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Allegations Of Dysfunction Continue To Plague FirstNet, Our $47 Billion (And Growing) National Emergency Network

from the history-repeats-itself-history-repeats-itself dept

Thu, Aug 18th 2016 10:47am — Karl Bode

When first responder communications networks failed after 9/11, the government decided to build a nationwide wireless emergency communications network that would actually work. It took a decade of general histrionics and dysfunction by Congress, but in 2012 the Middle Class Tax Relief and Job Creation Act formally created the First Responder Network Authority (FirstNet). FirstNet is an entirely new federal agency tasked with coordinating the build of a 700 MHz LTE-based coast-to-coast emergency broadband network.

But since its creation the effort (tell us if you've heard this one before) has been plagued with dysfunction, allegations of incumbent carrier cronyism, and stories of people getting paid a significant sum of money despite not actually producing anything of note. Fifteen years after 9/11 and four years after FirstNet was formally created, the program is showing only modest signs of progress. According to a new report in The Atlantic, completion projections for the project are now reaching $47 billion, without much of anything to show for it so far:

"It took FirstNet two years just to recruit a skeleton staff, only to be hit by an inspector general’s report that found potential conflicts of interest and problems with the awarding of initial consulting contracts. It then took another two years to issue a request for proposal (RFP) asking contractors to bid on the work to build and operate the system."

That RFP finally emerged in January, with the two most likely contenders being AT&T and Verizon, both already firmly entrenched in our domestic intelligence gathering efforts:

"The FirstNet RFP, which finally emerged in January, seeks one company to operate the nationwide system. (Verizon, AT&T, and one or more firms that would gather dozens of regional partners into a consortium are the likely players.) The bidders have to offer to pay FirstNet at least $5.6 billion spread over 25 years in return for the bandwidth that FirstNet would make available to them.

The winner (presumably, whichever company bids the most above $5.6 billion, while also demonstrating it can do the job) can then sell the FirstNet network to police and fire departments, hospitals, and other first responders, one by one."

If you've been playing along at home, you'll recall that both AT&T and Verizon have a long, proud history of taking billions in subsidies and tax breaks for next-generation networks repeatedly left half completed. AT&T, as we've well documented, has a prodigious history of fraud, whether it's ripping off low-income families, the hearing impaired, various school districts or the company's own customers. While the nation's top two wireless carriers make sense as the best positioned to win the contract, they're also the most likely to milk the program for every extra penny it's worth while doing the bare minimum required.

Not too surprisingly, the Atlantic article has reportedly upset those working on FirstNet, even though it's far from the first report of this kind. The above-cited report by the Office of Inspector General of the Department of Commerce initially found numerous conflicts of interest on the FirstNet board, with many board members playing fast and loose with conflict reporting rules. It's worth noting that many of these original board members (like FirstNet GM and former Verizon exec Bill D'Agostino) have already moved on, but these problems set the stage for the kind of dysfunction we've seen time and time again in telecom.

Estimates suggest the contract will be worth around $100 billion to the company that wins it, with the winner grabbing not only the lion's share of fees paid by state customers, but the right to sell off excess capacity to private companies and consumers. Winners are expected to be announced in November. And while the project may be well-intentioned and even necessary, it's painfully unclear if the U.S. government is actually capable of completing it without giving a master class in telecom waste, fraud and abuse. History, quite simply, just isn't on the project's side.

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Filed Under: corruption, emergency, first responders, firstnet, subsidies
Companies: at&t, verizon

21 Comments

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That One Guy (profile), 18 Aug 2016 @ 11:04am

And why exactly is what it supposed to be an emergency service being treated as though it should be profitable? At most whatever company gets the job should be allowed a minimum amount of profit from it, with costs set beforehand to be as close to break-even as possible, and the proceeds from it other than the company's small cut being put towards maintenance and upkeep of the system.

Emergency response should not be treated as a luxury, a profitable source of income for anyone, it should be treated as a necessity, something put in place because it needs to be, not because it makes someone money.
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Restin (profile), 18 Aug 2016 @ 11:26am

ARMER
Color me confused but don't we already have an emergency system in 55 regions across the country in the 800MHz range? In Minnesota we call it the ARMER system (Region 22 of the National Public Safety Planning Advisory Committee (NPSPAC)) and is made up of just under 300 towers across the state.

I guess I'm not surprised our government would throw billions at a different/duplicative system.
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Anonymous Coward, 18 Aug 2016 @ 11:28am

This is our not-to-distant future
Once the regressive left gets it's way and we have a very large, powerful central government, you will see this kind of waste and dysfunction all the time. We have seen this government waste time, money and effort for many decades now, yet people still think throwing more money at them is the answer.
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TheResidentSkeptic (profile), 18 Aug 2016 @ 11:44am

Seems appropriate
"100" Billion for a project that will most likely roll out on the centennial anniversary of 9/11...
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Quiet Lurcker, 18 Aug 2016 @ 11:44am

Re:
Why should it make a profit?

