What just happened? A review of key factors considered during the FirstNet ‘opt-in/opt-out’ decision period

After a whirlwind of announcements during the final week, the primary FirstNet “opt-in/opt-out” period concluded on Dec. 28 as most analysts eventually expected—with all states and territories making an “opt-in” decision that means AT&T will build and maintain the first-responder LTE network nationwide for the next 25 years.

Why use the phrase “eventually expected”? That’s because most industry observers anticipated that there would be no “opt-out” states and territories that actually would build and maintain their own public-safety LTE alternative radio access network (RAN) that would integrate seamlessly with FirstNet, but there was considerable debate about exactly when the “opt-out” pursuit would end.

Some thought the “opt-out” effort would end in about a year or so, when states would fully learn all of the “opt-out” challenges—and terms, in some cases—as they sought approvals from the National Telecommunications and Information Administration (NTIA) and tried to negotiate a spectrum management lease agreement (SMLA) with FirstNet. Others believed that securing FCC approval would be difficult enough to discourage many states, especially because FCC approval would mean that FirstNet and AT&T could discard their state-plan obligations at that point.

Even more thought that some governors would make an “opt-out” decision at the Dec. 28 in an effort to effectively buy more time to gather additional information and get several unanswered questions addressed—an approach that Rivada Networks officials encouraged for months, particularly after FirstNet changed draft SMLA terms nine days before the Dec. 28 deadline.

In the end, all state “opt-out” quests ended at the Dec. 28 deadline (Pacific territories have a March 12 deadline for their “opt-in/opt-out” decisions, and Guam made its opt-in announcement yesterday). To some, this was a surprise. After all, New Hampshire Gov. Chris Sununu had made an “opt-out” announcement early in December with the stated intent to have Rivada Networks build an alternative RAN in the state.

But Sununu never filed an official notification with FirstNet, so speculation about New Hampshire ran rampant until the deadline day.

Some sources believed that Sununu wanted the state’s Executive Council to have as much input as possible on the Rivada Networks contract before submitting his notification. Some said that waiting until the last possible moment to file the notification would provide New Hampshire more time to advance through the challenging stages of the opt-out process. A few thought Sununu might be hoping that FirstNet and AT&T would sweeten their offer to the state.

But the most popular theory was that New Hampshire was waiting to see whether other states also would make an “opt-out” decision. This makes a lot of sense, as New Hampshire is among the least-populous states in the country, boasting fewer residents than most New York City boroughs in a vastly larger geographic area. In addition, the state lacks the large metropolitan markets that were considered easier to monetize commercially in an “opt-out” scenario, although officials for Rivada Networks—New Hampshire’s vendor—insisted that its proposal was economically viable on a standalone basis.

Meanwhile, being the lone state to pursue the “opt-out” alternative promised to be politically challenging, as well. Explaining FirstNet and its nuances to the public is a difficult task under the best of circumstances. It likely would be significantly harder if all other governors made “opt-in” decisions, particularly if public-safety personnel started complaining that the decision meant that the choice meant they did not have a FirstNet communications option that was available to first responders in other states for at least a year or two as the “opt-out” process played out.

As a result, pursuing the “opt-out” route would be much easier for New Hampshire if other states in New England or some large states with political strength—for instance, New York, Florida or California—made the same decision.

But that didn’t happen. Any hope for a group of New England states forming an “opt-out” geographical alliance died when governors in Massachusetts and Connecticut made their “opt-in” announcements just before the Christmas holiday. The big states of Florida, New York and California eventually made their “opt-in” decisions at the Dec. 28 deadline, and Sununu decided New Hampshire should not pursue the “opt-out” alternative alone.

“While Rivada’s plan remains the better option for New Hampshire, I have determined that the additional risk associated with being the only state to opt-out creates too high a barrier for New Hampshire to continue down the opt-out path alone,” Sununu said in a prepared statement accompanying his “opt-in” decision.

Even during the Dec. 28 deadline day, some sources indicated that the governors New York and California were still considering an “opt-out” decision seriously. It is hard to gauge what New York state officials were thinking, because they were remarkably silent throughout the 90-day decision period and offered only cryptic statements about the decision-making process when they did talk, according to sources.

However, the notion that California seriously considered the “opt-out” alternative certainly seems possible, given that the state’s “opt-in” announcement included several reservations about the FirstNet deployment plan to be implemented by AT&T. California officials reviewing the state’s options also clearly indicated that they were not enamored with either the “opt-in” or “opt-out” alternatives, particularly after Verizon declined to bid when the state sought to procure an alternative-RAN contractor.

In the end, California chose the “lesser of two evils,” according to one source. Indeed, the “opt-in” letter from California Gov. Jerry Brown was not exactly a ringing endorsement of the current FirstNet deployment plan for the state, although it definitely was more hopeful than the one from New Hampshire’s Sununu.

“While California remains concerned that the proposed plan does not meet all our state’s needs, California is opting into the plan with the expectation that our concerns will be addressed throughout our partnership,” Brown stated in his letter notifying FirstNet of the “opt-in” decision.

“California looks forward to working with FirstNet to address the gaps in the proposed plan throughout the 25-year deployment and implementation period.”