[Federal Register Volume 80, Number 49 (Friday, March 13, 2015)]
[Notices]
[Pages 13336-13351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-05855]


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DEPARTMENT OF COMMERCE

National Telecommunications and Information Administration

First Responder Network Authority

[Docket Number 150306226-5226-01]
RIN 0660-XC017


Further Proposed Interpretations of Parts of the Middle Class Tax 
Relief and Job Creation Act of 2012

AGENCY: First Responder Network Authority, National Telecommunications 
and Information Administration, U.S. Department of Commerce.

ACTION: Notice and request for comments.

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SUMMARY: The First Responder Network Authority (``FirstNet'') publishes 
this Second Notice to request public comment on certain proposed 
interpretations of its enabling legislation that will inform, among 
other things, network policies, forthcoming requests

[[Page 13337]]

for proposals, and interpretive rules. With the benefit of the comments 
received from this Second Notice, FirstNet may proceed to implement 
these or other interpretations with or without further administrative 
procedure.

DATES: Submit comments on or before April 13, 2015.

ADDRESSES: The public is invited to submit written comments to this 
Second Notice. Written comments may be submitted electronically through 
www.regulations.gov or by mail (to the address listed below). Comments 
received related to this Second Notice will be made a part of the 
public record and will be posted to www.regulations.gov without change. 
Comments should be machine-readable and should not be copy-protected. 
Comments should include the name of the person or organization filing 
the comment as well as a page number on each page of the submission. 
All personally identifiable information (e.g., name, address) 
voluntarily submitted by the commenter may be publicly accessible. Do 
not submit confidential business information or otherwise sensitive or 
protected information.

FOR FURTHER INFORMATION CONTACT: Eli Veenendaal, First Responder 
Network Authority, National Telecommunications and Information 
Administration, U.S. Department of Commerce, 12201 Sunrise Valley 
Drive, M/S 243, Reston, VA 20192; 703-648-4167; or 
<a href="/cdn-cgi/l/email-protection#4520292c2f242d6b3320202b202b2124242905232c3736312b20316b222a33"><span class="__cf_email__" data-cfemail="1b7e7772717a73356d7e7e757e757f7a7a775b7d7269686f757e6f357c746d">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Introduction and Background

    The Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 
112-96, Title VI, 126 Stat. 256 (codified at 47 U.S.C. 1401 et seq.)) 
(the ``Act'') established the First Responder Network Authority 
(``FirstNet'') as an independent authority within the National 
Telecommunications and Information Administration (``NTIA''). The Act 
establishes FirstNet's duty and responsibility to take all actions 
necessary to ensure the building, deployment, and operation of a 
nationwide public safety broadband network (``NPSBN'').\1\
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    \1\ 47 U.S.C. 1426(b).
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    As detailed in our ``Proposed Interpretations of Parts of the 
Middle Class Tax Relief and Job Creation Act of 2012'' (``First 
Notice'') the rights and obligations of FirstNet, States and 
territories, and state, federal, local, and tribal public safety 
entities, among other stakeholders, turn on interpretation of the Act's 
terms and provisions.\2\ In this Second Notice, we make preliminary 
conclusions on a range of issues, including the equipment for use on 
the FirstNet network, the nature and application of FirstNet's required 
network policies, FirstNet's presentation of a state plan and its 
implications for the rights and duties of other stakeholders, and the 
rights of States choosing to assume responsibility to build and operate 
a radio access network (``RAN'') in said State. We believe that 
consideration of these preliminary conclusions and ultimately making 
final determinations on these matters will further guide all parties 
with regard to the building, deployment, and operation of the NPSBN.
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    \2\ The pronouns ``we'' or ``our'' throughout this Second Notice 
refer to ``FirstNet'' alone and not FirstNet, NTIA, and the U.S. 
Department of Commerce as a collective group.
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    Consistent with our approach in the First Notice, although FirstNet 
is exempt from the procedural requirements of the Administrative 
Procedure Act (``APA''),\3\ FirstNet desires to solicit public comments 
on foundational legal issues, in addition to technical and economic 
issues, to guide our efforts in achieving our mission.\4\ Thus, in 
general FirstNet may pursue APA-like public notice and comment 
processes such as this Second Notice, and we intend to rely upon 
comments filed in response to this Second Notice to inform our actions, 
including the establishment of network policies, development of 
requests for proposals (``RFPs''), and other duties FirstNet is 
assigned under the Act.
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    \3\ 47 U.S.C. 1426(d)(2).
    \4\ See 79 FR 57058-9 (September 24, 2014).
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    With respect to this Second Notice, in instances where we have 
drawn a preliminary conclusion and sought comments thereon, we 
currently intend to issue a subsequent document indicating final 
interpretative determinations, taking into consideration the comments 
received. This subsequent document might not precede release of the 
above-mentioned RFPs, which will nonetheless incorporate and constitute 
such final interpretive determinations in light of the received 
comments. Further, although we may, we do not currently anticipate 
issuing further public notices and/or opportunities for comment or 
reply comments on the preliminary conclusions made in this Second 
Notice, and thus encourage interested parties to provide comments in 
this proceeding.
    In instances where we have not drawn a preliminary conclusion, but 
have sought information and comment on an issue, we may issue 
additional notices seeking comments on any preliminary conclusions we 
may reach following review and consideration of the comments responding 
to this Second Notice. That notice, if issued, may then be followed by 
notice of final determinations. However, because we may not issue such 
a further notice of preliminary conclusions at all or prior to 
releasing the above-mentioned RFPs, we again encourage interested 
parties to provide comments in this proceeding.

II. Issues

A. Technical Requirements Relating to Equipment for Use on the NPSBN

    In the First Notice, we explored the network elements that comprise 
the NPSBN. We address below a separate section of the Act concerning 
equipment for use on the network. Our overarching considerations in 
these interpretations are the Act's goals regarding the 
interoperability of the network across all geographies and the cost-
effectiveness of devices for public safety.
    Section 6206(b)(2)(B) requires FirstNet to ``promote competition in 
the equipment market, including devices for public safety 
communications, by requiring that equipment for use on the network be: 
(a) Built to open, non-proprietary, commercially available standards; 
(b) capable of being used by any public safety entity and by multiple 
vendors across all public safety broadband networks operating in the 
700 MHz band; and (c) backward-compatible with existing commercial 
networks to the extent that such capabilities are necessary and 
technically and economically reasonable.'' \5\ Several critical terms 
in this provision must be interpreted to allow FirstNet to develop 
requests for proposals and network policies that will fulfill these 
requirements.
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    \5\ 47 U.S.C. 1426(b)(2)(B).
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    First, we must determine the scope of the ``equipment'' that must 
satisfy the requirements of Section 6206(b)(2)(B). The Act states that 
this Section applies only to equipment ``for use on'' the NPSBN, rather 
than, for example, ``equipment of'' or ``equipment constituting'' the 
network. Further, the Act makes clear that the range of equipment 
implicated in the Section must at least include ``devices,'' which, in 
the telecommunications market, is often a reference to end user 
devices, rather than equipment used inside the network to provide 
service to such devices. Finally, whatever the scope of the term 
``equipment,'' such equipment

