COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES
HOUSE VETERANS AFFAIRS & EMERGENCY PREPAREDNESS COMMITTEE
joint with the
SENATE VETERANS AFFAIRS & EMERGENCY PREPAREDNESS COMMITTEE and SENATE COMMUNICATIONS & TECHNOLOGY COMMITTEE
STATE CAPITOL HARRISBURG, PA
NORTH OFFICE BUILDING HEARING ROOM 1
OCTOBER 19, 2017 9:03 A.M.
PRESENTATION ON FIRSTNET
HOUSE COMMITTEE MEMBERS PRESENT: HONORABLE STEPHEN BARRAR, MAJORITY CHAIRMAN HONORABLE GARY W. DAY HONORABLE MARK M. GILLEN HONORABLE BARRY J. JOZWIAK HONORABLE ZACHARY A. MAKO HONORABLE JIM MARSHALL HONORABLE KATHY L. RAPP HONORABLE WILL TALLMAN HONORABLE BRYAN BARBIN HONORABLE DOM COSTA HONORABLE MARIA P. DONATUCCI HONORABLE CAROL HILL-EVANS
SENATE COMMITTEE MEMBERS PRESENT: HONORABLE RANDY VULAKOVICH, MAJORITY CHAIRMAN HONORABLE RYAN AUMENT HONORABLE SCOTT HUTCHINSON 2
1 HOUSE COMMITTEE STAFF PRESENT: RICK O'LEARY 2 MAJORITY EXECUTIVE DIRECTOR SEAN HARRIS 3 MAJORITY RESEARCH ANALYST LU ANN FAHNDRICH 4 MAJORITY ADMINISTRATIVE ASSISTANT
5 AMY BRINTON MINORITY EXECUTIVE DIRECTOR 6 HARRY BUCHER MINORITY RESEARCH ANALYST 7 IAN MAHAL MINORITY RESEARCH ANALYST 8
9 SENATE COMMITTEE STAFF PRESENT: NATE SILCOX 10 MAJORITY EXECUTIVE DIRECTOR RON JUMPER 11 MINORITY DEPUTY CHIEF COUNSEL CHARLIE O'NEILL 12 LEGISLATIVE OFFICE DIRECTOR, OFFICE OF SENATOR VULAKOVICH 13
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24 * * * * * * Summer A. Miller, Court Reporter 25 [email protected] 3
1 I N D E X
2 TESTIFIERS
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4 NAME PAGE
5 MAJOR DIANE STACKHOUSE PENNSYLVANIA STATE POLICE...... 8 6 JEFFREY BOYLE DEPUTY DIRECTOR FOR 911, 7 PA EMERGENCY MANAGEMENT AGENCY...... 14 JOHN MacMILLAN 8 DEPUTY SECRETARY FOR INFORMATION TECHNOLOGY, OFFICE OF ADMINISTRATION...... 19 9 DAVE BUCHANAN DIRECTOR OF CONSULTATION, FIRSTNET...... 38 10 JIM BUGEL VICE PRESIDENT, AT&T...... 44 11 DAVID KERR EXTERNAL AFFAIRS, AT&T...... 52 12 DECLAN GANLEY CEO, RIVADA...... 85 13 CHRIS MOORE HEAD OF PUBLIC SAFETY, RIVADA...... 105 14 EDMOND VEA DIRECTOR OF INTEROPERABILITY, RIVADA...... 113 15 TODD ROWLEY SENIOR VICE PRESIDENT OF BUSINESS, RIVADA..114 16 JEFFREY BLANK CHIEF TECHNOLOGY OFFICER, CONXX...... 150 17 BRIAN HENDRICKS HEAD OF POLICY & GOVERNMENT RELATIONS, 18 NOKIA...... 154 FRANK BUZYDLOWSKI 19 DIRECTOR OF GOVERNMENT RELATIONS, VERIZON..159 DON BRITTINGHAM 20 VICE PRESIDENT OF PUBLIC SAFETY POLICY, VERIZON...... 160 21
22 SUBMITTED WRITTEN TESTIMONY
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24 (See submitted written testimony and handouts online.)
25 4
1 P R O C E E D I N G S
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3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 Speakers that will be giving testimony,
5 stick to your three hours. I will stick to my five
6 hours and 23 minutes of questions.
7 All right, Representative Barrar.
8 HOUSE MAJORITY CHAIRMAN BARRAR: Thank
9 you.
10 I want to thank the members for staying
11 over for Thursday and being at the hearing today. I am
12 elated to see the turnout that we've gotten in the
13 audience there and the members, too. It's a very
14 interesting topic and it is going to be a very long
15 hearing, so I will be making comments throughout the
16 hearing with testifiers.
17 And I'm going to pass it on to the next
18 speaker. I guess Senator Aument.
19 SENATOR AUMENT: Thank you, Mr. Chairman.
20 In the interest of the time, I'll save
21 comments for questions throughout the morning, but thank
22 you to both chairmen for your leadership and for
23 convening this hearing and extending the invitation for
24 the Senate Communications and Technology Committee to
25 take part. I look forward to the discussion this 5
1 morning.
2 Thank you.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 Thank you, Senator.
5 We also will get a few remarks -- I think
6 Representative Chris Sainato couldn't be here today.
7 So, Representative Donatucci, are you representing --
8 REPRESENTATIVE DONATUCCI: Yes.
9 SENATE MAJORITY CHAIRMAN VULAKOVICH:
10 Yes. Would you like to say a few words?
11 REPRESENTATIVE DONATUCCI: No, I will
12 waive off.
13 SENATE MAJORITY CHAIRMAN VULAKOVICH: You
14 will waive off? Okay. Thank you.
15 All right. So let's get started.
16 (Inaudible.)
17 SENATE MAJORITY CHAIRMAN VULAKOVICH:
18 Yes, maybe we should do that. We have
19 them all over the place, I guess.
20 First off, are there any Representatives
21 or Senators that are sitting out there because of no
22 place up here?
23 (No response.)
24 SENATE MAJORITY CHAIRMAN VULAKOVICH:
25 There are none. Okay. Let's start at my 6
1 far left, down here, Representative.
2 REPRESENTATIVE RAPP: Representative
3 Kathy Rapp. And I represent Warren, parts of Forest and
4 Crawford Counties.
5 And thank you all for being here today.
6 I think we'll be hearing some good testimony.
7 Thank you, Mr. Chairman.
8 SENATOR HUTCHINSON: State Senator Scott
9 Hutchinson, 21st Senatorial District, all of Clarion,
10 Venango, Forest, and Warren Counties, and a portion of
11 Butler County.
12 REPRESENTATIVE MAKO: Zach Mako, the
13 183rd, Lehigh and Northampton Counties.
14 REPRESENTATIVE BARBIN: Representative
15 Bryan Barbin. I represent Cambria and Somerset
16 Counties.
17 SENATE MAJORITY CHAIRMAN VULAKOVICH:
18 We've already introduced ourselves, so to
19 my right --
20 MR. SILCOX: Nate Silcox, executive
21 director of the Senate Veterans Affairs and Emergency
22 Preparedness Committee for Senator Vulakovich.
23 MR. O'LEARY: Rick O'Leary, executive
24 director for Chairman Barrar.
25 REPRESENTATIVE TALLMAN: Bill Tallman, 7
1 parts of Adams and Cumberland Counties.
2 REPRESENTATIVE JOZWIAK: Barry Jozwiak,
3 Berks County.
4 REPRESENTATIVE GILLEN: Representative
5 Mark Gillen, Berks, Lancaster Counties.
6 SENATE MAJORITY CHAIRMAN VULAKOVICH:
7 Over to the far right, in the corner.
8 (Inaudible.)
9 SENATE MAJORITY CHAIRMAN VULAKOVICH:
10 Are you on?
11 MR. JUMPER: Ron Jumper, Senator Costa's
12 office.
13 MR. HARRIS: Sean Harris for the House
14 Committee.
15 MS. BRINTON: Amy Brinton, executive
16 director for Chairman Sainato.
17 (Inaudible.)
18 REPRESENTATIVE COSTA: Representative Dom
19 Costa, 21st District, Allegheny County.
20 SENATE MAJORITY CHAIRMAN VULAKOVICH:
21 And a member of my staff, Charlie
22 O'Neill, he's around here some place.
23 All right, let's get started with the
24 testimony.
25 Major Stackhouse, would you like to 8
1 begin?
2 MAJOR STACKHOUSE: Good morning, Chairmen
3 Vulakovich, Costa, Barrar, Sainato, Aument, and Haywood,
4 and Vice Chairmen Mensch and Regan, as well as members
5 of the Senate and House Veterans Affairs and Emergency
6 Preparedness and Senate Communications and Technology
7 Committees.
8 I am Major Diane Stackhouse, director of
9 the Bureau of Communications and Information Services.
10 In my role, I also serve as Pennsylvania's single point
11 of contact for the FirstNet project.
12 Seated with me is State Police Captain
13 Sean Georgia, who is also a member of the PA FirstNet
14 team.
15 The Middle Class Tax Relief and Job
16 Creation Act of 2012 created the First Responder Network
17 Authority, also known as FirstNet. FirstNet is charged
18 with overseeing the construction, operation, and
19 maintenance of the country's first interoperable,
20 nationwide public safety broadband network. The
21 FirstNet network will provide mission critical high
22 speed data services such as live streaming videos,
23 pictures, texts, maps, in-building blueprints to name
24 just a few.
25 On January 13 of 2016, FirstNet released 9
1 a request for proposal to select an experienced vendor
2 in the first of its kind, private-public partnership.
3 In March 2017, FirstNet announced its private partner,
4 AT&T.
5 I'd like to underscore the importance of
6 this private-public partnership because it has the
7 ability to leverage private-sector infrastructure which
8 enables the national public safety broadband network to
9 be deployed quickly, efficiently, and cost-effectively.
10 However, the legislation that created
11 FirstNet affords each state's governor the opportunity
12 to opt in or opt out of participating in how the radio
13 access network will be deployed within a state.
14 Opt-in means FirstNet AT&T deploys,
15 operates, and maintains the RAN, and in an opt-out
16 scenario, the state takes on the responsibility.
17 As part of the PA FirstNet team's due
18 diligence, we released a FirstNet opt-out option RFP on
19 July 7th, 2017, and to seek alternative solutions to
20 FirstNet AT&T's opt-in plan. The evaluation of the
21 proposed responses remains an active procurement and I
22 cannot comment on the results of this process.
23 On September 29th, 2017, the PA FirstNet
24 team received FirstNet AT&T's final state plan, which
25 will be scrutinized by state and local stakeholders. 10
1 The PA FirstNet team will present to Governor Wolf an
2 assessment of both the opt-in and opt-out options prior
3 to the 90-day decision-making window on December 28th,
4 2017.
5 Opt-in -- so what's opt-in? If
6 Pennsylvania opts in or takes no action within 90 days
7 of receiving the state plan, FirstNet AT&T will begin
8 deployment of the RAN at no cost. By opting in, there
9 is no financial risk to the Commonwealth because it does
10 not have to build its own RAN and AT&T will be
11 responsible for operating and upgrading the network.
12 The Commonwealth is not obligated to
13 purchase FirstNet AT&T services. This low-risk option
14 will also support fast delivery of services to
15 Pennsylvania's public safety community and help create
16 an interoperable network. To date, approximately half
17 of the states have opted in with FirstNet AT&T.
18 Opt-out -- if Pennsylvania elects not to
19 participate in the FirstNet AT&T RAN deployment, it must
20 provide notice to FirstNet within 90 days of receiving
21 our final state plan. Before a state's RAN deployment
22 can begin, the FCC must approve the alternative RAN plan
23 to ensure it complies with the minimum technical
24 interoperability requirements with the FirstNet network.
25 If approved, the state must then apply to 11
1 the National Telecommunications and Information
2 Administration, or also known as NTIA, for the right to
3 enter into a spectrum manager lease agreement from
4 FirstNet. NTIA has determined Pennsylvania's Spectrum
5 Lease Agreement will cost almost a billion dollars over
6 the 25-year contract term.
7 Pennsylvania can apply to NTIA for a
8 state grant, construction grant, which is currently set
9 at almost 149 million, but that amount could be
10 increased to 185 million, depending on the amount
11 available in the Network Construction Fund.
12 FirstNet has established termination fees
13 that range from multimillions to billions of dollars if
14 a state who initially opted out later decides to opt-in.
15 Above all, the state's opt-in RAN plan must be
16 interoperable with the nationwide public safety
17 broadband network and comply with FirstNet's
18 requirements and standards for the network. Otherwise,
19 the state will default to an opt-in status.
20 Opt-out states will assume all technical,
21 operational, and financial risks and responsibilities
22 relating to building, maintaining, and upgrading their
23 own RAN for the next 25 years.
24 So what FirstNet is not. FirstNet is not
25 a replacement for public safety land RAN mobile radio 12
1 systems. First responders' lives rely on
2 mission-critical voice communications and the FirstNet
3 project was not born for the purpose of replacing these
4 systems, but to enhance the capabilities of public
5 safety entities to receive data-rich information.
6 Over the years, the Commonwealth has made
7 valuable infrastructure investments in our LMR systems
8 and 27 counties share our tower for public safety
9 communication systems. In many instances, the
10 Commonwealth's land mobile radio towers are at near or
11 maximum structural loading capacity and would not be
12 able to contribute to building a state-owned RAN in an
13 opt-out situation. Additionally, the existing OpenSky
14 radio equipment and the Commonwealth's P25 land mobile
15 radio system deployment relies on leveraging existing
16 infrastructure investments.
17 A FirstNet opt-out decision is not a
18 mechanism for Pennsylvania to realize a revenue
19 windfall. Be cautious of promises that Pennsylvania
20 will receive substantial revenue generated by FirstNet's
21 network in an opt-out situation. This is simply
22 inaccurate.
23 The law is clear. Revenue generated
24 beyond the deployment, operation, and maintenance of the
25 RAN must be reinvested into the nationwide network. No 13
1 revenue can be redistributed to the state's general fund
2 or for other purposes.
3 FirstNet and Next Gen 911 -- the PA
4 FirstNet team shares PEMA's vision of marrying these two
5 independent projects to provide seamless
6 interoperability between public safety answering points
7 and the nationwide public safety broadband network. The
8 two systems are complementary and, if properly
9 coordinated, will greatly improve public safety
10 communications by providing data exchange between the
11 public, 911 personnel, and first responders.
12 In conclusion, in 2012, Congress enacted
13 legislation that will provide modern, reliable, secure,
14 and interoperable communications for first responders
15 and public safety entities. The decision to opt-in or
16 opt-out is critical to the success of public safety for
17 the next 25 years.
18 First responders have patiently waited
19 for a dedicated system that places our needs first,
20 especially during times of national and local crisis.
21 Thoughtful consideration of the benefits, risks, and
22 liabilities to the Commonwealth will factor into the
23 opt-out decision-making process. Understanding how a
24 RAN will be deployed, operated, and maintained, as well
25 as other sustainability requirements, is important so 14
1 the Commonwealth is not exposed to unwanted risk.
2 Regardless of the Governor's opt-in or
3 opt-out decision, the nationwide public safety broadband
4 network can complement the Next Gen 911 project if
5 properly coordinated. The public, our PSAPs, and
6 Pennsylvania first responders can benefit from data-rich
7 information on a network dedicated to public safety.
8 Thank you.
9 SENATE MAJORITY CHAIRMAN VULAKOVICH:
10 Thank you, Major.
11 Captain, do you have anything to add to
12 that?
13 CAPTAIN GEORGIA: No, sir.
14 SENATE MAJORITY CHAIRMAN VULAKOVICH:
15 You do not? Okay.
16 Next we'll hear from -- we're going to
17 save questions until the three are done testifying --
18 Jeffrey Boyle, deputy director for 911, PEMA.
19 MR. BOYLE: Thank you, Mr. Chairman.
20 Mr. Chairman, members of the committees,
21 I am Jeff Boyle, deputy director for 911 at PEMA. Thank
22 you for the opportunity to discuss Next Generation 911
23 and it's integration with FirstNet.
24 The 911 is a vital part of public safety.
25 It is often the first point of contact in emergency 15
1 situations. It is the primary way for the public to
2 quickly access emergency services. Our 911 centers,
3 known as public safety answering points, or PSAPs,
4 processed over nine and a half million requests for
5 emergency services in 2016. Pennsylvania's trained and
6 dedicated 911 personnel work all hours of the day to
7 keep the public and our first responders safe.
8 But our 911 system is facing challenges
9 today. Those challenges are impacting the ability of
10 our PSAPs to service the public and our first
11 responders. Legacy 911 systems that are decades old and
12 designed for traditional wireline use and still in
13 service today. The public's communication to 911 is
14 essentially limited to a voice call with very little
15 data.
16 Consumer technology such as smartphones,
17 apps, and even text messaging have surpassed the
18 capabilities of today's 911 system. Governor Wolf and
19 the General Assembly took proactive measures to enhance
20 911 and to implement Next Generation 911 through the
21 passage of Act 12 of 2015.
22 Next Gen 911 is a necessary upgrade of
23 our legacy 911 system to an internet protocol or an
24 IP-based platform. Next Gen will service many forms of
25 communication from the traditional wireline telephone to 16
1 the most recent sensor or device. It offers a robust
2 interconnected infrastructure. This will enhance the
3 capabilities of our PSAPs to communicate with each
4 other, to share calls, and even share call volume if the
5 situation deems the need to be.
6 In addition, Next Gen 911 will allow for
7 costs and operational efficiencies through shared
8 resources at the state and local levels and will also
9 allow us to retire expensive legacy technologies. The
10 planning and transition to Next Generation 911 is an
11 extensive multiyear effort that is completely dependent
12 on the availability of funds.
13 PEMA, working with our 39-member advisory
14 board, as well as the PSAP community, has had
15 significant accomplishments under Act 12. We have
16 completed a physical inventory of every PSAP. We
17 adopted a state-wide 911 plan. We adopted a Next
18 Generation 911 GIS plan, as well as systems, standards,
19 and requirements. We're in the process of obtaining
20 statewide mapping data to assist our stakeholders with
21 developing and maintaining the mapping data needed for
22 Next Gen 911. And we just released a request for
23 information to the vendor community to obtain additional
24 information on a statewide deployment of a Next
25 Generation 911 solution. 17
1 We implemented a new grant program in
2 2016. With that grant program, we facilitated PSAP
3 consolidations, we facilitated the regionalization of
4 911 systems and technology, and we addressed many aging
5 infrastructure concerns within our PSAPs. Additionally,
6 we streamlined business processes in the 911 program.
7 We're starting to realize the benefits of those changes.
8 Just a few quick examples.
9 In 2016, 911 surcharge revenue covered
10 93 percent of our costs, compared to only 71 percent in
11 2015. In 2016, our PSAPs reported expenses increased by
12 less than one percent compared to fourteen percent in
13 2015. And also in 2016, we reduced a deficit for 911
14 operations by 72 million. That's 72 million that county
15 general funds did not have to contribute to 911 service.
16 Overall, we've put ourselves in a great
17 position to implement and sustain Next Generation 911
18 here in Pennsylvania. But in addition to Next Gen 911,
19 FirstNet is another equally important enhancement of the
20 public safety communication system. Next Gen 911 and
21 FirstNet are two separate public safety systems, but
22 they do complement each other.
23 FirstNet is going to serve first
24 responders in the field. Next Gen 911 is going to serve
25 them in the PSAPs. The success of these two systems is 18
1 going to depend on their ability to share data through a
2 standard space network-to-network interface.
3 Interoperability between the two is not optional. It
4 has to happen for the public safety community to have
5 the ability to share critical emergency information in
6 real time.
7 The one point I do want to stress today
8 is that both systems are at a point in their planning
9 and design where we can make sure these systems are
10 interoperable. We can work together to find
11 efficiencies through shared resources and we can
12 collaborate on cyber security requirements.
13 PEMA and the state police have been
14 proactively meeting as part of the Public Safety
15 Communications Council to make sure that our efforts are
16 coordinated. PEMA is dedicated to making sure these two
17 systems are well interrogated and secure. And finally,
18 PEMA does look forward to the successful integration of
19 these two very important public safety systems.
20 Thank you.
21 HOUSE MAJORITY CHAIRMAN BARRAR: We've
22 been joined by Representative Dush, if you would like to
23 join us up here on the panel. I think there is seating
24 over here if you'd like to -- okay -- if you were
25 planning to ask any questions. 19
1 Also Representative Marshall has joined
2 us. Okay. Thank you for being here.
3 Okay. Next testifier.
4 MR. MacMILLAN: Good morning, Chairmen
5 and members of the committees.
6 I am John MacMillan, deputy secretary for
7 information technology and the chief information
8 officer, or CIO, for the Commonwealth.
9 Thank you for the opportunity to appear
10 before the committee with the state police and PEMA to
11 discuss the Governor's Office of Administration's role
12 with respect to the First Responder Network Authority,
13 or FirstNet.
14 I was appointed as deputy secretary in
15 March of 2015, and personally, I have over 31 years of
16 experience in the IT industry. I've developed
17 applications in a number of states, and for almost 19
18 years, I worked for one of the world's leading IT
19 companies. I've worked with other states on property
20 management, social services, data center consolidation,
21 operations, and standardization efforts that have
22 achieved --
23 HOUSE MAJORITY CHAIRMAN BARRAR: Could
24 you pull the microphone a little closer?
25 MR. MacMILLAN: My apologies -- and 20
1 standardization that has achieved operational
2 effectiveness and saved millions of dollars.
3 One of the most important high level
4 initiatives that OA leads is the development of the
5 Enterprise IT strategic plan. And one of our goals in
6 the plan is to foster collaboration, communication, and
7 governance. Our success across the Commonwealth's
8 enterprise relies on all agencies working together. An
9 example of working together is the roles that Major
10 Stackhouse and I play as co-chairs of the Public Safety
11 Communication Council mentioned just moments ago by
12 Mr. Boyle.
13 Two of the goals for the strategic work
14 group are to interconnect and interoperate existing
15 networks to improve public safety operations and improve
16 coverage. From the PSCC's perspective, FirstNet is
17 another tool to accomplish our goals through network
18 traffic, priority, and preemption protocols. When
19 agencies create their agency-specific IT plans, they are
20 expected to align their plans to the enterprise to
21 ensure that all agencies are moving in the same
22 direction with regard to future initiatives or
23 investments.
24 It is important to have our customers,
25 the state agencies we support, at the table during the 21
1 creation of this plan so we are all working together
2 towards the same goals and using similar strategies.
3 And the team has developed a framework that enables
4 agencies to integrate their initiatives with a shared
5 set of enterprise goals and strategies.
6 With the new shared services
7 transformation project, as of July 1st, 2017, all agency
8 IT staff are now under the Office of Administration.
9 And this new model will have delivery centers which will
10 build cross agency business solutions. With the shared
11 services project, agent-specific programs, such as PSP
12 STARNet and PEMA's Next Generation 911, remain with
13 their agency. And OA's IT staff will offer technical
14 support if needed for agency operations.
15 Next Gen 911 is an example of the
16 modernization of an existing business solution that will
17 drive the need for additional network bandwidth and
18 security. Coupled with active procurements to modernize
19 Commonwealth telecommunications, we must seize the
20 opportunity to own our network architecture and drive
21 marketplace competition.
22 With respect to FirstNet, PSP is the lead
23 Commonwealth agency on the project and Major Stackhouse
24 serves as Pennsylvania's single point of contact for the
25 project. OA has collaborated with PSP and PEMA on the 22
1 FirstNet project and will continue to do so.
2 Specifically, Jim Weaver, OA's chief technology officer,
3 and two other OA staff members are engaged on the
4 matter. OA's role with FirstNet is also at a strategic
5 level, and similarly, OA participates in the Next Gen
6 911 advisory team in collaboration with PEMA.
7 Our role is to ensure that with respect
8 to technology, we are all moving in the same direction
9 with regards to interoperability, interconnection,
10 utilization, and leveraging state-owned assets. Again,
11 our success across the Commonwealth enterprise relies on
12 all agencies working together.
13 Thank you for the opportunity to appear
14 before the committee.
