FirstNet buildout on Band 14 spectrum will be completed this year, AT&T says

AT&T will complete the initial buildout of FirstNet during this calendar year—several months ahead of schedule—according to a regulatory filing submitted this week by AT&T, which is contracted by the FirstNet Authority to build, operate and upgrade the nationwide public-safety broadband network (NPSBN).

Under its agreement with the FirstNet Authority signed in March 2017, AT&T is deploying NPSBN coverage on 700 MHz Band 14 spectrum that is licensed to the FirstNet Authority, with AT&T being paid in stages for completing buildout milestones and reaching subscriber-adoption target on time. With the work officially beginning in March 2018, the contract called for this five-year network buildout—a plan that includes 1,000 new towers in key locations identified by state governments—to be completed in March 2023.

It will be done several months sooner, with AT&T expecting to receive the maximum $6.5 billion for its FirstNet work, AT&T indicated in its annual 10-K report filed this week with the Securities and Exchange Commission (SEC).

“As of December 31, 2021, we have collected approximately [$5.86 billion] for the completion of certain tasks and anticipate collecting the remainder of the [$6.5 billion] as we achieve milestones set out by FirstNet in 2022,” AT&T states in its 10-K filing.

AT&T receives FirstNet payments after FirstNet Authority officials have validated that the contracted work has been completed for a given deployment stage. For AT&T to receive the final $640 million by the end of the year—three months ahead of the contracted schedule—sources indicate that the carrier giant likely would need to complete its work well before the end of the year to ensure time for the validation process to be completed, particularly with holidays in November and December.

Neither the FirstNet Authority nor AT&T responded to requests for comments made this morning by IWCE’s Urgent Communications in time to be included in this article. This article will be updated with those comments, if they are received.

AT&T has been expected to complete this five-year buildout phase early, as company officials have indicated that the FirstNet buildout of Band 14 coverage has been six months to almost a year ahead of schedule at various stages of the process. Scott Agnew, AT&T’s assistant vice president for FirstNet products said the FirstNet Band 14 buildout was “over 95% complete” during his IWCE 2021 keynote speech in late September.

Information about the progress of the FirstNet buildout has been released sporadically, but AT&T has provided updates about subscriber adoption of FirstNet services on a quarterly basis. AT&T announced in January that FirstNet was providing more than 3 million connections to more than 19,500 public-safety agencies as of the end of 2021.

AT&T is required to meet FirstNet subscription goals as part of its contract with the FirstNet Authority. Those subscriber-adoption target have not been released publicly, but AT&T apparently has achieved all of the contracted thresholds in the past. In fact, most references to FirstNet adoption indicate that it has exceeded expectations—not surprising, given that many believed that FirstNet only would be able to serve about 3 million public-safety users when Congress passed the legislation establishing FirstNet in 2012.

Although the initial five-year buildout goals have been primary focus of AT&T and the FirstNet Authority, completion of this phase will not mark the end of the partnership. The FirstNet Authority’s agreement with AT&T extends into 2042, with the FirstNet Authority’ operations and future FirstNet system upgrades being funded by annual payments made by AT&T to the FirstNet Authority.

In total, AT&T is scheduled to pay a total of $18 billion to the FirstNet Authority, with the AT&T’s annual “sustainability” payment scheduled to increase in stages throughout the life of the 25-year contract. Overall, about $3 billion of the AT&T payments are expected to fund the FirstNet Authority’s organizational operations through 2042, while the $15 billion is expected to be reinvested into the FirstNet system, according to AT&T’s 10-K report.

As the FirstNet network provider, AT&T is expected to receive most—if not all—money that the FirstNet Authority decides to reinvest into the NPSBN to enhance coverage and to make technological improvements, such as upgrading the system from LTE to 5G. AT&T received $170 million in such reinvestment money during 2021, the AT&T SEC filing states.

AT&T will increase its sustainability payment to the FirstNet Authority in 2022, with the amount jumping from $120 million in 2021 to $195 million in 2022, according to AT&T’s 10-K report. AT&T will pay $195 million to the FirstNet Authority to from 2022 through 2025, and the sustainability payment will jump to $1.59 billion in 2026. AT&T will pay the FirstNet Authority a total $15.03 billion in sustainability payments from 2027 to the end of the contract, the AT&T SEC filing states.