FirstNet CEO, AT&T official provide further details about 25-year contract for first-responder network

AT&T plans to provide “very aggressive” pricing for its FirstNet subscription packages, and the carrier has pledged $18 billion to ensure that the nationwide public-safety broadband network (NPSBN) receives regular technological and coverage upgrades during the 25-year contract period, according to officials for AT&T and FirstNet.

Pricing for the various FirstNet subscription offering is “not yet” available, but AT&T is confident that state and public-safety officials will find the packages compelling when they are announced, according to Kay Kapoor, president of AT&T new global public-sector business unit that was announced last week.

“We’re working through multiple models, as you would expect, but we really don’t have anything yet,” Kapoor said about pricing during an interview with IWCE’s Urgent Communications. “But we can assure the states that it’s going to be fair, very aggressive and robust pricing that we will bring forward.”

Under the terms of the 25-year FirstNet contract, AT&T will gain access to the 20 MHz of Band 14 700 MHz spectrum licensed to FirstNet, which the carrier will used to support the deployment of the NPSBN. While the primary purpose of the NPSBN is to provide mission-critical communications to public-safety users, remaining bandwidth capacity on the system can be sold to AT&T commercial customers on a secondary basis.

In addition to the spectrum, AT&T is eligible to receive a maximum of $6.5 billion in federal funds to help fund construction of the network—monies that are disbursed as construction deployment goals are met, according to the FirstNet request for proposals (RFP). However, the RFP also required the contractor—AT&T—to pay FirstNet a minimum of $5.625 billion over the 25-year contract period to ensure that FirstNet would remain operational as an organization and that funding exists to refresh the broadband system as technology evolves.

FirstNet CEO Mike Poth last week revealed that the AT&T proposal exceeds the rural-deployment coverage targets that includes $18 billion in payments to FirstNet—more than three times the minimum requirement cited in the FirstNet RFP—as part of the carrier’s commitment to invest $40 billion overall into FirstNet.

“That’s a significant number for a lot of different reasons,” Poth said during a speech at the Competitive Carriers Association (CCA) Mobile Carriers Show 2017. “One is—by statute and by our responsibility to first responders—we are going to reinvest the excess amount of funds from that $18 billion back into the network.

“This isn’t a one-and-done, [in which] they’re going to build it out once and it stops. This network, the innovation and technology is going to grow and evolve, and I think that’s where a lot of [regional and rural carriers] probably will have an interest and an opportunity.”

Of the $18 billion in payments to FirstNet, about $2 billion is expected to fund the organization’s ongoing operations throughout the 25-year contract period, Poth said.

 “That gives us $16 billion to reinvest back into the network,” Poth said. “Where are we going to revinvest? Probably in those rural areas to further expand the footprint that will already be out there today.

“All 16 objectives that were laid out in the contract were met. The rural-coverage milestones were exceeded. All of those things will start coming out in the next two to three weeks down to the states, giving that communications to them, so that they have the information to make informed decisions.”