15 SENATE MAJORITY CHAIRMAN VULAKOVICH:
16 Thank you, John.
17 Okay, we're going to open it up to
18 questions.
19 Representative Jozwiak.
20 REPRESENTATIVE JOZWIAK: Thank you, Mr.
21 Chairman.
22 I have a couple of questions for the
23 state police.
24 First of all, I'd like to let the
25 audience know that the state police in our Commonwealth, 23
1 I'm very proud of them. They have never failed on any
2 project that they've been given or any duty that they've
3 been given. They've always been successful.
4 I'm a former member of that department
5 and I'm proud of that, and I'm proud of you guys.
6 My question is -- I have two questions,
7 actually. One, the structural loading of existing
8 towers, do you have any concerns about that? Because
9 you mentioned that these towers are there and I know
10 what they look like. So could you explain that?
11 MAJOR STACKHOUSE: (Inaudible.)
12 SENATE MAJORITY CHAIRMAN VULAKOVICH:
13 Major, could you put your microphone on?
14 MAJOR STACKHOUSE: Sorry.
15 The tower foundations, I said that the
16 tower anchor bolts are corroded. We have tower
17 foundations that are cracked and the tower pedestals are
18 crumbling. And the third thing that causes me concern
19 is our previous vendor reneged on their promise to do
20 warranty work. They did 12 regrounding sites and then
21 stopped in December of 2016, and I still have 45 radio
22 sites that need regrounded. If we would get struck by
23 lightning, equipment could be damaged or destroyed.
24 And again, there's going to have to be a
25 process that we go through every time when someone 24
1 requests to put equipment on our tower. Many times,
2 these towers need modifications because of these
3 deficiencies.
4 REPRESENTATIVE JOZWIAK: Also concerning
5 the towers, I know some of the towers, as we imagine,
6 they're steel structures. There's other towers,
7 telephone pole-type towers.
8 MAJOR STACKHOUSE: Well, we do have more
9 than 400 wooden pole cell sites in the Commonwealth.
10 That system only operates under the OpenSky system.
11 Those are not considered public safety grade, and when
12 we decommission OpenSky, those telephone poles will no
13 longer be used in a P25 compliance system.
14 REPRESENTATIVE JOZWIAK: Okay. A second
15 question I have is, you mentioned that the land mobile
16 radios are maxed out. And I was wondering, can the
17 FirstNet system take care of this or not?
18 MAJOR STACKHOUSE: Well, land mobile
19 radio system, I'm very proud of the fact that we're
20 transitioning to a new open radio technology in -- I
21 believe the one Representative or Senator down at the
22 end is from Warren County, things are going extremely
23 well there. And by the beginning of November, we are
24 going to be operational with troopers in Venango,
25 Crawford, and Erie. 25
1 FirstNet, as it relates, or land mobile
2 radio relates to FirstNet, as I stated in my testimony,
3 FirstNet AT&T is not a solution to our land mobile radio
4 system. And I have two reasons for that.
5 Commercial carrier service is not always
6 available and it's not always reliable. First
7 responders deserve that when it comes to mission
8 critical voice. So with knowing that and kind of
9 transitioning from availability and reliability,
10 commercial carrier sites aren't hardened like land
11 mobile radio sites, like your big -- you mentioned the
12 big towers. At our tower sites, we have DC battery
13 plans, we have generators that can run for days.
14 And think about the earthquakes,
15 hurricanes, ice storms, and other natural disasters that
16 have hit our country. Take for example, Hurricane
17 Harvey that hit Texas. There was one county in Texas
18 that had their cell sites go down. There were like
19 close to 95 percent of their cell sites that went down.
20 In another Texas county, they had about 80 percent of
21 their cell sites go down, and this wasn't just for one
22 day. It was for several days. If we were relying on
23 mission critical voice on a commercial carrier network,
24 it would be disastrous for first responders.
25 So for right now, I think the FirstNet 26
1 vision, it can be extremely successful, but we should
2 not ever think about abandoning our land mobile radio
3 system.
4 REPRESENTATIVE JOZWIAK: Thank you.
5 Thank you for what you do, and I'm glad you're here
6 today.
7 MAJOR STACKHOUSE: Yes, sir.
8 REPRESENTATIVE JOZWIAK: Thank you, Mr.
9 Chairman.
10 HOUSE MAJORITY CHAIRMAN BARRAR: We've
11 also been joined by Representative Hill-Evans down on
12 the end here from Philadelphia, right?
13 REPRESENTATIVE HILL-EVANS: York.
14 HOUSE MAJORITY CHAIRMAN BARRAR: From
15 York, okay. Sorry.
16 Questions from any of the members down
17 here?
18 Representative.
19 REPRESENTATIVE DONATUCCI: Thank you, Mr.
20 Chairman.
21 Mr. Boyle, this question is for you.
22 You had mentioned that the success of the
23 NG911 and FirstNet is dependent upon the ability for the
24 two systems to share data. How would this be affected
25 if we pursued the opt-out or what would be the 27
1 difference between opting in or opting out?
2 MR. BOYLE: Thank you for the question.
3 It would really depend on the design.
4 Essentially, what has to happen, the
5 public sends the information to 911, 911 has to get that
6 information to the first responders through FirstNet,
7 whether it's an opt-in or an opt-out option. There just
8 has to be that capability there between the two networks
9 to share data.
10 HOUSE MAJORITY CHAIRMAN BARRAR:
11 (Inaudible.)
12 REPRESENTATIVE DUSH: Yes. Thank you.
13 Major, you had mentioned that the
14 previous vendor reneged on the warranty work. I'm
15 curious, has the AG's Office pursued anything as far as
16 recoupment from, or reimbursement from that company?
17 MAJOR STACKHOUSE: General counsel is
18 working that issue. I just met with general counsel
19 this week, and we are pursuing our options regarding
20 their failure to reground our sites. They're deficient
21 and they need done.
22 REPRESENTATIVE DUSH: One additional
23 question. The preventive maintenance on that, you
24 mentioned the corrosion -- excuse me -- the corrosion on
25 the foundational bolts for the towers. Do you have a 28
1 routine PM cycle that, or somebody to take care of that
2 to prevent it?
3 MAJOR STACKHOUSE: Yes. That same vendor
4 had the maintenance contract for preventive maintenance,
5 as well as demand maintenance, meaning fixing of
6 equipment if it broke. Years of substandard or poor
7 maintenance have led to some of the deterioration that
8 we're seeing now.
9 REPRESENTATIVE DUSH: Thank you. I hope
10 that's part of what legal counsel is looking at
11 pursuing, the cost of repairing all that that went
12 unattended.
13 MAJOR STACKHOUSE: Yes, sir.
14 REPRESENTATIVE DUSH: Thank you.
15 HOUSE MAJORITY CHAIRMAN BARRAR:
16 Representative Tallman.
17 REPRESENTATIVE TALLMAN: Thank you, Mr.
18 Chairman.
19 Major, welcome here. Your predecessor,
20 Major Martin, and I had -- I don't know why I didn't get
21 tickets from the state police. And I just got your
22 contact information, as I let you know, prior to us
23 starting, and so we will be having frank discussions
24 also.
25 MAJOR STACKHOUSE: Absolutely, sir. 29
1 REPRESENTATIVE TALLMAN: So it's probably
2 maybe more Jeffrey's question.
3 So Adams, Cumberland, Franklin, York
4 Counties are already interoperable. We just put in a
5 switch two years ago, which cost the county big money.
6 So Franklin County can dispatch Adams and we can
7 dispatch Franklin, and we already have it in place for
8 York. So we have interoperability and we have gone to
9 800 megahertz, which is -- I don't know -- I don't know
10 why we got kicked off by VHF, but that's a different
11 story. That's federal.
12 But what improvements -- I mean, we
13 already work well. Why would you force us to do
14 something that's working well?
15 MR. BOYLE: Number one, it's not a
16 mandate, but I think the interoperability between those
17 two counties is on the radio side. That's more on the
18 dispatch side.
19 With Next Generation 911 it's an update
20 of the infrastructure we currently have in place. We
21 have very old selective routers in place. A lot of our
22 systems are satellite because of that. Next Generation
23 911 is going to replace that infrastructure and allow
24 the sharing of calls, enhanced redundancy, enhanced
25 backup capability of these PSAPs. Many are siloed 30
1 today, so if one of those selective routers fails, it
2 could be disastrous for that county.
3 REPRESENTATIVE TALLMAN: You're saying
4 that the $25 million that Adams County just finished
5 spending two years ago is up in smoke?
6 MR. BOYLE: No. That's strictly the
7 radio piece. It's probably a question for both of us.
8 The radio piece does not tie into the
9 Next Generation 911 solution. The Next Gen solution is
10 going to get the calls to the PSAPs. It's essentially
11 replacing the telephone infrastructure that takes the
12 call from the public and gets it to a 911 center.
13 REPRESENTATIVE TALLMAN: So if Adams
14 County, which I happen to personally know -- we can get
15 calls any which way, including internet. So what
16 improvements is this going to bring?
17 MR. BOYLE: Again, it's going to enhance
18 the ability, the backup capability, of Adams County.
19 Adams County --
20 REPRESENTATIVE TALLMAN: We have plenty
21 of backup.
22 MR. BOYLE: Sure. But it's essentially a
23 silo system, very old technology that needs to be
24 replaced. The selective routers, they're decades old.
25 We can replace that with new IP infrastructure that is 31
1 going to enhance the capabilities of these PSAPs to back
2 each other up and share calls.
3 Adams County's capability today is very
4 limited to share these calls amongst their peers.
5 REPRESENTATIVE TALLMAN: It works well,
6 as well as being a first responder and having worked at
7 Adams County 911.
8 MR. BOYLE: It is, but it's very tough to
9 find people to maintain these systems today. That's a
10 job for the providers to do that.
11 REPRESENTATIVE TALLMAN: So you're
12 saying -- that was the excuse they used to spend
13 $25 million, because they couldn't get parts anymore.
14 So now you're saying the 25 million we wasted, we're
15 going to have to spend additional?
16 MR. BOYLE: No. I'm sure the 25 million
17 was a necessary upgrade to the radio system. That's
18 separate from the Next Gen system.
19 REPRESENTATIVE TALLMAN: Thank you.
20 HOUSE MAJORITY CHAIRMAN BARRAR:
21 (Inaudible.)
22 SENATE MAJORITY CHAIRMAN VULAKOVICH:
23 Major, in your testimony, you talked
24 about an evaluation of proposed responses remains an
25 active procurement. You can't comment on the results of 32
1 this process. I wouldn't think you would comment before
2 you go through the process.
3 Do you have any idea when you'll have
4 gone through the process of evaluating, if you go
5 looking at the opt-out applications?
6 MAJOR STACKHOUSE: Probably around
7 December. We should have the whole process, at that
8 point, finalized.
9 SENATE MAJORITY CHAIRMAN VULAKOVICH:
10 Okay. The next question I have is once
11 you have the analysis done, and the Governor -- it will
12 be the Governor's decision whether to opt-in or opt-out.
13 You'll make a recommendation to him on whether to opt-in
14 or opt-out?
15 MAJOR STACKHOUSE: I will provide -- as
16 part of my responsibilities, I will provide the Governor
17 with the advantages, disadvantages, risks, and
18 liabilities on both options to include even if there are
19 responsibilities or added resources that will be
20 required from the Commonwealth, and all of that
21 information will be assessed and provided to the
22 Governor to make an informed decision.
23 SENATE MAJORITY CHAIRMAN VULAKOVICH:
24 Okay. And, Mr. MacMillan, you're part of
25 that process, right? So you'll be working hand in hand 33
1 with the Major on advising the Governor?
2 MR. MacMILLAN: Yes, Senator. The Major
3 and I work very well together.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 I think it's really important because
6 it's a big decision the Governor is going to have to
7 make here, and very involved. So he needs two people
8 that are kind of experts in this, dealing with it on an
9 everyday basis, to help him out. It's one of the
10 reasons for this hearing today, to bring everybody out
11 here so the information can get out there, people
12 talking about it. And the Governor, hopefully, he will,
13 you know, he'll look at this hearing and get some
14 information from it.
15 I have a question about -- you mentioned
16 in here the Pennsylvania Spectrum Lease Agreement and
17 how much it might cost over a 25-year period, roughly
18 close to a billion dollars, I think you said?
19 MAJOR STACKHOUSE: Yes, sir.
20 SENATE MAJORITY CHAIRMAN VULAKOVICH:
21 Is that billion dollars if we do the
22 opt-in with AT&T?
23 MAJOR STACKHOUSE: If we do an opt-out,
24 then there is lease agreements, termination fees in the
25 event that we decide the opt-out wasn't what we wanted. 34
1 And there's also some other fees, like user adoption
2 disincentive fees, that I don't have in my testimony.
3 But those all surround the opt-out option.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 So in the opt-in option, basically, if we
6 determine that they're going to provide the best
7 services at the best cost, and we go opt-in with AT&T,
8 from the readings that I see here and from, you know,
9 just talking to people, basically, we have very little
10 risk, as far as the state goes, as far as the fiscal
11 risks and operational risks of a system if we go
12 opt-out. Is opt-in a better way to go?
13 MAJOR STACKHOUSE: Well, at first
14 blush --
15 SENATE MAJORITY CHAIRMAN VULAKOVICH:
16 Yes.
17 MAJOR STACKHOUSE: -- opt-in suggests
18 that there is less risk. However, until I fully explore
19 the proposals for opt-out, I'm not counting anybody out.
20 Someone there might have a very good plan that is
21 viable.
22 SENATE MAJORITY CHAIRMAN VULAKOVICH:
23 And these other plans certainly would
24 have to have some sheet with some pretty big numbers on
25 to be able to pull this off. I think this is going to 35
1 be quite costly to do all this.
2 MAJOR STACKHOUSE: Time will tell.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 Okay.
5 One other question about -- well, in your
6 testimony, "The FirstNet opt-out decision is not a
7 mechanism for Pennsylvania to realize a revenue
8 windfall. Be cautious of promises that Pennsylvania
9 will receive substantial revenue generated by the
10 FirstNet system in an opt-out situation."
11 Would you explain that a little bit,
12 about the windfall?
13 MAJOR STACKHOUSE: Some -- and I've heard
14 it in various publications or meeting individuals who
15 might suggest that the Commonwealth could receive excess
16 revenue as a result of opting out and, you know, that
17 excess selling of spectrum would then -- we would be
18 able to keep. But the law and also the federal
19 register -- I have the site if you want it -- clearly,
20 FirstNet, or I should say NTIA, has made a determination
21 and they have been very consistent with this message.
22 Beyond the building construction, operating,
23 maintenance, and upgrades of the system, any excess
24 revenue will be funneled right back into the nationwide
25 network so that other states can build their networks. 36
1 So I just wanted you to have all the
2 information.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 Okay. And this might seem like an odd
5 question, Jeff, but with regards to Next Generation 911,
6 if you were sitting there and the first time you heard
7 that FirstNet was available, and knowing what FirstNet
8 is meant to accomplish, okay, what would be your instant
9 response talking to people who understand your language
10 in the tech field? I mean, would you say, "Wow, this is
11 going to be fantastic to complement our Next Generation
12 911"?
13 MR. BOYLE: I would. I would be very
14 excited.
15 Essentially, it's a tool where we can get
16 critical information to the first responders in real
17 time, which they don't have today. And this is an
18 opportunity for us to do that. And really, the design
19 of these two systems, making that a reality, is very
20 critical to that.
21 SENATE MAJORITY CHAIRMAN VULAKOVICH:
22 Good, that's good to hear.
23 I'm glad we have the three of you people
24 here to collaborate on this and to make the decisions
25 and inform the Governor so he can make the best decision 37
1 he can possibly make to provide this ongoing protection
2 for our citizens and those who visit our great state.
3 So we thank you for your testimony today.
4 And if there's any questions by any of
5 the members of either of the committees, please submit
6 them to either Representative Barrar's office or my
7 office, and we'll be sure to get them to the proper
8 people and get them answered.
9 Thank you so much.
10 MAJOR STACKHOUSE: Yes, sir, Senator.
11 SENATE MAJORITY CHAIRMAN VULAKOVICH:
12 Major, could I ask you one question?
13 MAJOR STACKHOUSE: Absolutely.
14 SENATE MAJORITY CHAIRMAN VULAKOVICH:
15 How many opt-out proposals have you
16 received from --
17 MAJOR STACKHOUSE: Three, sir.
18 SENATE MAJORITY CHAIRMAN VULAKOVICH:
19 Three?
20 MAJOR STACKHOUSE: Sorry, three.
21 SENATE MAJORITY CHAIRMAN VULAKOVICH:
22 Okay, three. Okay. All right. Thank
23 you.
24 MAJOR STACKHOUSE: Yes, sir.
25 SENATE MAJORITY CHAIRMAN VULAKOVICH: 38
1 Sorry, I missed asking that.
2 Okay. Now we have what we call the
3 opt-in panel, and that will be made up of Dave Buchanan,
4 director of consultation, FirstNet. And then Jim Bugel,
5 vice president, AT&T.
6 Okay, Mr. Buchanan, would you like to
7 start off?
8 MR. BUCHANAN: Sure. Thank you.
9 Good morning, Chairman Vulakovich,
10 Chairman Barrar, Chairman Aument, Ranking Member Costa,
11 and all members of the committee. I would like to thank
12 you for the opportunity to appear here today to discuss
13 the First Responder Network Authority, or FirstNet, and
14 to provide an update on the progress we are making
15 toward the deployment of an interoperable nationwide
16 public safety broadband network.
17 My name is Dave Buchanan, director of
18 consultation for FirstNet. As a Pennsylvania native,
19 born in Greene County, raised in Venango County, living
20 in Bucks County, I'm honored to be here today to testify
21 before my home state legislature regarding a project
22 that will help save lives and make a difference in the
23 public safety of my fellow Pennsylvanians.
24 FirstNet is often confused with the state
25 land mobile radio networks, so I would like to be clear. 39
1 FirstNet is not LMR. We are not here to replace the
2 Pennsylvania statewide LMR system, PA STARNet.
3 FirstNet, when it is deployed in Pennsylvania, will be a
4 complementary network to Pennsylvania STARNet.
5 FirstNet was established in February 2012
6 by an act of Congress and came from one of the last
7 recommendations of the 9/11 Commission, where an
8 independent authority within the U.S. Department of
9 Commerce was charged with a mission of building,
10 deploying, maintaining, and operating a high speed
11 mobile broadband network nationwide that will equip the
12 public safety community throughout the country with the
13 tools they need to save lives and protect U.S.
14 communities. FirstNet will deploy this network through
15 a public-private partnership and in consultation with
16 Pennsylvania.
17 Since our inception in 2012, FirstNet has
18 created a brand new, stand-alone independent
19 organization, released a request for proposal for a
20 private-sector partner, selected AT&T as our partner to
21 deploy, operate, and maintain the network for 25 years,
22 and delivered a state plan to Pennsylvania and all of
23 the states and territories.
24 Pennsylvania's plan was delivered to
25 Governor Wolf on September 28th and gives him 90 days, 40
1 until December 28th, 2017, to decide to either opt-in to
2 the FirstNet AT&T plan at no cost and no risk to the
3 Pennsylvania taxpayer, or opt out, giving the
4 Commonwealth six months to do an RFP and decide on a
5 partner to build out, operate, and maintain the network
6 in Pennsylvania for 25 years.
7 The opt-in/opt-out decision is the sole
8 decision of the Governor. And should Pennsylvania opt
9 out, FirstNet pledges to work with the Commonwealth and
10 make sure there's a successful FirstNet network here in
11 the keystone state. And if the Governor opts in, we can
12 immediately deploy the network in Pennsylvania.
13 The decision is an important one. Opt-in
14 or opt-out, I want to make clear that FirstNet service
15 is completely voluntary. In an opt-in scenario, it will
16 be FirstNet and AT&T that will ensure that the cost of
17 the service is affordable to Pennsylvania public safety
18 agencies.
19 Now, you may ask what FirstNet has done
20 to consult with Pennsylvania to design a plan specific
21 to the Commonwealth's public safety community. As part
22 of the FirstNet enabling statute, we were required to
23 consult with all 56 states, territories, and the
24 District of Columbia as to their needs in the public
25 safety broadband network. States received a grant from 41
1 the Department of Commerce in order to commence the
2 consultation process. The grant was awarded to the
3 Commonwealth through Pennsylvania State Police, and
4 Major Diane Stackhouse, who's Pennsylvania's single
5 point of contact, manages the grant, consults with
6 FirstNet on behalf of Pennsylvania.
7 Thank you to the Major and her team for
8 all of their hard work and working with us over the last
9 several years.
10 Since 2013, FirstNet's consultation team has
11 been working hand in hand with Pennsylvania and public
12 safety agencies in Pennsylvania to find out what first
13 responders want in a network and to make sure the
14 network is built specifically to their needs.
15 Pennsylvania, PA FirstNet, and FirstNet collected
16 statewide data on coverage gaps. We surveyed public
17 safety across the state to find out what they need in a
18 network, pricing, coverage, and features. We
19 participated in a road show across the Commonwealth and
20 made ourselves available to discuss the project at major
21 public safety conference events. This a road show of
22 engagements totaling more than 29 meetings before we
23 selected our partner in 12 cities with more than 1200
24 public safety personnel participating in those
25 consultation meetings. 42
1 We learned that public safety needs a
2 broadband network in Pennsylvania dedicated to serve
3 them. Cost is a major factor. They want the service
4 FirstNet provides to be affordable. Coverage, they want
5 extended coverage where they don't have it, because as
6 we have seen in Pennsylvania, and around the country,
7 with a manhunt in the Poconos, for example, in 2014, you
8 don't know where the next emergency or disaster will
9 take you. Capacity, public safety in Pennsylvania needs
10 greater speeds and services in the cities where first
11 responders experience congestion, particularly in large
12 events. Customer service, they want a service that's
13 dedicated to public safety with 24/7, 365 customer
14 service, and they want priority and preemption over the
15 entire network.
16 On AT&T's entire network, first responders
17 will have priority over commercial traffic, and when
18 needed, a FirstNet device will be able to preempt or
19 kick off commericial users, that public safety will have
20 access in an emergency.
21 We were excited to see that the FirstNet and
22 AT&T proposal to Pennsylvania addresses these public
23 safety needs and a lot more. FirstNet took the input
24 from the Pennsylvania team and stakeholders across the
25 Commonwealth to customize the Pennsylvania state plan, 43
1 you heard Major Stackhouse mention earlier, which
2 outlines the coverage features and mission critical
3 capabilities FirstNet and AT&T will bring to first
4 responders and other public safety personnel in the
5 keystone state.
6 By leveraging private sector resources,
7 infrastructure, and cost-saving centers to deploy,
8 operate, and maintain the network, the nationwide public
9 safety broadband network, FirstNet, can be deployed
10 quickly, efficiently, and cost effectively. Should the
11 Governor opt-in, priority service will be offered to
12 agencies immediately and build up of the network will
13 commence.
14 We're very encouraged by the early work we've
15 achieved in these first stages of the partnership with
16 AT&T. And given the length of the contract, 25 years,
17 and the commitment that they are making toward serving
18 public safety, I can confidently say that this is a
19 partnership with an aligned goal, providing the best
20 service possible to public safety.
21 To conclude, I would like to thank the
22 committees for holding this hearing and allowing
23 FirstNet to participate. I enjoyed meeting many of the
24 committee members and staff in the lead-up to the
25 hearing. And I appreciate the thought and interest you 44
1 have dedicated to this conversation about FirstNet.
2 Hopefully, you will leave the hearing with an
3 appreciation for some of the work we have done here in
4 Pennsylvania with first responders in your state and our
5 plans for the future.
6 Thank you, again, for your support and I look
7 forward to answering your questions.
8 SENATE MAJORITY CHAIRMAN VULAKOVICH:
9 Thank you, Mr. Buchanan.
10 Mr. Bugel.
11 MR. BUGEL: Thank you, Chairmen
12 Vulakovich, Aument, Barrar. Thank you, Mr. Costa, and
13 members of the committee for this opportunity.
