AWS-3 auction bidding bodes well for FirstNet’s short-term funding, long-term sustainability opportunities

During an interview with IWCE’s Urgent Communications later that day, Kennedy reiterated the real-estate analogy.

“If you think about it, … when your neighbor puts his house up for sale and it goes for a lot more than some people expect, it raises the value of the neighborhood,” Kennedy said during the interview. “I think that’s a nice comparison of what’s happening with AWS-3.”

Kennedy also noted that everyone should “give a lot of credit to Congress and key players that made this happen. They designed a way to fund this network, and it’s working.”

Kennedy stopped short of saying that FirstNet will receive its full allotment of funding promised by Congress under the 2012 law that established FirstNet, probably on the advice of government lawyers who note that funding isn’t real until the auction is complete and high bidders actually pay the U.S. Treasury.

However, the reality is that the AWS-3 auction will mean that FirstNet will be fully funded as Congress intended, as will some other key public-safety communications research and next-generation 911 initiatives that were included in the 2012 legislation.

While the short-term effect of allowing FirstNet officials to breathe a little easier knowing that the $7 billion is funded is important, the greater overall impact may be that the auction provides tangible evidence that there is a market demand for spectrum that could help FirstNet realize a business model for long-term sustainability.

From the outset, FirstNet officials have acknowledged that generating revenue from secondary access to the public-safety network’s broadband capacity—when first responders do not need it—will be critical to its economic model. Rivada Networks has suggested one potential arrangement, but there are many other possible partnerships that could be pursued.

But one concern associated with all of these partnership opportunities has been whether there was sufficient market demand for bandwidth capacity that a partner would be willing to pay major dollars—and/or provide in-kind assets like fiber or rights of way that are worth major dollars—for the chance to operate on FirstNet’s network, even if users could be preempted when an emergency happens in a given location.

The AWS-3 spectrum auction is providing dramatic evidence that the pent-up demand for spectrum—and the bandwidth capacity it can enable—is massive. When such demand exists, suppliers like FirstNet should have the opportunity to negotiate favorable deals.