[[Page 13338]]

must be ``built to open, non-proprietary, commercially available 
standards.''
    In Section 6202, the Act describes the components of the NPSBN 
itself, including a core network and RAN, and requires each to be based 
on ``commercial standards.'' \6\ Thus, when describing criteria for the 
equipment with which the network itself is to be constructed, the Act 
requires use of only equipment built to commercial standards, whereas 
in describing the equipment of Section 6206(b)(2)(B), the Act requires 
that such equipment must be built not only to commercial standards, but 
also ``open, non-proprietary'' standards.\7\ Therefore, given the ``for 
use on'' language of the provision, the distinct addition of the terms 
``open, non-proprietary,'' and the separate section of the Act 
describing and prescribing requirements for the components of the 
network itself, it appears that the equipment described in Section 
6206(b)(2)(B) refers to equipment using the services of the network, 
rather than equipment forming elements of the NPSBN core network or the 
RAN.
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    \6\ See id. Sec.  1422(b).
    \7\ Id. Sec.  1422(b)(2). We interpret the terms ``commercially 
available standards'' and ``commercial standards'' as having the 
same meaning as ``commercial standards'' defined in the Act.
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    This interpretation is supported by the other two elements 
appearing in Section 6206(b)(2)(B). For example, Section 
6206(b)(2)(B)(ii) requires that such equipment be ``capable of being 
used by any public safety entity,'' which would seem inconsistent with 
a requirement applicable to complex network routing and other equipment 
used inside the network. Similarly, Section 6206(b)(2)(B)(iii) requires 
such equipment to be ``backward-compatible with existing commercial 
networks'' in certain circumstances, which would again make sense in 
the context of end user devices, but not equipment being used to 
construct the network. This interpretation is also consistent with 
section 4.1.5.1, entitled ``Device or UE,'' of the Interoperability 
Board Report.\8\
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    \8\ Section 6203 of the Act established the Technical Advisory 
Board for First Responder Interoperability (``Interoperability 
Board'') and directed it to develop minimum technical requirements 
to ensure the interoperability of the NPSBN. 47 U.S.C. 1423. On May 
22, 2012, the Interoperability Board, in accordance with the Act, 
submitted its recommendations to the FCC in a report. See 
Interoperability Board, Recommended Minimum Technical Requirements 
to Ensure Nationwide Interoperability for the Nationwide Public 
Safety Broadband Network (``Interoperability Board Report'') (May 
22, 2012), available at http://apps.fcc.gov/ecfs/document/view?id=7021919873. On June 21, 2012, the FCC completed its review 
of the Interoperability Board's final report and approved it for 
transmittal to FirstNet. See FCC Order of Transmittal, 
Recommendations of the Technical Advisory Board for First Responder 
Interoperability, PS Dkt. No. 12-74, FCC 12-68 (rel. June 21, 2012), 
available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-12-68A1.pdf.
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    Thus, we preliminarily conclude that Section 6206(b)(2)(B) applies 
to any equipment, including end user devices, used ``on'' (i.e., to use 
or access) the network, but does not include any equipment that is used 
to constitute the network. Given the interoperability goals of the Act 
and that end user devices will need to operate seamlessly across the 
network regardless of State decisions to assume RAN responsibilities, 
we also preliminarily conclude that this provision applies whether or 
not the equipment is to access or use the NPSBN via a RAN in a State 
that has chosen to assume responsibility for RAN deployment.\9\ We seek 
comments on these preliminary conclusions, and on what if any 
equipment, other than end user devices, would fall under the scope of 
Section 6206(b)(2)(B) under this conclusion.
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    \9\ See infra Section II.B.ii. (further discussing the term 
``network'' as used in, for example, Section 6206(b)(2)).
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    Having preliminarily concluded that Section 6206(b)(2)(B) applies 
to end user devices, we turn to the requirements of this provision. 
Section 6206(b)(2)(B)(i) requires that all equipment used to access the 
NPSBN must be built to ``open, non-proprietary, commercially available 
standards.'' \10\ We seek comments on the scope of these requirements, 
including in particular the extent to which they impose requirements 
beyond the minimum requirements identified in the Interoperability 
Board Report, and whether they would preclude, for example, proprietary 
operating systems on devices. Such an expansive interpretation could 
eliminate use of commercial Long-Term Evolution (``LTE'') devices used 
by public safety entities today.
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    \10\ 47 U.S.C. 1426(b)(2)(B)(i).
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    The Act, however, defines ``commercial standards'' as ``technical 
standards . . . for network, device, and Internet Protocol 
connectivity.'' \11\ We thus preliminarily conclude that the Act's goal 
of ``promot[ing] competition in the equipment market'' would still be 
served, as it is today in the commercial market, by applying these 
requirements to only those parameters necessary to maintain 
interoperability with the NPSBN--that is, ``connectivity''--and which 
are included in the Interoperability Board Report or otherwise in 
FirstNet network policies. We recognize that, for innovation to bring 
forth improved products for the NPSBN, and for FirstNet and public 
safety entities to benefit from competition, product differentiation 
must be allowed to thrive. However, such differentiation must be 
balanced with the interoperability goals of the Act. Thus, certain 
network technical attributes must be met by the equipment under the 
terms of Section 6206(b)(2)(B), but other equipment attributes may be 
left to individual vendors to develop. We seek comments on this 
preliminary conclusion and the appropriate delineation between 
attributes for ``connectivity'' and others.
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    \11\ Id. Sec.  1401(10) (emphasis added).
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    Beyond the Act's requirement that equipment for use on the network 
comply with specific types of standards, Section 6206(b)(2)(B)(ii) 
requires that the equipment be ``capable of being used by any public 
safety entity and by multiple vendors across all public safety 
broadband networks operating in the 700 MHz band.'' First, the 
requirement that the equipment be capable of being used by any public 
safety entity would appear to serve the cause of both interoperability 
and competition in the equipment market by ensuring the largest market 
possible for such devices. We seek comment on the limits of this 
requirement, including whether use of the word ``capable'' permits 
sufficient flexibility for product differentiation by public safety 
discipline or application. For example, we preliminarily conclude that 
this requirement would not preclude devices primarily designed for 
police applications so long as such devices were technically capable of 
being used by, for example, emergency medical services.
    Next, we examine the requirement that such equipment be ``capable 
of being used . . . by multiple vendors.'' \12\ We seek comments on the 
distinction between Congress' use of the terms ``used . . . by multiple 
vendors'' and, for example, if Congress had used the terms 
``manufactured by multiple vendors,'' and whether this distinction 
should be interpreted as requiring devices that are at least capable of 
being sold to public safety entities through multiple suppliers who are 
not themselves manufacturing the devices. We seek comments on how this 
requirement should be interpreted to further the interoperability goals 
of the Act.
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    \12\ Id. Sec.  1426(b)(2)(B)(ii).
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    The final phrase of the requirement--``across all public safety 
broadband networks operating in the 700 MHz band''--could be 
interpreted to modify just the vendor clause, but we preliminarily 
conclude that, taken as a

