What the Payroll Tax Bill Means for Public Safety and Critical Infrastructure

 

By Sandra Wendelken, Editor

 

With the signing the Middle Class Tax Relief and Job Creation Act of 2012 last week by President Barack Obama, the details of the bill and what they mean to public safety and critical infrastructure entities are coming to light.

 

On a high level, the bill reallocates the 700 MHz D block spectrum to public safety, with $7 billion in funding to build one nationwide public-safety broadband network. The legislation also establishes governance through a newly created First Responder Network Authority (FirstNet) with state and local implementation rules. It also requires public safety UHF T-band licensees to relocate to other spectrum. More specifics on each of these points are outlined below.

 

On the spectrum front, the bill specifically reallocates the D block to public safety and permits the FCC to allow flexible use of narrowband spectrum, including use for public-safety broadband communications, subject to technical and interference protection measures. The bill also requires the public-safety licensees in the UHF T-band spectrum to relocate out of the spectrum within nine years with relocation to be completed two years after the spectrum is competitively bid. Proceeds from auctions will be used to cover the costs to relocate the affected public-safety licensees.

 

The UHF T-band (470 – 512 MHz) also includes business/industry users and SMR operators in 13 of the largest U.S. cities. Those cities include Boston, Chicago, Cleveland, Dallas/Fort Worth, Detroit, Houston, Los Angeles, Miami, New York, Philadelphia, Pittsburgh, San Francisco and Washington. At press time, the FCC hadn’t yet responded to questions about how the bill will affect non-public-safety users in the spectrum or the narrowbanding mandate that affects all VHF and UHF licensees.

 

During a meeting last week, Harlin McEwen, chairman of the Public Safety Spectrum Trust (PSST) and holder of public safety’s current 10 megahertz of 700 MHz broadband spectrum, said the UHF T-band spectrum will continue to be addressed by public-safety leaders. “It’s a battle for another day,” McEwen said. “There’s nothing to panic about. There are nine years to transition.”

 

“We shouldn’t over react at this point as one could interpret the provisions to mean that non-public safety incumbents are excluded from being required to vacate their T-Band spectrum lands,” said Mark Crosby, CEO of the Enterprise Wireless Alliance (EWA), which represents business/industry licensees, in a blog. “Conversely, the provisions are written such that it could be that non-public safety T-Band incumbents are to be forcefully relocated to wireless reservation territory in Oklahoma without financial assistance.”

 

FirstNet, an independent authority within the National Telecommunications and Information Administration (NTIA) created by the bill, will hold the 10-year license for the public-safety 700 MHz D block spectrum and the additional 10 megahertz of public-safety broadband spectrum currently licensed to the PSST. The license can be renewed for another 10 years if FirstNet meets its obligations. FirstNet is responsible for establishing a nationwide public-safety broadband network based on a single, nationwide network infrastructure that consists of a core network and a radio access network.

 

The 15-member FirstNet board will consist of the secretary of Homeland Security, the U.S. attorney general and the director of the Office of Management and Budget (OMB), along with 12 individuals appointed by the secretary of Commerce. Three of the board members must be public-safety officials and three members must represent states, localities, tribes and territories, ensuring geographic and urban and rural representation. Board members must be appointed within 180 days to three-year terms and can’t serve more than two consecutive three-year terms. Four members will serve three-year terms, four members two-year terms and four members one-year terms. The secretary of Commerce will appoint the chair to serve a two-year term.

 

The board must meet at least quarterly and the meetings must be open to the public. Eight members will constitute a quorum. Members will be paid “at the daily rate of basic pay for level IV of the executive schedule for each day during which such members are engaged in performing a function of the board.”

 

FirstNet must establish a standard pubic-safety advisory committee to assist the authority. FirstNet will obtain grants and make contracts, spending funds to advance public-safety communications. It will also oversee the building, deployment and operation of the network including promoting competition in the equipment market, including devices for public-safety communications and promoting integration with public-safety answering points (PSAPs) and ensuring rural coverage.

