NTIA proposes rules to review, approve FirstNet fees each year

Many key FirstNet fees will be reviewed by the National Telecommunications and Information Administration (NTIA) to determine whether the fees generate enough revenue to cover FirstNet’s expenses but are not excessive, according to an NTIA proposal released yesterday that will be the subject of a public proceeding for the next month.

Congress passed legislation in 2012 establishing FirstNet as an independent entity within NTIA that was charged with deploying a nationwide broadband network for public safety that would be financially self-sustaining. NTIA’s fee-review process is designed to help achieve that goal, according to NTIA Administrator Lawrence Strickling, who also serves as the U.S. Department of Commerce's assistant secretary for communications and information.

“To be successful, FirstNet will have to win customers through competitive pricing and services,” Strickling said in a prepared statement. “The approach we outline today will give FirstNet the flexibility it needs to respond to changing market conditions and meet the demands of its customers—the public-safety community.”

Under the notice of proposed rulemaking (NPRM), NTIA would review and approve FirstNet’s proposed annual fees before they can be implemented in three categories:

• Network user fee—“A user or subscription fee from each entity, including any public-safety entity or secondary user, that seeks access to or use of the [Network];"
• Covered-leasing-agreement (CLA) fee—“A fee from any entity that seeks to enter into a [CLA],” which is defined by law as “a written agreement resulting from a public-private arrangement to construct, manage, and operate the nationwide public safety broadband network between the First Responder Network Authority and secondary user to permit (i) access to network capacity on a secondary basis for non-public safety services; and (ii) the spectrum allocated to such entity to be used for commercial transmissions along the dark fiber of the long-haul network of such entity;” and
• Fees from entities seeking access to FirstNet-owned network equipment or infrastructure—“A fee from any entity that seeks access to, or use of, any equipment or infrastructure, including antennas or towers, constructed or otherwise owned by the First Responder Network Authority resulting from a public-private arrangement to construct, manage, and operate the [Network].”

Throughout the NPRM, NTIA states that it will review fees only to determine whether they are at a level that, “in aggregate,” lets FirstNet be financially self-sustaining without being excessive—for instance, questions of “reasonableness” will not be considered, according to the NPRM. NTIA will consider any all FirstNet revenue sources in determining whether fees in these three categories are financially appropriate, insufficient or excessive.

However, the NPRM notes that NTIA will defer to FirstNet’s judgment about how much money the organization should have in reserve.

If NTIA determines that proposed fees are either insufficient or excessive, FirstNet would have to adjust its fees and get NTIA’s approval for the new fees before they can be implemented, according to the NPRM.

Despite the detail included in the 23-page NPRM, there are some questions about which fees would be reviewed by NTIA under the proposal.