[[Page 13339]]

whole, it appears that Congress desired both the public safety entity 
clause and multiple vendor clause to be modified by the phrase.\13\ We 
seek comments on this preliminary conclusion. The term 700 MHz band is 
a defined term under the Act, and includes not just the frequencies 
licensed to FirstNet, but all frequencies from 698 to 806 
megahertz.\14\ Thus, we also seek comments on the appropriate 
definition of, and which ``public safety broadband networks'' \15\ 
other than FirstNet would qualify under this clause, and note that the 
Act contains a separate definition for ``narrowband spectrum.'' \16\
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    \13\ Id.
    \14\ Id. Sec.  1401(1) (defining 700 MHz band).
    \15\ Id. Sec.  1426(b)(2)(B)(ii) (emphasis added).
    \16\ 47 U.S.C. 1401(20) (defining narrowband spectrum).
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    Finally, Section 6206(b)(2)(B) requires equipment for use on the 
network to be ``backward-compatible with existing commercial networks 
to the extent that such capabilities are necessary and technically and 
economically reasonable.'' \17\ Such backwards compatibility could 
prove very valuable for roaming and in the unlikely event that 
FirstNet's Band 14 network encounters an outage. We seek comments on 
the scope of the term ``backward-compatible,'' particularly with 
respect to whether non-LTE networks (including switched-voice networks) 
are implicated, and the criteria for determining whether such 
capabilities are necessary and technically and economically reasonable.
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    \17\ Id. Sec.  1426(b)(2)(B)(iii).
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B. FirstNet Network Policies

i. Overview
    Under Section 6206(b), FirstNet must ``take all actions necessary 
to ensure the building, deployment, and operation of the [NPSBN].'' 
\18\ In addition to this general charge, subsection (b) of Section 6206 
itemizes a long list of specific actions FirstNet must take in 
fulfilling this obligation.
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    \18\ Id. Sec.  1426(b)(1).
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    In the next subsection (c) of Section 6206, however, FirstNet is 
tasked with establishing ``network policies'' in carrying out these 
requirements of subsection (b).\19\ In particular, under subsection 
(c)(1), FirstNet must develop the appropriate timetables, coverage 
areas, and service levels for the requests for proposals referenced in 
subsection (b), along with four sets of policies covering technical and 
operational areas.\20\ In paragraph (2) of subsection (c), FirstNet is 
required to consult with State and local jurisdictions regarding the 
distribution and expenditure of amounts required to carry out the 
network policies established in paragraph (1).\21\
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    \19\ See id. Sec.  1426(c)(1).
    \20\ See id.
    \21\ See id. Sec.  1426(c)(2)(A).
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    We explore these requirements below considering the overall 
interoperability goals of the Act. These network policies, along with 
the Interoperability Board Report, will form the fundamental basis of 
such interoperability for public safety, and thus their scope and 
applicability must be clear to equipment and device manufacturers, 
network users, and any States that choose to assume RAN 
responsibilities in their States.
ii. Network Policies
    Under Section 6206(c)(1), entitled ``ESTABLISHMENT OF NETWORK 
POLICIES,'' FirstNet is required to develop five groups of items, the 
first being ``requests for proposals with appropriate'' timetables, 
coverage areas, service levels, performance criteria, and similar 
matters.\22\ Unlike the remaining four groups of items in paragraph 
(1), this first group might not ordinarily be thought of as the subject 
of a ``policy'' based on a plain language interpretation. The title of 
the entire paragraph, however, does reference ``policies.'' In 
addition, the consultation required in paragraph (2) of subsection (c) 
is with regard to the ``policies established in paragraph (1),'' and 
expressly includes topics such as ``construction'' and ``coverage 
areas'' that are the subject of the requests for proposals listed in 
paragraph (1)(A).\23\ Thus, we preliminarily conclude that the items 
listed in paragraph (1)(A) are ``policies'' for purposes of paragraph 
(2) and as the term is generally used in subsection (c).
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    \22\ 47 U.S.C. 1426(c)(1)(A).
    \23\ See id. Sec.  1426(c).
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    In addition to the appropriate timetables, coverage areas, and 
other items related to the requests for proposals in paragraph (1)(A), 
FirstNet must develop policies regarding the technical and operational 
requirements of the network; practices, procedures, and standards for 
the management and operation of such network; terms of service for the 
use of such network, including billing practices; and ongoing 
compliance reviews and monitoring.\24\
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    \24\ See id. Sec.  1426(c)(1).
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    Taken as a whole, these policies, including the elements of the 
requests for proposals, form the blueprint and operating parameters for 
the NPSBN. Many of these policies will be informed by the partners 
chosen to help deploy the network, and will likely change over time, 
with increasing specificity as FirstNet begins operations. Some of 
these policies, such as those related to the ``technical and 
operational requirements of the network,'' will prescribe how the 
FirstNet core network and RAN will interconnect and operate together, 
consistent with the Interoperability Board Report. This interaction is 
among the most important ``technical and operational'' aspects of the 
network given the Act's definition of these terms and our preliminary 
interpretations in the First Notice.\25\ For example, this interaction 
would determine how the FirstNet core network implements authentication 
and priority and preemption at the local level, including the framework 
for such authentication and prioritization provided to local 
jurisdictions to enable them to control important aspects of such 
authentication and prioritization. Other technical, operational, and 
business parameters essential to the nationwide interoperability of the 
network will be determined by such policies governing core network and 
RAN interactions. This raises the question as to whether and how 
FirstNet's policies developed under subsection (1) apply to States that 
assume responsibility for deployment of the RAN in such States under 
Section 6302.
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    \25\ 79 FR 57059 (September 24, 2014) (discussing elements of 
the network).
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    The Act does not expressly state whether only FirstNet, or both 
FirstNet and a State assuming RAN responsibilities must follow the 
network policies required under Section 6206(c)(1).\26\ Sections 6202 
(defining the NPSBN) and 6206 (establishing FirstNet's duties) only 
refer to the ``nationwide public safety broadband network'' or the 
``network'', without expressly indicating whether such State RANs are 
included in the term. We preliminarily conclude below that, given the 
provisions of the Act, the

[[Page 13340]]

