AT&T Selected as Lead Partner to Build FirstNet, Brings Strong Spectrum Portfolio to Table
AT&T was picked to be FirstNet’s partner (see 1703300007) in building the national network for first responders. The news Thursday was hardly a surprise since AT&T had been viewed as the only contender still standing, and we had reported the pick was imminent (see 1703240035). The choice was greeted as net positive for FirstNet. AT&T said it will make a $40 billion investment in FirstNet over the length of the 25-year contract and expects to create 10,000 U.S. jobs. In return, AT&T gets access to 20 MHz of 700 MHz spectrum to supplement its already significant spectrum holdings.
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Other members of its team include Motorola Solutions, General Dynamics, Sapient Consulting and Inmarsat Government, AT&T said in a news release. Rural carriers, not cited in the release, are also part of the team, FirstNet officials said. None of the members of AT&T’s team was mentioned during an event Thursday where Commerce Secretary Wilbur Ross unveiled the choice. The announcement had a high enough profile that White House Press Secretary Sean Spicer mentioned the contract award during his daily news briefing.
Rivada Networks, which challenged its exclusion from the bidding process, said in a statement it's continuing to contact the states. A spokesman told us Rivada hasn't decided whether it will continue its legal challenge beyond the U.S. Court of Federal Claims, which ruled in the government’s favor March 17 (see 1703170066) and denied our motion to obtain that ruling, just as FirstNet denied our request for contracting documents (see 1703290047). “We congratulate FirstNet on concluding the federal procurement and moving to the next phase of this vital project for public safety,” said Rivada co-CEO Declan Ganley. “We look forward to working with the many states and territories that have expressed a desire to examine alternatives to the federal government's chosen approach to deploying this network for first responders.”
AT&T is widely expected to pick up additional low-band spectrum in the TV incentive auction, which formally ended Thursday (see 1703300044). The carrier was a major player in the 2008 700 MHz auction, focusing in particular on the B-block, though it came away with less spectrum during that auction than Verizon. In the years since, AT&T has completed many smaller deals to pick up licenses in the secondary market. Industry officials note there are few deals left to be done.
FirstNet President TJ Kennedy said in an interview he didn’t have any additional comment on a potential further challenge by Rivada. “We were authorized after the protest was dismissed to move forward and we’ve moved forward,” he said.
Best Value Proposal
The authority put out a “best value” request for proposals and “the best value solution did win the RFP,” Kennedy said. “Many things went into that.” AT&T brings with it “an entire suite of smaller carriers that are already partners for them and [AT&T] obviously will add to that to fill in holes where they need to,” Kennedy said. Deployment of the network can start in states that opt-in to FirstNet as soon as they do so, Kennedy said. That should start in the fall “or sooner if we can speed this up,” he said.
“Spectrum is the lifeblood of the wireless industry and this is attractive spectrum,” Chris Sambar, AT&T senior vice president-AT&T FirstNet, told us. “We’re thrilled to have the spectrum as a business. … More importantly, we’re thrilled to be able to provide it to first responders for their dedicated use.”
“FirstNet is a terrific model for how public-private partnerships can come together and accomplish really big things for America,” said AT&T CEO Randall Stephenson during the announcement ceremony in the Commerce Department auditorium. “We’re ready to get started.”
First responders should have the tools they need to do their jobs, said FCC Chairman Ajit Pai, who also spoke at the ceremony. “A world-class, modern technology network is one such tool,” Pai said. “The journey of 1,000 miles may not be over yet, but this is a major milestone toward getting there.” The FCC later posted his comments.
“Through this public-private partnership, FirstNet can begin to deliver on its mission -- to provide our first responders with a nationwide, high-speed, interoperable broadband network; to equip our first responders with the same robust communications capabilities enjoyed by the rest of the public; and to provide tools that transcend the limits of the land mobile radios on which they had for so long relied,” House Commerce Chairman Greg Walden, R-Ore., said during the announcement ceremony. FirstNet “is a solution that is going to work, that is going to bring safety to our communities, to our streets, and allow our first responders who now can be knitted together, to provide the type of safety that is expected,” said House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn.
Long Time Coming
Sixteen years after the Sept. 11, 2001, attacks, "we finally are creating an interoperable first responder network,” said Roger Entner, analyst at Recon Analytics. “By choosing a network operator, first responders can immediately enjoy the benefits by using an existing network that improves over time as the network becomes deeper and larger. With AT&T investing $40 billion over the next 25 years into FirstNet, it proves once again that when spectrum gets deployed, jobs get created and the country benefits.”
AT&T will be able to blend FirstNet’s 700 MHz spectrum with the spectrum it already owns, MoffettNathanson wrote investors. “AT&T will deploy its fallow AWS-3 and WCS [wireless communications services] holdings in conjunction with the FirstNet build to reduce the cost of doing so,” the firm said. “Doing FirstNet together with AWS-3 and WCS will require one tower climb rather than two.” MoffettNathanson said AT&T is “clearly very competent when it comes to network engineering and has a proven track record of efficiently managing large-scale deployments.” All tower companies will benefit, the firm said. FirstNet will be worth about $3 per share to American Tower, $4 per share to Crown Castle and $4 per share to SBA, MoffettNathanson said. Other analysts made similar comments.
“AT&T has other fallow spectrum … that we expect it will look to deploy in a similar timeframe to the FirstNet deployment, which could save a significant amount of overall cost,” Raymond James said. “These cost savings could offset some of the long-term costs. It also argues for a significant improvement to the network and capacity over the next couple of years. We expect handsets and other equipment to be available as the network is deployed.”
“In selecting a partner that is an established wireless service provider with a nationwide network, FirstNet is well-positioned to achieve the goals of the law that created it,” APCO said in a news release. “FirstNet users will benefit from the significant investment and infrastructure AT&T already has in place, which is more efficient than depending upon a green-field build or untested solutions.”
“All public safety entities should have access to the latest technologies that can improve communications and better serve our communities,” the National Emergency Number Association said.