Heck, why should it even be necessary to sell the thing in the first place?

Compare "sell. Verb. persuade someone of the merits of." (This definition found here.
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DB (profile), 18 Aug 2016 @ 11:49am

We already have emergency communication bands, with long-established networks.

The problem is that they don't interoperate.

The 'solution' is create a new, incompatible and more expensive network. In reality, a new empire with a direct funding path from congress. It doesn't need to be cost-effective, or even work, because no one relies on it.

A far better solution would have been to spend a few hundred million on industry standards, and have the FCC only allow standards-conforming communication systems on the reserved bands.

The absurdity of having private companies buy the spectrum and then having a monopoly to sell it back to the government boggles the mind. The more they spend, the more the justification for high prices. Why only $7.5B? Why not $30B, charge 4x as much, and make 4x the profit? It's basically a poker game where the player with the most money wins everything.
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Dr Myers, 18 Aug 2016 @ 12:27pm

Confusion!
There seems to be some confusion as to whether or not the use of the D-Block spectrum for revenue versus not. The fact is the network, by law, has to be self-sustaining and self-funded. You cannot have a self-sustaining and self-funded network without dipping into the revenue capabilities of the solution. The fact is, we are creating an infrastructure not a broadband network. The broadband network just happens to be the primary business of that infrastructure. The difference being is that the existing carrier networks are designed for consumer products to generate revenue for more profit to shareholders. But, that means that Public Safety is not priority in any considerations of how the network needs to be built and run. What the Public Safety Broadband Network is suppose to do is use the same type of commercially available broadband network but design it and run it with Public Safety as the priority instead of the consumer -- ion short turning the commercial model upside down. Plus, prioritizing Public Safety still allows for the use of commercial services on the same network that in the end is still modeled to generate revenue, only this time Public Safety (the State and FirstNet) get to be a partial owner thus generate revenue. The law states that FirstNet has to reinvest their share of any revenue; it does not state that a State has to reinvest.

Revenue is good. The revenue generated from the PSBN can be injected into State economies, foster more local employment and relieve taxpayers of having to fund it -- that is why the term "Public Private Partnership" is written into the law. Through the P3 a State can bring in investors to share in the revenue through an investment in the State's network -- all State solutions then design up to the nationwide solution of interoperability for FirstNet (one network for First and Secondary Responders.

But I'm just some guy and a blog.....
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Whatever (profile), 18 Aug 2016 @ 12:27pm

A couple of things: First, a congrats to Karl for apparently buying out Techdirt, as the site for the moment is almost exclusively your posts on pages 1.

As for the story, well...

First and foremost, if I understand this correctly, the network is going to be built by industry not using government money, and they will in face be paying the government for the privilege. So the estimated cost, in many senses, is not a direct expense.

Second, one of the things you have to remember about a system like this is the concept that the coverage is nationwide without gaps. An emergency happens, and fire and rescue from various jurisdictions can work together on the ground with a common communication system. That's pretty powerful concept.

Anyway, I end up a little confused, the price is going up but it's private industry paying, and that 47 billion will net them more than 100 billion. Seems like a fair return - and even if they costs akmost double again (say 80 billion) it would still be a good deal for them overall.

Trying to figure out where the outrage is aimed, exactly.
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Padpaw (profile), 18 Aug 2016 @ 1:04pm

why build what is supposed to protect the country when you can steal the money and put millions of other peoples lives at risk. It's not like you will be held accountable for it. Most likely anyone that whistleblows on you will be charged, harassed and probably jailed for exposing you.
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Kaden (profile), 18 Aug 2016 @ 1:09pm

Re: This is our not-to-distant future
Good one. Phil Hartman's 'absurdism as reality' done with a kinda Steve Wright delivery.

Can you do Emo Phillips?
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mb (profile), 18 Aug 2016 @ 2:36pm

Re: Confusion!
What you are talking about sounds a lot like trickle-down economics. While the theory behind this is good. The reality is, that the private corporations do NOT reinvest profits, and in cases of public funding, generally don't even complete the job.

