Congressional hearing on FirstNet offers fresh insight into potential opportunities, challenges for commercial partners

Challenges

1.   Cumbersome federal regulation on hiring and procurement could reduce desirability of or opportunity for commercial partnership. Committee senators from both sides of the aisle expressed frustration over the bureaucratic red tape FirstNet is experiencing for its hiring and procurement-related activities. Based on Swenson’s statements during the hearing, FirstNet has not been able to obtain authority from from the Office of Personnel Management to expedite its hiring. Although not explicitly required under the 2012 law, FirstNet has indicated that it intends to follow the Federal Acquisition Regulation (FAR) process for its comprehensive network-services procurement to meet the statutory requirements for openness and transparency. Furthermore, the law does not exempt FirstNet from a number of other federal laws related to federal acquisition, such as the Contract Dispute Act and the Small Business Act. Understanding how FirstNet must comply with these complex federal requirements governing its acquisition process will be a challenge for any entity wishing to partner with FirstNet.

2.   Limited funding and an emphasis on self-sustainability will drive FirstNet’s review of responses to its RFPs. Given the limited public funding available, FirstNet will seek to promote competition among infrastructure providers to obtain the most cost-effective leasing arrangements. Similarly, FirstNet will seek to maximize the value of its spectrum capacity fees from secondary users of the network to greatest extent possible. How FirstNet prices its spectrum could affect the economic opportunity for private-sector partners. 

Based on Swenson’s testimony, it is clear that FirstNet’s business plan is largely dependent on the value of its spectrum, its ability to partner with commercial operators and to leverage existing infrastructure, and its ability to deploy to rural areas in a cost-effective manner.  FirstNet is understandably anxious to get its RFP process started, as the responses to the draft RFP will further inform FirstNet whether its business assumptions are correct.  Not only did Swenson confirm the draft RFP is imminent, but she was very confident that FirstNet would issue its final RFP this year.

For further information, please contact Shawn Chang at [email protected] or 202-719-4456 or Anna Gomez at [email protected] or 202-719-7261. Michael Lewis, senior engineering advisor at Wiley Rein, contributed to this article.