14 I am Jim Bugel, AT&T's vice president for
15 the state opt-in FirstNet program. On behalf of AT&T
16 and the more than the 6,500 employees and retirees in
17 the Commonwealth of Pennsylvania, thank you for the
18 chance to share our perspectives on FirstNet and how we
19 are committed to this public-private partnership that
20 will bring advanced tools and broadband communications
21 to Pennsylvania's first responders to save lives and
22 protect communities. I have submitted more detailed
23 testimony for the record, but I want to spend a few
24 minutes addressing some aspects of this historical
25 public safety partnership. 45
1 AT&T's roots are deep in Pennsylvania,
2 and we haven't stopped investing in the Commonwealth
3 since 1885, when we celebrated the completion of the
4 first long distance line between Philadelphia and New
5 York City. From 2014 to 2016, we invested more than
6 $800 million in our network in the Commonwealth to keep
7 Pennsylvanians connected to the world and each other.
8 We invest in our communities in other
9 ways, too, contributing more than $5 million to
10 important community programs across Pennsylvania during
11 that time period. And last year we spent more than
12 $2.1 billion on goods and services in the state of
13 Pennsylvania. Major Stackhouse and Dave Buchanan
14 clearly have articulated the history and the goals of
15 FirstNet. So I want to share a few highlights about
16 AT&T's commitment to achieving those goals.
17 FirstNet is much more than a few
18 selective features on a commercial network. FirstNet is
19 the platform for public safety, by public safety. The
20 First Responder Network Authority and AT&T will deliver
21 a reliable, innovative solution to our nation's first
22 responders that gives them the ability to operate across
23 jurisdictions seamlessly with wireless broadband
24 communications. Together we will unlock innovation and
25 ecosystem that fully supports the Next Generation tools 46
1 that will help save lives and that our first responders
2 depend on, and benefit from the scale of economics for
3 both equipment, applications, and infrastructure.
4 We will bring to bear the necessary
5 resources to deliver first responders to services they
6 need and deserve and to implement FirstNet successfully
7 in state of Pennsylvania. We will spend about
8 $40 billion nationwide over the life of the contract to
9 build, operate, maintain, and refresh the network across
10 the country. AT&T will connect FirstNet to our world
11 class communications network valued at over $180 billion
12 with a network reaching 99.6 percent of the U.S.
13 population.
14 FirstNet is about commitment to serve
15 public safety over the next 25 years by delivering a
16 compelling solution unlike any they've had before. This
17 exclusive experience designed by first responders will
18 fit their own unique evolving communications, wireless
19 communications, broadband needs, and the needs of those
20 to support their vital efforts and mission. Public
21 safety asks for, and we are delivering, a single,
22 nationwide, public safety interoperable broadband
23 network, not a network of networks. Any claim that
24 multiple networks will meet the objective conflicts with
25 the public safety mission. 47
1 FirstNet is about accountability. AT&T
2 is contactually obligated to build the solution, to meet
3 public safety's expectations, and perform its metrics.
4 It is a 25-year binding contact with obligations to
5 deliver on public safety's needs.
6 FirstNet is about security. Through the
7 combination of features, including end-to-end
8 encryption, a dedicated core, dedicated 24/7 by 365
9 security operations, a team of experts work around the
10 clock to provide Pennsylvania and the FirstNet network
11 security for applications, devices, and connections and
12 analyze the traffic on the network to identify incoming
13 threats.
14 The FirstNet RFP included dozens and
15 dozens of security specifications and standards. We are
16 committed, as part of the solution, to implement those,
17 maintain those, and refresh those.
18 FirstNet is about innovation, to develop
19 an ecosystem that will serve as the backbone of modern
20 public safety communications. This will inspire the
21 developer and the device community to innovate in a
22 cost-effective manner, collaborate to fulfill the needs
23 of public safety like they have never done before for
24 something they so deserve.
25 FirstNet is about agility, with 48
1 unwavering service to public safety and with access at
2 no additional charge to 72 FirstNet dedicated
3 deployables to support public safety's needs across the
4 country, and specifically, across Pennsylvania. AT&T is
5 the only company nationwide to receive the U.S.
6 Department of Homeland Security's Private Sector
7 Preparedness Program certification. AT&T's network
8 disaster recovery -- it is probably appropriate at this
9 time to also mention that our disaster recovery efforts
10 are in place in Puerto Rico and the U.S. Virgin Islands.
11 This is a massive effort. We have over 1,000 personnel
12 currently in the islands working for restoration. We
13 have restored 61 percent of the population to wireless
14 service and basically all electrical power was out on
15 the island so everything is being done with generators
16 and refueling.
17 And in California, our network is
18 completely restored.
19 We are honored to begin supporting the
20 states that have opted in to FirstNet and we look
21 forward to adding Pennsylvania to that list. We want
22 Pennsylvania to benefit from the unmatched commitment to
23 public safety and to the first responder community,
24 which does so much for us. No call is more important
25 than the one that saves lives. 49
1 Thank you for this opportunity.
2 SENATE MAJORITY CHAIRMAN VULAKOVICH:
3 No questions?
4 (No response.)
5 SENATE MAJORITY CHAIRMAN VULAKOVICH:
6 Okay. All right.
7 Questions on your --
8 HOUSE MAJORITY CHAIRMAN BARRAR: Yes.
9 Thank you, gentlemen, for your testimony,
10 and being here today.
11 I guess one of the concerns we have with
12 the opt-in provision would be when, during construction
13 and, I guess you would say, deployment of the system, do
14 we -- does the state still maintain any control or do we
15 have a lot of input still in the system that is being
16 built or does it just follow the guidelines of all of
17 the other states?
18 MR. BUCHANAN: So I can tell you, Mr.
19 Chairman, that the state plan that we delivered to
20 Governor Wolf on September 28th, we also gave a preview
21 copy of that same plan to Major Stackhouse and her team
22 back on June 19th. So they had an additional 90 days to
23 really get started with reviewing that information.
24 The plan includes details about the
25 build-out of the network to show where the network 50
1 exists today. And as you know, we're able to take
2 advantage of the investments AT&T has already made in
3 Pennsylvania, make first responders prioritized on the
4 existing network, but the plan also shows where the new
5 investments are going to be made, how investments are
6 going to be deployed over the next five years. We're
7 able to show in specificity where those locations of new
8 service are going to be available. And that was very
9 much a big part of the conversation we were able to have
10 with Major Stackhouse and her team. And I know that the
11 review process is considering that at the moment.
12 That is the process we've used to be able
13 to show the Commonwealth of Pennsylvania and its
14 decision makers how this network is going to be rolled
15 out, where it's going to be, and where public safety can
16 expect to find it when they become subscribers in the
17 future.
18 HOUSE MAJORITY CHAIRMAN BARRAR: The
19 country has been hit with quite a few catastrophes over
20 the past, I would say month, three hurricanes and the
21 huge fires out in California. Are any of these areas
22 that you've deployed your network? And if so, how has
23 it -- maybe create a scenario for us how it would work.
24 MR. BUGEL: Yes. So we -- obviously, the
25 network -- the hurricanes in Texas and Florida were 51
1 large. Large scale recovery was needed, a significant
2 amount of commercial power outages and flooding. It was
3 the first time that we deployed what's called AT&T
4 Dynamic Management, which is prioritization for first
5 responders. We basically equipped thousands of first
6 responders with phones via a SIM chip that had priority
7 on the network, which worked very, very successfully in
8 those area.
9 Obviously the physical damage, having a
10 nationwide network and nationwide resources, we were
11 able to keep network elements like generators, spare
12 parts, and employees out of harm's way until the storm
13 passed and we can quickly deploy them in the areas
14 affected. That leads to a very rapid restoration in
15 those areas.
16 HOUSE MAJORITY CHAIRMAN BARRAR: Thank
17 you.
18 MR. BUGEL: Thank you.
19 HOUSE MAJORITY CHAIRMAN BARRAR: Mr.
20 Chairman?
21 SENATE MAJORITY CHAIRMAN VULAKOVICH:
22 Anyone else have any questions?
23 HOUSE MAJORITY CHAIRMAN BARRAR: Any
24 other members --
25 SENATE MAJORITY CHAIRMAN VULAKOVICH: 52
1 Representative Donatucci.
2 REPRESENTATIVE DONATUCCI: Thank you.
3 How many employees work on your wireless
4 network -- this is for AT&T -- and what are your plans
5 to provide for quality maintenance of the FirstNet
6 network?
7 MR. BUGEL: How many employees work on
8 the wireless network in Pennsylvania or nationwide?
9 REPRESENTATIVE DONATUCCI: No, in
10 Pennsylvania.
11 MR. BUGEL: I'm sorry?
12 REPRESENTATIVE DONATUCCI: In
13 Pennsylvania.
14 MR. KERR: David Kerr, excuse me, I'm
15 with external affairs with AT&T.
16 We have over 2500 employees in
17 Pennsylvania. A majority of those folks are in our
18 wireless operations.
19 REPRESENTATIVE DONATUCCI: And then the
20 follow-up was what are your plans to provide for quality
21 maintenance in the FirstNet network?
22 MR. BUGEL: So our contract with FirstNet
23 has several metrics for performance contractually
24 obligated, that we have a service availability metric,
25 meaning that we have to hit availability, the network 53
1 has to be available to the users, and that drives the
2 maintenance. So you're basically maintaining the
3 network to be always available for the first responders.
4 That includes the physical infrastructure and the
5 circuitry and the switches and everything that comes
6 along with that. So it's making sure that the
7 availability is there.
8 We have routine -- as Major Stackhouse
9 talked about, we are constantly going and inspecting our
10 towers.
11 This is kind of a unique element of
12 FirstNet. That ability to maintain the towers, the
13 antennas, all the associated equipment, that cost is
14 borne by AT&T. That shifts from the state to AT&T.
15 The state is not responsible for
16 maintaining, building, upgrading these towers. They are
17 our towers that we are adding the FirstNet spectrum,
18 public safety spectrum, to.
19 MR. BUCHANAN: If I could add to that, I
20 just wanted to discuss, you know, the public-private
21 partnership we've created with AT&T. The FirstNet
22 responsibility and that public part of the partnership
23 is to really conduct oversight and management and have a
24 relationship with AT&T as they deliver this network and
25 make it available to the standards outlined in the 54
1 contract.
2 Our other responsibility to the
3 public-private partnership is to have a relationship
4 with the public safety part of this, as well and
5 understand how the network is working, how it's
6 performing and make sure that it's available in all the
7 ways that, I know, your constituents are going to expect
8 it to be available. We have a relationship not just
9 with public safety, but with the public -- not only with
10 AT&T as our private-sector partner, with public safety
11 in this public-private partnership.
12 REPRESENTATIVE DONATUCCI: Okay.
13 Then I have another question for you.
14 And this is, like, at the risk of sounding really naive,
15 but whether it's opted in or opted out -- like they just
16 said, we've had a lot of hurricanes, there's been
17 wildfires, we've had oil spills. When it happens near
18 state lines, what happens with the communications
19 between one state and another? Does that come into
20 this?
21 MR. BUCHANAN: Yep. So -- great
22 question. And that's one of the issues that the
23 FirstNet network seeks to address, is interoperability
24 across all 56 states, territories, and the District of
25 Columbia. So when there's an incident in Bucks County, 55
1 it doesn't -- we don't have to worry if there's a mutual
2 aid with New Jersey and they're coming to help, that
3 we're going to have a communications issue.
4 You can communicate seamlessly through
5 this technology across state lines. First responders in
6 Pennsylvania can communicate seamlessly with first
7 responders in all of the states and territories,
8 including those that have opted out.
9 We have an obligation to ensure that if
10 states choose to opt-out that there's an
11 interoperability standard and a technological standard
12 that's met so that those first responders will be able
13 to communicate even in those situations.
14 REPRESENTATIVE DONATUCCI: Thank you.
15 And thank you, Mr. Chairman.
16 HOUSE MAJORITY CHAIRMAN BARRAR: Great.
17 Representative Dush for a question.
18 REPRESENTATIVE DUSH: Yes, thank you.
19 I'm curious, do you -- have you been
20 coordinating with DHS and the military, as well? I know
21 the 271st from up here at Fort Indiantown Gap deployed
22 during the Texas hurricane in order -- their
23 communications squadron helped restore emergency
24 services and communication services.
25 Are they integrated as a part of what 56
1 you're doing?
2 MR. BUGEL: Yes, sir. Through DHS, FEMA,
3 we are using the military assets to help move equipment.
4 Yes.
5 REPRESENTATIVE DUSH: Thank you.
6 MR. BUCHANAN: And I would add that we
7 have been consulting with the federal entities, the
8 National Guard, for four years now. We had a meeting
9 yesterday with the National Guard here in Pennsylvania
10 to discuss their needs and operational aspects of the
11 network. We want to make sure that the FirstNet -- if
12 Pennsylvania decides to opt in, that they're ready to
13 become customers and ready to become part of that
14 network.
15 HOUSE MAJORITY CHAIRMAN BARRAR: I also
16 see in your testimony that -- this committee is the
17 Veterans Affairs and Emergency Preparedness Committee in
18 both the Senate and the House, it's the beginning of our
19 title. And I see in here that you've made a commitment
20 to hire another 10,000 veterans and have already hired
21 11,000 veterans. We thank you for that. It means a lot
22 to us.
23 The unemployment rate in the veteran
24 community is still higher than most of the nation and we
25 appreciate your commitment to that. 57
1 So Representative Dom Costa.
2 REPRESENTATIVE COSTA: Thank you,
3 Chairman.
4 I would direct this question to
5 Mr. Buchanan.
6 In either an opt-in or opt-out decision,
7 can the state use revenue for a separate endowment
8 account for other worthwhile policies or uses?
9 MR. BUCHANAN: So the funds that come
10 from the network are used to support the network in an
11 opt-in or an opt-out. The revenues that are created
12 from this network are used to boost the network in all
13 56 states and territories. We have an obligation to
14 bring the network, a sustainable network, for 25 years
15 to all states and territories across the nation.
16 So revenues that are derived or obtained
17 through the network are to be used to be put back into
18 the network.
19 REPRESENTATIVE COSTA: All right. Thank
20 you very much, sir.
21 Thank you, Chairman.
22 HOUSE MAJORITY CHAIRMAN BARRAR: As that
23 revenue comes in, okay, who makes that decision of
24 what's within the network spending and what's not?
25 Where is that decision made? 58
1 MR. BUCHANAN: We have a relationship
2 with AT&T, a technical relationship, a contractual,
3 financial relationship, that ensures that they deliver
4 the network to the specifications that public safety has
5 asked it to be delivered for 25 years. They have made
6 payments back to the network over the life of the
7 program so it can be reinvested over those 25 years.
8 You know, western states, low population,
9 aren't going to generate as many revenues as high
10 population states and we need to ensure, just like the
11 rest of the federal government does, that they have a
12 robust network. And the funds that come in will be used
13 to ensure that, you know, North Dakota's network is just
14 as good as Pennsylvania's.
15 HOUSE MAJORITY CHAIRMAN BARRAR: And just
16 to be clear, the revenue we're speaking of is the
17 revenue that would come in from the commercial use of
18 the RAN while it's a nonemergency situation, right?
19 MR. BUCHANAN: Revenues can come in
20 through excess use of the radio access network, it can
21 come in from the user fees that are associated with a
22 monthly subscription. And those are the funds that are
23 generated through either the public safety subscribers
24 or through the Band 14 FirstNet licensed spectrum that
25 we are awarding to AT&T for the nationwide network. 59
1 HOUSE MAJORITY CHAIRMAN BARRAR: Okay.
2 Representative Tallman.
3 REPRESENTATIVE TALLMAN: Thank you, Mr.
4 Chairman.
5 I'm going to follow up on Chairman
6 Barrar's questions earlier.
7 So you have provided Major Stackhouse and
8 the Governor's office with documentation. How about
9 giving it to the committee chairman?
10 MR. BUCHANAN: Major Stackhouse is
11 appointed by the Governor as the single point of
12 contact. She is -- it's our responsibility to work with
13 her. She's free to share with anybody that she deems
14 appropriate inside the Commonwealth of Pennsylvania,
15 local public safety, elected officials, people inside
16 the government. She has been the person authorized to
17 make the decision about who in Pennsylvania can have
18 access to that.
19 We're happy to work with the committee
20 and make information available, but she also is the
21 point of contact here in Pennsylvania we would work with
22 to make that plan available to anybody in Pennsylvania
23 that needs access to it.
24 REPRESENTATIVE TALLMAN: So as and if the
25 project moves forward, and I'm going to reference Perk 60
1 Chart, would you make that information available?
2 So on October 25th, you were supposed to
3 have a tower built on the top of South Mountain and you
4 missed it by two months. Is that kind of project time
5 line going to be available to the chairman?
6 MR. BUCHANAN: Well, yeah, we'll continue
7 for the life of the project, to be able to provide
8 information to Major Stackhouse and to the chairman and
9 the committee, information about the progress of the
10 build-out of the network, the progress of adoption of
11 the network, how the network is performing, how public
12 safety agencies are using it in Pennsylvania.
13 We would be happy to share that
14 information and make that available to you.
15 HOUSE MAJORITY CHAIRMAN BARRAR:
16 (Inaudible.)
17 SENATOR AUMENT: Thank you.
18 I actually want to follow up that line of
19 questioning.
20 Can you speak to how the various sources
21 of revenue, the various revenue mechanisms, and how much
22 money at this point you project collecting or receiving
23 for Pennsylvania for the build-out of this project?
24 MR. BUCHANAN: I don't think we can -- I
25 don't have that information, first of all, at my 61
1 fingertips. And I don't think we can tell you today
2 what we project the revenues will be in Pennsylvania.
3 You know, there are a lot of variables that are in play.
4 We want to work very, very hard to adopt customers in
5 Pennsylvania.
6 As you are aware, public safety agencies
7 in Pennsylvania will have to decide whether they want to
8 subscribe to FirstNet or not. We are going to work very
9 hard to make the compelling case that this is the best
10 network available to them. But that's something we
11 don't know the answer to yet, and that will be a driver
12 behind what kind of revenues are available through this
13 network in Pennsylvania.
14 SENATOR AUMENT: And following up
15 Representative Tallman's questioning, what mechanisms
16 are in place, do you anticipate putting in place, to
17 ensure that policymakers, that the Commonwealth, has not
18 just direct governance over the build-out, but also has
19 visibility over progress, success, who determines what
20 is success, who makes that determination, and what
21 visibility -- what mechanisms will be in place to ensure
22 that we have complete visibility and governance over
23 that?
24 MR. BUCHANAN: So we'll continue to be
25 available to the committee, we'll be available to public 62
1 safety and the public safety customers in Pennsylvania
2 about the network. We will continue to have field
3 staff, FirstNet field staff, of the public side of the
4 public-private partnership who are responsible for those
5 engagements.
6 And you know, it's in our best interest,
7 as we have been through the beginning parts of FirstNet,
8 to be as transparent as we can be. We have to work hard
9 to earn your business, earn the business of public
10 safety in Pennsylvania. And we know they expect no less
11 of us than to be open and honest about how the build-out
12 is going, whether the time lines have been met or not,
13 what the adoption has been, how public safety is using
14 it, what kind of new features are available, how the
15 innovation process that Jim mentioned earlier is going.
16 It's very much in our best interest to make that
17 available, to be as transparent as we can, to keep staff
18 in Pennsylvania, to continue to dialogue with you and
19 your public safety executives, and to continue to,
20 again, be as open as we can be to continue to earn your
21 trust and eventually earn your business.
22 SENATOR AUMENT: Thank you.
23 Thank you, Mr. Chairman.
24 HOUSE MAJORITY CHAIRMAN BARRAR: I don't
25 think there's any other questions. Members? 63
1 (No response.)
2 HOUSE MAJORITY CHAIRMAN BARRAR: Nope. I
3 think it's just you.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 Okay.
6 All right. First off, I noticed as of
7 September 19th, you had 23 states and territories
8 that are going on to, or opted in. Are you -- and you
9 don't have to name the states, but about how many --
10 have you started building the system in those 23 states,
11 territories, that -- where as of September 19th, have
12 you actually started building out yet?
13 MR. BUGEL: Yes, we have. And in those
14 states, we've actually started developing features,
15 delivering features to those users, too.
16 SENATE MAJORITY CHAIRMAN VULAKOVICH:
17 Now, are you in all of the states working
18 on something or are you starting in certain states and
19 going maybe in the manner, or the number that they
20 joined in?
21 MR. BUGEL: Our efforts start almost
22 immediately upon the Governor's approval.
23 SENATE MAJORITY CHAIRMAN VULAKOVICH:
24 Okay.
25 MR. BUGEL: So they're not being done in 64
1 any order. As soon as they opt in, we start working in
2 the state.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 Okay. Then in less than a month, four
5 more states, Minnesota, Indiana, Alabama, and Louisiana
6 joined in.
7 MR. BUGEL: Yes, sir.
8 SENATE MAJORITY CHAIRMAN VULAKOVICH:
9 Okay. Why did those states join in so
10 early in comparison to Pennsylvania?
11 MR. BUGEL: So --
12 SENATE MAJORITY CHAIRMAN VULAKOVICH:
13 Did the information get out to all states
14 at the same time? And I know we're one of the complex
15 states, I get that, so that's why I'm asking.
16 MR. BUCHANAN: I can take a minute to
17 describe the process.
18 On June 19th, we made the initial state
19 plans available to all states at the same time. Our
20 teams together, the AT&T and FirstNet teams, traveled to
21 every single state between June 19th and July 30th in
22 order to unveil the plan, discuss the plan, answer
23 questions, have dialogue, and answer those kinds of
24 questions that states have about opting in and opting
25 out. 65
1 We kept that pace through the summer. We
2 continued to have those meetings and dialogues, and
3 continued to answer the questions, like we're answering
4 today, about people's interest in the network. And
5 states are opting in once they've been, you know,
6 satisfied with the information they're seeing in the
7 plan.
8 SENATE MAJORITY CHAIRMAN VULAKOVICH:
9 From a -- do you have any states, as of
10 right now, that have opted out?
11 MR. BUCHANAN: No.
12 MR. BUGEL: No.
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 None. So the rest are still consulting
15 amongst themselves?
16 MR. BUCHANAN: They're considering the
17 state plan we provided. Yes.
18 SENATE MAJORITY CHAIRMAN VULAKOVICH:
19 Okay. You're going to have to build -- I
20 guess AT&T is going to have to build some towers. Is
21 there a difference between the towers that you build
22 commercially as opposed to the towers that we use in the
23 state that we -- and I'm not talking about the small
24 booster poles. I'm talking about the big towers that we
25 have the state on. Is there a difference in how you, in 66
1 the makeup of those towers that you're going to -- you
2 have to put additional towers in, I would think.
3 MR. BUGEL: So we -- yes. As you know,
4 we have a very robust network in the state already. And
5 we build to the public, to the grades that are required.
6 There will be hardening that we're going to be doing on
7 some sites. As I said earlier, we're also going to be
8 adding Band Class 14 to the sites in Pennsylvania and
9 expanding the coverage with additional sites as we go.
10 So as we go through that, we are adding
11 backup power in some areas. As we add additional
12 infrastructure to the towers, as Major Stackhouse said,
13 you have to reengineer the towers to some aspect, make
14 sure that their loading conditions are survivable with
15 wind, ice, and snow, and things like that.
16 So we are building to a public safety
17 grade, yes.
18 SENATE MAJORITY CHAIRMAN VULAKOVICH:
19 Have you taken into consideration -- we
20 know for our land, our LMRs, and the new cell tower,
21 STARNet, that we're going to maybe put more capacity on
22 some of our own towers. Have you taken -- because
23 here's what I don't want to happen, that in your plan,
24 you plan to use some of our towers, which is okay with
25 me -- 67
1 MR. BUGEL: Yeah.
2 SENATE MAJORITY CHAIRMAN VULAKOVICH:
3 -- I've promoted that for a while. But I
4 want to make sure that when you start yours, you go on
5 these towers that we have. And then as we're finishing
6 what we need to do, we look at the tower and say, "The
7 capacity is full. We should have maybe had our stuff on
8 there first before we let you go on, because you could
9 have build out on it to get on there if you needed to or
10 built a tower of your own."
