FirstNet’s role as spectrum licensee critical as states consider opt-out alternative

LAS VEGAS—Last week, the FirstNet board released its second public notice, which explores the relationship that FirstNet will have with any state or territory that chooses the “opt-out” route allowed by law in considerable detail. In this document, FirstNet’s staff seeks comments on a wide variety of legal issues, including what is “cost effective” under the law and what nuanced differences exist between a covered leasing agreement (CLA) and a public-private partnership (PPP).

There’s a lot to consider and some of the concepts are fairly complex, particularly for those of us who are not in the legal profession. But, as easy as it is to get lost in the weeds of legalese, my mind keeps wandering back to the golden rule of business: “He who has the gold makes the rules.”

Why? Spectrum is akin to gold in wireless communications. In fact, spectrum is more valuable than gold, because you simply cannot have wireless communications without access to airwaves. With this in mind, the wireless-industry corollary to the golden rule of business has always been: “He who has the spectrum makes the rules.”

Congress made FirstNet the licensee for 20 MHz of prime 700 MHz public-safety broadband spectrum. Thus, FirstNet effectively gets to make the rules for these airwaves.

Of course, it’s not that straightforward. If it was, there probably would not be any reason to write a lengthy public notice and conduct a proceeding. There are a number of items associated with opt-out states that need to be determined, and interpretations of the 2012 law that established FirstNet—and the opt-out alternative—can vary greatly.

Indeed, legitimate arguments can be made about the proper implementation of several clauses associated with the many hoops that a state or territory must jump through, if it chooses to pursue the opt-out route.

If a governor decides to opt out, the state or territory must develop a plan to deploy the FirstNet-compliant radio access network (RAN) in its jurisdiction and complete a request-for-proposal (RFP) process. In addition, the opt-out state’s RAN deployment plan must be blessed by the FCC.

(Putting aside the legal issues for a moment, this part of the process begs a question from the cheap seats: How can a state attract the best possible bids in an RFP, if the vendors do not know whether a spectrum lease will be granted, much less the terms of such a lease?)

But clearing all of these hurdles—a considerable task that likely will take at least a year to process—does not mean the state can begin deploying a RAN in its jurisdiction. It only allows state or territory pursing the opt-out alternative to apply to the National Telecommunications and Information Administration (NTIA) for a spectrum leasing agreement from FirstNet.

If I read the law correctly, there is nothing in the law that dictates the terms or the timing of such a spectrum lease, and the FCC has always taken a hands-off stance on spectrum leases—they are the product of negotiations between the entities involved. In other words, it appears that NTIA and/or FirstNet (an authority within NTIA) do not have to sign a spectrum lease that includes unfavorable terms for the overall deployment of the nationwide public-safety broadband network.