The previous suggestion of creating a standard that ALL emergency networks MUST use, and then allowing for regional deployment of those services by the users of said service (or local/state agencies) is much more likely to meet with actual success.
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art guerrilla (profile), 18 Aug 2016 @ 3:07pm

Re:
exactly !
as if the purpose of these gummint actions is to facilitate the greatest good for the greatest number, versus providing a means for the psychopathic 1% to con us out of our monies...
duh...
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EM, 18 Aug 2016 @ 5:36pm

Logic quibble
"According to a new report in The Atlantic, completion projections for the project are now reaching $47 billion, without much of anything to show for it so far"

I'm not saying FirstNet is definitely well-run, but the thing about *projected* spending is that it hasn't been spent yet, so it would make sense if you didn't "have anything to show for it" yet. Otherwise, I could be upset that I *expect* to spend $200k to buy a house someday but yet I'm still living in an apartment today.

If you used numbers about money spent to date, that would form a better basis for arguing that we haven't gotten our money's worth, although the high up-front costs for telecom network deployment would maybe make that a bit complicated too.
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Coyne Tibbets (profile), 18 Aug 2016 @ 8:05pm

$100 billion? Hee, hee, hee, haw, haw, haw...
Let me get this straight: we've spent $47 billion for nothing so far? $100 billion it's supposed to cost?

No, not buying. You're looking at at least a $1 trillion boondoggle here, for a project I'm betting never delivers an usable result. That trillion will be the fed share, and we're already 5% of the way there.

And that's before the winner soaks all the local police for $hundreds$of$billions$ more for components of the system that will never work.

I knew this was a government giveaway, but even I never dreamed...
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Anonymous Coward, 18 Aug 2016 @ 8:07pm

Re:
You jelly?
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OldMugwump (profile), 18 Aug 2016 @ 8:12pm

20th century thinking
The whole idea is idiotic.

It's 20th century thinking - the government needs it's own special network that's going to keep working when the public Internet goes down.

There are only 2 conceivable scenarios when such a thing would even be useful:

1 - Some enemy attacks and brings down the entire Internet in the US, as the Russians tried to do to Estonia in 2007.

2 - Somebody in the government thinks they will "turn off" the public Internet in the event of some emergency - terrorism, civil war, rebellion, etc.

Re #1, even Russia couldn't do it to tiny Estonia. (Not that they didn't cause trouble, but the Internet didn't ultimately go down.)

And if some enemy did succeed, then they've already won the war - without the Internet the US is a dead duck. No commerce, no hospitals, no nothing - everything is dependent on a working network. Without it there is no country to defend.

Re #2, this is paranoid fantasy. Even if the US government tried to "turn off" the public Internet, even if they had legal authority to do it, even if the NSA hacked into routers and tried to break them - they couldn't.

Because of #1. Because virtually all of the economy is dependent on the network working, political pressure wouldn't let them turn it off. Too many powerful people would lose money. And even if they tried it anyway, it wouldn't work. Network techs and service providers would be under so much pressure from their important customers - businesses losing money! - that they'd block the NSA and fix it. Tech aware customers would route around the blockages. They'd have no choice. Things would be fixed within hours, whether the government likes it, or allows it, or not. They can't shoot every nerd in the country.

So the whole thing is just...stupid 20th century pre-Internet thinking.

The government doesn't need it's own special network. Make the one we all use robust. And use that one. Without it we're all dead ducks anyway, so fix it properly.
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Whatever (profile), 18 Aug 2016 @ 11:30pm

Re: 20th century thinking
Just to clarify: It's a radio and communication network that also handles data (like in car terminals). It's not an internet replacement or a secret web.
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Ninja (profile), 19 Aug 2016 @ 11:02am

Re:
Trying to figure out where the outrage is aimed, exactly.

We'll see you in your next incarnation to have a discussion on it. By then maybe you'll actually have learned reading comprehension.
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OldMugwump (profile), 20 Aug 2016 @ 8:26am

Re: Re: 20th century thinking
Ya, we have that already. Look at your phone.
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Whatever (profile), 20 Aug 2016 @ 7:36pm

Re: Re: Re: 20th century thinking
Umm, no, it's not a phone network either. Think walkie talkies, in car radios, base stations... first responders don't have time to speed dial each other every time they want to say something.
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OldMugwump (profile), 20 Aug 2016 @ 9:16pm

Re: Re: Re: Re: 20th century thinking
Yes. I am not a child. I said look at "your phone", not at "the phone network".

Indeed, the telephone calling functionality of modern phones (E.164 et al, harking back to Alex Bell) is already obsolete, and persists only due to momentum and (more important) the ability of service provides to charge by the minute for usage. VoIP telephone ala Skype, Google Hangouts, SIP, etc. are already vastly more advanced technology.

My point being that modern smartphones have all the functionality such a system needs - always-on Internet access, with strong encryption and endless possibilities for prioritization and customized applications.

That wasn't true in 2001 when this monstrosity was invented (I was on several of the relevant standards committees at the time).

But it is true now. If there ever was a reasonable justification for this project (I didn't think so at the time), there certainly isn't now.
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