11 MR. BUGEL: So you raise a really
12 interesting point because FirstNet, because of its
13 collaboration with the state, we're at an unprecedented
14 level of cooperation with the state of Pennsylvania. We
15 are actually having conversations with you about where
16 you would like to have cell sites, cell sites that,
17 quite frankly, you've wanted in unserved areas for
18 decades. We're talking to you about features.
19 And that coordination between the two
20 groups is very constructive for all of the reasons that
21 you just laid out. Could we co-load in a very effective
22 way? If we are going to rebuild a tower, why don't we
23 rebuild it to help Pennsylvania, or if you're going to
24 rebuild a tower, build it so that we can rent space on
25 it. 68
1 Absolutely an unprecedented level of
2 cooperation and coordination, and it helps to augment
3 your LMR system.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 Do you feel you have all of the
6 information necessary to know where some of these places
7 are? For example, we had a train derailment, and we
8 talked about this, in Somerset.
9 MR. BUGEL: Yep.
10 SENATE MAJORITY CHAIRMAN VULAKOVICH:
11 And there was no coverage down in that
12 hole.
13 MR. BUGEL: Right.
14 SENATE MAJORITY CHAIRMAN VULAKOVICH:
15 Now, of course, we could bring in a
16 mobile land vehicle in there with the radio tower on.
17 But that doesn't help the first responder, especially
18 because it's during those first early minutes or hours,
19 depending on the scope of the significant event, that
20 your people need this type of coverage to be able to
21 communicate with the data. And --
22 So do you know most of those places?
23 Because where you learn it is from the locals. They can
24 tell you everything.
25 MR. BUGEL: All emergencies are local, 69
1 absolutely. And it's that type of insight -- you don't
2 know where the next emergency is going to come from, but
3 your first responders have a good idea of where things
4 are happening. And basically, the state of Pennsylvania
5 opting in really allows us to start building that,
6 enrolling investment forward in the state of
7 Pennsylvania by five, ten, and fifteen years. That's
8 what this is doing. It allows us to bring those
9 investments forward.
10 SENATE MAJORITY CHAIRMAN VULAKOVICH:
11 Are you limited in -- is FirstNet --
12 whether it's what FirstNet has chosen to take a limit on
13 or either AT&T says, "This is all we can spend," do you
14 have a limit on how much you have to spend or can spend
15 in each state to deliver services? Because it might
16 cost you more in Pennsylvania than it would somewhere,
17 like in Indiana, which is flat, unless there's some
18 other things that I don't know about, go up in the air
19 into waves and everything else. But do you -- are you
20 limited?
21 MR. BUGEL: So we have a business in
22 Pennsylvania. That's the beauty, that we are, that
23 Pennsylvania, the first responders, are benefiting from
24 that existing embedded investment.
25 FirstNet is bringing tremendous 70
1 investment to the equation. That's allowing us to build
2 more sites. We are bringing, as we said, $40 billion
3 over 25 years. We are, in the contract, we have levels
4 of subscribership that we have to hit. We obviously are
5 going to build to those levels in order to get those
6 levels of subscribership.
7 So to say there's -- it's not limitless,
8 but we know what our goals are and we know what the
9 requirements are and we know that public safety votes
10 with their pocketbook. If we're providing a service
11 that is compelling, useful, and of good value, they will
12 buy it. We have to build to that. Yes, sir.
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 So there's not a limit where someone
15 comes to you and says, "You know, we have service in
16 certain areas and in other areas we still don't," and
17 someone says, "Well, this is all the money we can spend
18 at this time."
19 Is there a limit on how much you can
20 spend? And I'm concerned about the state of
21 Pennsylvania. Is there a limit --
22 MR. BUCHANAN: No. We're not going to
23 have a conversation that sounds like that in
24 Pennsylvania.
25 And our job, again, in this 71
1 public-private partnership is not just for the initial
2 build-out here for the first five years, but for the
3 duration, for 25 years, to continue to have dialogue
4 with public safety, continue to have dialogue with
5 decision makers in Pennsylvania about where future
6 investments need to be made.
7 Our plan we brought forward shows the
8 first five years in the build-out to bring this network
9 to Pennsylvania, but we're going to continue that
10 dialogue and continue those investments long beyond that
11 five years to continue to bring those billions of
12 dollars back to places, back to all the 56 states and
13 territories, and address those needs as they pop up.
14 SENATE MAJORITY CHAIRMAN VULAKOVICH:
15 Now, there's costs, there's costs to
16 everything. So most of the testimony, I'm sure we're
17 going to hear today, is that if, opt-in, opt-out,
18 whatever way we go -- but the opt-in sounds like it's
19 the best feature as far as saying that you don't have to
20 worry about too much. You have really little, if any,
21 financial risk here on behalf of the state if you
22 opt-in, because we're going to build it, we're going to
23 maintain it, we'll service it.
24 Will you service it?
25 (Inaudible.) 72
1 SENATE MAJORITY CHAIRMAN VULAKOVICH:
2 Okay.
3 So is there any cost to the state
4 whatsoever, to state government? In other words, are we
5 in the future going to have to put something in a line
6 item in our budget or some other special account to pay
7 for something that we are not thinking of right now with
8 regards to the FirstNet program?
9 MR. BUCHANAN: So I want to say, to make
10 it very clear, that in the opt-in scenario, FirstNet and
11 AT&T take on the full risk and responsibility, building,
12 deploying, maintaining, upgrading, servicing for 25
13 years the radio access network that will bring the
14 broadband network to first responders in Pennsylvania at
15 no cost to taxpayers in Pennsylvania.
16 SENATE MAJORITY CHAIRMAN VULAKOVICH:
17 Okay. And that's the very, the core
18 infrastructure. Now, as far as our state agencies --
19 MR. BUCHANAN: Yep.
20 SENATE MAJORITY CHAIRMAN VULAKOVICH:
21 -- PennDOT, let's take PennDOT. Will
22 there be a cost to PennDOT to partake in the FirstNet
23 program?
24 MR. BUCHANAN: So the opt-in is exactly
25 how I described it. There's no cost to the taxpayer. 73
1 For agencies that choose to adopt, there is going to be
2 a monthly subscription fee, like there is for other LTE
3 networks today.
4 We have a responsibility to bring a
5 sustainable network, again, for 25 years. You've heard
6 me say this over and over again, but that's not a short
7 amount of time. And we believe that the business model
8 that we've put together with AT&T, that includes
9 these -- and Jim is going to speak to this in just a
10 second -- those monthly subscription fees are an
11 important part of making this sustainable. No cost to
12 the taxpayer, but users will have, that are going to use
13 this network, are going to have a modest fee that is
14 associated with a monthly subscription to the network.
15 SENATE MAJORITY CHAIRMAN VULAKOVICH:
16 Well, but as far as, let's take the state
17 now. A state agency like PennDOT, if there's a cost to
18 PennDOT to partake in this system -- is there?
19 MR. BUCHANAN: If PennDOT decides they
20 want to become FirstNet customers --
21 SENATE MAJORITY CHAIRMAN VULAKOVICH:
22 Yes.
23 MR. BUCHANAN: -- they will have to enter
24 a contract with AT&T to obtain FirstNet services and
25 there would be a cost associated with that. 74
1 SENATE MAJORITY CHAIRMAN VULAKOVICH:
2 And I'm not trying to be difficult here.
3 MR. BUCHANAN: Yep, I understand.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 But I want everybody to understand. I
6 don't want to think this is absolutely cost-free --
7 MR. BUCHANAN: Right.
8 SENATE MAJORITY CHAIRMAN VULAKOVICH:
9 -- because nothing is cost-free.
10 MR. BUCHANAN: No.
11 SENATE MAJORITY CHAIRMAN VULAKOVICH:
12 But it is going to be taxpayer dollars.
13 And it's -- not to go against the system because I want
14 to see this system. I don't know who's going to do it,
15 but I want to see this system because I'm very high on
16 public safety. Number one job of government, public
17 safety. And this is something that we need to get into
18 the next generation, so I'm very supportive of that.
19 But I want the people to know, there's still going to be
20 costs to this.
21 For example, if I'm a first responder,
22 whether I'm a policeman, EMS, or volunteer fire, okay,
23 if we opt-in and we have, AT&T is running the show here,
24 am I going to have to -- to participate in this
25 system -- am I going to have to have a certain phone 75
1 from AT&T and pay for service from AT&T or can I go to
2 Verizon or Comcast or something like that, buy a phone,
3 and buy their service? How's that work?
4 MR. BUGEL: So initially you can bring
5 any phone to the AT&T FirstNet network. We replace the
6 SIM chip and you have access to the FirstNet network.
7 The way to look at this is FirstNet is a
8 carrier, and it basically is providing the first
9 responders and the state of Pennsylvania with options.
10 Most of your -- it's safe to say that most of your first
11 responders, volunteered and pay, have communications
12 right now with smartphones or feature phones. They buy
13 them from one of four carriers. FirstNet is a carrier
14 that is groomed for public safety, has unique features
15 for public safety, unique access, unique security,
16 federated ID. All the integration that was discussed in
17 the previous panel, all that is available on the
18 FirstNet network because FirstNet is the carrier that
19 has its own core that does all that.
20 So, yes, the users, the state, for
21 example, if they're currently buying a thousand lines of
22 a competitor's service and they want to move to
23 FirstNet, they will have to pay subscriber lines on
24 FirstNet. That cost is there.
25 But we're talking about going, we're 76
1 talking about broadband communications that's
2 integrated. That's the features.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 Okay. So if I'm at this train derailment
5 and I'm down in that hole -- and it's just the way it is
6 today -- I'm trying to use my cell phone, I cannot.
7 After hearing me today, one of the first things you do
8 is say, "Senator Vulakovich talked about it, we better
9 put a tower up there and get it there because he is
10 going to criticize right away."
11 So you put the tower up there. Now I'm
12 down in that hole with my same cell phone. Is it going
13 to work unless I have that chip and unless I have your
14 service?
15 MR. BUGEL: If -- so basically, if it's a
16 FirstNet AT&T tower, it's going to be a FirstNet AT&T
17 phone to work with it.
18 SENATE MAJORITY CHAIRMAN VULAKOVICH:
19 Okay.
20 MR. BUGEL: Now, if other carriers indeed
21 do populate with radio there, yes, they will be able to
22 access their networks.
23 SENATE MAJORITY CHAIRMAN VULAKOVICH:
24 Okay. Now, if you build a tower, AT&T,
25 we opt-in, you build a tower, and -- are you, can you -- 77
1 business, I don't know. That's another thing. I think
2 about public safety. If I have, say I have Verizon, and
3 I don't want to go put a chip in my phone, do any of
4 that, if AT&T would come to you and say, "We would like
5 to put on your tower and of course, pay you for it at
6 least," is that something that is in the thoughts?
7 MR. BUGEL: Co-locating carriers on the
8 same tower is a common practice that basically is all
9 throughout the industry.
10 SENATE MAJORITY CHAIRMAN VULAKOVICH:
11 Okay.
12 MR. BUGEL: Communities drive us to that
13 point. They would rather have one tower with four or
14 five carriers on it than five towers, right?
15 SENATE MAJORITY CHAIRMAN VULAKOVICH:
16 Okay. So the reason I'm getting to this
17 is because in the past with IT -- and I want to
18 compliment the state on your new Enterprise IT program
19 that you have. I don't know if you're still here. But
20 it's something we've been talking about for a while and
21 I want to compliment them.
22 The idea is that we have to get beyond
23 the providers telling us what they're going to give us.
24 We want to tell you what we need and what we want. And
25 if you can't deliver it for some reason, but you're the 78
1 best person in a lot of the areas, we go with you. But
2 I want to be able to come to you and say, "What they
3 can't give, I want you to give me. But you have to have
4 interoperability between the two of you."
5 And that's where we are going out with
6 the state now, as far as with our IT systems and
7 everything. That's what we're really looking at,
8 interoperability.
9 So I don't know if I have -- I have a lot
10 of questions here, but I think we're going to move on.
11 HOUSE MAJORITY CHAIRMAN BARRAR: Gillen.
12 SENATE MAJORITY CHAIRMAN VULAKOVICH:
13 Representative Gillen.
14 REPRESENTATIVE GILLEN: Very briefly.
15 Thanks, Jim.
16 I was born and raised in Bucks County and
17 then I graduated to Berks County.
18 FirstNet's innovation and testing lab in
19 Boulder, could you explain to the committee the nexus of
20 AT&T with that laboratory? And then I have a brief
21 follow-up question.
22 MR. BUCHANAN: Sure. We have, as you
23 mentioned, we have a lab in Boulder, Colorado. It's a
24 testing lab to test equipment and the technology. We
25 use it to make sure that any new device, application, 79
1 service, solution that's going to be part of the
2 FirstNet network meeting our technical standards, is
3 interoperable and meets the needs of public safety.
4 We have a professional team of engineers
5 there that test the equipment. We have, as we do with
6 our entire partnership, a great relationship with AT&T.
7 They bring, again, their equipment in, their solutions,
8 and we use that to make sure that when the network and
9 the solutions, those that are available now and those
10 that are going to be available, hit the street that they
11 work for cops, firefighters, and paramedics.
12 REPRESENTATIVE GILLEN: Would it be
13 accurate to describe that as a quasi-independent unit of
14 the Department of Commerce, what is going on out there?
15 MR. BUCHANAN: So FirstNet, the First
16 Responder Network Authority, we are an independent
17 authority inside the Department of Commerce. So we
18 have -- we sit inside the government, but loosely inside
19 the government. And we enjoy the benefits of being a
20 federal agency, but we also enjoy the benefits of being
21 independent and...
22 REPRESENTATIVE GILLEN: Where is the line
23 drawn on proprietary rights with regard to what's
24 developed out of that laboratory?
25 MR. BUGEL: So your question is very 80
1 interesting because the law that enables FirstNet,
2 enables legislation, basically charges FirstNet with
3 creating an open architecture nonproprietary system.
4 We have -- FirstNet has contracted with
5 us to create an agnostic platform that allows for
6 development, and using open standards, that people are
7 able to participate in that. This allows public safety
8 to benefit, quite frankly, from the same scale of
9 economics and development environment that is out in the
10 smartphone world right now for unique applications.
11 FirstNet will have those available for first responders,
12 despite if it's just used in Pennsylvania or it's used
13 in 40 other states.
14 Basically, it's an open system. Look at
15 it as Google Play for public safety. That's what it's
16 like.
17 The interface between AT&T and FirstNet
18 is that we have device testing, applications testing,
19 all those things to make sure that the network is secure
20 and none of our credentialing is violated and that the
21 device performs consistently on the network as designed.
22 We then pass that to FirstNet where they have other
23 tests that they apply to that.
24 Security is paramount. Putting devices
25 or applications or uncredentialed people on the network 81
1 is absolutely what you want to prevent. And when you
2 introduce all sorts of variables into the network with
3 different connections, that's where you increase risk.
4 And so those two labs work closely
5 together to make sure that, number one, security is
6 maintained; number two, that the reliability to public
7 safety needs, as we get into mission critical
8 push-to-talk and other features that are coming into LTE
9 in the future, that those work as public safety intends
10 them to work.
11 REPRESENTATIVE GILLEN: Thanks, Jim.
12 And thank you, Mr. Chairman.
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 My mind is going here, so I have another
15 couple of questions.
16 For the rural people, this is a question
17 I promised to ask.
18 Rural cell phone coverage is challenging.
19 Every cell phone user knows there are areas of weaker
20 coverage from commercial operators. With Band 14, seven
21 times stronger than the existing LTE, shouldn't you have
22 made your FirstNet goal in Pennsylvania be to get as
23 much Band 14 coverage as possible?
24 MR. BUGEL: Yes, and we are.
25 SENATE MAJORITY CHAIRMAN VULAKOVICH: 82
1 Okay. You mentioned about the FirstNet
2 lab. If you opt out, will you have access -- and I have
3 no idea what this lab does, but it sounds kind of like
4 important to me, the FirstNet lab in Colorado. If a
5 state opts out, will they have access to that lab?
6 MR. BUCHANAN: We're going to use the lab
7 to, again, test technology, test applications, make --
8 we haven't even mentioned security until Jim mentioned
9 it -- make sure that the networks are secure. We use
10 the lab to ensure that all of the devices, all of the
11 network features meet the interoperability standards,
12 meet the technical standards, meet the security
13 standards, meet our application standards.
14 Whether they're opt-in solutions or
15 opt-out solutions, that lab is designed to be able to
16 test the equipment and test those technologies to make
17 sure, again, we have a ubiquitous network across the 56
18 states and territories.
19 SENATE MAJORITY CHAIRMAN VULAKOVICH:
20 Okay. And last statement, question, in
21 the plan, does the state -- and this could be for the
22 other people, too, later on -- in the plan that AT&T
23 gave for the Governor to make a decision on, do you put
24 a price tag -- did you calculate what it would cost the
25 state if they enter into this contract? And in this 83
1 case, AT&T, if they would enter into a contract with you
2 to know -- because I would think that every one of my
3 agencies, if I'm Governor, I'm going to tell them,
4 "You're going to do this service if we go with AT&T."
5 Do we know, do our agencies know what
6 that cost is going to be?
7 MR. BUGEL: In the state plans, there is
8 basically what we call rack pricing. It's illustrative
9 pricing. It shows the price of devices. It shows the
10 price of if you want to bring your own device from
11 another network, it shows unlimited plans, it shows
12 metered plans. So it is a calculator of, if you're
13 going to need 30 lines or 300 lines, this is what it's
14 going to cost you on a monthly basis.
15 SENATE MAJORITY CHAIRMAN VULAKOVICH:
16 Okay. And you have all of the variables
17 there, but you didn't actually put all the numbers
18 together saying, "Governor, this will cost PennDOT, this
19 is what it will cost state police." You didn't do that?
20 MR. BUGEL: No, sir, because as we said
21 earlier, the decision for the Governor to opt in merely
22 basically gives the state of Pennsylvania, FirstNet and
23 AT&T's permission to come in and start building the
24 network and competing for the business.
25 We didn't want to be presumptive in 84
1 saying that this is what it's going to cost you because
2 that is not, that's the decision of the state or whoever
3 writes the checks for those accounts.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 Yes, I would agree. And I'm not trying
6 to put you on the spot. It's just that, you know, if
7 there's going to be a cost factor to it, when we sit
8 down and look at our budget, obviously you all know out
9 there we have an issue, that, you know, we have to start
10 preparing ahead of time and thinking about this, so that
11 we can gradually build up to where we can make those
12 payments.
13 MR. BUGEL: We would be more than happy
14 to come in and actually have some of those conversations
15 about how, basically, how to frame up that cost for the
16 state and for other people.
17 SENATE MAJORITY CHAIRMAN VULAKOVICH:
18 Well, we have Major Stackhouse. She's a
19 math genius. She can help figure that out.
20 Hey, any other questions?
21 (No response.)
22 SENATE MAJORITY CHAIRMAN VULAKOVICH:
23 Okay. I thank all of you for your
24 testimony today. We really appreciate it. We're
25 learning a lot today. Thank you very much. 85
1 MR. BUGEL: Thank you for the time.
2 SENATE MAJORITY CHAIRMAN VULAKOVICH:
3 Now we would like to call up what we have
4 titled our opt-out panel, Declan Ganley, CEO; Chris
5 Moore, head of public safety; Edmond Vea, director of
6 interoperability; Todd Rowley, senior vice president of
7 business, Rivada.
8 Okay, all four, just one, two, three, how
9 many are going to speak?
10 MR. GANLEY: Probably all four will
11 participate in the responses to the questions, Mr.
12 Chairman. I believe --
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 And I apologize, but you are, Mr. --
15 MR. GANLEY: Ganley.
16 SENATE MAJORITY CHAIRMAN VULAKOVICH:
17 Ganley, okay. Mr. Ganley, you may
18 proceed.
19 MR. GANLEY: Mr. Chairman, Senators,
20 thank you and it's an honor to be here this morning.
21 I'm Declan Ganley. I'm the chairman and CEO of Rivada
22 Networks.
23 I was thinking earlier on about some of
24 the early, the first times I came to Pennsylvania and
25 who got me in the wireless industry, who put me in the 86
1 wireless industry back in 1994. It was Ralph Roberts in
2 Comcast headquarters back in the day. I went in there
3 in 1994 as an Irish entrepreneur looking for backing to
4 bid on a wireless network in Ireland. And I couldn't
5 get backing anywhere in Europe, went into Ralph, Ralph
6 heard me out and Ralph backed me, and put me into the
7 wireless industry in 1994.
8 And I went on to found a company called
9 Broadnet and rolled out fixed wireless networks across
10 10 countries in Europe. We've rolled out the top 42
11 towns and cities in Germany, 10 of the top cities in
12 France, all of Spain -- anyway, 10 countries across
13 Europe. We rolled out cities in Switzerland. Every one
14 of those radio networks was a challenge. And I
15 eventually sold that business to Ralph Roberts and
16 Comcast.
17 So Pennsylvania has been -- I've had a
18 strong link with the Pennsylvania wireless industry for
19 a very long time, and they've been very good to me. And
20 if it wasn't for Ralph Roberts, I wouldn't be here
21 today.
22 With that said, what I wanted to do was
23 sort of bring -- I've submitted written testimony, but I
24 wanted to, perhaps, address some of the issues that are
25 relevant to the committee that have come up today. 87
1 So for example, on the opt-out/opt-in
2 question, no state has yet opted in, no state has opted
3 out. The opt-outs happen and begin on the 28th of
4 December. That is legally when our tower starts. It
5 cannot start before that. The letters that have been
6 signed, that we are aware of, with states, are letters
7 of intent to opt in.
8 We know that in at least three states,
9 the cases of three of those states that have signed
10 those letters, they are now seriously looking at doing
11 an RFP, following the lead of your state and a few other
12 states that decided -- now 18 in total -- to put out
13 RFPs.
14 So the states that signed opt-in letters
15 of intent, all but two of those did not run RFPs. So
16 you are to be congratulated for running a rigorous
17 process and really learning what your options are. You
18 have lit and fired up competition here, which is why you
19 have all of these people in this room today. There are
20 not many states that have done that. And it is to your
21 credit that you have done it because you are going to
22 end up with a better public safety network because you
23 are doing this.
24 So the process that Pennsylvania is
25 running, that New Hampshire has run, that other states, 88
1 18 other states in total have run so far is a process
2 that has brought to bear due diligence and has shed a
3 light, really, on what the options are for the states
4 and for public safety.
5 The Rivada Networks has been involved in
6 this process, the FirstNet process, since before
7 FirstNet was set up. The first major deployment we did
8 after we set up here as an American company in 2005 was
9 for Hurricane Katrina. We got paid for that. We got a
10 medal for it. We ended up providing those deployable
11 systems to over 30 states across the country.
12 We did submit a proposal for the FirstNet
13 nationwide plan. We made a very significant investment
14 into preplanning.
15 So for example, right across the U.S.,
16 including this state, we put together a radio
17 propagation and network design plan right down to a
18 20 -- sorry, 30-square-meter resolution. So we
19 submitted a very detailed radio propagation plan. It
20 was the only one that anybody did to that level of
21 detail designing the network coverage and propagation
22 for every 30 square meters of the state.
23 Now, I know that may sound absurd. And
24 when we saw the requirement, we sort of thought it was
25 as well, but we did it. And when you see the results of 89
1 that and the quality of planning that comes out of
2 that --
3 You made a point earlier on about the
4 train accident. When you're down in a hole, do you have
5 coverage or not? Well, that's a life-or-death question
6 and has been a life-or-death question in this state in
7 the past.
8 Band 14, the Band 14 network that public
9 safety fought for is absolutely essentially. In my
10 testimony, we give an example of what Band 14 coverage
11 constitutes and the difference between Band 14 coverage
12 and regular coverage of an average site. So it's on
13 page 6 of my testimony. You get a lot more building
14 penetration, physical coverage.
15 If we could go to page 6, that would
16 be --
17 (Inaudible.)
