‘Bane of my existence’

Given these opt-out timing issues, it is not surprising that Jason Karp, FirstNet’s acting chief counsel, declared the process to be “the bane of my existence as a lawyer.”

When we get to FirstNet’s final request for proposal (RFP), perhaps potential partners can submit bids contingent on different opt-out scenarios for each state. However, even that may not ensure the clarity that state representatives want to provide their governors when the time comes to make the opt-out decision—for instance, a governor may like the pricing associated with all states and territories opting in, but the governor may not like the pricing if even one state or territory chooses the opt-out route.

Frankly, although states and territories should explore the opt-out alternative and may want to use the possibility as a leverage point in negotiations with FirstNet, I think opting out is realistic for only a few. To make it work, a jurisdiction needs a lot of population density and technical expertise (finding and affording personnel with LTE training in this market is tough) that many state and territories simply don’t have.

Perhaps more difficult for me to envision is the idea that a governor would want his or her state to assume the financial risk associated with deploying the RAN within the state. My understanding is that, if something goes wrong financially in an opt-out state, the state picks up the tab, not FirstNet.

If the potential opt-out reward is great enough—for instance, if states could keep revenues generated within their jurisdictions to themselves—it could be worth pursuing. But that clearly is not FirstNet’s intention at the moment, because it wants to spread the revenue throughout the country.

One other argument that is repeated often is that some states would want to opt out because they want “control” over their portion of the FirstNet system. That is understandable from a conceptual standpoint, but I’m not sure how much control a state actually would have under an opt-out scenario.

Yes, the state could oversee the RAN buildout and pursue a desired coverage strategy, but that’s a significant project-management undertaking. Meanwhile, FirstNet holds the spectrum license and will operate the core, which is the “brains” of the network that will control much of the functionality.

In addition, depending on the details of the opt-out arrangement, it is very possible that the opt-out state would be obligated to upgrade its RAN based on a migration strategy dictated by FirstNet, not the state. If that proves to be the case, it sounds like a bad middle-management job: lots of responsibility and little authority.

Once again, if the financial rewards are great enough, it may make sense—after all, people take middle-management jobs all the time, usually for monetary reasons. But, if FirstNet succeeds in getting similar money from a state or territory whether it opts out or not, then having a state or territory assume the extra operational burdens and financial risks associated with the opt-out alternative does not sound especially appealing.

Hopefully, all of this opt-out legalese will prove to be much ado about nothing, instead of a process that leads to lengthy delays in the deployment of an all-important communications network for first responders. In an ideal world, the state-consultation process will result in the development of a state plan that will be something that a governor will be happy to accept.

Meanwhile, I’m encouraged that these meaningful business-model discussions finally are happening. Even though the answers to the problems may not be easy to find, the fact that these conversations are occurring is a significant sign of progress.