supposed to be a financially self-sustaining network, even though Congress provided just $7 billion for a project that experts estimated would cost more than $50 billion to build.
But the FirstNet Authority effectively assured its financial security by signing its contract with AT&T in March 2017 after completing a procurement process. The 25-year deal provides AT&T with access to the 20 MHz of prime 700 MHz spectrum licensed to the FirstNet Authority as well as potentially $6.5 billion—paid in phases, as AT&T meets network-deployment benchmarks—in funds generated from FCC spectrum auctions several years ago.
In return, AT&T is responsible for building and maintaining the NPSBN and making annual payments totaling $18 billion to the FirstNet Authority over the 25-year period of the contract. Of this $18 billion in AT&T payments, about $3 billion is expected to fund FirstNet Authority operations, and about $15 billion is slated to fund enhancements to the FirstNet system.
AT&T has paid $120 million annually to FirstNet thus far in the contract, but these payments are scheduled to increase throughout the life of the contract. As a result, the FirstNet Authority board will have an ever-increasing amount of discretionary money that it can reinvest into the FirstNet system.
In June 2020, the FirstNet Authority board approved using the first $218 million of this reinvestment money to initiate the FirstNet LTE core upgrade to support 5G services and to purchase additional deployable assets. No specifics were provided about exactly how much funding was allocated to each purpose, but most of the money was directed to the first phase of the 5G upgrade, according to sources.