Interoperability Board Report, and the overall interoperability goals 
of the Act and the effect on such interoperability of not having the 
network policies of Section 6206(c)(1) apply to opt-out RANs, such 
policies must so apply to ensure interoperability.
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    \26\ We preliminarily determined in our First Notice that such 
State RANs must use the FirstNet core network when service is 
provided to public safety entities. We stated that this preliminary 
conclusion, which is supported by the express provisions in the Act 
and sections of the Interoperability Board Report, was also 
``supported by the overall interoperability goal of the Act, which 
would, from a technical and operational perspective, be more 
difficult to achieve if States deployed their own, separate core 
networks to serve public safety entities.'' 79 FR 57059 (September 
24, 2014). We received comments generally supporting this conclusion 
overall, with some commenters suggesting that we also provide a 
measure of flexibility to States assuming RAN responsibility so long 
as the interoperability goals of the Act were achieved.
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    Section 6302(e), addressing the process by which a State may submit 
a plan to assume RAN deployment, states that the alternative RAN plan 
must demonstrate ``interoperability with the [NPSBN].'' \27\ This 
interoperability demonstration is separate from a State's demonstration 
that it will comply with the minimum technical interoperability 
requirements of the Interoperability Board Report, and thus must 
require a demonstration of interoperability in addition thereto. 
Similarly, Section 6302(e)(3)(D) requires such States to demonstrate 
``the ability to maintain ongoing interoperability with the [NPSBN].'' 
\28\
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    \27\ See 47 U.S.C. 1442(e)(3)(C)(II).
    \28\ Id. Sec.  1442(e)(3)(D).
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    A literal reading of these provisions could be interpreted as 
indicating a distinction between the NPSBN and such State RANs, such 
that the policies required by Section 6206, which apply to the 
``nationwide public safety broadband network'' or ``the network'' could 
theoretically be interpreted as not directly applying to such RANs. We 
preliminarily conclude, however, that such an interpretation reads too 
much into the wording of Section 6302, which could also be interpreted 
as requiring the State RAN to interoperate with ``the rest of'' the 
NPSBN.
    The Act's primary goal is the creation of an interoperable network 
based upon a ``single, national network architecture that evolves with 
technological advancements'' and is comprised of both a core network 
and RAN.\29\ This suggests that network policies established by 
FirstNet pursuant to Section 6206(c)(1) should apply to all elements of 
the network, including RANs built by individual States, to ensure 
interoperability. In addition, Congress did not differentiate between 
opt-in and opt-out States in the provisions of Section 6206(c)(2) 
requiring consultation with States on the policies of Section 
6206(c)(1), and such consultations would presumably not be required for 
States assuming RAN responsibility if the policies in question (at 
least those applicable to RANs following opt-out) did not apply to 
their RAN deployment.
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    \29\ See id. Sec.  1422(b).
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    In the context of the Act, we thus preliminarily conclude that an 
important aspect of a State's demonstrations of interoperability under 
Section 6302(e)(3) would be a commitment to adhering to FirstNet's 
interoperability policies implemented under Section 6206(c) that are 
applicable to NPSBN RANs. This could be particularly important because 
such policies will likely evolve over time as the technology, 
capabilities, and operations of the network evolve. An alternative 
reading could result in freezing in time the interoperability of an 
opt-out State RAN contrary to the goals of the Act. We seek comments on 
these preliminary conclusions.
    Notwithstanding these conclusions, however, the policies 
established under Section 6206(c) would, if not directly, likely apply 
indirectly to a State seeking to assume State RAN responsibilities. As 
discussed above, such States must demonstrate interoperability with the 
NPSBN, and from a practical perspective such interoperability will 
largely depend, as is the case with FirstNet's deployed core networks 
and RANs, on compliance with the network policies of Section 
6206(c)(1).\30\ In addition, such States must also demonstrate 
``comparable security, coverage, and quality of service to that of the 
[NPSBN].'' \31\ FirstNet's policies will establish requirements for 
such security, coverage, and quality of service standards for the 
NPSBN, and thus States seeking to assume State RAN responsibilities 
would, practically speaking, need to demonstrate ``comparable'' 
capabilities to those specified in these policies. The Federal 
Communications Commission (``FCC'') and NTIA will presumably use these 
policies in making this comparison at least at the point in time when a 
State applies to assume RAN responsibilities.
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    \30\ It is important to note that Congress required that a State 
RAN plan demonstrate to the FCC both compliance with the 
Interoperability Board Report and interoperability with the NPSBN, 
indicating that the requirements of the Interoperability Report are 
distinct from those further requirements that may be necessary to 
interoperate with the NPSBN. See 47 U.S.C. 1442(e)(3(C). The 
Interoperability Board Report focused on ``technical 
interoperability,'' noting that this term was more limited than 
general network interoperability. See Interoperability Board Report 
at 23. To establish NPSBN interoperability therefore, we believe a 
broader set of technical, business, and operational standards must 
be developed pursuant to Section 6206(c)(1) and demonstrated by any 
State seeking State RAN build and operation authority. Id. Sec.  
1426(c)(1).
    \31\ Id. Sec.  1442(e)(3)(D)(iii).
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    Finally, given that FirstNet has a duty to ensure the deployment 
and operation of a ``nationwide'' public safety broadband network, we 
preliminarily conclude that, independent of the interpretations 
discussed above, FirstNet could require compliance with network 
policies essential to the deployment and interoperable operation of the 
network for public safety in all States as a condition of entering into 
a spectrum capacity lease under Section 6302(e)(3)(C)(iii)(II).\32\ 
Accordingly, in order to ensure the interoperability goals of the Act 
and for the reasons discussed above, we preliminarily conclude that 
FirstNet's network policies will either directly or indirectly apply to 
any State RAN deployment. We note that FirstNet is subject to extensive 
consultation requirements with States regarding such policies under 
Section 6206(c)(2), and thus States will have substantial opportunities 
to influence such policies and, as is discussed more fully below, 
FirstNet will want to work cooperatively and over time with States in 
their establishment. We seek comments on these preliminary conclusions.
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    \32\ Id. Sec.  1442(e)(3)(C)(iii)(II).
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C. A State's Opportunity To Assume Responsibility for Radio Access 
Network Deployment and Operation

i. Overview of Statutory Provisions on Deployment of State Networks
    Section 6302(e) describes the process for determining whether 
FirstNet or a State will conduct the deployment of the RAN within such 
State.\33\ As we preliminarily concluded in the First Notice, the Act 
requires FirstNet to provide the core network in all States.\34\ The 
process for determining who will deploy the RAN in a State requires 
FirstNet to provide States with (a) notice that FirstNet has completed 
its request for proposal process for the construction and operation of 
the nationwide network, (b) details of FirstNet's proposed plan for 
buildout of the NPSBN in such State, and (c) the funding level, as 
determined by NTIA, for such State.\35\ The Governor of a State, after 
receiving the notice, must then choose to either participate in the 
deployment of the network as proposed by FirstNet, or conduct its own 
deployment of a RAN in such State.\36\
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    \33\ See id. Sec.  1442(e).
    \34\ 79 FR 57059 (September 24, 2014) (describing that the core 
network provides the primary control layer of the network and 
connects the RAN to the Internet and public switched network).
    \35\ 47 U.S.C. 1442(e)(1).
    \36\ Id. Sec.  1442(e)(2).
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    It is important to note that the provisions of the Act, and the 
interpretations discussed below, address what is essentially the final 
or official plan presented to a State. FirstNet expects to work 
cooperatively, and in keeping with its consultation obligations, with 
each State in

