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New Hampshire Is First State to Opt Out of FirstNet

Dec. 07–More than 30 states and territories have already opted in to FirstNet, the dedicated nationwide network for public safety and first responders — but on Thursday, Dec. 7, New Hampshire Gov. Chris Sununu announced his state will be the first to officially opt out and pursue an alternate plan.

Like other key states including California, Colorado, Florida and New York, New Hampshirehas devoted considerable time to the question of whether or not to join the FirstNet coalition.

The state went so far as to issue an RFP to explore the issue in 2016, and awarded a no-cost, no-obligation contract to telecommunications company Rivada Networks LLC later that year — indicating that if the state chose to opt out, Rivada would be its contractor.

Following a unanimous opt-out recommendation from New Hampshire’s Statewide Interoperability Executive Committee, and a financial and regulatory due diligence report from its FirstNet Opt-Out Review Committee, Sununu made his decision.

In an announcement, Sununu said the committee determined that from a technical perspective, opting out was unquestionably the best course of action for the state to take.

“After reviewing the report from the FirstNet Opt-Out Review Committee, it is clear that while an opt-out decision comes with regulatory and financial risks, those risks can be mitigated through the safeguards and contractual provisions that the committee has recommended,” Sununu said in the statement, praising the Opt-Out Review Committee for its work on the due diligence evaluation.

New Hampshire will work with Rivada on a high-speed, wireless, broadband network for first responders, the governor said, praising the company’s plan, which he said includes “unparalleled public safety infrastructure investments” that will lead to “unmatched and near universal coverage.”

Its advantages will include free service for first responders, increased physical assets Rivada has committed to providing as well as the ability to monetize excess spectrum and use those benefits for investment back in the network, John Formella, Gov. Sununu’s legal counsel, said in an interview.

New Hampshire and Rivada will begin further negotiations later this year and will likely reach a final plan and sign a contract during the first quarter of 2018, Formella said.

Colorado is another potential Rivada client, should Gov. John Hickenlooper decide his state will join New Hampshire in opting out.

On Nov. 17, the Colorado Governor’s Office of Information Technology (OIT) made a conditional award to Rivada Networks and Australian financial services provider Macquarie Group — conditional on the FirstNet Colorado Governing Body ultimately making the recommendation to opt out and reaching a contractual agreement based on the two companies’ joint proposal of a FirstNet alternative for the state.

States have had roughly 90 days to reach decisions on whether or not to join FirstNet and their deadline, Dec. 28, is looming.

Coverage, local control and the potential for penalties should states fail to opt out and later have to join the network, have been issues for New Hampshire and other states. But Sununu struck an optimistic tone in his remarks, particularly on the issue of state oversight.

“If we successfully navigate the opt-out path, New Hampshire will retain a level of control that it would not have enjoyed in an opt-in scenario,” Sununu said, adding that he was “pleased” the state has the chance to pursue a plan he said “will provide the maximum benefit to our public safety community and all of our citizens.”

Formella said opting out does carry risks.

The state has 240 days from Dec. 28 to sign a contract with Rivada, submit plans and have them approved by the Federal Communications Commission (FCC) and the National Telecommunications and Information Adminstration (NTIA).

The state, the legal counsel said, would hope to achieve build-out of the network within three years of getting that final approval.

If New Hampshire is unable to finalize its plans and submit them during those 240 days, it would revert to opting in to FirstNet, and not be penalized.

But should the state’s opt out be denied, it could face potential penalties in the form of termination fees ranging from $10 million to $608 million.

“But what FirstNet has assured us is that the $608 million is just a worst case scenario,” Formella said, characterizing it as a number reflecting FirstNet’s costs if it should have to later build a network for New Hampshire “from scratch” and operate it for 25 years “without any revenue.”

“Even FirstNet has said it is extremely unlikely that any penalties would come close to approaching that amount,” Formella added.

In an interview late last month, New Hampshire’s Statewide Interoperability Coordinator John Stevens, the state’s single point of contact for FirstNet, said both options — opting in or out — presented positive opportunities, but the possibilities with Rivada are greater.

“We are a firm believer in FirstNet. We want it to be successful here but the state of New Hampshire has done its due diligence here. We want to assess what is the best path,” Stevens said.

“We feel that there will be a robust network here with the alternate plan and we feel that there would be an increase of connectivity with the FirstNet/AT&T plan, but not to the extent that we will be able to produce in the alternate plan,” he added.

The state’s geography and settled areas present some unique challenges and opportunities, Stevens said, pointing out that the state’s southern part is “really considered metropolitan Boston”; while elsewhere, the eighth of 13 original colonies has significant rural territory including the highest peak east of the Mississippi.

Concerns about FirstNet being able to adequately cover remote areas and serve the entire nation remain, Stevens said, noting that while the Federal Communications Commissionraised $7 billion to fund the network in a spectrum auction more than two years ago, the U.S. Government Accountability Office estimated in April 2015 that actual construction and operation costs could run from $12 billion to $47 billion during its first 10 years.

“The option that FirstNet and AT&T present is that there would be an opportunity to enhance the network that is currently already in states. With the alternate plan that we have created here in New Hampshire, the construction of that infrastructure would also be at no cost to the state,” Stevens said.

In a follow-up conversation, Stevens said he believes the terms of the final agreement “could be very favorable to New Hampshire,” and the financial risk of failure during the eventual contract’s 25-year term will be offset by performance assurity bonds.

In a statement, Chris Sambar, senior vice president at AT&T, underscored that to date, 35 states and territories have opted in, “reflecting a belief across the nation that it is the best option for the public safety community and the residents they serve.”

“We remain hopeful New Hampshire will continue to assess the substantial risks associated with an opt-out proposal of an unproven vendor,” Sambar said. FirstNet intends to complete its core network in March 2018 and be available across 56 states and territories, with a full build-out of network infrastructure around 2020.

READ HERE: New Hampshire Is First State to Opt Out of FirstNet

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