18 MR. GANLEY: Okay. All right.
19 So the point being that Band 14 is what
20 public safety fought for, the allocation of this
21 spectrum is what they fought for, and getting Band 14
22 built out makes all the difference.
23 You can radiate, in Band 14, at seven
24 times greater power, you mentioned it yourself, than you
25 can in the commercial bands. It's not the same as other 90
1 spectrums. This is not a commercial network. It is a
2 public safety network. That's what this spectrum is
3 for.
4 So one of the things that you need to
5 make sure is that what the state ends up with is a Band
6 14 network that can do this and radiate this kind of
7 power instead of relying on a commercial network where
8 we know, time after time, disaster after disaster after
9 disaster, they fail. Look at Puerto Rico, look at
10 Texas, look at Florida, look at California. They're not
11 designed for the stresses of public safety or for the
12 performance of public safety.
13 So the proposal that we have provided --
14 and there is an ongoing evaluation of that right now --
15 is for a Band 14 network that is fully paid for, at no
16 cost to the state. And what we have done in that
17 instance is we are bonding that. So that is to say, you
18 don't have to trust us that this thing is fully paid
19 for, we bond it. We provide insurance company bonding
20 that we will be able to build, complete, and finance
21 that Band 14 network and roll it out right across the
22 state.
23 Very importantly, we don't know where
24 public safety instances, where emergencies are going to
25 occur. A lot of them occur in rural areas. This Band 91
1 14 network -- I'm not going to give the exact percentage
2 of geographic coverage because my competitors are in the
3 room -- but suffice it to say, well over 90 percent of
4 the geography of this state, including challenging
5 areas, is covered in this plan. And it will all be
6 rolled out in four years, most of it rolled out in the
7 first two years. We are bonding that.
8 What you will have with us is a contract,
9 a contract with bonding behind it that you can hold us
10 to and hold our bonders to and our partners to. So we
11 will enter it -- if we are selected, we will enter into
12 a contract with the state. You will have security and
13 privacy of contract with us and our bonders. You will
14 not have that, as far as we know, with, for example,
15 AT&T. They have a contract with FirstNet. So you're
16 dealing with the federal government in that instance.
17 In the instance that you opt out, while
18 it's still a FirstNet solution, you're not leaving
19 FirstNet. The FirstNet representative did point that
20 out. So you're not abandoning FirstNet. You're just
21 not going for the AT&T version of FirstNet, you're going
22 for the so-called opt-out version of FirstNet.
23 In this case, you will have a contract
24 with the vendor, provider, contractor, and you will have
25 bonding from the vendor, provider, contractor. 92
1 If I can take you to page 4, we actually
2 are providing you with numbers. And remember the
3 performance under this contract is being bonded. We
4 estimate the current value of this spectrum, that 20
5 megahertz of 700 megahertz spectrum, at approximately
6 $520 million right now.
7 So I want to be very clear on this. This
8 20 megahertz of 700 megahertz spectrum, the band, that
9 where Band 14 exists, this is the beachfront property of
10 radio spectrum. All radio spectrum is not the same.
11 You know, when God said, "Let there be
12 light," the first thing he created was radio spectrum,
13 was light. So light was there. Radio spectrum came
14 first.
15 And that spectrum is not all the same.
16 It performs differently. It carries -- some of it lends
17 itself to distance, some of it lends itself to carrying
18 more information, more data. Band 14 and this spectrum,
19 this 20 megahertz, is the sweet spot, it's the most
20 valuable radio spectrum there is. And you have it right
21 now.
22 If you opt in, you give that spectrum up.
23 You will lose it for 25 years, and I don't think you'll
24 get it back after 25 years. Right now, under the
25 FirstNet umbrella, that is yours if you choose the 93
1 so-called opt-out. If you opt out, you keep control.
2 The spectrum is worth about $520 million.
3 The federal grants we estimated in our proposal at
4 $168 million. Interestingly, we found from the
5 testimony earlier this morning that the range that has
6 actually, has ended up being between 145 million to
7 185 million, so our estimate was about in the mid range
8 of that. So 168 million is what we estimate you'd get
9 in federal grants.
10 The revenue sharing that we provide,
11 which is not a windfall, but it's a revenue sharing, is
12 $383 million of cash over the 25-year period.
13 Now I want to be clear about this and
14 other -- we've heard this earlier on in previous
15 testimony. That money is not a windfall insofar as that
16 it is not something that you can go off and use in your
17 general fund. The law is very clear, that money must be
18 reinvested into the public safety broadband network.
19 You have to reinvest that money in the public safety
20 broadband network, but you are entitled to do that
21 within the state. The law is also very clear on that,
22 as well. So you can use those revenues in state as long
23 as you're reinvesting them into the public safety
24 broadband network.
25 And we also have heard earlier on today, 94
1 there are all sorts of issues with your public safety
2 network that you need, whether it's cracked foundations,
3 deteriorating bolts on towers, so on and so forth. All
4 of this is a necessary part of building a sustainable
5 public safety broadband network into the future.
6 The savings that we are offering in our
7 submission, we estimate in the range of about
8 $1.14 billion. How do we estimate that, or where do we
9 get that number from? That is the number that we
10 estimate conservatively is what it would cost you in
11 subscription fees if you were to adopt a subscription
12 model, that kind of model that we've talked about
13 before, where over 25 years you are paying user fees for
14 public safety. We've taken a very different approach.
15 And I'll explain why.
16 We've taken an approach where we have
17 decided -- and in fact, we wanted to do it for free --
18 to charge public safety for a basic package of two
19 gigahertz a month per user, a fee of one cent per user.
20 The only reason that we didn't make it free was because
21 under the rules of the FirstNet RFP, we weren't allowed
22 to do that. We cannot count a subscriber unless we're
23 charging them something. So we put it in at one cent.
24 The reason that we are doing that and are
25 able to do that is that the number of public safety 95
1 users that you have can never approach the capacity that
2 you have on this network right across this state.
3 Suffice it to say, while you are maxing out individual
4 sites and cells in the case of a major emergency and 100
5 percent of that capacity would be being used during
6 those types of instances, for 99-point something percent
7 of the time, that capacity is available and it's
8 available for commercial access on a subpriority access
9 basis.
10 That generates revenue and it generates a
11 lot of revenue, and that revenue is something that we
12 take in, we use that to service the cost that we incur
13 to privately fund and bond this network. And then we
14 give a share of that revenue back to the states for use,
15 as the legislation stipulates, to be reinvested into the
16 public safety broadband network.
17 So it's a different model to the model
18 that AT&T is proposing and to what I would expect the
19 model that Verizon would propose. What it does do is it
20 gives you a dedicated public safety network in Band 14
21 that takes advantage of the Band 14 spectrum.
22 I would encourage you to look very
23 closely at how, at whether or not you are getting a Band
24 14 network in other proposed solutions, because that is
25 what this is supposed to be. 96
1 As I -- I've made the point about the
2 spectrum. It's the beachfront property. You are
3 allowed to do things in Band 14 that you can't do
4 anywhere else, and public safety is going to need those
5 capabilities in those disaster-type scenarios and
6 situations.
7 The coverage, the full coverage map of
8 well over 90 percent of the state -- and this is in our
9 detailed submission -- will be completed within four
10 years. We have a very aggressive rollout schedule.
11 I just want to make, also, a point about
12 towers. Towers these days tend to be owned by a cross
13 section of commercial companies other than the carriers.
14 They've sold off their tower infrastructures. So it
15 tends to be, there's a cross section of companies from
16 American Tower, SBC, Crown Castle, and various others
17 that own these tower -- and there are others that own
18 this tower infrastructure.
19 You do leverage off existing sites. We
20 would look at that when developing a detailed state
21 plan.
22 So let's say that the state selects us in
23 this process, as New Hampshire has done, for example.
24 We would finalize a very detailed state plan. We would
25 look at incorporating state assets where it made sense 97
1 for the state to do so. We will pay you for access to
2 those state assets, so you will get income from use of
3 state assets where those state assets can be utilized.
4 We would invest into those assets if we are allowed to
5 do so.
6 So we heard about some of the problems
7 with, for example, tower loading, you know, failing
8 foundations, so on and so forth. Those types of
9 situations, if you wanted to have us look at upgrading
10 some of those facilities, we would do it, if you wanted
11 us to do it and we were allowed to do it. So we would
12 look at incorporating and monetizing and providing
13 income to the state for use of state assets where it
14 makes sense to do so.
15 So that's a fine-tuning exercise that we
16 would go through with the state once you had made your
17 selection from your RFP.
18 Now, to be clear, as my -- in every other
19 state that's done an RFP so far, when you make a
20 selection on your RFP -- and this has happened in New
21 Hampshire. New Hampshire chose us, so there were five
22 bidders in New Hampshire. It sounds like you have
23 three. There were five bidders in New Hampshire. We
24 won the New Hampshire RFP.
25 What New Hampshire did -- and that was 98
1 about, more than a year ago now. New Hampshire selected
2 us to be their alternative. So if they decided not to
3 opt in, we would be the plan that they would go with if
4 they decided to opt out.
5 Last week, the committee that advises the
6 Governor on this process, the committee of 15, voted --
7 well, there were two abstentions, thirteen votes in
8 favor, two abstentions. One abstention was from the
9 individual that actually ran the whole process and the
10 other abstention was somebody that thought they might
11 have a commercial conflict at some point in the future,
12 but they voted otherwise unanimously to recommend that
13 the state, that the Governor, opt out.
14 There are extensive reports on that. The
15 Governor of New Hampshire has put out, is putting out a
16 letter. There's a press release and notification out on
17 this to all of the governors of the states to ask them
18 to carefully consider their options, to talk to New
19 Hampshire if they want to do that, because New Hampshire
20 has run the most rigorous RFP process. They ran it over
21 two years over two administrations. It started under
22 Governor Maggie Hassan and it has finished under
23 Governor Chris Sununu. It's a very thorough and
24 rigorous process, lots of competitors. And over the
25 course of the last number of months, we have had to go 99
1 into the room with AT&T and Verizon and be run through
2 the hoops before they reached this conclusion.
3 So it's a very rigorous process, similar
4 to your own indeed, and you're not that far behind them
5 in terms of timing.
6 The time line that you have, in terms of
7 opt-in, opt-out, as Major Stackhouse said earlier on,
8 you have your opt-in or opt-out decision to make finally
9 at the end of December. I think it's the 28th of
10 December. And then if you decide to opt out, you've got
11 90 days to submit your state plan, your alternative
12 state plan, to the FCC and the NTIA. The FCC's rulings
13 on this have been very open and fair.
14 And I should also emphasize in terms of
15 concerns about interoperability -- and you've heard it
16 from other panels. The genius of this network from the
17 outset was that it selected LTE as the technology. LTE,
18 whoever ends up doing this, whether it's us, whether
19 it's AT&T, whoever it may be, LTE is inherently
20 interoperable. It's why the cell phone that you use
21 today, the smartphone that you use, will work here, it
22 will work in Mississippi, it will work in London, it
23 will work in Paris.
24 This is an LTE standard network. It is
25 inherently interoperable. It is open standards and that 100
1 is something that public safety has needed for the last
2 40 years, so it's a huge achievement that we've got
3 there. And it gives you the flexibility to make this
4 kind of choice.
5 So in terms of risk, the risk can be
6 bonded, the risk can be offset by surety of a contract
7 with your provider. The partners that will execute on
8 that have got a long history in the wireless industry.
9 Frankly, in terms of tower climbers and
10 people that go out and roll out these networks, it's
11 largely the same guys we all use. They're highly
12 accomplished contractors in that field, whether it's us
13 or Sprint or Verizon or AT&T. It's generally, it's
14 similar crews and similar faces that you will see doing
15 those physical infrastructure rollouts.
16 The revenue streams we have detailed to
17 you, the use we have pointed out, cannot be used for the
18 general fund. It must be reinvested into the public
19 safety broadband network.
20 On page 2 you will see the scales where
21 we have weighed the advantages and disadvantages, some
22 of them, of opting in and opting out. If you decide to
23 opt out and maintain state and local control, you
24 maintain authority, you maintain fiscal oversight.
25 You've got a throat to choke, this is it right here, and 101
1 there will be others, as well. You will have a bonded
2 contract with bonded performance. You will have a
3 network that covers well over 90 percent of the
4 geography of the state. And we're happy to brief you
5 privately on exactly what that percentage coverage is
6 and exactly where it's covered and where it isn't. You
7 will also have deployables to back that up.
8 We have a different view of deployables
9 to our competitor. We think that, for example, 72
10 deployables for the whole country is a little bit short.
11 I mean, I know the number of deployables that we have
12 for just New Hampshire with well over 90 percent of the
13 state covered, and it would take a big chunk out of that
14 72 number, and that's just for New Hampshire, which
15 isn't a very big state.
16 Deployables are something that you have
17 to have ready and that they can get to a place of a
18 disaster or emergency within a very short window of
19 time. They need to be prepositioned in locations around
20 the state where they can be dispatched from.
21 Deployables are not something that you
22 rely on for day-to-day operations. A deployable, in our
23 design, is something that you would deploy into that
24 very small percentage of the state where there isn't
25 geographic coverage in the case that there was a 102
1 disaster there.
2 But the real reason, the main reason for
3 having them, is when the network that you have, even
4 though it's public safety grade and it's reinforced and
5 all of those things, there are going to be times when
6 you are going to lose sites. It could be by accident,
7 it could be deliberate, it could be a terrorist attack,
8 whatever it might be. In that instance, you need to be
9 able to get a deployable into that location and light it
10 up quickly so that first responders have access to
11 communications.
12 Again, I congratulate this state for
13 having the vision and the courage, because there's been
14 a lot of lobbying going on to try to and stop states
15 from doing RFPs. I think I may have mentioned that all
16 but I think two of the states that have signed these
17 opt-in letters of intent did not do an RFP, so they did
18 it blind.
19 In many of the instances, I know, for
20 example, we didn't even, they didn't even talk to us or
21 others with regard to what their options are. They
22 heard one side of the story and they signed an LOI.
23 I do think that now that there is more
24 light of day being shed on all of this, that you are
25 going to see RFPs being issued from some of those states 103
1 very soon.
2 So congratulations. Keep going. Put us
3 all through the mill, which is exactly what you're
4 doing. And you are going to end up with the best
5 solution for your first responders and public safety and
6 for your rural and urban communities by running a tough
7 and transparent process.
8 One thing I would encourage you to get,
9 because this is the secret figure at the moment, is I
10 would encourage you to get the penalty figure that AT&T
11 FirstNet are seeking to impose in the case that you
12 decide in a few years' time that you wanted to opt in.
13 Now, I can't imagine why you would do that, but there is
14 a penalty figure that has been given to states. The
15 figures that I know of -- these are public figures.
16 There was a public hearing in California.
17 Chief, when was that?
18 (Inaudible.)
19 MR. GANLEY: Last Wednesday. The penalty
20 that was given to California was $15 billion. That was
21 in a public hearing. The penalty number that's been
22 uncovered through an FOI process in Vermont is
23 $175 million. The Governor of New Hampshire, in a
24 public statement, has said that he views these
25 penalties, the penalty figures that have been given to 104
1 his state, as an attempt to make opt-out difficult, as
2 an obstacle to opt out.
3 So the Governor of New Hampshire, I know,
4 is reaching out to other governors to talk about
5 addressing the issue of this arbitrary penalty with
6 FirstNet, with the NTIA, and various others.
7 So I would say that that is a discussion
8 in progress at the moment, but I would greatly encourage
9 you to find out what the penalty figure is for this
10 state and where that number comes from, what it's
11 constituted of, how do you justify it, given that the
12 grant figure to this state will be in the region of
13 $185 million. If California is anything to go by, I
14 think the penalty that will have been suggested here is
15 an awful lot more than the grant figure.
16 Bonded contract, over 90 percent of
17 geography covered, one cent per user per month for first
18 responders for service. We're not looking to make
19 revenue out of first responder subscriptions. It's your
20 spectrum. It's your network. We should be paying you
21 for it, not the other way around. And a revenue stream,
22 as we've detailed in this submission, constituting
23 approximately $338 million that you must use to reinvest
24 into the network.
25 And by the way, as we do this across 105
1 Pennsylvania, if we're selected, over the course of the
2 next three to four years, we will be employing 6,000
3 people in the state of Pennsylvania. Half of those will
4 be directly employed, the other half will be contractors
5 and others, called sort of second-tier hires as it were,
6 that will not be directly on payroll.
7 Thank you very much.
8 SENATE MAJORITY CHAIRMAN VULAKOVICH:
9 Thank you.
10 Who else is going to testify?
11 (Inaudible.)
12 MR. MOORE: Chairman Vulakovich, Chris
13 Moore.
14 Chairman Barrar, Chairman Aument, thank
15 you very much for the time, Senators, Representatives.
16 My name is Chris Moore. I'm a retired
17 chief of police from the city of San José, a city of a
18 million people in northern California, Silicon Valley.
19 I'm retired as senior vice president with Rivada
20 Networks.
21 On behalf of major city chiefs, I share
22 the effort to bring public safety nationwide, together
23 in the same room, which is a defeat in and of itself,
24 and then get them to agree on one thing, which is why we
25 needed a nationwide public safety broadband network. 106
1 We started this effort after the failure
2 of the D Block auction of 2008. Everybody knew that
3 public safety needed a network. We had gone to all the
4 carriers individually and said, "Look, we need coverage
5 in places," and the carriers were very polite to us, and
6 said, "Look, you're another customer to us, but we
7 appreciate what you do, but the fact is we're not going
8 to provide you that. We can't. We won't give you a
9 service level agreement, even though we're willing to
10 pay for it."
11 The reality for us is we were tenants on
12 their network. We got public safety online, went to
13 Congress, and basically said -- even though both
14 parties, both houses, the FCC, and the White House, all
15 said, "You guys are just inefficient users. We can't
16 invest 20 megahertz of really valuable spectrum in
17 public safety."
18 Well, we were able to change their minds.
19 We got 20 megahertz and $7 billion. This is -- and I'm
20 speaking of public safety at this point. I said, "We
21 got that so we could get a dedicated Band 14 network."
22 That was the plan.
23 The RFP went out. There was lots of
24 input and I have lots of friends at FirstNet and lots of
25 friends at AT&T and Verizon, because frankly, both AT&T 107
1 and Verizon, Mr. Bugel, a good friend and respected
2 colleague, Don Brittingham from Verizon, who will be
3 testifying shortly, were instrumental in making sure
4 public safety got what it needed. The reality is, it
5 didn't quite go the way we thought.
6 We have now -- we all agreed in public
7 safety that commercial network was not going to provide
8 us what we needed. In effect, they said they would
9 never provide us ruthless preemption for when we needed
10 it. That was a fair statement. We asked them why.
11 It's not in their shareholders' interest to do that.
12 That's what they said then.
13 They are now singing a different tune,
14 which is not a bad thing for public safety. It is --
15 they are recognizing, hey, they need it. I wish they
16 would have said it a long time ago, but the reality is
17 they're saying it now. That's what competition brings
18 to this.
19 The reality is now, though, you have a
20 scenario before you, opt-in, opt-out. The opt-in
21 scenario, basically, you do not have purview of
22 contract. The contractual relationship is between AT&T
23 and FirstNet.
24 Now, with all due respect to the folks at
25 FirstNet, you have a very large company and a small 108
1 staff. They are directing this. They've said as much.
2 They're directing this program. I'm not criticizing.
3 I'm just saying it's a path.
4 If you have an issue and you want a site
5 and need a site, you have -- and AT&T is not willing to,
6 they've expressed a desire and willingness to entertain
7 it. In California -- California, in that public hearing
8 that Declan references, they said, this is a (inaudible)
9 work. We have zero, zero accountability between the
10 state and AT&T, the contractor.
11 Now, as somebody who managed contracts in
12 a large city 911 center, I had enough trouble getting
13 contractors that I had valid, good contracts with, with
14 big national companies, to get them to do what I needed
15 them to do for public safety. It was difficult. Can
16 you imagine not even having a contract? They can give
17 you platitudes, they can give you great reassurances,
18 but at the end of the day, who do you go after? And if
19 you have to go to the federal government to get
20 something that you need right now, it's problematic.
21 I would refer to you the Senate Oversight
22 Committee on the Senate Commerce Committee testimony,
23 where the CEO of FirstNet and the head of the AT&T
24 FirstNet project, Chris Sambar -- a Navy Seal and a
25 national hero, by the way, so I absolutely trust him. 109
1 He got up and honestly said to the chair, Mr. Wicker,
2 basically the question was posed to him, "Who is going
3 to determine where the Band 14 sites are built?" Well,
4 first of all, the question was, "Where are you going to
5 build the Band 14 sites?" And he said, "Senator, that's
6 proprietary. We can't tell you."
7 The chairman reeled back. And you can
8 watch this online, if you'd like. And the reality is
9 this, this is proprietary. Well, who's going to
10 determine where those sites are going to be built? And
11 he says, "AT&T will, based on our needs." That was an
12 honest answer I would expect from a Seal.
13 The reality is that's not the answer that
14 public safety fought for. I mean, really, it was that
15 it needs to have local control. It's their control.
16 That's what they negotiated with FirstNet, we believe,
17 because frankly, the contract is not available for
18 anybody to see. It's another problem.
19 I'm not criticizing. I'm just pointing
20 out the fact that nobody's been able to see that
21 contract. You've heard references to it, that there are
22 penalties, but you don't -- none of us know.
23 At the California hearing, it was brought
24 up as a real sore point. We don't know. They're saying
25 there's lots of penalties. Great. What are they? What 110
1 is your relationship contractually that allows us to get
2 access? They won't tell you because it's proprietary.
3 Again, that's the business model, and I
4 understand it. But from an oversight perspective, if
5 you're telling somebody at the U.S. Senate, who actually
6 does have budgetary authority, FirstNet is an
7 independent agency within the Department of Commerce. I
8 was somebody who helped craft that language. That was
9 not what was intended to hear, to be able to say, "We're
10 not going to tell you anything." That's just -- really,
11 the transparency issue is a real problem for me.
12 The other point I'd like to raise is just
13 nationwide. This term of a nationwide public safety
14 broadband network, a dedicated public safety wireless
15 broadband network. That's what we fought for. The
16 issue is nationwide was chosen for a reason. It's not a
17 national network. They tried to make it a national
18 network, and we said, "no."
19 The reality is you're going to have
20 providers that provide exactly what public safety needs
21 in different places around the country. FirstNet's job
22 was to basically make sure that they met the standards
23 so you had a seamless interoperable network so I could
24 go to southern California, I could go to Nevada, from a
25 California perspective, to make sure it worked. That 111
1 was the role. We morphed into this, quote -- it's
2 called nationwide, and it is, but it's not supposed to
3 be a national network.
4 You're going to see another, the next
5 group of testimony, listed as neutral, but it's Verizon.
6 Now, Verizon they have over 70 percent of the nationwide
7 customers in public safety. That's just a fact. And
8 you know, I don't -- that's not meant to disparage AT&T
9 or to enhance what I think Verizon does. It's a
10 reality. And to think that public safety today is not
11 going to be using Verizon networks in the future, it's
12 not possible.
13 The reality is FirstNet, there's no
14 requirements -- and we made sure of that in public
15 safety -- there was no requirement that you had to buy
16 FirstNet service. It was imperative that they were
17 interoperable, so that you could use them, and that it
18 was nonproprietary. And yet, you have Senate testimony
19 saying that it's proprietary.
20 We're trying to get away from these
21 proprietary systems. We're trying to get into open
22 standards, we're trying to get into devices that are
23 cheaper. Rather than paying $7,000 for a fully featured
24 multiband LMR radio, I can take my device here for less
25 than $800, have something that's worth a lot more to 112
1 pubic safety.
2 The last comment is this, public safety's
3 real reason, what you need is, the coin of the realm,
4 coverage. It's -- capacity is important, particularly
5 in places like Philadelphia and Pittsburgh, no question.
6 It's about coverage. We need to be able to control
7 where and when, wherever we operate. Where is that
8 coverage? Do you have a guarantee that you can get it
9 built where you need it, when you need it? That's key.