[[Page 13341]]

developing its plan, including an iterative approach to plans in order 
to achieve both a State's local and FirstNet's nationwide goals for the 
NPSBN. Accordingly, none of the discussions in this Second Notice 
should be interpreted as implying a unilateral or opaque approach to 
plan development prior to the presentation of the official ``plan'' 
reflected in the Act.
    Following such a FirstNet plan presentation, a decision by the 
Governor to assume responsibility for deployment of the State's RAN 
sets in motion an approval process for the State's alternative RAN 
deployment plan.\37\ The FCC must approve the plan.\38\ If this 
alternative RAN plan is approved, the State may apply to NTIA for a 
grant to construct the RAN within the State and must apply to NTIA to 
lease spectrum capacity from FirstNet.\39\ Conversely, if a State 
alternative plan is disapproved, the RAN in that State will proceed in 
accordance with FirstNet's State plan.\40\
---------------------------------------------------------------------------

    \37\ See id. Sec.  1442(e)(3).
    \38\ See id. Sec.  1442(e)(3)(C).
    \39\ See id. Sec.  1442(e)(3)(C)(iii).
    \40\ See id. Sec.  1442(e)(3)(C)(iv).
---------------------------------------------------------------------------

    The Act is not entirely clear about the economic and operational 
effects of an approved alternative State plan. The interpretations 
discussed below will have substantial effects on the operation, 
funding, and potentially the viability of the FirstNet program. 
Congress drew a balance between the interoperability and self-
sustainment goals of the Act and preserving the ability of States to 
make decisions regarding the local implementation of coverage, 
capacity, and many other parameters if they wanted to exercise such 
control. FirstNet has a duty to implement the Act in a manner that is 
faithful to this balance and to the opportunity of States to exercise 
local deployment control. But in balancing the above interests, 
Congress was careful not to jeopardize the overall interoperability and 
self-sustainment goals of the Act in its express provisions. For 
example, a State's ability to exercise local control of deployment is 
with respect to the RAN only, not the core network, and the State must 
demonstrate that its alternative plan for the RAN maintains the overall 
goals of the Act through, among other things, demonstrating 
interoperability and cost-effectiveness.
    In the discussions below we continue this balancing through our 
preliminary interpretations of often complex provisions. These 
interpretations are preliminary, and they attempt to remain faithful to 
the balance Congress appears to have intended by affording States the 
right to assume RAN responsibilities, but not at the cost of 
jeopardizing the interoperability and self-sustainment goals of the Act 
on which public safety entities and the overall program will depend.
ii. FirstNet Presentation of a State Plan
    FirstNet must present its plan for a State to the Governor ``[u]pon 
the completion of the request for proposal process conducted by 
FirstNet for the construction, operation, maintenance, and improvement 
of the [NPSBN] . . . .'' \41\ The Act does not further define when such 
process is ``complete.'' The process cited is presumably the request 
for proposal process detailed in subsections 6206(b) and (c), which 
describe FirstNet's duty to develop and issue ``requests for 
proposals.'' \42\ Because Section 6206 speaks in terms of plural 
``requests for proposals,'' the ``process'' referenced in subsection 
6302(e) could be interpreted to require completion of all such requests 
for proposals, particularly given that Section 6302(e) refers to the 
request for proposal process for the ``nationwide . . . network,'' 
rather than just a process for the State in question. This would 
require the completion of requests for proposals for all States prior 
to any one State receiving a plan from FirstNet.\43\
---------------------------------------------------------------------------

    \41\ 47 U.S.C. 1442(e).
    \42\ See id. Sec.  1442(b)(1)(B), Sec.  1442(b)(2).
    \43\ We note that FirstNet is still in the process of 
determining whether it will follow a single, nationwide RFP process 
or regional, State, or other multiple RFP processes.
---------------------------------------------------------------------------

    We tentatively conclude, however, that it is reasonable to 
interpret subsection 6302(e) to merely require completion of the 
process for the State in question, rather than the nation as a whole, 
prior to presentation of the plan to the State, assuming that FirstNet 
can at that stage otherwise meet the requirements for presenting a plan 
(and its contents) to such State.\44\ First, Section 6206 provides 
FirstNet with flexibility in deciding how many and of what type of 
requests for proposals to develop and issue. This flexibility inures to 
the benefit of public safety and the States by allowing FirstNet to 
reflect the input of regional, State, local, and tribal jurisdictions 
under the required consultations of Section 6206. If Section 6302 were 
read to require all States to await the completion of all such requests 
for proposals, FirstNet would likely constrain the range of RFPs it 
might otherwise conduct to avoid substantial delays nationwide, and in 
doing so constrain its ability to reflect the input from consultative 
parties.
---------------------------------------------------------------------------

    \44\ See 47 U.S.C. 1442(e).
---------------------------------------------------------------------------

    Second, such a ``wait for all'' approach could, depending on how 
such requests for proposals are issued, nevertheless substantially 
delay implementation of the network in many or most States contrary to 
the Act's apparent emphasis ``to speed deployment of the network.'' 
\45\ For example, if a protest or litigation delayed proposals for one 
State or a region, the entire network could be held hostage by such 
litigation, creating substantial incentives for gamesmanship. Finally, 
if Congress had wanted such an extreme result, we believe it would have 
been more explicit than the generalized reference to ``network'' in 
subsection (e).\46\ Thus, we preliminarily conclude that a State plan 
can be presented to a State upon the completion of the request for 
proposal process only to the extent necessary to develop such a plan 
for such State. We seek comments on this preliminary conclusion.
---------------------------------------------------------------------------

    \45\ Id. Sec.  1426(b)(1)(C).
    \46\ Id. Sec.  1442(e).
---------------------------------------------------------------------------

    An additional question regarding the interpretation of the term 
``completion'' in subsection 6302(e) concerns the specific stage of the 
request for proposal process that constitutes such ``completion.'' The 
process prescribed by the Act itself may impose a practical limit on 
the extent of such completion. Although we interpret the effects of a 
State decision to assume RAN deployment responsibilities in detail in 
subsequent sections of this Second Notice, for purposes of our 
discussion here it is important to note that although a Governor's 
decision to assume RAN responsibilities is on behalf of his or her 
State, depending on the interpretations discussed below, an individual 
State's decision could materially affect all other States and thus the 
request for proposal process.
    For example, depending on such interpretations, if a State chooses 
to assume RAN responsibilities, it potentially takes with it subscriber 
fees and/or excess network capacity fees that would have helped fund 
the FirstNet network in all other States.\47\ Independent of funding 
issues, by assuming RAN responsibilities the State also reduces 
FirstNet's costs, at least with regard to the RAN, but also the volume 
of purchase from a potential vendor. The net amount of such reduced 
funding and costs, and the impact to economies of scale, determines 
whether all other States will have a net reduction

[[Page 13342]]

in available funding and/or increased costs due to the opt-out.\48\
---------------------------------------------------------------------------

