FirstNet Opt-In/Opt-Out decision pushed back past Christmas

It appears lawmakers will have even more time to make a decision regarding FirstNet after the National Telecommunications and Information Administration failed to provide required funding information to states, according to editors at Urgent Communications (http://urgentcomm.com/ntiafirstnet/ntia-funding-level-still-missing-through-monday-firstnet-opt-inopt-out-deadline-pushed-)

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“Most governors will have at least until Dec. 25 to decide whether their states and territories will “opt-in” to FirstNet or pursue the “opt-out” option after the National Telecommunications and Information Administration (NTIA) on Monday failed to provide key funding information for states that achieve “opt-out” status.

Last week, FirstNet updated the state-plan portals for all 50 states and three territories—the South Pacific territories of Guam, American Samoa and the Northern Mariana Islands have not received initial state plans. But NTIA did not release the funding level determination (FLD)—the amount of construction-grant money a state or territory could receive in an “opt-out” scenario—as of Monday, multiple sources confirmed to IWCE’s Urgent Communications. As a result, the statutory 90-day period for governors to make their “opt-in/opt-out” decisions has not yet started.

If the NTIA releases the funding levels today, the 90-day period technically would conclude on Monday, Dec. 25—a federal holiday for Christmas—for the 50 states and three territories. In this case, governors presumably would be given until Tuesday, Dec. 26, to provide their decisions.

No official explanation for funding-level delay has been provided, but multiple industry and Beltway sources have speculated that that NTIA construction-grant program theoretically could be very large—exceeding more than $1 billion—so the number of approvals needed within the government likely would be considerable.

Governors in 21 states and two territories already have announced their “opt-in” decisions, which means their jurisdictions have accepted the deployment plan provided by FirstNet and AT&T—FirstNet’s nationwide contractor—to build and maintain the radio access network (RAN) within the state or territory for the next 25 years. FirstNet released actionable state plan that enabled such early “opt-in” decision on June 19.

As with other “opt-in” jurisdictions, these states and territories would not be eligible for funding from the NTIA construction-grant program. Only states and territories that complete the “opt-out” process—something that is estimated to take a year or two—to build and maintain the RAN within their borders would be eligible for the NTIA construction grants.

Under the law that created FirstNet, official state-plan delivery to the governor requires three items:

  • Notification that FirstNet completed its procurement process;
  • Submittal of the official state plan by FirstNet; and
  • The NTIA construction-grant funding level a state or territory can expect to receive, if the state or territory meets other “opt-out” criteria.

Once the missing NTIA construction-grant funding levels are available, FirstNet can complete the official notification of state-plan delivery to most governors. At that point, governors have 90 days to make their “opt-in” or “opt-out” choice, which means the decision deadline will be no earlier than the last week of December.

Meanwhile, multiple state officials have confirmed to IWCE’s Urgent Communications that the FirstNet state plans that were updated last week also lack information about the payments that an “opt-out” state would have to make to FirstNet for access to the FirstNet LTE core and the 700 MHz Band 14 spectrum licensed to FirstNet.

Although not statutorily mandated like NTIA’s funding-level determination for official notification, these payments to FirstNet are expected to have a much greater impact on the financial feasibility of an “opt-out” initiative, according to multiple state and industry sources. Depending on the formula used to determine the payments to FirstNet, the total cost of these payments could exceed $1 billion during the 25-year period, particularly in states with attractive commercial wireless markets, according to sources.

John Stevens, New Hampshire’s single point of contact (SPOC), said a regional FirstNet coordinator indicated that states would have information about the core and spectrum payments, but he has not found any payment details in the updated FirstNet state plan for New Hampshire.

“We’d better get that [information about core and spectrum payments to FirstNet], because we can’t make a decision unless we do have it,” Stevens said during an interview with IWCE’s Urgent Communications. “We have an expectation that FirstNet and AT&T will provide that information to each of the individual states. That’s certainly my opinion.

“If we’re not provided that information, it makes it very difficult … If any state is considering an opt-out option—if any state has an alternative plan in place—and they want to weigh that against the state plan that’s being provided by FirstNet and AT&T, that financial package will have to be disclosed.”

Part of the financial package is the NTIA construction-grant funding level, which likely will not be great enough to pay for buildout of the RAN in a given state, NTIA officials have stated repeatedly. The available $5.5 billion will be allocated among the 56 states and territories, with each receiving a portion of the funding, based on the cost to construct, operate, maintain and improve the FirstNet system. However, the NTIA funding will reflect only the construction portion of the equation.

Given this, at least one federal-government source has said that the NTIA construction-funding may provide only “pennies on the dollar” when compared to the actual cost to construct the RAN within a state or territory.

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Of course, a state or territory would receive NTIA construction-grant money only if it achieves “opt-out” status, which is done by executing the following tasks:

  • Within 180 days of the governor’s decision to pursue the “opt-out” alternative, complete the procurement process to select a vendor to build the alternative RAN;
  • Within another 60 days, submit an alternative RAN plan to the FCC, which will evaluate whether the initial plan would be interoperable with the FirstNet nationwide system. The FCC has established a 90-day “aspirational” shot clock for completing its interoperability evaluation; and
  • If approved by the FCC, the state must secure comparability approval from the NTIA and negotiate a spectrum-lease agreement with FirstNet. FirstNet’s enabling statute does not dictate a timetable for these steps.”

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