10 Cost is a factor, as is speed. But it's
11 always going to be about coverage. So you can promise
12 all the capacity you want, but if you don't have
13 coverage, it doesn't really matter how much capacity you
14 have.
15 I'll leave you that.
16 I appreciate -- at the end of the day,
17 your process is great, as Declan described. This is
18 about public safety. Whatever you decide and whatever
19 the Governor decides, if it's in the interest of public
20 safety, I'd be supportive of it. That's the reality of
21 it. Make sure that your folks get what they need to
22 serve you. That's it.
23 Thank you.
24 SENATE MAJORITY CHAIRMAN VULAKOVICH:
25 Okay. Are you currently a chief or -- 113
1 MR. MOORE: No, I retired, retired four
2 and a half years ago.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 See that, Dom, you're not the only
5 retired chief here.
6 Okay. Let's see here, Mr. Vea, are you
7 going to testify?
8 MR. VEA: Yes, sir. Thank you, Senator
9 Vulakovich.
10 I'm just going to testify on two quick
11 points, if I may.
12 The first time we met and I brought this
13 to your attention, you said, "That's not a lot of time."
14 And we couldn't agree more that 90 days is not a lot of
15 time to make a decision. And you have the option, the
16 Governor has the option, to opt out. The FirstNet plan
17 that's on the table today does not go away if the
18 Governor opts out. That just buys you another 180 days
19 to do due diligence, and then also go through the FCC
20 progress, whereby the FCC guarantees that what we are
21 presenting to you is something that is totally
22 interoperable into the nationwide public safety
23 broadband network.
24 The second point I'd like to point out on
25 page 8, Section 6, Pennsylvania is a leader in the 114
1 opt-out option. Pennsylvania submitted to the NTIA a
2 year ago a very precedent commentary to what was known
3 as the NTIA SAAP, or a state alternative plan program,
4 guidance for the grant and for the evaluation of it, a
5 very detailed commentary. And in it, it pointed out
6 some of the issues and time lines that would need to be
7 met for states to have a viable opt-out option.
8 So I just wanted to point out and commend
9 Pennsylvania for being a leader in that role. It's an
10 outstanding document. We've included it in our
11 testimony and I recommend that you take the time to read
12 it. It's very informative and as I said, precedent.
13 It's really, what is predicted in that document from
14 August 2016, is in fact what is happening today.
15 Thank you.
16 SENATE MAJORITY CHAIRMAN VULAKOVICH:
17 Okay. Mr. Rowley. Are you going to say
18 a word?
19 MR. ROWLEY: Yes. Thank you, Senator.
20 So I just want to emphasize and maybe
21 clarify something that Declan Ganley had highlighted.
22 You know, you talked a little bit about
23 the opt-in solution as being kind of a low-risk
24 solution, no cost to the state. I kind of want to make
25 sure that it's clear that our solution is the same 115
1 thing. It's a no-cost solution to the state. The state
2 would contract with Rivada and Rivada would take on the
3 responsibilities of operating the network, maintaining,
4 building it.
5 I think Declan went on to describe how we
6 would address any concerns about any risk with respect
7 to the fact that we have kind of a strong federation of
8 kind of partners and vendors that are world class
9 vendors, world class partners, that would, that are the
10 same vendors and partners that the major carriers are
11 using today, that would be working with us to build and
12 operate that network.
13 Secondly, that in addition to each of
14 those vendors bonding their work, Rivada will also bond
15 the contract overall with an umbrella, so it's actually
16 a double-bonded structure that really eliminates or
17 reduces any risk to the state with respect to the cost
18 of operating it.
19 But as you kind of talk about low risk,
20 immediately what clicked in my head was, I think in the
21 opt-in model, as we currently understand it, I think
22 it's actually structured as very low reward right now
23 for the state. You actually are just getting access to
24 a commercial network that is available today, that you
25 can continue to get access to. AT&T is going to 116
1 continue to sell to public safety regardless of whether
2 you opt in or not. Verizon will also do it. And you
3 probably read a lot. I know they'll be testifying later
4 today. And they'll be talking about that.
5 Those services will continue to be there.
6 I think the difference is, I think we do have a proposal
7 where there are financial benefits and indirect benefits
8 that are there. And Declan highlighted those. They are
9 real benefits, they are real financial benefits that the
10 state will have access to that you will not have access
11 to in other scenarios, not the least of which I think is
12 this revenue share that would give you the ability to
13 pick tower locations or other investment opportunities
14 to the extent that if we were not doing everything you
15 wanted us to do, then we'd have access to additional
16 revenues to invest into that network wherever and
17 whatever you wanted on that. So I think there's a list
18 of strong financial benefits that are there and are
19 real, and you would not have access to that, you know,
20 in the other model.
21 Thank you.
22 SENATE MAJORITY CHAIRMAN VULAKOVICH:
23 Chairman, do you want to take care of
24 your people?
25 HOUSE MAJORITY CHAIRMAN BARRAR: Yes. 117
1 Representative Tallman.
2 REPRESENTATIVE TALLMAN: Thank you,
3 Mr. Chair.
4 And I'm going to call you Ed, you can
5 call me Will. I have a question. I may have not caught
6 it. So when you referenced this high value Band 14, can
7 you give that to me in megahertz or meters?
8 MR. GANLEY: It's 700 megahertz. It's 20
9 megahertz in the 700 megahertz network. The
10 different -- you can radiate at 200 milliwatts in the
11 Band 14 space. So not only is it prime real estate
12 radio spectrum, being 20 megahertz in the 700, you can
13 radiate at greater power in that space, which is --
14 that's really, it's phenomenal, it's unique.
15 And by the way, it's unique in America.
16 It's unique in the world. No one else in the world has
17 permitted that yet. They're going to follow it, but
18 that is -- and that's why you want to make sure that
19 what you end up with is a Band 14 network, that you
20 don't end up having a bait and switch, where you end up
21 with a commercial network and not Band 14.
22 SENATE MAJORITY CHAIRMAN VULAKOVICH:
23 Is that it, Representative?
24 (Inaudible.)
25 HOUSE MAJORITY CHAIRMAN BARRAR: Okay. 118
1 Representative Costa.
2 REPRESENTATIVE COSTA: Thank you, Mr.
3 Chairman.
4 And Senator, Mr. Chairman, if you would
5 indulge me with a little bit of police courtesy, I would
6 appreciate it. I have a compound question here.
7 Mr. Ganley, you stated that they'll be
8 6,000 jobs produced, because the important thing to all
9 of us, both in the House and Senate are jobs, okay?
10 Now, that's 6,000 jobs in Pennsylvania. You're saying
11 it's going to take four years to get your system up and
12 running, which tells me that there's no system in place.
13 Are you going to be using Pennsylvania labor -- and of
14 those 6,000 jobs, some of the concerns I have, are you
15 going to have a place local, in Pennsylvania somewhere,
16 where first responders can get retail goods, you know,
17 so that they're not calling California or New Jersey or
18 wherever? And are these places going to be manned by
19 Pennsylvanians? It's very important.
20 And the other thing I would like to know
21 is along those lines, do you or will you commit to
22 hiring union workers in those places?
23 I mean, I see these different companies.
24 They come here, they promise the world, and then we're
25 calling India or Mexico or wherever, Canada, and talking 119
1 to people. Our first responders need to have that
2 service available here in PA.
3 And of those 6,000 workers -- this is a
4 big contract -- I want to see 6,000 permanent jobs here
5 in PA. I know you say some of them are contractors. I
6 understand that. You're going to need them to build
7 that system.
8 So if you can just, you know, please try
9 to elaborate on that.
10 (Inaudible.)
11 MR. GANLEY: On the -- let me take the
12 sort of -- so for example, on the union question, one of
13 my board members, you'll see him there, is the former
14 Governor of Maryland, Martin O'Malley. If I don't hire
15 union members, he's going to string me up. So the
16 answer to that is, yes, we will absolutely work with the
17 unions and hire union workers.
18 In terms of -- I want to be very clear
19 about the 6,000. So that is the -- first of all, that
20 is four years to completion, that is the over 90 percent
21 of geographic coverage, yeah? But we are building out a
22 lot and we can, in private session, we could give you
23 the details of how much we build in -- a lot of this is
24 permitting. You've heard about permitting challenges.
25 You know sometimes permitting can -- you know, there's 120
1 environmental issues and everything else. So that's
2 really the gating factor, as it were. So a lot of that
3 build does take place in the first two years, but to
4 complete it takes four, largely guided by the permitting
5 process. That tends to be the gating factor.
6 In terms of the 6,000 jobs, those will
7 be, those are Pennsylvania jobs. Those are jobs that
8 are going to be in the state of Pennsylvania. We're not
9 counting people that are going to be in Virginia or New
10 York or California. Those are real jobs in
11 Pennsylvania.
12 We are actually -- I think that it's okay
13 to talk about Carnegie Mellon. We're doing, we're
14 already doing some work with Carnegie Mellon on looking
15 at leveraging the tech hub that is Pittsburgh, and doing
16 some very exciting things in the field of, you know, of
17 vehicle technology, of driverless cars, and other
18 applications of this bandwidth, because --
19 Think about this. As we build out that
20 Band 14 network right across this state, we're providing
21 capacity in some places where there is no capacity right
22 now or in some places where there is constrained
23 capacity. So the scope for industrial innovation,
24 things like driverless cars, the stuff that we are
25 talking with Carnegie Mellon about, we want Pennsylvania 121
1 to be an innovation hub to create new jobs.
2 Now, we're not including those in this
3 6,000. So we expect new jobs, probably whole new
4 industries, to come out of the fact that this
5 commoditized bandwidth in this manner is available in
6 this state. This is going to drive the GDP of this
7 state. The number of actual jobs being created will be
8 greater than the number we're giving you here. That's
9 in the build-out phase.
10 I'm not going to tell you it's going to
11 be 10,000 jobs or whatever, because I don't know. The
12 fact is I don't know. But what we're doing is providing
13 a marketplace of bandwidth and a resource of bandwidth
14 out there that innovators in the likes of Carnegie
15 Mellon already recognize is going to fuel job creation,
16 growth, and innovation in this state. You've already
17 got the tech hub in Pittsburgh anyway to do all of this.
18 REPRESENTATIVE COSTA: Okay. One more
19 question, please.
20 In your hiring practices and things like
21 that, are you going to use the federal system of
22 E-verifying your employees to make sure that they're --
23 MR. GANLEY: Of course, yes.
24 REPRESENTATIVE COSTA: Okay. All right.
25 Thank you. 122
1 HOUSE MAJORITY CHAIRMAN BARRAR:
2 Representative Donatucci.
3 REPRESENTATIVE DONATUCCI: Thank you, Mr.
4 Chairman.
5 And thank you for your testimony.
6 Okay, I have some confusion here so
7 you're going to have to clear a lot of this up.
8 Number one, you don't have -- do you have
9 employees now in the state of Pennsylvania?
10 MR. GANLEY: Actually, yeah. We've got
11 one in the room here. Two of them are in the room right
12 now. But yeah, we don't have thousands of employees in
13 the state of Pennsylvania.
14 What we do, what everybody else does is,
15 for the build-out of this public safety network -- this
16 is not a retail network, so we're not selling handsets
17 to -- you know, we're not running call centers for
18 retail customers calling up, you know, asking for
19 friends and family subscriptions or whatever. This is a
20 dedicated public safety network, first and foremost.
21 In terms of the build-out, those people
22 that we use for the build-out phase, we will be hiring
23 Pennsylvanians ourselves directly, but we will also be
24 using contractors that have people in Pennsylvania, and
25 they know, you know, where these resources are available 123
1 and we will be contracting them to execute against
2 contracts that we undertake and bond to deliver with
3 you. So those are the people that actually do the
4 rollout.
5 REPRESENTATIVE DONATUCCI: Okay. So now
6 we're going to go to Band 14. There's a lot of talk
7 about Band 14. It's my understanding that that's
8 licensed to first responders. I know that FirstNet is
9 building new Band Class 14 and that if there is a
10 partnership with a public company, then for the first
11 time, safety communications will be based on commercial
12 standards. That's a big thing. Do you have a comment
13 on that?
14 MR. GANLEY: That is -- my comment is
15 absolutely correct. Whoever you select, that's what you
16 get. And whoever you select, they will be, they will
17 work under the FirstNet umbrella. So whether it's AT&T
18 or whether it's us, they will work under the FirstNet
19 umbrella and will be using open standards LTE to deliver
20 that solution.
21 REPRESENTATIVE DONATUCCI: Okay. In your
22 testimony it says that Rivada will pay millions in lease
23 payments to state, county, and local government.
24 Where will that be paid? Where are these
25 lease agreements being -- 124
1 MR. GANLEY: So for example, I believe
2 what that refers to is -- for example, you have
3 infrastructure in-state. You may have, you know,
4 infrastructure -- and this is one of the things that we
5 need to get into in more detail once you've made your
6 selection on your RFP. We've done this in New
7 Hampshire.
8 And by the way, I would encourage you to
9 speak to your counterparts in New Hampshire about how
10 we've performed on that. We've attached a letter to the
11 testimony from the state point of contact for FirstNet
12 for New Hampshire that talks about how we've performed
13 for that state.
14 But that is where we would be renting or
15 leasing some state and local and county infrastructures,
16 so you may have something that is not providing a
17 revenue stream or not being monetized right now that we
18 might be able to incorporate into the plan. That's in
19 the next phase. That's post your RFP selection.
20 But in New Hampshire's case, for example,
21 there was a lot of that. And I expect that Pennsylvania
22 is not going to be that different.
23 REPRESENTATIVE DONATUCCI: Well, I know
24 that exists now because I see it on the water towers and
25 things and different parks. 125
1 And lastly, I'm going to ask you the same
2 question I asked AT&T. What are your plans to provide
3 for quality maintenance of the FirstNet network and
4 who's going to be paying for that?
5 MR. GANLEY: The quality and maintenance
6 and upgrade, constant upgrade of the network, is
7 something that we have in our submission to your state
8 RFP. We detail how we do it and we bond it to the
9 state. You don't get that, by the way, going another
10 route.
11 So we say we contract with you for
12 exactly how we perform and what we will do. You'll have
13 a contract. But if we break it, okay, you'll have
14 bonding and you can collect on the bonding.
15 So you will have absolute transparency
16 and accountability provided by a contract with us. And
17 that contract will be bonded, so that's how you know
18 you're going to be able to get that thing sustained and
19 funded for the duration of the 25 years, and beyond the
20 25 years, if the license is extended beyond the 25
21 years.
22 The revenues being generated off the
23 commercial subpriority access to that network are what
24 is used to help fund everything that I have described.
25 REPRESENTATIVE DONATUCCI: Thank you. 126
1 And thank you, Mr. Chairman.
2 HOUSE MAJORITY CHAIRMAN BARRAR:
3 Representative Gillen.
4 REPRESENTATIVE GILLEN: Thank you,
5 gentlemen, for your testimony.
6 APCO has indicated that they have
7 reservations conceptually with opting out. I'm sure
8 you've read, and some of your testimony has alluded to
9 their concerns, but these are public safety
10 communication professionals.
11 How would you address the reservations
12 relative to opting out in general?
13 MR. MOORE: Sure. If I may, first of
14 all, I think APCO is a great organization. I have a lot
15 of my employees part of that. APCO is an integral
16 player in getting us where we needed to be with the
17 nationwide public safety broadband network. The
18 individuals that are actually making those statements,
19 the opinions, were actually staff members at both the
20 House Energy and Commerce Committee. And their names
21 are attached so I don't have to go after them. They're
22 good people.
23 They don't understand, unfortunately --
24 again, we're talking line level communicators, managers
25 of those folks. But when you talk to folks who deal 127
1 with the, quote, risk of how do you finance this, the
2 established wholesale marketplace today in wireless --
3 and I learned all this, I didn't come to that from the
4 wireless community. I came from public safety. But to
5 be able to fund it, the value of that spectrum, why we
6 fought for it, pays for this. Their concern was, look,
7 this model doesn't work. It's too risky. It's a
8 fundamental misunderstanding of those who are opining
9 from APCO.
10 Again, no disrespect. They are a great
11 organization representing dispatchers, Next Gen 911.
12 And all of the communications issues would not be where
13 they are today, in a good way, without APCO. They
14 helped drive the standards to make sure that we went to
15 LTE.
16 But again, on this particular business
17 side of it, my position is they don't understand the
18 business piece of it. You know, we can disagree with
19 it. I do --
20 Jeff Cohen is the name. He's a great
21 guy, helped us quite a bit. But I just happen to
22 disagree with Jeff on this issue. And I'm open to have
23 a debate with him publicly at any time, and I've told
24 him that.
25 MR. GANLEY: It also would have been 128
1 useful if APCO talked to us, because then they wouldn't
2 have made the fundamental mistake that they made in,
3 really, just completely misunderstanding what we even
4 do. But we're happy to talk to them if they decide to
5 talk to us before they make erroneous statements.
6 MR. MOORE: It's a great organization,
7 don't get me wrong. I'm just -- on this one issue...
8 REPRESENTATIVE GILLEN: Thank you,
9 gentlemen.
10 Thank you, Mr. Chairman.
11 HOUSE MAJORITY CHAIRMAN BARRAR: Thank
12 you.
13 Representative Dush.
14 REPRESENTATIVE DUSH: Thank you,
15 Chairman.
16 Declan, you had talked about the
17 $320 million that would be coming back to the state and
18 I think I understand this, but I want to be, make sure
19 I'm clear on it.
20 Basically, the additional bandwidth, you
21 had mentioned that the law enforcement and first
22 responders were not going to be using the tremendous
23 capabilities of the Band 14 network. Now, what I
24 understand is that you will be selling that additional
25 bandwidth and it will be a revenue stream for you; 129
1 however, when the need arises, the law enforcement, the
2 safety and security folks, have first access to that.
3 So when you do have something like a Hurricane Katrina
4 or something, other users are put to the side and our
5 emergency responders have first dibs.
6 That's how you come up with the
7 320 million. You'll still be able to sell that excess
8 bandwidth and it will be, it will fund you, plus provide
9 the extra revenue to the Commonwealth. Is that correct?
10 MR. GANLEY: Correct. Can I give a
11 little more --
12 REPRESENTATIVE DUSH: Certainly.
13 MR. GANLEY: -- nuance to the answer?
14 I just want to be clear, the $383 million
15 that we mentioned here, that's not the only revenue that
16 this generates, but it's the revenue we're giving, we're
17 making available to the state for reinvestment.
18 Obviously, the revenue also, you know, pays for, pays us
19 back for what we've invested into the rollout of the
20 network, the bonding, the upgrades, so on and so forth.
21 That's the surplus that's left.
22 And you're absolutely right. We call it
23 ruthless preemption. We invented the technology. We
24 have the patents for the technology. If you look at
25 ruthless preemption technology, you'll see that Rivada 130
1 actually invented it. And we invented it and I'll tell
2 you the reason why we invented it. Some of the people
3 in this room know it.
4 I was at the NYPD -- this is years ago
5 now. It was after Katrina, talking to them about
6 providing capability, public safety communications
7 capability. And I explained that we could give them
8 priority and preemption.
9 And a lot of the guys from all of these
10 companies know Chief Chuck Dowd, who was actually on the
11 board of FirstNet, the first board. He said, "I don't
12 want priority preemption." He said, "I want ruthless
13 preemption. I want you to know that you are going to
14 kick users off that cell and put us on." And he said,
15 "If my user experience of this network, if it feels to
16 me like there's someone else on it, because there is
17 some kind of lag or delay," he said, "it is
18 unacceptable." So he said, "I need ruthless preemption.
19 Our public safety first responder user experience," he
20 told me, "needs to be like there's no one else on that
21 network. If they're on it and they're using it while
22 we're not using it, fine." He said, "But when I turn
23 the lights and sirens on, there better be nothing in the
24 way."
25 And that's why we went out and invented 131
1 the technology to do that, to provide that experience
2 for the first responders. Because if they can't get it,
3 this isn't going to do the job that they need.
4 REPRESENTATIVE DUSH: I appreciate that
5 and I appreciate the transparency you've actually
6 provided with how your corporation will actually make
7 money on this. And you're providing a service to our
8 law enforcement, so there's nothing wrong with that.
9 And I like ruthless preemption.
10 MR. GANLEY: That belongs to the NYPD,
11 really, that phrase.
12 REPRESENTATIVE DUSH: One last question,
13 have you received letters of intent or agreements with
14 any of the bonding agencies? Do you already have people
15 who are willing to line up behind you?
16 MR. GANLEY: Yes, we have. And on all
17 issues related to finance, we've submitted the relevant
18 letters, and indeed, in the case of New Hampshire,
19 attended multiple meetings and everything else on this
20 issue.
21 And just to, I mean, save a little bit of
22 work, I would encourage you -- I've said it already --
23 just because you've been so thorough, New Hampshire has
24 done an awful lot of work on this and I would encourage
25 any of you to speak to your counterparts there in terms 132
1 of where they are on this.
2 REPRESENTATIVE DUSH: Thank you.
3 HOUSE MAJORITY CHAIRMAN BARRAR: Thank
4 you.
5 Are there any other House members looking
6 to question?
7 (No response.)
8 HOUSE MAJORITY CHAIRMAN BARRAR: Okay.
9 That's it for the House members.
10 SENATE MAJORITY CHAIRMAN VULAKOVICH:
11 You need --
12 HOUSE MAJORITY CHAIRMAN BARRAR: No, I'm
13 good.
14 SENATE MAJORITY CHAIRMAN VULAKOVICH:
15 The spectrum that we talked about, who
16 actually owns that?
17 MR. MOORE: Sure. The spectrum is
18 actually owned by the federal government, but it is
19 licensed to FirstNet on behalf of public safety.
20 SENATE MAJORITY CHAIRMAN VULAKOVICH:
21 It's actually -- one other point, it's a
22 direct grant. It was a direct grant by Congress to an
23 entity. That's really rare. Usually, the FCC or NTIA
24 will have authority. This was specific. And because of
25 the effort of public safety to get it in the language -- 133
1 actually, it's in the law -- that this particular
2 spectrum has to go to public safety.
3 (Inaudible.)
4 MR. MOORE: And then allocate it to the
5 states.
6 MR. GANLEY: So the states have a stake
7 in this, unless they surrender that stake by opting in.
8 MR. MOORE: Can I just add one point on
9 the opt-in? Because it's historical, but it's really,
10 really important.
11 We in public safety did not ask for an
12 opt-out provision. That was not part of our
13 conversation when we went there. It was actually the
14 chairman of the committee, Greg Walden from Oregon. He
15 was the chairman of the subcommittee on oversight for
16 House Energy and Commerce. He is now the actual chair.
17 He came to me and said, "Chief, you're
18 putting a lot of faith in the federal government. You
19 have a lot more faith than I do in the federal
20 government and I work here. I don't think that they can
21 pull this off."
22 And he was real candid with me. And I
23 said, "Sir, I think we'll be fine." And he said, "Look,
24 we're going to need to have a safety valve."
25 And so what he did is he tasked his staff 134
1 with creating this opt-out provision as a safety valve
2 for the states. So this was not something that we in
3 public safety asked for. It was designed in case a
4 state was handed a plan by the federal government that
5 they didn't like or didn't think they could work with.
6 That's why this exists today.
7 Now, it was never meant to be easy. Now,
8 you've heard this before. Opt-out is not supposed to be
9 easy, but it's also not supposed to be impossible. The
10 idea is it has to be interoperable. That's why this FCC
11 process, which was an independent body -- the only
12 people you opt out to under the law is actually you go
13 to the FCC to opt out. That starts a process for the
14 FCC for interoperability. And then if you pass that,
15 then you go to the NTIA and FirstNet.
16 And the FCC has been real clear in its
17 most recent report and order. It says, "We're not going
18 to be a one and done. We're going to work with the
19 state to get them to where they need to be. If they
20 can't get there, they're automatically opted back in."
21 It's pretty clear.
22 But it seems to me that there's been a
23 lot of pressure put on states, like it's so hard you
24 can't do it. I've actually heard that before. It was
25 never meant to be. It was just thrown in there. 135
1 No, it was meant to be there by the chair
2 for the very reason that he was concerned that they were
3 handed a plan that didn't work for a state, that they
4 had to have an alternative path.
