California last week issued a request for proposals (RFP) from vendors willing to build and maintain the FirstNet radio access network (RAN) within the state for the next 25 years, if California pursues and achieves “opt-out” status.
Released on Friday, the California RFP requires bidders to submit their proposals by 6:00 p.m. PST on Dec. 6. Evaluators will have a week to assess the proposals and are expected to complete the process by Dec. 13, according to the timetable included in the RFP.
Under the law that established FirstNet, governors in all 56 states and territories have the choice of making an “opt-in” decision—accepting the FirstNet deployment plan and allowing AT&T to build the LTE radio access network (RAN) within the state’s borders at no cost to the state—or pursuing the “opt-out” alternative, which would require the state to be responsible for building and maintaining the RAN for the next 25 years.
Like other state governors, California Gov. Jerry Brown has until Dec. 28 to announce his “opt-in/opt-out” decision. If a governor takes no action, the state is treated as an “opt-in” state. California plans to announce its intention to make an alternative RAN—or not—on the following day, Dec. 29.
No decision has been made yet, according to the RFP.
“California’s release of this RFP should not be interpreted that California has made the decision to opt-out of the state plan developed by AT&T and FirstNet,” the RFP states.
California has been one of the most closely watched states during the FirstNet “opt-in/opt-out” decision period, because of its large commercial markets, geographic size and the presence of the largest public-safety LTE early-builder project in the Los Angeles area.
State officials have been outspoken in their disappointment with several aspects of the FirstNet/AT&T proposal—in particular, the lack of coverage and network-hardening guarantees in the state plan—but they have also noted that the significant financial risks associated with the “opt-out” alternative make that choice far from ideal. In fact, if the California secures “opt-out” status and its effort fails, the state would be liable to pay a penalty of as much as $15 billion in a termination payment to FirstNet, according to multiple state presentations.
In addition to a $112 million performance bond, vendors should be prepared to supply the funds necessary to allow the state to meet any termination-payment requirements, according to the RFP.
“The state reserves the right to file a claim against the contractor’s performance bond in the event of contractor’s failure to perform resulting in a material breach,” the RFP states. “Furthermore, should the state opt to cancel the Spectrum Manager Lease Agreement [with FirstNet] due to the contractor’s material breach of the contract, the state reserves the right to file a claim for any termination payments owed by the state.”
If California decides to pursue the “opt-out” alternative, the state’s contract with an alternative-RAN vendor would be for a minimum of 10 years, with the state having the option to renew the agreement in 5-year increments extending to the full 25-year period that the AT&T nationwide FirstNet deal covers.
Officials for both Verizon and Rivada Networks have indicated publicly that their companies would be interested in submitting bids for a California alternative-RAN procurement.
FirstNet released its initial state plans on June 19 and made them actionable, so governors would have the opportunity to “opt-in” to FirstNet prior to the final state plans being released on Sept. 29. Governors in 53 states and territories that received initial state plans on June 19—the exceptions being the Pacific territories of Guam, American Samoa and the Northern Mariana Island, which will have a separate timetable—are required to make their “opt-in/opt-out” decisions by Dec. 28.
With the release of its RFP, California joins the District of Columbia and the following 11 other states that have issued an RFP without having their governors announce an “opt-in/opt-out” decision to date: Colorado, Connecticut, Massachusetts, Mississippi, Missouri, New Hampshire, Oregon, Rhode Island, Vermont, Washington and Wisconsin. Of these states, New Hampshire and Colorado are the only states to announce the winner of their procurements.
Meanwhile, only seven governors in the following states have not announced an “opt-in” decision or had state officials issue an RFP seeking a potential alternative RAN vendor: Delaware, Florida, Illinois, New York, North Dakota, Ohio and South Dakota.
Thus far, 31 states—Virginia, Wyoming, Arkansas, Kentucky, Iowa, New Jersey, West Virginia, New Mexico, Michigan, Maine, Montana, Arizona, Kansas, Nevada, Hawaii, Alaska, Tennessee, Nebraska, Maryland, Idaho, Texas, Louisiana, Minnesota, Alabama, Indiana, Oklahoma, Pennsylvania, South Carolina, Utah, North Carolina and Georgia—have announced their “opt-in” decisions, as did the U.S. Virgin Islands and Puerto Rico territories.