AT&T’s bid to build a nationwide, US public safety network – FirstNet – can finally move forward. But the 25 year, $40bn commitment doesn’t ensure a financial success.
At the end of March AT&T was chosen by the First Responder Network Authority (FirstNet) to build and manage a nationwide broadband network for US first responders and public safety agencies.
Timeline for AT&T
Covering all 50 states, five territories and Washington DC, AT&T expects to spend about $40bn over the life of the contract to build, operate and maintain the network.
FirstNet, in turn, will provide AT&T with 20 MHz of spectrum to power the network, along with payments of $6.5bn over the next five years.
On its face, the arrangement would seem like a win-win.
US first responders – the likes of fire fighters, police departments, and ambulance services – get access to an interoperable, broadband communications network promising to deliver on the capabilities and scale economics of a global technology like LTE.
AT&T gets billions of dollars in funding, access to spectrum and a shiny new network – albeit one that it will be building – to sell into the public safety community.
Sounds great, right? Well, there’s always risk
Unfortunately, the reality is not that simple.
While AT&T has been contracted to build the FirstNet network, each state has the discretion to either opt-in or opt-out of the plan.
States that opt-out will need to provide alternate plans for building their first responder network, but those plans could cut AT&T from the picture.
Some states, in turn, might commit to opting-in only if AT&T builds the network to their specific demands, but that could, ultimately, raise network deployment and operations costs.
Perhaps most worrying, as noted by GlobalData research, is that AT&T is not alone in selling communications services to public safety, and supporting FirstNet does not change that.
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Verizon and Sprint, for example, have been successful selling into public safety, building private networks for state and local government agencies, offering push-to-talk services and leveraging their existing, public networks.
AT&T’s association with FirstNet and the network it is building to support public safety needs will, doubtless, help its sales efforts but they won’t supply a captive market.
Will states choose to opt-out of FirstNet? Will they put demands on AT&T that increase its FirstNet-related costs? Will other carriers in the US re-double their efforts to compete for public safety business?
Each unanswered question highlights that winning the FirstNet contract is just the first step in a long project for AT&T.