    \47\ See infra Section II.D.iii.
    \48\ We note that FirstNet will be able to impose a user fee for 
use of the FirstNet core network by such a State, which could make 
up for, among other things, any added costs to integrate the State 
RAN with the FirstNet core network.
---------------------------------------------------------------------------

    Given this dynamic, the specific States, and number thereof that 
choose to assume RAN responsibilities will affect, potentially 
materially, the final awards in the request for proposal process.\49\ 
The funding level in particular will determine the amount and quality 
of products and services FirstNet can afford for public safety in the 
request for proposal process to construct the network. In addition, the 
information on the specific and number of opt-out States is an 
important factor determining economies of scale and scope represented 
by the FirstNet opportunity to potential vendors (and thus their 
pricing to and the determination of costs for FirstNet).
---------------------------------------------------------------------------

    \49\ From a timing standpoint, this holds true during the 
pendency of such a State's application to assume RAN 
responsibilities even if such application is ultimately 
unsuccessful.
---------------------------------------------------------------------------

    Under the Act, however, FirstNet must ``complete'' the request for 
proposal process before presenting plans to the States and obtaining 
this important information. States will, of course, want their plans to 
provide as much specificity regarding FirstNet's coverage and services 
as possible, which would ideally be determined on the basis of the 
final outcomes of the request for proposal process (which, as is 
discussed above, ideally requires the State opt-out decisions). 
Accordingly, because of the circularity of these information needs, 
FirstNet may not be able to provide the level of certainty in State 
plans that would ordinarily be assumed to emerge from the final award 
of a contract to a vendor to deploy in a State. Thus, we preliminarily 
conclude that ``completion'' of the request for proposal process occurs 
at such time that FirstNet has obtained sufficient information to 
present the State plan with the details required under the Act for such 
plan, which we discuss below, but not necessarily at any final award 
stage of such a process. We seek comments on this preliminary 
conclusion.
iii. Content of a State Plan
    FirstNet must provide to the Governor of each State, or a 
Governor's designee, ``details of the proposed plan for build out of 
the [NPSBN] in such State.'' \50\ Section 6302 does not provide express 
guidance as to what are the ``details of the proposed plan'' that must 
be provided. Other provisions of the Act, however, provide some 
guidance in this regard.
---------------------------------------------------------------------------

    \50\ 47 U.S.C. 1442(e).
---------------------------------------------------------------------------

    Because the plan details are to be provided upon completion of the 
RFP process, we can of course reasonably conclude that such details are 
contemplated to include outputs of such process, as discussed in the 
previous section of this Second Notice.\51\ Further, Section 
6206(c)(1)(A) requires that FirstNet include in RFPs ``appropriate'' 
timetables for construction, coverage areas, service levels, 
performance criteria, and other ``similar matters for the construction 
and deployment of such network.'' \52\ Therefore, it is reasonable to 
conclude that Congress expected that FirstNet would be able to include 
at least certain outcomes of the RFP process on such topics in a State 
plan for the State in question. This is particularly true with regard 
to construction and deployment of the RAN, regarding which the Governor 
must make a decision in response to being presented with the plan. We 
note that Section 6302(e)(1)(B) states that the details provided are 
for the buildout of the network ``in such State'' only, although 
FirstNet may choose to include details of, for example, core 
functionality that will be implemented nationally or outside the State 
with benefit to the State.
---------------------------------------------------------------------------

    \51\ See supra Section II.C.ii.
    \52\ See 47 U.S.C. 1422(c).
---------------------------------------------------------------------------

    Other sections of the Act provide further insight as to what should 
be included in a State plan. A State that seeks to assume 
responsibility for the RAN in the State must present an alternative 
plan to the FCC that ``demonstrate[s] . . . interoperability with the 
[NPSBN].'' \53\ Thus, the State must at that point have knowledge of 
how such interoperability can be achieved, either through receipt of 
FirstNet network policies or the FirstNet plan for the State, or both. 
Further, in order for a State to obtain grant funds or spectrum 
capacity, it must ``demonstrate . . . that the State has . . . the 
ability to maintain ongoing interoperability with the [NPSBN] . . . and 
the ability to complete the project within specified comparable 
timelines specific to the State.'' \54\ Thus, for example, implicitly 
the State must have been presented with FirstNet timelines with which 
NTIA may ``compare'' to the State alternative plan.
---------------------------------------------------------------------------

    \53\ Id. Sec.  1442(e)(3)(C)(ii).
    \54\ Id. Sec.  1442(e)(3)(D) (emphasis added).
---------------------------------------------------------------------------

    In order to obtain grant funds or spectrum capacity, a State must 
also ``demonstrate . . . the cost-effectiveness of the State plan . . . 
and . . . comparable security, coverage, and quality of service to that 
of the [NPSBN].'' \55\ Thus, similar to the timelines discussed above, 
implicitly the FirstNet plan (in combination with FirstNet network 
policies) must provide the State with sufficient information to enable 
NTIA to make comparisons of cost-effectiveness, security, coverage, and 
quality of service. We seek comments on the above preliminary 
conclusions regarding the minimum legally required contents of a 
FirstNet plan for a State.\56\ Finally, as discussed above, we 
preliminarily conclude that certain limitations regarding plan content 
are inherent in the plan process prescribed by the Act.\57\
---------------------------------------------------------------------------

    \55\ Id. Sec.  1442(e)(3)(D).
    \56\ As stated above, however, FirstNet may provide more details 
than are legally required under the Act.
    \57\ See supra Section II.C.ii.
---------------------------------------------------------------------------

iv. Governor's Role in the State Plan Process
    Section 6302(e)(2), entitled ``State decision,'' is clear that 
``the Governor shall choose'' whether a State participates in the 
FirstNet proposed plan or conducts its own deployment of a RAN in such 
State.\58\ Thus, we preliminarily conclude that the decision of the 
Governor in this regard will, for purposes of the Act, be binding on 
all jurisdictions within such State. For example, if the Governor of a 
State decides the State will participate in FirstNet's plan for 
buildout of the State, a city or county within the State would not be 
able to separately choose to deploy a RAN.\59\ Aside from the clear 
language of the Act regarding the Governor's role and decision, such 
sub-State level opt-out, if permitted, could create potential islands 
of RANs which do not meet the interoperability and other similar goals 
of the Act, and FirstNet would have to agree to use of its spectrum in 
such cases. We note, however, that FirstNet and a State could agree 
that, as part of FirstNet's plan, FirstNet and the State (or sub-State 
jurisdictions) could work together to permit, for example, State 
implementation of added RAN coverage, capacity, or other network 
components beyond the FirstNet plan to the extent the interoperability, 
quality of service, and other goals of the Act were met. These further 
customizations of State deployments over time may form an important 
aspect of the FirstNet implementation nationwide. These additions have 
been raised in

[[Page 13343]]

consultation with state and local jurisdictions and could improve the 
network and provide additional coverage. We seek comments on the above 
preliminary conclusions. We also seek comments, considering the 
provisions of the Act and other applicable law, on the effect of both, 
a Governor's decision to participate in FirstNet's plan for a State, 
and a Governor's decision to apply for and assume RAN responsibilities 
in a State, on tribal jurisdictions in such a State.
---------------------------------------------------------------------------

