If FirstNet is not the answer, does someone have a better alternative?
Fortunately, the smart folks at FirstNet figured out a way: have the winning contractor pay FirstNet a fixed amount every year for the 25-year term—almost as much money as the $6.5 billion it would pay the contractor toward the front end of the deal. Meanwhile, the RFP also includes a series of clever incentives that are designed to ensure that the contractor will take the actions necessary to make the proposed nationwide network a long-term reality.
After reviewing the document—much different than any other government procurement I had seen before—it seemed like the FirstNet RFP addressed virtually all of the significant issues, although many details will be determined by the contractor’s bid. The one glaring question that remained was: The RFP requires the contractor has to assume a lot of risk, so will anybody bid on it?
Others had similar concerns.
“How are they going to build a nationwide network to public-safety standards and pay for continuous upgrades?” said one source who is actually a big FirstNet proponent. “Whoever is financing these guys [an offeror team submitting an RFP bid] has got to be high.”
Fortunately, the opportunity apparently is terrific, because we have public confirmation of two bidders and at least one other likely offeror team, not to mention other rumored possibilities. If any of these proposals comply with the terms of the RFP, FirstNet’s long-term financial sustainability should be assured when the contract is signed. Despite this, sustainability questions continue to be raised in hearings on Capitol Hill.
So, assuming a contractor is selected and FirstNet is sustainable, we go back to the original questions: Should Republicans try to undermine FirstNet, if given the opportunity after the November elections?
At this point, I think it would be a mistake.
If this was a typical government program built on the notion that it would return to Congress and seek additional funding, there might be an argument to kill FirstNet. But that’s not the case. If a contractor performs in the manner outlined in the RFP, FirstNet should be self-sustaining for 25 years.
In other words, FirstNet should require no more taxpayer funding for the next 25 years, as a result of a public-private partnership agreement. Isn’t that what every Republican—and every taxpayer—wants from a government initiative?
Some may argue that the money and the all-important 20 MHz of 700 MHz spectrum could be put to better use elsewhere, but I doubt that is is the case.
If the terms of the RFP are implemented, FirstNet represents a remarkable financial value—a nationwide network for 25 years for just $7 billion. That’s $280 million per year. Or, if you divide it equally between the 56 states and territories that FirstNet will cover, that’s an average of $5 million per state/territory per year for an interoperable public-safety broadband network that supposedly will provide coverage throughout the jurisdiction.
In short, does anyone really believe we can hit the “restart” button and come up with better deal than that?
At just $5 million per year for each state/territory, we are talking about less than the cost of an LMR network in many suburbs. Given this, I think that elected officials from both sides of the aisle—not to mention policymakers throughout the rest of the world—would want to see if FirstNet’s master plan actually works.