What just happened? A review of key factors considered during the FirstNet ‘opt-in/opt-out’ decision period

Years later, Rivada Networks’ meticulous network-modeling mapping won plaudits from evaluators when the company bid for the nationwide FirstNet contract. And Rivada Networks promised to partner with established wireless vendors to actually build the network.

Rivada Networks had a unique business model, which called for the wholesale auction of any excess bandwidth—network capacity not being utilized by first responders, who would have always have “ruthless preemption” priority on the system—on the public-safety network it would build.

Even the harshest critics of Rivada Networks acknowledged that it was an intriguing business model, although some questioned whether recent FCC spectrum sales and the offering of unlimited wireless plans would undermine some of the demand needed for an auction-based wholesale model to work.

But many state officials—and the evaluators reviewing the FirstNet nationwide bids—cited several concerns with Rivada Networks, including the following:

•  Rivada Networks was unproven. The company had some attractive partners and expertise, but the team had not built a network together or actually implemented the wholesale auction marketplace; the company did not even have a small-scale pilot project to cite as a success story.
• Whether multiple device manufacturers would build equipment for Rivada Networks—a provider with no existing customers—was a question, because Rivada Networks would lack the significant customer scale that manufacturers seek. This was a concern raised in the company’s nationwide bid, and it likely would be an even bigger issue in an “opt-out” scenario, because the potential customer base would be limited further.   
• The company would need to borrow a lot of money to finance its network-deployment, operations and marketplace investments. If something went awry in any of those financial arrangements, it could create problems for the state.
• Many believed that Rivada Networks would be able to build the initial 4G LTE network that would be needed in an “opt-out” scenario on Band 14 spectrum. However, there was some doubt whether Rivada Networks would have the technical expertise, financing and spectrum assets to upgrade the network—to 5G technology and beyond—at the same pace as FirstNet and AT&T.

If everything went well, the Rivada Networks proposal was very attractive to officials in some states contemplating the “opt-out” alternative. However, such uncertainties surrounding Rivada Networks made it difficult for governors to make an “opt-out” decision, particularly when judged against the low-risk proposal from FirstNet and AT&T.

Given these circumstances, most industry observers expected all states ultimately would make “opt-in” decisions. There may be some who would argue that the “opt-in/opt-out” decision period was a waste of time, since all states made the “opt-in” choice. I disagree.

Having the “opt-in/opt-out” decision process raised awareness of the FirstNet initiative, provided an opportunity for state officials to have input into the FirstNet system design within their states, and ensured a certain level of “buy in” from the governor and other top administrators—an important aspect for any initiative in a state.

Furthermore, by researching the opportunity to make an “opt-out” decision and have the state build the network itself, governors and other state officials hopefully gained a better understanding of the challenges faced by FirstNet and AT&T in developing a state network plan. No complex project like FirstNet is going to be planned or implemented without issues, but officials may have gained a greater appreciation for the full scope of the FirstNet/AT&T package after exploring how difficult it would be for their state to implement an alternative RAN on its own.