    \58\ See 47 U.S.C. 1442(e)(2) (emphasis added).
    \59\ We discuss certain post-State-decision aspects of this 
issue in subsequent sections of this Second Notice.
---------------------------------------------------------------------------

v. Timing and Nature of State Decision
    Section 6302(e)(2) requires that the Governor make a decision 
``[n]ot later than 90 days after the date on which the Governor of a 
State receives notice under [Section 6302(e)(1)].'' \60\ This 
phraseology raises the question as to whether a Governor could make 
such a decision prior to receiving such notice.
---------------------------------------------------------------------------

    \60\ 47 U.S.C. 1442(e)(2).
---------------------------------------------------------------------------

    We preliminarily conclude that the Governor must await such notice 
and presentation of the FirstNet plan prior to making the decision 
under Section 6302(e)(2). The language of Section 6302(e)(2) creates a 
90-day period ``after the date'' the notice is received, and the 
decision is clearly designed to be informed by the FirstNet plan.
    In addition, any alternative interpretation would not fit within 
the process contemplated by the Act. Even if a State were able to make 
a qualifying decision prior to such notice, and we preliminarily 
conclude it could not, such a decision would trigger the 180-day clock 
for submitting an alternative plan to the FCC, discussed below. Without 
a FirstNet plan having been presented, the State's premature decision 
would not enable the FCC to make the assessments required to approve 
the State's alternate plan, or if such plan is approved, enable NTIA to 
review and determine whether to grant an application for grant funds 
and/or spectrum capacity. For example, without the FirstNet plan, a 
State would not be able to demonstrate to the FCC that its alternative 
RAN would be interoperable with the yet-unspecified FirstNet core 
network interconnection points within the State. Nor would a State be 
able to demonstrate ``comparable'' timelines, security, coverage, or 
quality of service, as required by Section 6302(e)(3)(D).\61\ Thus, the 
Governor's premature decision, prior to a FirstNet plan, would likely 
be unworkable under the requirements in the Act.\62\ We seek comments 
on this preliminary conclusion.
---------------------------------------------------------------------------

    \61\ Id. Sec.  1442(e)(3)(D)(iii).
    \62\ The Act's requirement that a State be presented a plan 
prior to rejecting it also ensures that each State has adequate 
information to determine whether the State would receive a greater 
benefit from either participating in the FirstNet proposed network 
plan for such State or by conducting its own deployment of the RAN 
in such State. More specifically, the contents of the notice 
provided under Section 6302(e)(1) will be necessary for a State to 
make an informed decision as to whether the State has the resources 
and capability to demonstrate it can meet the minimum technical, 
operational, funding, and interoperability requirements described 
throughout Section 6302(e). See 47 U.S.C. 1442(e).
---------------------------------------------------------------------------

vi. Notification of State Decision
    The Act does not require the Governor of a State to provide notice 
of its decision to participate in the FirstNet proposed network under 
Section 6302(e)(2)(A) to FirstNet, or any other parties. Rather, notice 
is only required, as is discussed in detail below, should the Governor 
of a State decide that the State will assume responsibility for the 
buildout and operation of the RAN in the State.\63\ Thus, we 
preliminarily conclude that a State decision to participate in the 
FirstNet proposed deployment of the network in such State may be 
manifested by a State providing either (1) actual notice in writing to 
FirstNet within the 90-day \64\ decision period or (2) no notice within 
the 90-day period established under Section 6302(e)(2). We seek 
comments on these preliminary conclusions.
---------------------------------------------------------------------------

    \63\ See id. Sec.  1442(e)(3).
    \64\ In the absence of language to the contrary, we interpret 
the days specified in the Act as calendar days and seek any comments 
on this preliminary interpretation.
---------------------------------------------------------------------------

    Read literally, the 90-day period established under Section 
6302(e)(2) applies to the Governor's decision, rather than the notice 
of such decision, which is addressed in Section 6302(e)(3). We 
preliminarily conclude, however, that it is clear from the language of 
Section 6302(e)(3) that the notice is to be provided to FirstNet, NTIA, 
and the FCC ``[u]pon making a decision . . . under paragraph (2)(B).'' 
\65\ Thus, we interpret the requirement to issue such notice as an 
immediate (i.e. same day) requirement, and that Congress did not intend 
to apply an artificial deadline on the Governor's decision, and then 
permit an indefinite period to lapse before providing notice of such 
decision. Such an indefinite period would run contrary to the Act's 
emphasis on the ``speed of deployment'' of the network for public 
safety.\66\ We seek comments on this preliminary conclusion.
---------------------------------------------------------------------------

    \65\ 47 U.S.C. 1442(e)(3).
    \66\ See e.g., 47 U.S.C. 1426(b)(1)(C) (describing the need for 
use of existing infrastructure to speed deployment of the network); 
see also e.g., 47 U.S.C. 1426(b)(3) (encouraging FirstNet to seek 
cost effective opportunities to speed deployment in rural areas).
---------------------------------------------------------------------------

vii. The Nature of FirstNet's Proposed State Plan
    The Act describes what FirstNet is to propose to each State as a 
``plan.'' \67\ Section 6302 describes a process for the implementation 
of the nationwide public safety broadband network in each State.\68\ 
FirstNet's presentation of a plan to the Governor of each State for 
buildout in that State and his/her decision to participate in such 
buildout as proposed by FirstNet or to deploy the State's own RAN are 
important steps of this process. However, we preliminarily conclude 
that FirstNet's presentation of a plan to a Governor and his/her 
decision to either participate in FirstNet's deployment or follow the 
necessary steps to build a State RAN, do not constitute the necessary 
``offer and acceptance'' to create a contract.
---------------------------------------------------------------------------

    \67\ A plan is defined as ``a detailed proposal for doing or 
achieving something.'' Oxford Dictionaries, available at http://www.oxforddictionaries.com/us/definition/english/plan.
    \68\ 47 U.S.C. 1442(e).
---------------------------------------------------------------------------

    Nowhere does the Act use words of contract, such as ``offer,'' 
``execute,'' or ``acceptance'' in relationship to the FirstNet plan. 
For example, a Governor's decision is whether to ``participate'' in the 
FirstNet plan. The Act provides the Governor with 90 days to make a 
decision once presented with the plan, which would be an extremely 
short period within which to negotiate a final contract of this 
magnitude if a contract were contemplated. Notwithstanding this 
preliminary conclusion, a State would, however, ultimately benefit from 
any contractual remedies that FirstNet can enforce against its 
contracting parties for deployment of the network in the State.
    In addition, we believe this interpretation is reasonable given 
that establishing the plan as a contract between FirstNet and a State 
would likely be unrealistic in light of the nature of the FirstNet 
program. For example, as discussed above, the process prescribed in the 
Act itself may make contract-like promises at the plan stage 
difficult.\69\ In addition, subscriber adoption and fees will form an 
important funding and self-sustaining basis for FirstNet, dictating at 
least part of the scope of its ongoing buildout, features, and timing. 
These levels of subscriber adoption and fees across the network overall 
will not be known at the State plan stage and will likely be express 
assumptions thereunder.
---------------------------------------------------------------------------