 

FirstNet will also establish network policies, oversee state and local planning, leverage existing infrastructure, oversee maintenance and upgrades, develop roaming agreements, develop network infrastructure and device criteria and offer representation before standard-setting entities. The entity is prohibited from negotiating with foreign governments. The authority will terminate in 15 years.

 

Within 30 days of the bill becoming law — March 23 — the FCC must establish a Technical Advisory Board for First Responder Interoperability with 14 members, four of which will be representatives of wireless carriers, three members of equipment manufacturers, and four members of public-safety entities. The assistant secretary will appoint one nonvoting member to the interoperability board, and members are appointed for the life of the board. A chair and vice chair will be selected by the board, which will operate through a quorum or majority of the members.

 

Within 90 days after the bill was signed into law — May 23 — the interoperability board will work with federal agencies to develop recommended minimum technical requirements based on Long Term Evolution (LTE) to ensure a nationwide public-safety broadband network. The board’s travel expenses will be paid under the legislation.

 

Public-safety officials pointed out last week that although FirstNet likely won’t be completely formed for six months, the report from the interoperability board with LTE technical recommendations is due in three months to FirstNet.

 

The bill establishes the Public Safety Trust Fund with $7 billion in funding from spectrum auctions to build the nationwide network, and NTIA can borrow $2 billion from the Treasury to fund the network until spectrum is auctioned. FirstNet can collect network user fees, lease fees and reinvest funds. FirstNet will be audited and provide annual reports to Congress. The network can’t provide services directly to consumers.

 

The secretary of Commerce within a year after the bill passes must identify 15 megahertz of spectrum between 1.675 and 1.71 GHz for reallocation from federal use to nonfederal use and allocate it for commercial use through an auction. The identified spectrum and additional spectrum at 1.9 and 2.1 GHz must be auctioned within three years. The proceeds will be used to cover the relocation of the T-band users and federal entities from their spectrum. The remainder of the proceeds will be deposited into the Public Safety Trust Fund.

 

A State and Local Implementation Fund will establish a grant program to give grants to states to identify, plan and implement their buildout of the network. Each state will designate a coordinator for the grant funds. There is $135 million for state and local implementation administered by NTIA to integrate infrastructure and equipment with the nationwide broadband network. The federal share is up to 80 percent meaning states must provide 20 percent of the funding.

 

"We need that state and local participation to move forward," said Richard Mirgon, past president of the Association of Public Safety Communications Officials (APCO) International. "State and local agencies have time to talk to their governing boards about what that 20 percent will look like, and it’s time to start planning for it."

 

Each state will decide whether to participate in the deployment of the nationwide interoperable broadband network or deploy its own state radio access network. If a state opts out of the nationwide network, the state must submit an alternative plan showing interoperability compliance with the nationwide network for FCC approval. If the FCC approves a state’s opt-out plan, it can apply to NTIA for grants to build its network and to lease spectrum capacity from FirstNet. If the plan isn’t approved, FirstNet will oversee the state’s buildout.

 

"This process by design for the states isn’t easy,” Mirgon said. "The opt-out process is cumbersome. If you have the wherewithal to do the opt-out planning process, you can probably build it. Congress didn’t want states opting out and doing nothing. Opting out doesn’t allow you to not pay your share or to build proprietary equipment or be in violation of any standards." 

 

States are allowed to lease the network to secondary users that aren’t consumers. Therefore, utilities, transit agencies and other critical infrastructure firms could access the network. “Lease and network user fees will apply to critical infrastructure entities operating on the public-safety network and must cover, but not exceed, the administrative costs,” said a note from the Keller and Heckman law firm. Any revenue gained by the state from such a leasing agreement shall be used only for constructing, maintaining, operating or improving the radio access network of the state.

 

Several federal agencies are charged with research and development into public-safety communications specific to accelerating narrowband and broadband synergies. The director of the National Institute of Standards and Technology (NIST) will oversee the $100 million research fund.

 

The full bill is available here. Further parts of the bill will be outlined in future articles. 

 

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