FirstNet’s latest legal interpretations make opt-out alternative less appealing to states, territories

If the financial factors associated with the opt-out alternative are discouraging, the logistical gauntlet that an opt-out state will have to navigate approach the level of being scary. Not only is it complex and full of difficult timelines for the opt-out state, it doesn’t address the most fundamental issue for any wireless network—the terms associated with accessing the spectrum needed to operate the system—until the end of the process.

Here is a summary of the opt-out process:

• Step 1—FirstNet presents its deployment plan to a state/territory. In the legal interpretations, FirstNet states that there is some flexibility in the plan and stresses that it is not a contract. Many are interpreting that to mean that FirstNet is not necessarily bound to meet the terms of the plan; of course, public-safety agencies always can choose not to subscribe, if they don’t like FirstNet’s implementation of the plan.
• Step 2—After receiving the state plan from FirstNet, the governor for the state/territory has 90 days in which to opt out of the FirstNet plan for the state. This timetable is dictated by law. If no action is taken, FirstNet will proceed with its plan for the state, according to the legal interpretations.
• Step 3—If the governor chooses the opt-out route, the state/territory has 180 days to complete its RFP process and submit it to the FCC for its approval. Again, this timetable is dictated by law. Getting a state-level RFP done in six months promises to be challenging. As if the logistics were not difficult enough, there also is the reality that bidders likely will not have all details when responding to the RFP, because the state will not have a spectrum lease to use FirstNet’s 700 MHz airwaves, so the associated costs of using the spectrum probably will not be certain.
• Step 4—The opt-out state submits its RAN plan to the FCC. According to the law, this review would be done primarily to determine whether the opt-out state’s plan will be interoperable with the nationwide FirstNet initiative. To some extent, FirstNet’s legal interpretation is that this stage is a “point of no return” for the opt-out state: if the FCC approves a state’s opt-out plan, then the state immediately is on the hook to implement the plan, and FirstNet no longer has an obligation to build out the RAN in that state. However, it is likely that the state still will not have a spectrum lease at this point.
• Step 5—The opt-out state must get approval from the National Telecommunications and Information Administration (NTIA), which must weigh the cost-effectiveness of the opt-out plan. This step is outlined in the law passed by Congress. FirstNet’s legal interpretation is that the cost-effectiveness of a state’s plan should include an evaluation of its impact on the nationwide initiative, not just its effectiveness within the opt-out state.
• Step 6: Opt-out state/territory must negotiate a spectrum-lease agreement to use FirstNet’s airwaves. It is only logical that an opt-out state needs access to spectrum to implement its RAN. FirstNet is not mentioned in this portion of the law, which has caused some to believe that the spectrum lease should be negotiated with NTIA. FirstNet’s legal interpretation is that the negotiation will be between the opt-out state and FirstNet, which holds the license to the spectrum.

Whether NTIA or FirstNet should negotiate the spectrum lease is legally debatable, but the bottom line is that FirstNet is part of NTIA. The more important implication is that an opt-out state would be sitting at the negotiating table with FirstNet/NTIA with very little leverage, from a legal standpoint. After all, the opt-out state has to agree to whatever terms that FirstNet or NTIA dictate, or it could be without a public-safety broadband network entirely—remember, FirstNet’s obligation to build a RAN in the opt-out jurisdiction ended with the FCC approval. Of course, there may be other political or public-opinion tactics that a state could use to improve its negotiating position.