AT&T CEO highlights FirstNet role as ‘foundation’ to carrier’s 5G plans

FirstNet was AT&T’s top strategic initiative last year, and the telecom giant has begun construction of the nationwide public-safety broadband network (NPSBN), which will “prove to be the foundation for taking wireless network performance to a completely new level,” according to AT&T Chairman and CEO Randall Stephenson.

“What we’re doing is building a nationwide network with the latest technology,” Stephenson said yesterday during AT&T’s quarterly earnings call. “It’s designed and it’s hardened for America's first responders, and then that will be our foundation for broad 5G deployment.

“We're well underway with the build, including new sites in unserved or underserved rural parts of the country. We plan to deploy 40 MHz of fallow spectrum that we've accumulated over the last few years, along with the spectrum from FirstNet. And we'll also be deploying the millimeter wave spectrum from our FiberTower purchase, and this is going to give us a quantum leap in both capacity and performance.”

In response to an inquiry from IWCE’s Urgent Communications, an AT&T spokesperson clarified that AT&T has conducted “new site selection” and other preparatory work to date. “Physical construction will begin once the [FirstNet] Authority issues the buildout task order,” according to a statement provided by the spokesperson.

Under the FirstNet contract, AT&T is scheduled to be reimbursed for reaching coverage and operational milestones in the deployment of the FirstNet system. Although the FirstNet deployment schedule associated with these milestones would take five, Stephenson last year indicated that AT&T would accelerate the buildout, if all states and territories made “opt-in” decisions—something that has happened.

AT&T also plans to spend an additional $1 billion on capital projects—primarily the expansion of its fiber network that supports many initiatives, including backhaul for wireless broadband—because of the lower corporate tax rate included in the tax-reform package approved by Congress last year.

“Tax reform changes everything, as it relates to capital allocation,” Stephenson said. “When you’re suddenly looking at your after-tax returns improving by 20% roughly, it just changes how you think about your investment theses. It changes the profitability equation on fiber, as well as 5G, and how you think about rural and how you think about FirstNet. So, it gives us the ability to consider starting to push our fiber deployments faster and further.

“We’ve been planning for this for quite some time. But now that [tax reform is] here and it’s real, we’re going through, we’re digging in, and asking ‘What are these projects that we want to be investing in—and these initiatives we want to be investing in—that could continue to drive growth over the next five or six years?’ and let’s take advantage of it.”

John Stephens, AT&T executive vice president and CFO, echoed the sentiment that the lower corporate-tax rate will allow AT&T to be more aggressive in its fiber-deployment plans and noted that tax reform also will have a positive impact on the FirstNet buildout.

“I think the team is working very, very hard to achieve the FirstNet goals and even exceed the goals set out by the FirstNet authority—that's a really positive thing for us,” Stephens said. “While we were interested in doing that for some time, tax reform and the cash-savings aspect of that provide the flexibility to go after that even more.”

When asked by IWCE’s Urgent Communications how AT&T plans to “achieve … and even exceed the goals established by FirstNet,” an AT&T spokesperson provided the following statement:

“It’s our goal to deliver a world-class communications platform to public safety as quickly as possible,” according to the statement. “From the network build to next-generation tools, we’re working to meet or exceed the goals that have been set by the First Responder Network Authority.”