A report has come to light from the Department of Commerce Office of the Inspector General that says FirstNet could not demonstrate investment decisions were the best use of reinvestment funds or maximized benefits to public safety. The 29-page report, which came out in November, is one of a series covering FirstNet’s reinvestment process.
“Our audit objective was to determine whether FirstNet Authority’s process for reinvesting fee payments is effective and consistent with established practices, procedures and regulations,” wrote Arthur Scott, Jr., Assistant Inspector General for Audit and Evaluation. Many of the financial figures were redacted to protect proprietary AT&T information.
FirstNet “could not demonstrate that these investment opportunities were the most appropriate or efficient use of resources” for reducing network performance gaps and “meeting first responders’ priorities of evolving operational needs,” states the Inspector General (IG) in the document.
FirstNet, says the IG, did not conduct a needs analysis, or study alternatives or sufficiently justify the need in the business case. The report also states that FirstNet “relies on information from AT&T that appeared to influence the process of identifying and selecting reinvestment opportunities.”
Congress, in 2012, established the FirstNet Authority, as an independent authority under NTIA to ensure the building, deployment and operation of the nationwide public safety broadband network dedicated to first responders. In 2017, FirstNet Authority signed a 25-year contract with AT&T for the construction and operation of the network. The contract involves an initial obligation of $6.5 billion in funds to AT&T and AT&T’s use of dedicated broadband spectrum. It also includes annual payments from AT&T to FirstNet over the life of the contract for use of that spectrum.
Per Congress, FirstNet must reinvest a portion of the payments into the network to construct, maintain, operate and improve it. In June 2020, the FirstNet Authority Board approved its first two reinvestments. They include expanded deployable capabilities and services and an initial investment of Phase 1 of the 5G upgrade to the core network. The IG audited the reinvestment process “due to its importance to the nation’s first responders and the substantial dollars to be reinvested over the next several years,” stated the IG.
The IG said a more efficient evaluation process would help FirstNet determine which financial investments would be most beneficial and determine which should be prioritized for public safety and “ensure funds are spent efficiently.” The IG said the office was making recommendations that could put more than $296 million in funds “to better use and ensure future multi-billion-dollar investments are supported and justified and reflect public priorities.”
NTIA and FirstNet responded to the report last October, before the official public version was released. NTIA Administrator Alan Davidson said: “Given the long-term relationship established by the contract with AT&T and building on the government’s substantial initial Core and Radio Access network investments, the FirstNet Authority and AT&T must collaborate closely on foundational investments such as 5G network upgrades.” NTIA agreed with all of the IG’s recommendations and said it would prepare an action plan to implement them.
FirstNet Authority Acting Director Lisa Casias, too, said that FirstNet agreed with most of the IG’s recommendations and would implement them. The one sticking point, she said, the report didn’t appear to take into consideration FirstNet’s Authority’s established procedures it followed to support the two initial investments. Those included collaboration with organizations throughout the Commerce Department and consultations with the Office of Management and Budget.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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