5 Whether they choose to use it or not,
6 again, no one is required to use this network. And that
7 also goes to this nation to have one single provider --
8 never made sense. That's why I said, "Nationwide, not a
9 national network."
10 Sorry. Thank you.
11 MR. GANLEY: One final point I'd like to
12 make, I hope final.
13 If we end up being the provider here and
14 we're on contract to the state, you're still going to
15 have AT&T, you're still going to have Verizon. And by
16 the way, some of your first responders are going to want
17 to stay with Verizon for, you know, they'll have their
18 own good reasons for wanting to do that. Some may want
19 to stay with AT&T. You will have more competition and
20 you will have more providers seeking to serve your first
21 responder community with state of the art
22 communications. And as America has proven for over 200
23 years, competition is a good thing.
24 SENATE MAJORITY CHAIRMAN VULAKOVICH:
25 In the chart that you provided for the 136
1 spectrum jobs, federal grants, revenue sharing, local
2 savings -- and I remember you saying that you would need
3 to check and see what that fee is going to be. Do you
4 know how to find what that fee is going to be?
5 MR. GANLEY: Well, I can make a
6 suggestion. Ask FirstNet. They know what it is.
7 SENATE MAJORITY CHAIRMAN VULAKOVICH:
8 Okay.
9 MR. GANLEY: FirstNet knows what the fee
10 is and AT&T knows what the penalty fee is.
11 The only -- apparently, and I know that
12 one of the challenges is when they've given that penalty
13 fee, it was only given, I think, last week to states, or
14 the week before. And only two states have been able,
15 have revealed what that number is, California,
16 15 billion, Vermont, 175 million. And that was kind of
17 by accident, I think.
18 We understand from other states -- we do
19 know what the fees are in some other states, but we are
20 bound by NDA and they were bound by NDA not to reveal
21 those fees.
22 I think in the interest of transparency
23 and oversight, it is essential that you know and this
24 committee knows what that penalty fee is and how it is
25 made up. 137
1 MR. MOORE: And the basis for it.
2 SENATE MAJORITY CHAIRMAN VULAKOVICH:
3 Let's define the penalty fee. Is that a
4 penalty fee if you decide to opt out and then opt in, or
5 you opt out and you do your own thing?
6 MR. ROWLEY: Yeah, if -- so just to
7 clarify. I think if you opt out and we move forward and
8 we build the network and we all move forward and
9 everything is great, there's no penalty. So the penalty
10 fee does not apply.
11 Where the penalty fee applies is if you
12 enter into the contract and then down the road, you go
13 back to FirstNet and say, "We're not doing this anymore,
14 we want to quit and get back in to opt in." That's when
15 the penalty fee -- so it's if you default, if you
16 default on your Spectrum Lease Agreement that you have
17 with FirstNet. So the state of Pennsylvania would have
18 a Spectrum Lease Agreement with FirstNet. If you
19 defaulted on that, that's where, as we understand it,
20 that's where the penalty fee would apply.
21 But I think --
22 MR. GANLEY: To be clear, though, we pay
23 that.
24 MR. ROWLEY: Right.
25 MR. GANLEY: So look, it's a full specter 138
1 in many regards. It's kind of like asking a shipping
2 company, "What happens if all your ships sink on the
3 same day?" It's not going to happen. But it's -- and
4 as Governor Sununu publicly has stated, he believes it
5 was created to sort of create this sort of scary
6 Halloween ghost. He didn't use those words. Those are
7 my words. But this -- to try and create a deterrent to
8 states wanting to opt out to create some kind of specter
9 of a liability at some point in the future. But you
10 know, given that that is currently there, and it may go
11 away, but given that it's there, you should know what
12 that number is.
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 Well, it is somewhat scary. And let's
15 say we would go with company X, and all of a sudden --
16 we opt out. We owe company X, and company X -- all of a
17 sudden, we're just not happy and maybe they can't
18 deliver. So we have to go back to AT&T.
19 Now, if we had to pay -- you know, I
20 don't know how they did this, but if you look at the
21 state of California versus PA, I think they probably
22 have three times the population we have, they are
23 probably two and a half times larger land mass-wise than
24 we are. I don't know what that number would be. Say it
25 would be five billion. And if the state would have to 139
1 pay that, I mean...
2 MR. GANLEY: Yeah, I mean, it's designed
3 to provoke exactly that reaction.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 It is, but if it is...
6 MR. GANLEY: And so what we would have to
7 do in that circumstance -- so let's say that remains and
8 that doesn't change -- and if you look at Governor
9 Sununu's language, I think you can see there's quite a
10 determination for the Governor there to rally with other
11 governors to make sure that this issue is, this specter
12 is removed.
13 But let's say it isn't, and let's say the
14 number, for argument's sake, is five billion. None of
15 us know what it is. It's a secret number right now.
16 It's been kept secret from you, it's been kept secret
17 from us. We don't know what it is. But whatever the
18 secret number is, let's, for argument's sake, say it's
19 five billion. What we would then have to satisfy you, I
20 would suggest, is that in the case that this happens
21 that we have insured that risk and that that risk is
22 underwritten to the point where in the highly unlikely
23 event it took place, you get that money from our
24 insurers. And that's a matter of going out and insuring
25 that risk. 140
1 And look, you can insure pretty much any
2 risk. You can definitely insure that risk, but it's a
3 false risk and it's better to get rid of it rather than
4 be out there insuring against something that is never
5 going to happen.
6 But you're absolutely right, Mr.
7 Chairman, that's something that would need to be
8 addressed by whoever you would select as your opt-out
9 vendor if that requirement is still there.
10 SENATE MAJORITY CHAIRMAN VULAKOVICH:
11 I mean, I don't even know how you would
12 go and insure like $5 billion. I mean, I don't know how
13 you would -- and somehow if you assume that risk...
14 MR. GANLEY: Well, we wouldn't assume
15 that risk directly. What you would do is -- I know some
16 people in Lloyd's of London that you could phone and
17 they'll insure pretty much anything as long as you pay
18 them enough money. So it is insurable.
19 The thing is, how real is the risk? And
20 of course, that's something that the insurance
21 underwriters assess. It's a -- there's no need for it
22 to be there.
23 I mean, let's talk about -- while we're
24 on this subject. So for example, let's say for some
25 reason whoever you were to choose on an opt-out program, 141
1 that they weren't somehow performing and that you wanted
2 to replace them.
3 We're talking about 20 megahertz of
4 spectrum. I mean, we put a number on here of around
5 half a billion dollars in value. The real value of that
6 spectrum in 10 years from now is going to be much, much
7 more than the figures that we've given in here. They
8 can't make any more radio spectrum. This is a very
9 finite natural resource.
10 The idea that, for example, someone else,
11 an Apple, a Google, a Facebook, a Verizon, a Sprint,
12 T-Mobile, IBM, Amazon, or a world of others, Comcast,
13 you know, that they wouldn't want to step in and be able
14 to get subpriority access to that capacity, frankly,
15 this is a really scarce resource. This is beachfront
16 property and there are lots and lots of users that would
17 gladly set up on that beachfront property, if they were
18 given the opportunity to do so.
19 SENATE MAJORITY CHAIRMAN VULAKOVICH:
20 Ed, when you were talking, you made a
21 statement about, if we opted out, because of the process
22 you have to go through with submitting a plan, FCC
23 approval, and all those kinds of things, that you would
24 buy yourself another 180 days, but there would be no
25 penalty for that if we, when we choose somebody else, 142
1 unless we go back to AT&T.
2 MR. VEA: That's correct.
3 And we've submitted a letter and an
4 opinion from John Nakahata, who's an attorney, an FCC
5 attorney, from Washington to that effect. It's part of
6 our record.
7 And also, these fees that we've been
8 talking about, this is an opening salvo, if you will, in
9 a negotiation. They seem to be arbitrary and if you
10 were to see these terms, they seem to be arbitrary, we
11 would think. I mean, these numbers don't match.
12 SENATE MAJORITY CHAIRMAN VULAKOVICH:
13 Yes, I get that, but --
14 MR. VEA: Right.
15 SENATE MAJORITY CHAIRMAN VULAKOVICH:
16 -- "seem to be" doesn't give us...
17 MR. VEA: Indeed. But these will not
18 come into effect and there will be clarity into what
19 these numbers are as the process continues and we reach
20 that phase, which would be after the NTIA acceptance,
21 then you would go into these contract terms. And this
22 is something that is bound to be negotiated as we move
23 forward.
24 And again, I would like to point back to
25 the submission that you made to the NTIA last year in 143
1 August 2016, where it was pointed out that this might
2 even be a way that FirstNet or the NTIA in effect would
3 prohibit opt-out. And the intent of the law was never
4 to prohibit opt-out.
5 Again, I'll -- your own document on it is
6 probably one of the best treaties on how this process
7 could be manipulated. And we need to be careful because
8 a valid opt-out is what's brought us here today, I'd
9 submit to you. And what's brought us here today has
10 brought Verizon here and others that want to compete and
11 offer public safety a competitive service and offer
12 Pennsylvania first responders, really, a quality
13 solution.
14 So I would submit to you that you want to
15 take that time. You're at no risk to take that
16 additional 180 days. The FirstNet plan, in accordance
17 with the law, is the plan that's on the table today and
18 it can't be taken away.
19 MR. GANLEY: Every other state that's
20 looking at this has exactly the same issues and exactly
21 the same concerns, so you're not on your own. And I --
22 you know, you should talk to them, as well.
23 SENATE MAJORITY CHAIRMAN VULAKOVICH:
24 Just a -- because we have to move on.
25 We're a little off schedule. The one cent fee per user 144
1 per month, is that part of the revenue sharing?
2 MR. GANLEY: No. That's completely
3 separate.
4 SENATE MAJORITY CHAIRMAN VULAKOVICH:
5 That's not.
6 MR. GANLEY: That's an incline.
7 SENATE MAJORITY CHAIRMAN VULAKOVICH:
8 How do you make money on a one --
9 MR. GANLEY: Because you haven't got
10 enough men and women to soak up all of that capacity all
11 of the time. It's actually a very light load compared
12 to the capacity that we build. The number of first
13 responder users that will be using that service, you
14 know, 365 days a year, 24 hours a day, compared to the
15 capacity on that network, it's a de minimis load and
16 consumption that you have on the network.
17 So frankly, what we've always planned --
18 and we were -- because at the beginning, public safety
19 said that they wanted free service, so we took them
20 seriously on that and we designed our plan around it.
21 And so we're carrying them and it's a cost of being
22 carried. We call it an in-kind value here, but for us,
23 it's the cost of doing business.
24 But the trade off of getting access,
25 subpriority, to that spectrum and that capacity is worth 145
1 so much more than the cost of giving those first
2 responders that access. It's a no-brainer.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 All right. And two more questions, real
5 short. Number one, do you know how many towers you will
6 have to build? Do you have that in your plan, how many
7 towers you would have to build to, according to the
8 plan --
9 MR. GANLEY: Yes, we do.
10 SENATE MAJORITY CHAIRMAN VULAKOVICH:
11 -- you have right now?
12 MR. VEA: In fact, I can direct you. We
13 have in our testimony, we have 1,162 on page 13. It's
14 page 10. And actually, what we do on that page, is we
15 make reference to another great public-private
16 partnership, the Rapid Bridge Replacement Program,
17 indicating the similarities between this project and
18 that, which was to build out statewide, replace bridges,
19 558 bridges over 36 months. We're proposing to do 1,162
20 sites over 48 months, very similar comparison here on
21 that chart that I can direct your attention to.
22 MR. ROWLEY: And the one thing I'd say to
23 just -- Declan referenced this earlier. Out of those
24 1200 towers, one of the first things we would do is
25 overlay that design, if you will, with Pennsylvania's 146
1 tower and infrastructure, telecom infrastructure. We're
2 going to lease and buy access to towers, backhaul, and
3 other telecom infrastructure from somebody, and that
4 money should go, or could go, back to the Commonwealth
5 of Pennsylvania.
6 So you know, we can run some math for you
7 on that. We did not do it in this testimony. But I
8 think it would be a significant percentage of those
9 towers. Figure, you know, over 25 years, it's probably
10 a million dollars a tower kind of revenues or higher,
11 and then there's backhaul and other things. So it can
12 be pretty significant.
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 You're talking about 558 towers? Is
15 that --
16 MR. VEA: No, I'm sorry, 1,162 towers.
17 MR. ROWLEY: It's the one in the
18 right-hand column.
19 SENATE MAJORITY CHAIRMAN VULAKOVICH:
20 That you would build?
21 MR. VEA: No, no, no. That we would
22 attach equipment to or make use of.
23 MR. ROWLEY: In some cases, build.
24 SENATE MAJORITY CHAIRMAN VULAKOVICH:
25 My question is, how many do you have to 147
1 build?
2 MR. GANLEY: About 200.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 About 200 towers, okay.
5 And you brought up about the deployables.
6 Now, I know AT&T owns deployables. They have a lot down
7 in Puerto Rico right now. Do you own deployables?
8 MR. GANLEY: We do not own deployables
9 because we sold deployables to the federal government.
10 But we have maintained deployables for the federal
11 government that we sold to them for years.
12 We cut our teeth in the deployable
13 business. The first contract that we ever had was to do
14 the concept of operations and concept of execution for
15 deployable emergency communication systems for NORAD,
16 U.S. Northern Command. That was back in 2005. So we
17 have a huge amount of experience with deployables, and
18 that's how we know that, for example, a number like 72
19 is really low balling, you know.
20 So for example, you have AT&T, rightly
21 you've got deployables down in Puetro Rico right now.
22 Well, what if something happens in Pennsylvania and
23 there's an earthquake in California, God forbid? I
24 mean, these deployables don't fall out of thin air.
25 So what we will be doing in 148
1 Pennsylvania's case, and we're doing in every state, is
2 we will build, we will deploy, and keep deployables in
3 facilities across this state so that you can get there
4 within the golden hour, as it were, and get deployable
5 capacity put in place wherever and whenever it's needed
6 in the case of an extreme emergency.
7 SENATE MAJORITY CHAIRMAN VULAKOVICH:
8 Last question, the money you're going to
9 need to build this, the system, do you have that -- just
10 to put it simplistic, do you have that money in the bank
11 to do that or are you going to borrow that money?
12 MR. GANLEY: That money is in the bank,
13 but it's not our money. It's the bank's money, or it's
14 the funds money.
15 What we did, for example, in our
16 nationwide bid is provided credit committee cleared,
17 highly confident letters from eight of the top banks on
18 Wall Street on the ability to provide funding and
19 finance this rollout. What they look to, just so you
20 know, is the value of the subpriority access to that
21 capacity. What the banks know is that you can print
22 money, you can't print radio spectrum. And what you
23 have right now, what this state has right now, is the
24 most valuable block of radio spectrum that exists on
25 God's green earth, which is that 20 megahertz of 700 149
1 megahertz capacity.
2 MR. ROWLEY: And one thing I would add to
3 that, Declan, is, you know, the state receives
4 $168 million of NTIA grant money as part of the
5 agreement with FirstNet. We would use that grant money,
6 which is a significant percentage approaching the half
7 of kind of what our peak negative or our peak cash
8 requirements are. And so a big, big percentage of that
9 money comes from the grant money that will be deployed
10 back into this network and into your state.
11 The remaining balance would be a mix of
12 debt and equity that we would raise. And Declan
13 referenced kind of where that's at, and you know, we've
14 obviously been working with the banks and funding
15 partners on that.
16 SENATE MAJORITY CHAIRMAN VULAKOVICH:
17 Okay. I thank all of you. It's been a
18 long day, but complex issues. So thank you very much.
19 Okay. The next panel we have is Jeffrey
20 Blank, chief technology officer, CONXX; Brian Hendricks,
21 head of policy and government relations, Nokia; and Don
22 Brittingham, vice president of public safety policy;
23 Frank Buzydlowski, director of government relations,
24 Verizon.
25 Okay, Mr. Blank, you want to go first? 150
1 MR. BLANK: Absolutely.
2 Thank you guys. Thanks for the long day.
3 Thanks for having me.
4 I have to apologize on two fronts,
5 though. Sitting back there listening, I don't do these
6 like these other guys, a lot. First of all, I'm an
7 engineer and engineers should never be allowed to speak
8 in public, first apology. The second thing is I'm the
9 only -- what's that?
10 (Inaudible.)
11 MR. BLANK: Second thing, I'm the only
12 person in the United States that is not from
13 Pennsylvania, just going by this committee here, because
14 everybody seems to be from Pennsylvania. I'm not. I
15 apologize. I'm from Frostburg, Maryland. But we are
16 considering seceding into Pennsylvania or West Virginia,
17 we're not sure which.
18 But thank you guys, and thank you for
19 taking the time.
20 I am absolutely passionate about this
21 subject. I've worked with public safety for 18 years on
22 the technical side, building networks for public safety.
23 I'm now CTO of a company called CONXX, which does work
24 in Pennsylvania. Our office is in Scranton, one of our
25 offices is in Scranton. 151
1 And the subject I'm going to talk about,
2 and I'm going to be brief, is tangential diverse net,
3 but it's very important. You talked about it a little
4 bit today when you talked about enhanced 911 services
5 and LMR services. And what my company does is
6 specialize in building a thing called multiservice
7 networks.
8 Now, multiservice networks, not a real
9 buzz word. The bottom line is, everybody has them. All
10 the carriers in this room builds -- Verizon, AT&T --
11 builds multiservice networks. And what that means is,
12 the things you're talking about, whether it's broadband,
13 whether it's FirstNet, even in some cases LMR, are all
14 applications on a core network. And what our company
15 specializes in is building networks that can support all
16 the applications that come on the network. One of our
17 flagship networks is in Pennsylvania, Lackawanna County.
18 What we find is that public officials are
19 being inundated with network requests. Whether it's
20 public broadband, whether it's LMR, whether it's
21 municipal wifi, whether it's municipal services, whether
22 it's schools and libraries, everybody needs networks.
23 And in the past, what happened was everybody built their
24 own network. So you would build an LMR network, you'd
25 build a public safety network, you'd build a public 152
1 safety broadband network, you'd build a municipal
2 services network, you'd build a wifi network, and you
3 guys are getting it from all sides to build all these
4 different networks when what can be done nowadays -- the
5 technology has advanced, where you can build a single
6 network that provides all those services, reliably and
7 securely.
8 And I'm talking regional networks, I'm
9 not talking FirstNet, I'm not talking nationwide. In
10 this case, I'm talking about those county networks,
11 those municipal networks, that, you know, the county
12 administrators are coming to you and saying, "Hey, I've
13 got one group that wants public wifi, I've got one group
14 that wants a new LMR network, rebanding or whatever,
15 I've got another group that needs better access for
16 schools and libraries."
17 And what we're saying is don't build
18 independent networks, don't build single-purpose
19 networks, but build this thing called a multiservice
20 network. It saves money, it provides better services.
21 Whether you use us or don't use us, it doesn't matter.
22 There's a lot of companies that can do it. But it
23 spends the public's money better and it absolutely
24 serves the population better.
25 And like I said, I'm not going to take a 153
1 lot of time.
2 I talked a little bit about all of the
3 services you can ratchet into this network. The last
4 thing is sovereignty. It used to be there was a fear
5 that if you built a public safety network and put wifi
6 in the park on it, that somehow that would impact public
7 safety. And in the past, that was true. It's not true
8 today.
9 Today you can build a multiservice
10 network where your individual applications are siloed
11 and secure. Just like FirstNet is going to on the
12 national network. It's a multipurpose network.
13 You know, AT&T, I believe, in their
14 testimony said that they're going to leverage existing
15 network resources and they're going to prioritize public
16 safety over that. Exactly what we do on our regional
17 networks, on our county networks, in our city networks.
18 I'd encourage you guys, if you can, get
19 down to Lackawanna, talk to the 911 folks down there,
20 talk to the public broadband folks down there, talk to
21 the municipal services people down there. They're all
22 playing on one network that was built for a lot less
23 money than if they built individual networks, and it
24 serves them very well.
25 That's kind of our story, that's what 154
1 we're here to tell. I'm not going to read my written
2 testimony. That just seems silly. You guys can read
3 this.
4 I think that's it. Thank you.
5 SENATE MAJORITY CHAIRMAN VULAKOVICH:
6 Okay. Thank you.
7 Mr. Hendricks.
8 MR. HENDRICKS: Thank you, Mr. Chairman,
9 and members of the committee.
10 My name is Brian Hendricks. I'm the head
11 of technology, policy, and public affairs for Nokia in
12 the western hemisphere. You'll be delighted to learn
13 I'm not an engineer, but that delight will be
14 short-lived. I'm a lawyer and an economist, and I'm --
15 we probably shouldn't be allowed to talk in public
16 either.
17 We wanted to come here for a couple of
18 reasons today. The first of which is we have a
19 longstanding relationship with the Commonwealth of
20 Pennsylvania as a key equipment supplier and
21 technologist for STARNet in our own right, and certainly
22 now that we have fully integrated Alcatel-Lucent into
23 Nokia, which has a decade and a half-plus relationship
24 with the Commonwealth. We feel, as a key customer of
25 ours, you deserve the best information that we can 155
1 provide to you as you make what is going to be a very
2 difficult decision, and that you do so clear-eyed
3 because there's a lot of information out there.
4 I'm perfectly happy to address some of
5 the issues that have been raised here today. If I don't
6 have the answers, I will bring back our RF engineers and
7 business development people to answer them for you.
8 At the top, I do want to say that one of
9 the reasons we wanted to come here today is to correct a
10 bit of a misperception that has been permeating here and
11 elsewhere with regard to Nokia's position on opting in
12 versus opting out. And I've actually seen leave behinds
13 from the Capitol here and elsewhere suggesting that we
14 are supporting opt-out as a supplier to certain people.
15 I think it's important for you to know, and my testimony
16 makes this abundantly clear, Nokia is in favor of a
17 nationwide interoperable network for public safety.
18 That has been our position the six years that I have
19 worked here. That was my personal position when I
20 worked in the U.S. Senate drafting much of the
21 provisions that would ultimately become the law creating
22 FirstNet.
23 So we are a supplier to FirstNet and to
24 AT&T. We are also a technology agnostic supplier to
25 many other entities, including Verizon, as a customer of 156
1 ours.
2 But the key part of my testimony today
3 was to lay out, I think, something that AT&T in one of
4 their appendices to their testimony, did a very good job
5 of, which is really laying out the opt-in versus opt-out
6 advantages and disadvantages. I don't have a great deal
7 to add to that except to say that it's been presented as
8 an easy decision one way or the other. The decision the
9 states were given, the opportunity the states were
10 given, to opt out was meant to be one carefully
11 considered because it brings with it a tremendous amount
12 of challenges, not just financial. A couple of them are
13 listed in my testimony.
14 In order to get the Spectrum Lease
15 Agreement with FirstNet, should you opt out -- and
16 that's an important key here, because it's been
17 suggested that you have something that you give up if
18 you choose to opt out.
19 At the moment, you don't have spectrum.
20 You can only get access to that spectrum by the
21 build-out from AT&T or if you choose to opt out and
22 satisfy the rigorous criteria laid out in the law by
23 NTIA and the FCC and you successfully negotiate a
24 spectrum leasing agreement with FirstNet. So in order
25 to achieve that, you have to demonstrate the technical 157
1 capability to operate the network, the ability to
2 maintain interoperability with FirstNet on a nationwide
3 basis, the ability to complete the project in a similar
4 timetable, provide comparable security, coverage, and
5 quality of service to that of FirstNet.
6 One of the things that is very
7 interesting to note is that you do have an unprecedented
8 partnership here at the very beginning between the
9 federal government, private contractors, and states to
10 develop and deploy a solution. That brings together an
11 extraordinary ecosystem of partners.
12 When you make the decision to opt out,
13 many of those partners revert to a role of compliance to
14 ensure that you are capable of meeting the criteria for
15 opting out, that you build a network, that it remains
16 interoperable. You have the responsibility to stay on
17 top of your vendors to ensure that the solutions they're
18 deploying won't harm the FirstNet core to which it
19 connects, that they're comparable with the solutions
20 that are being deployed.
