By Mike Poth, FirstNet CEO

Last week FirstNet held its second Industry Day, which was attended by more than 400 members of the public safety community, industry, and the public. If you were able to participate in the event either in-person or through the webcast, you heard us talk about how FirstNet has a unique opportunity to fundamentally transform the way public safety communicates. By combining a dedicated frequency band for a resilient network with innovative applications and services on the nationwide public safety broadband network (NPSBN), FirstNet plans to help first responders improve the service they provide to the public while reducing the risks to their own lives. For example, based on information from the U.S. Fire Administration, stress and overexertion cause nearly 30 percent of firefighter fatalities today. Transmitting firefighters’ real-time health information over the FirstNet network could improve the identification of personnel at risk and facilitate potential lifesaving intervention.

The general public would also likely benefit. According to articles in Research Gate and Academic Emergency Medicine, greater use of geographic information system applications has decreased emergency medical service response times by 15-30 percent in other countries, increasing the likelihood that patients will receive faster treatment and achieve better outcomes. The FirstNet network can be the platform for these and other new and exciting capabilities for first responders.

These benefits from FirstNet, however, are only possible if FirstNet pursues a collaborative "win-win-win" business model uniting public safety, network contractor(s), and the FirstNet program. As we discussed at Industry Day, FirstNet will only be successful if the business model provides services that public safety personnel want to adopt, proves financially attractive to a potential contractor or contractors, and meets FirstNet’s programmatic goals, including Congress’ requirement that FirstNet become financially self-sufficient. Based on feedback from industry, public safety, and other stakeholders, FirstNet has proposed a win-win-win framework for a business model.

The foundation of FirstNet’s proposed business model starts with identifying and communicating the attributes desired by public safety through an objectives-based acquisition. Currently, these attributes include nationwide coverage, network hardening, and other items identified in FirstNet’s Statement of Objectives. The objectives-based approach provides potential contractors the flexibility to propose the best solutions that they deem possible by emphasizing higher performance on certain objectives over others.

In return for executing its proposal, the selected contractor(s) could receive up to $6.5 billion in cash, all future NPSBN revenue from public safety entities, and use of band 14 network capacity to serve commercial needs and generate additional revenue, when that capacity is not used by public safety. Importantly, the NPSBN revenue and excess capacity provided to the contractor(s) are likely significantly more valuable than $6.5 billion in cash and could more than offset costs of deploying and operating a nationwide network.

Today, the core public safety communications market of police, fire, and emergency medical services has millions of users, generates billions of dollars in revenue per year, and is poised for growth with the priority and preemption services that FirstNet plans to enable on the NPSBN. The non-public safety market is likely several multiples larger than that, and data traffic is projected to grow by almost five times over the next several years.

The combined cash and non-cash value of the FirstNet opportunity also provides an opportunity for FirstNet to be financially sustainable, which is a critical FirstNet objective and a requirement of its enabling legislation. As part of the current objectives-based approach, potential offerors would propose payments to FirstNet as consideration for the NPSBN revenue and excess capacity. This would provide the resources necessary to operate the FirstNet program and provide confidence to public safety users and other stakeholders that the NPSBN and FirstNet are on solid financial footing. In addition, FirstNet is required to reinvest funding received from these payments into legitimate expenses of the NPSBN, such as additional coverage, capacity and features.

Finally, providing all potential public safety revenues to the NPSBN contractor(s) supports FirstNet’s ultimate mission by aligning incentives toward public safety adoption. Simply put, NPSBN contractor(s) have the potential to realize financial success when public safety chooses to adopt the network.

This structure also helps relieve a reported concern of potential contractors that public safety may use significant network capacity, leaving little excess network capacity for potential contractor(s) to monetize to support the NPSBN. Under the proposed business model, however, the contractor(s) would receive value from greater public safety adoption in addition to excess network capacity, thereby lessening the need to define a specific amount of excess capacity available at any point in time.

Moving forward, FirstNet will continue to refine the business model based on feedback to the Special Notice, stakeholder engagements, and release of an RFP. These refinements will help enhance the win-win-win business model that we believe will deliver the potential life-saving benefits of FirstNet.

Thanks,
Mike