FirstNet’s role as spectrum licensee critical as states consider opt-out alternative
And the success of that nationwide broadband initiative depends largely on the ability for FirstNet to redistribute funds from a handful of states that can generate excess revenue—via user fees and/or spectrum-capacity leases. While the FirstNet board has not formally voted on the matter, this sentiment is indicated clearly in the staff-written second notice and was a key point in FirstNet Chairwoman Sue Swenson’s testimony to the Senate Commerce Committee last week.
Given this, it would appear that FirstNet/NTIA simply could refuse to sign a spectrum-lease deal with a state/territory pursuing the opt-out alternative, until the proposed terms approach the funding model that FirstNet envisions for that state, if it had adopted the FirstNet plan.
This is not to imply that excess-revenue states do not have any leverage when negotiating with FirstNet. After all, FirstNet wants to make this network a reality as quickly as possible, and having a key state or two in limbo for a lengthy period of time would have negative impact on that effort, in terms of both perception and finances.
For these reasons, it is not hard to envision a scenario in which an excess-revenue state could secure a better deal, but it seems doubtful that FirstNet/NTIA would sign a spectrum deal that allows such a state or territory to “get rich” at the detriment of other jurisdictions in the country. If that is the case, will governors believe that the opt-out alternative is attractive enough to go through all of the steps necessary to pursue it? Or, can FirstNet’s state-consultation process be effective enough to forge an up-front agreement that would sidestep the delays associated with the opt-out process?
It will be intriguing to watch this process unfold during the next couple of years—and it is a debate will begin in earnest this week during FirstNet-related sessions at IWCE 2015. My guess is that people who are lot smarter than me and are much more relevant will have a lot to say on the subject.