21 And so this is a pretty significant
22 undertaking, one that is certainly possible. And as a
23 partner of yours, should you choose to opt out, we would
24 be happy to consult with you on how to make that happen.
25 But it is important that you recognize that it comes 158
1 with a great deal of responsibility.
2 And I was telling the story to some of my
3 colleagues before that, as I read through some of the
4 testimony today that's being presented about, "you give
5 up flexibility and choice and autonomy," that it reminds
6 me about a debate I had with my wife about two years
7 ago, when we were deciding, when we had our first child,
8 whether we would stay living in the kind of planned
9 community that we had lived in, where I didn't have to
10 worry about anything that happened outside the four
11 walls of my home, to a place where we would get some
12 more aesthetic flexibility, which is something that my
13 wife wanted. Having just completed a project hand
14 digging 477 holes in my yard for edger stone, there's a
15 great deal to commend about maintenance-free living.
16 And I think that's the way we
17 conceptualize what FirstNet is offering you, an
18 opportunity with the most trusted vendors in the
19 ecosystem to deploy a solution here for first responders
20 in Pennsylvania. It's also important to know that you
21 really don't give away the opportunity for another
22 solution.
23 FirstNet and AT&T and its partners,
24 including me, must still demonstrate to the satisfaction
25 of you and public safety that this is a compelling 159
1 offering. There is no legal requirement for you to
2 adopt the system. There's pressure. There will be
3 other solutions talked about, both in terms of opting
4 out. But even if FirstNet, you decide to build the
5 FirstNet radio network here in the Commonwealth, there
6 will still be other options available, if they don't
7 deliver a valuable proposition for first responders.
8 So I think I will leave it there, given
9 that it's been a long hearing today, and just simply
10 answer the questions that you have for us.
11 SENATE MAJORITY CHAIRMAN VULAKOVICH:
12 Okay. Thank you.
13 Next we have Don Brittingham --
14 MR. BUZYDLOWSKI: Hi, Mr. Chairman.
15 SENATE MAJORITY CHAIRMAN VULAKOVICH:
16 -- vice president of public safety
17 policy.
18 MR. BUZYDLOWSKI: I will kick it off for
19 Verizon.
20 Good afternoon, Chairman Vulakovich and
21 Chairman Barrar, and members of the committees. I'm
22 Frank Buzydlowski, director of Verizon's state
23 government relations in Pennsylvania. And on behalf of
24 our 28,000 employees and retirees working and living
25 here in Pennsylvania, I appreciate the opportunity to 160
1 appear before your committees.
2 Verizon has a longstanding commitment to
3 support and serve the public safety community both in
4 the Commonwealth and throughout the nation. Each and
5 every day, we provide first responders with high quality
6 voice and data services to meet their communications'
7 needs. We also provide assistance to public safety
8 agencies in their efforts to prepare for and respond to
9 disasters. And our law enforcement resource team
10 provides support to law enforcement agencies in
11 Pennsylvania and across the country.
12 Given Verizon's strong commitment to
13 public safety, we are pleased to testify today before
14 this joint session to address issues related to the
15 development of a nationwide public safety broadband
16 network by FirstNet and to consider the Commonwealth of
17 Pennsylvania's role in that process.
18 Seated beside me is Don Brittingham, vice
19 president of public safety policy for Verizon, who has
20 led Verizon's efforts related to FirstNet for more than
21 a decade. Mr. Brittingham will deliver the balance
22 of Verizon's testimony.
23 MR. BRITTINGHAM: Thank you, Frank.
24 And good afternoon, everyone. Thank you
25 for having me today. 161
1 Verizon has long recognized the unique
2 and critical nature of public safety communications and
3 it has been a strong supporter of efforts to develop a
4 nationwide broadband network for public safety's use,
5 long before FirstNet was established.
6 In 2008, I testified before the Federal
7 Communications --
8 SENATE MAJORITY CHAIRMAN VULAKOVICH:
9 Excuse me, sir. Will you turn your
10 microphone on? Green light.
11 MR. BRITTINGHAM: Oh, okay. My
12 apologies. Should I start again?
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 No.
15 MR. BRITTINGHAM: Okay. Sorry about
16 that.
17 In 2008, I testified before the Federal
18 Communications Commission following the agency's failed
19 attempt to create a public-private partnership through
20 an auction of the so-called D Block spectrum. In that
21 hearing, Verizon called on the FCC to take a new
22 direction by reallocating the spectrum to public safety
23 and licensing it on a state or regional basis. We
24 recommended that states then be allowed to create the
25 public-private partnership that works best for them and 162
1 that all state or regional networks be required to
2 interoperate with one another in order to create a
3 nationwide network for public safety's use.
4 Now, Verizon made these recommendations
5 because it recognized that the communications needs of
6 the public safety community and the assets and
7 capabilities of perspective commercial partners often
8 vary from one state to another. In recognizing these
9 differences, state officials should have the flexibility
10 and the authority to establish those partnerships that
11 best meet their requirements and it should not be
12 limited to a single one-size-fits-all approach. Verizon
13 believed then, as we do now, that a flexible,
14 pro-competitive approach for establishing a nationwide
15 interoperable public safety broadband network is in the
16 best interest of public safety.
17 In 2012, of course, Congress established
18 FirstNet and provided it with a governance framework,
19 spectrum, and funding to develop a nationwide network
20 for public safety. Now, while the new law places
21 primary network deployment responsibility on FirstNet,
22 it also recognizes the authority of the states to make
23 their own decisions, and that includes provisions that
24 would allow the states to opt out by building their own
25 state networks using the spectrum and the federal 163
1 funding available to FirstNet.
2 Verizon commends the Commonwealth of
3 Pennsylvania in their efforts to thoroughly evaluate all
4 options available to the state. And Verizon is not here
5 to advocate that the Commonwealth pursue any particular
6 option. We are prepared to work with the state,
7 regardless of whether it opts in or opts out of
8 FirstNet.
9 It's critically important, however, that
10 the Commonwealth have viable competitive alternatives in
11 either case. Promoting competition and preserving the
12 rights of states to make their own communications
13 decisions, including the right to build their own
14 state-based networks, are two important tenets of the
15 legislation that was enacted by Congress. While the law
16 does not require states to participate in the FirstNet
17 network at all, the opt-out provisions do guarantee that
18 states have a meaningful opportunity to participate in
19 the network while taking on specific responsibilities
20 for its deployment.
21 In order for such an option to be
22 meaningful, however, it must allow states to pick their
23 own commercial partners, establish their own private
24 partnership in a manner that's comparable to the
25 partnership established by FirstNet. It must allow 164
1 states to develop network and service arrangements that
2 are both viable and sustainable over the long term. And
3 critical to the viability of such an option is the
4 ability for a state to use its own network core or one
5 deployed by its commercial partner. States should not
6 be required to use the network core deployed by
7 FirstNet, as such a requirement would put the state in
8 the untenable position of being driven by the interest
9 and decisions of FirstNet's commercial partner, a
10 condition that would certainly be unattractive to any
11 perspective state commercial partner.
12 Unfortunately, based on recent press
13 reports, it doesn't appear that either FirstNet or AT&T
14 will allow a state to use its own network core if it
15 decides to opt out and would actually require the
16 state's public safety users to purchase their services
17 from AT&T.
18 Now, ensuring interoperability between
19 the state network and a FirstNet network is certainly an
20 important requirement for any state that decides to opt
21 out. Indeed the law requires that states opting out of
22 FirstNet demonstrate how they will achieve
23 interoperability in their alternate state plans and
24 these plans must be submitted to the FCC and NTIA for
25 their approval. 165
1 The FCC recently released its standards
2 for determining whether its alternate state plan will be
3 interoperable with FirstNet. And though it stated that
4 it would not reject a plan if it includes the use of a
5 separate state network core, it declined to find that
6 such a core was expressly allowed by a state and said it
7 believes that decision is up to NTIA.
8 Verizon believes -- Verizon respects the
9 FCC's decision, but we hope that NTIA answers that
10 question affirmatively in the near future as we believe
11 it's important to any state considering an opt-out
12 choice.
13 Now, regardless of whether the
14 Commonwealth opts out of FirstNet, it should ensure that
15 public safety agencies within the state have competitive
16 options and that other public safety networks used by
17 those agencies are interoperable with FirstNet.
18 Enabling competitive alternatives for public safety is
19 vitally important to ensuring continued innovation,
20 increased reliability, and competitive pricing. A
21 public safety market that provides agencies with only
22 one choice of network provider is unlikely to achieve
23 those objectives.
24 Verizon's commitment to public safety is
25 not predicated on whether or not a state opts in or opts 166
1 out.
2 Earlier this year, we announced our
3 intention to make substantial investments in new network
4 capabilities and enhanced products and services for
5 public safety. And this commitment includes building
6 and operating our own private network core that will be
7 dedicated to public safety and making priority and
8 preemption services available to our public safety
9 customers. Combined with our unmatched coverage in the
10 state of Pennsylvania, this solution provides
11 considerable benefit to the state's public safety users.
12 Verizon's public safety solution will be
13 available, not just to Pennsylvania, but to all states
14 and all public safety users throughout the country
15 irrespective of a state's decision to opt out.
16 Moreover, it does not require access to federal funding
17 provided to FirstNet and it does not require any
18 financial commitment from the states to support network
19 deployment.
20 FirstNet has certainly provided
21 significant benefits to public safety by focusing
22 attention on the importance of mission critical
23 communications and establishing an effective framework
24 for ensuring that goal is realized. And while that goal
25 is critically important for the country, it can be 167
1 achieved while preserving the robust competitive
2 framework that we believe will continue to drive
3 innovation and advancements for public safety.
4 Competition and interoperability are not
5 mutually exclusive. Both can be achieved, and Verizon
6 is committed to work with the Commonwealth, FirstNet,
7 and all other interested stakeholders to make that
8 happen.
9 Thank you for the opportunity to testify
10 this afternoon and I'm happy to answer any questions you
11 may have.
12 SENATE MAJORITY CHAIRMAN VULAKOVICH:
13 Okay. Thank you.
14 Representative Barrar, do you have
15 questions down here?
16 Representative Day.
17 REPRESENTATIVE DAY: Thank you, Mr.
18 Chairman, or all Chairmen, and the panel for being here.
19 I wanted to ask the neutral panel if you
20 know the answers to these two questions. And FirstNet
21 can provide answers to the chairmen, if you haven't
22 answered these already.
23 Under the opt-in, the FirstNet option to
24 work with them, do you guys know if FirstNet has already
25 established prioritization for usage, like what that 168
1 would be? Will it be other people using their network
2 or first responders? Like, have they issued something
3 like that? I'm just curious if anybody on the neutral
4 panel can give us a neutral viewpoint on that.
5 MR. BLANK: I am not aware of any
6 information that's been made public regarding their
7 priority plans.
8 MR. BUZYDLOWSKI: The only thing I can
9 say from the vendor perspective is that it has always
10 been envisioned that the radio infrastructure that we
11 are supplying will have preemption capability. And that
12 is a feature that all of the vendors have been asked to
13 develop for AT&T and FirstNet and will be expected when
14 deployed so that they can make those kinds of traffic
15 distinctions between commercial and public safety users
16 in emergency situations.
17 REPRESENTATIVE DAY: Is the Commonwealth
18 able to make their own agreement with FirstNet or will
19 they have to have the same agreement that everyone else
20 has with them also? Do you know?
21 MR. HENDRICKS: That's probably more of a
22 legal question for FirstNet under their guidelines.
23 REPRESENTATIVE DAY: Okay. The only
24 other question I had is just if you guys have any
25 information about whether, if we would go with the 169
1 FirstNet option, would they allow -- have they talked at
2 all about allowing revenue sharing for the usage of any
3 excess bandwidth? Have you heard anything along those
4 lines?
5 MR. HENDRICKS: I haven't. I want to
6 make sure I understand the question, though.
7 So there will be capacity that is not
8 utilized at all times by public safety users, except
9 obviously, in emergencies, they have priority. And
10 there will be wholesaling or other use of that. And
11 your question is whether --
12 REPRESENTATIVE DAY: We can participate
13 in --
14 MR. HENDRICKS: -- there will be revenue
15 sharing back to the state.
16 REPRESENTATIVE DAY: Right.
17 MR. HENDRICKS: Again, that's going to
18 have to be whether -- that's a question of whether or
19 not the statute permits that. FirstNet would have to
20 answer that for you.
21 REPRESENTATIVE DAY: Okay.
22 Thank you, all. Not easy questions, or I
23 don't expect you to have the answers. I just wanted --
24 if you knew about it, I wanted you to share it with us,
25 and also let -- if anyone else is still here from 170
1 FirstNet, they can provide answers to the chairman.
2 Thank you, Mr. Chairman.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 All right. This panel that just came up
5 here, it's -- we get a little bit of a message that "we
6 don't care what you do," but we see a little leaning to,
7 "hey, give us an opportunity, opt out." That's how I
8 read this. And there's nothing wrong with that.
9 But looking at the -- let's go to, let's
10 see, Verizon here. Basically, in your testimony, on
11 page 6, you announced earlier this year, "The intention
12 to make substantial investments in new network
13 capabilities and enhanced products and services for
14 public safety. The commitment includes building and
15 operating our own private network core," that you would
16 dedicate to public safety communications, "making
17 priority and preemption services available to our public
18 safety customers."
19 You go on to say, moreover, "It does not
20 require access to federal funding provided to FirstNet
21 and does not require any financial commitment from
22 states to support network deployment."
23 How do you do that?
24 MR. BRITTINGHAM: We'll use our own money
25 to build the dedicated core and to provide priority and 171
1 preemption services to our customers. We don't require
2 funding from either the state or the federal government.
3 SENATE MAJORITY CHAIRMAN VULAKOVICH:
4 Okay. So if you do not, money is not
5 limitless. It is a very diverse state. We know that
6 there's, you know, some new towers that would have to be
7 built and a lot of infrastructure needs that will need
8 to be taken care of whether you use somebody else's
9 towers or you build new towers. And you're going to pay
10 for all that?
11 MR. BRITTINGHAM: Well, sir, first of
12 all, we cover about 99 percent of the population in the
13 state of Pennsylvania and 91 percent of the geography of
14 the state, more than any other provider. So we're
15 starting from, you know, a better basis than other
16 competitors may be starting from.
17 SENATE MAJORITY CHAIRMAN VULAKOVICH:
18 Okay. And you can tie this all in to
19 interoperability with FirstNet?
20 MR. BRITTINGHAM: Yes. And so
21 interoperability, I think -- clearly, it's important. I
22 think everyone understands how important
23 interoperability is, and it should be incorporated in to
24 any solution, regardless of whether the state chooses to
25 opt out and regardless of whomever they choose to be 172
1 their partner, whether it be Verizon or anyone else --
2 or even if the state chooses not to opt out and to let
3 FirstNet and AT&T implement their network as they have
4 proposed, they still should have competitive choices.
5 And regardless of whatever choice that is, it should be
6 interoperable.
7 So if the state were to choose not to opt
8 out, but public safety users in the state were to decide
9 to continue to use Verizon, which certainly we'd hope
10 that they would, we would have a dedicated solution for
11 them. We would want to be sure that our network
12 solution is interoperable with what FirstNet provides in
13 this state.
14 SENATE MAJORITY CHAIRMAN VULAKOVICH:
15 So if Verizon -- if the state chose to
16 opt out and go with Verizon, you're saying as good as or
17 better than AT&T coverage, but it would not cost the
18 state any dollars in the same manner that it's not going
19 to cost the state any more dollars for AT&T?
20 MR. BRITTINGHAM: That's correct.
21 Our intent is to offer a solution to the
22 state that is essentially the same as what it would get
23 from AT&T. So the same dedicated network core, the same
24 priority and preemption, and obviously a service
25 arrangement that would have monthly fees associated with 173
1 it, but without requiring investment in new capital to
2 build a network. And we would do that for the state,
3 irrespective again, as to whether it opts out or opts in
4 to FirstNet.
5 SENATE MAJORITY CHAIRMAN VULAKOVICH:
6 Okay. So with AT&T, I think there was a
7 tentative five-year build-out with Rivada. There was a
8 tentative four-year build-out -- so with the coverage
9 that you have and the infrastructure you have, what is
10 your build-out period?
11 MR. BRITTINGHAM: Well, our network is
12 ready today. So the dedicated core that we would build
13 would be built in the, likely, in the first quarter of
14 next year. Priority is already available on our network
15 today for public safety, has been for several years.
16 Preemption has not yet been provided, but it will be
17 provided within the next several months. So we're ready
18 to go in the short term with our solution.
19 SENATE MAJORITY CHAIRMAN VULAKOVICH:
20 Okay. Now, Verizon covers, what,
21 99 percent of --
22 MR. BRITTINGHAM: We cover 91 percent of
23 the geography and about 99 percent of the population in
24 the state.
25 SENATE MAJORITY CHAIRMAN VULAKOVICH: 174
1 Population -- and let's go to my example
2 of the train derailment. I'm sure people had Verizon
3 service, phone, down in that big hole and they couldn't
4 get to anybody. Now, you have a system already,
5 infrastructure system deployed, but in that case, there
6 needs to be something to be done. What do you do there?
7 MR. BRITTINGHAM: I'm not familiar with
8 the particular case of the --
9 MR. BUZYDLOWSKI: You're talking about
10 the railroad derailment in Hyndman, Somerset County?
11 SENATE MAJORITY CHAIRMAN VULAKOVICH:
12 Somerset, yes.
13 MR. BUZYDLOWSKI: We were -- our people
14 were contacted immediately by the emergency responders,
15 were on scene very quickly. And we brought in what we
16 call COWs, or cells on wheels, and other devices that we
17 then had to pick up a signal in order to provide service
18 to that valley.
19 I've actually been there. I toured there
20 with Representative Metzgar not that long ago. And
21 railroad cars are still in disarray laying on the side
22 where there used to be houses, very difficult things to
23 see. But it's in a valley and there's no macro tower
24 for any provider, that I know of, providing service
25 there, so it had to be brought in. 175
1 SENATE MAJORITY CHAIRMAN VULAKOVICH:
2 Could something be built in certain
3 areas? Let's take the -- did Verizon supply the
4 deployables when we had the Frein manhunt up in the
5 Poconos area?
6 MR. BUZYDLOWSKI: We did. In northeast
7 Pennsylvania, we did provide service there, also.
8 SENATE MAJORITY CHAIRMAN VULAKOVICH:
9 Right. Now --
10 MR. BUZYDLOWSKI: And that was in -- I
11 mean, I'm familiar with the area, too, a lot of forest
12 area with --
13 SENATE MAJORITY CHAIRMAN VULAKOVICH:
14 Oh, yes. I was there. I went up there,
15 and I see some of these areas.
16 But for first responders, you know, if
17 you're not a first responder or never have been, it
18 depends, you know, if you're getting there and where
19 there's a life-threatening situation. A police officer
20 gets someplace -- you know, we talk about all the time,
21 the -- and I know we're not talking about radios here,
22 so to speak. But you know, your portable radio is your
23 lifesaver. And you go into some of these areas and if
24 you're not close to the car or the portable, the
25 frequency goes to the vehicle and then to the tower and 176
1 then back and then back. You're alone.
2 And so I guess what we're saying is, when
3 we think of FirstNet and its capability -- and I know
4 it's about data, the different types of data thing.
5 When I think of it, I think, okay, a lot of money is
6 going to be spent and there's a lot of talk about this
7 and everybody is excited about it, but somehow I think
8 that we get the impression that it truly will be
9 statewide.
10 When we had the initial statewide
11 radio -- which there has been so much concern about in
12 this state, that's why we're all a little leery here.
13 We spent a lot of money, and I think there is some
14 exaggeration because we do have something to show for
15 it, but it's not a statewide radio.
16 So how close can we get to FirstNet's
17 mission and vision of, hey, you're out there, you need
18 the data, you're going to get it? Or are we still going
19 to -- can we lessen the amount of deployables we put out
20 there by putting up infrastructure in certain places or
21 attaching to certain infrastructure? That's what we
22 want to get to.
23 It's a lonely -- I'm telling you, it's a
24 lonely place. Not only for you, but there's a person or
25 persons out there that are counting on you to be their 177
1 savior in one way or another. There's a lot that goes
2 through your mind when you respond.
3 And so, do you know what I'm saying?
4 MR. BRITTINGHAM: Absolutely. And we
5 certainly understand how important communications are
6 for first responders. We designed our network to be
7 public safety grade, to meet a public safety grade
8 standard. I don't think there are other commercial
9 carriers that do that. So we understand that.
10 The reason why we have better coverage
11 than other commercial providers is because we understand
12 that first responders need coverage, you know, when
13 they're out doing their jobs and it's not always where
14 there are a lot of people.
15 Obviously, there are some parts of the
16 country and some parts of this state that are very
17 difficult to cover. I think we certainly want to be
18 working with other officials in the state to understand,
19 you know, where the gaps are. And certainly if we were
20 to be opting out with the state and have access to Band
21 14 spectrum in addition to our own spectrum and our own
22 networks, we'd certainly want to discuss with you where
23 the state would find it necessary to expand coverage in
24 order to meet some of those needs.
25 MR. HENDRICKS: Mr. Chairman, I would 178
1 just add from the standpoint of a technologist, when we
2 look backward at previous generations of technology
3 having left gaps, there's some good news here, as well.
4 When we're talking about the spectrum that Verizon has
5 deployed commercially for LTE, that would be used in
6 Band Class 14. The characteristics of that spectrum are
7 really that good.
8 And so we're going to do a lot in
9 shrinking the coverage gaps just based on the type of
10 technology that is being deployed. But our role as a
11 technologist is to work with our customers, including
12 the Commonwealth of Pennsylvania, Verizon, and others,
13 to figure out what kinds of solutions can be deployed in
14 places where you might still have either a coverage gap
15 or in the event -- apparently, there are a lot of holes
16 in Pennsylvania because people have been falling in
17 holes all afternoon. But in a situation like that, we
18 have other solutions that can be deployed, including an
19 LTE-based network in a backpack that can be carried by
20 one person to show up with a 70-mile radius. Those are
21 the kinds of solutions that can be brought to bear to
22 ensure that you don't have the kinds of situations where
23 you're going to have your public safety individuals cut
24 off from network access at any time.
25 And by the way, I'm reminded that we are 179
1 also testing that technology on drones. So there will
2 be an opportunity to provide not only coverage gap --
3 fill those in, but also in particular situations to add
4 capacity and coverage.
5 SENATE MAJORITY CHAIRMAN VULAKOVICH:
6 Good to hear because drones is a big
7 subject.
8 And you know, I know from talking to
9 people in the military, it's easier to operate a drone
10 out in the battlefield someplace than it is in like a
11 city someplace because of the terrain and everything,
12 even though they're under, you know, dangerous
13 situations.
14 Well, look, it's almost one o'clock, so I
15 have another three and a half hours to ask questions.
16 PANEL MEMBER: We're leaving you.
17 PANEL MEMBER: We'll stay around.
18 SENATE MAJORITY CHAIRMAN VULAKOVICH:
19 Is it divorce time? Okay.
20 Hey, I have to tell you, I really
21 appreciate it. I learned so much today. I know other
22 members did. I hope I can retain a lot of this. You
23 have some really smart people out here. And I
24 appreciate the testimony.
25 If we have questions, we'll get them to 180
1 you. And I know that one of the main reasons for this
2 meeting today was to bring everyone here, have your say,
3 and let us try to weigh it in our minds. And the
4 Governor has a very important decision to make here in a
5 short period of time. So we wanted to make sure that we
6 had this type of dialogue to help him make the best
7 decision that he can make for the people of
8 Pennsylvania. And so, I really thank you for your
9 patience today.
10 And, Representative Barrar, would you
11 like to close?
12 HOUSE MAJORITY CHAIRMAN BARRAR: Same
13 thing, I would just like to say thank you.
14 SENATE MAJORITY CHAIRMAN VULAKOVICH:
15 Okay. The hearing is over.
16 (The hearing concluded at 12:49 p.m.)
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