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acc.com

Top carriers may have reservations about participating in FirstNet bid, analyst says

Top carriers may have reservations about participating in FirstNet bid, analyst says

  • Written by raidee
  • 1st October 2018

Many public-safety officials believe that commercial wireless carriers are logical partners for FirstNet in its effort to deploy and maintain a nationwide public-safety broadband network, but nationwide carriers may view the endeavor as too risky to participate, one analyst said yesterday during a webinar hosted by IWCE’s Urgent Communications.

FirstNet officials repeatedly have emphasized the value that a partner could gain from excess network capacity realized via access to the contiguous 20 MHz of prime 700 MHz spectrum licensed to FirstNet. Ken Rehbehn, a principal analyst for the 451 Research, described FirstNet’s draft RFP documents as “fantastic” and acknowledged the spectral opportunity, but he said commercial carriers likely will have significant reservations about the potential arrangement.

Key cost impacts include the need to harden sites and equipment to meet public safety’s reliability, as well as paying for additional space at locations to support the FirstNet system, Rehbehn said. But the need to prioritize public-safety traffic—potentially at the expense of commercial customers—and endure the public scrutiny associated with the high-profile public-safety network may be even bigger factors, he said.

“There may be a risk to the service provider’s brand. They spent a lot of money, with advertisements, to get the best possible brand image out there in terms of price, performance and quality,” Rehbehn said during the webinar (click here to access archive). “Co-mingling the [commercial] network with a [FirstNet] network, where the quality-of-service mechanisms may result in customers being impacted, may be a concern to them.

“In addition, we do have failures of networks. This is not unheard of. Now, a failure of a Tier 1 network in a region of the United States may be noticed by users—they may tweet about it or complain about it—but the operator really doesn’t have to say much about it. When the FirstNet network is co-mingled, there may be some very negative publicity that flows from a network failure.

“It may be very difficult to limit what the news media’s access is to the state of the network, what has happened, and what is the root cause [of a problem]—all of these issues that operators usually can hide from the customer base and let the usage just go by with the passage of time.”

In addition to these complexities, Rehbehn noted that the FirstNet draft RFP proposes a timeline for the deployment of future releases of LTE on the FirstNet system. Such a mandate could be perceived by carriers as burdensome, because they would lose the flexibility to migrate when it makes the most economic sense to them, he said.

“There are a lot of issues. My suspicion is that the Tier 1 operators are going to be very reluctant to engage in this, because of the risks and the loss of flexibility,” Rehbehn said. “In addition, they probably benefit less, in terms of gaining new spectrum assets with this. The FirstNet allocation is relatively small in the grand scheme of things, when you look at the other spectrum bands that are out there, so the value just may not be high enough for a Tier 1 operator.”

Rehbehn was more optimistic that regional commercial carriers would be interested in working with FirstNet.

“I suspect that regional players can benefit in a big way,” he said. “First of all, they don’t have some of the issues that the large players have. There’s reduced scale, and that helps them be a little bit more nimble—and perhaps more flexible—in meeting FirstNet requirements. They also generally are not as well-endowed with spectrum—especially lower-band spectrum—so it quite possibly may be more attractive to regional players.”

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