    \69\ See supra Section II.C.ii.
---------------------------------------------------------------------------

    Unlike the plan itself, however, when public safety entities 
subscribe to

[[Page 13344]]

FirstNet's services, those subscription agreements are expected to take 
the form of contracts with FirstNet, including contractual remedies in 
the event FirstNet service does not meet promised-for service levels. 
Similarly, to the extent FirstNet enters into contracts with State or 
local agencies for use of local infrastructure, those contracts will be 
negotiated and presumably contain contractual remedies for both 
parties.\70\ We seek comments on the above preliminary conclusions.
---------------------------------------------------------------------------

    \70\ FirstNet is specifically authorized to make contracts with 
Federal, State, regional, and local agencies. See 47 U.S.C. 1426 
(a)(3), (b)(4)(A).
---------------------------------------------------------------------------

viii. State Development of an Alternative Plan
    Section 6302(e)(3)(B) requires, not later than 180 days \71\ after 
a Governor provides a notice under Section 6302(e)(3)(A), that the 
Governor develop and complete requests for proposals for construction, 
maintenance, and operation of the RAN within the State.\72\ We believe 
the Act imposes this 180-day period to ensure that the public safety 
entities in and outside the State gain the benefit of interoperable 
communications in the State in a reasonable period of time, either 
through the FirstNet plan or a State plan.
---------------------------------------------------------------------------

    \71\ In the absence of language to the contrary, we interpret 
the days specified in the Act as calendar days.
    \72\ 47 U.S.C. 1442(e)(3)(B).
---------------------------------------------------------------------------

    Consistent with our preliminary interpretation of the 
``completion'' of the FirstNet request for proposal process,\73\ we 
preliminarily conclude that the phrase ``complete requests for 
proposals'' means that a State has progressed in such process to the 
extent necessary to present an alternative that could demonstrate the 
technical and interoperability requirements described in Section 
6302(e)(3)(C)(i).\74\ Like FirstNet, States will potentially have gaps 
in information at the time of their request for proposal process, and 
subsequently at the time of their submission of an alternative plan. 
For example, to the extent such States have not negotiated at least the 
material parameters of a spectrum capacity lease agreement with 
FirstNet at the time of an RFP, they will be unable to finally 
determine the terms, which may be materially affected by such 
parameters, of any covered leasing agreement (``CLA'') the State would 
enter into to offset some or all their costs of construction. Nor will 
NTIA have potentially approved of such spectrum capacity leasing rights 
at that point. Thus, we encourage States that may contemplate such a 
process to engage FirstNet as early as possible to increase the 
specificity of the alternative plans they can present to the FCC and 
NTIA.
---------------------------------------------------------------------------

    \73\ See supra Section II.C.ii.
    \74\ See 47 U.S.C. 1442(e)(3)(C)(i).
---------------------------------------------------------------------------

    In keeping with this interest in timely network deployment, we 
preliminarily conclude that where a State fails to ``complete'' its 
request for proposal process in the 180-day period under the Act, the 
State would forfeit its ability to submit an alternative plan in 
accordance with paragraph (e)(3)(C).\75\ This forfeiture would result 
in the construction, maintenance, operations, and improvements of the 
network within the State proceeding in accordance with the FirstNet 
plan. We expect that the FCC will establish procedures regarding the 
filing of alternative State plans where States have completed their 
requests for proposal in a timely fashion. We seek comments on these 
preliminary conclusions.

---------------------------------------------------------------------------

    \75\ Id. Sec.  1442(e)(3)(C).
---------------------------------------------------------------------------

ix. Responsibilities of FirstNet and a State Upon a State Decision To 
Assume Responsibility for the Construction and Operation of Its Own RAN
    Under Section 6302(e)(3)(C)(ii), States with alternative plans 
approved by the FCC may apply to NTIA for a grant to construct a RAN 
within that state and must apply to NTIA to lease spectrum capacity 
from FirstNet.\76\ We preliminarily conclude that approval by the FCC 
of an alternative State plan results in that State being solely 
responsible for the construction, operation, maintenance, and 
improvement of the RAN in such State in accordance with the State's 
approved plan, thereby extinguishing any obligation of FirstNet to 
construct, operate, maintain, or improve the RAN in such State.\77\ 
Certainty as of the date upon which the FCC approves or disapproves the 
alternative plan is important for FirstNet in determining the final 
economics of its network and business planning and thus its ability to 
move forward, with vendors and otherwise, in that and other States. We 
seek comments on this preliminary conclusion.
---------------------------------------------------------------------------

    \76\ Id. Sec.  1442(e)(3)(C)(iii).
    \77\ Such a State would, however, at a minimum still require 
approval from NTIA for spectrum capacity leasing rights and still 
fulfill their contractual requirements of any spectrum capacity 
lease negotiated with FirstNet. In addition to FirstNet's 
obligations under such a spectrum capacity lease, FirstNet would 
also have to fulfill its obligations, including any supervision 
obligations, under FCC rules as the licensee of the FirstNet 
spectrum with regard to any such State's use thereof.
---------------------------------------------------------------------------

    The Act, however, does not provide a mechanism for a State, 
following an FCC-approved State RAN plan, to reinitiate an ``opt-in'' 
process where FirstNet would assume the duty to build the NPSBN in that 
State. For example, if the sequence of events ended with a State 
receiving approval of its alternative plan by the FCC but being unable 
to reach agreement on a spectrum capacity lease with FirstNet or being 
denied approval of such spectrum capacity leasing rights or needed 
grant funds by NTIA, the State subsequently would be unable to operate 
the RAN in the State. Although we intend to work closely with the FCC, 
NTIA, and States to try to anticipate and avoid any such unnecessary 
process issues, we preliminarily conclude that the inability of a State 
to implement its alternative plan for such reasons would not preclude a 
State and FirstNet from agreeing to allow FirstNet to implement the RAN 
in such State. FirstNet's duty is the deployment of the network 
nationwide, and deployment in all States greatly benefits the nation as 
a whole. As such, we do not believe Congress intended to put such 
States in limbo with regard to the NPSBN.
    Further, because such uncertainty in any one State would affect the 
benefits of the NPSBN nationwide, we preliminarily conclude that denial 
by NTIA of at least the spectrum capacity leasing rights would then 
permit FirstNet to implement a plan in the State.\78\ Absent this 
interpretation, any one State could indefinitely delay, among other 
things, construction of the network in such State, the funding derived 
from spectrum capacity leases in such State, and the positive effects 
of economies of scale and scope from construction and operation in such 
State, all to the detriment of all other States and citizens through 
the effect on the FirstNet program. In the absence of express 
provisions under the Act, we believe this preliminary interpretation 
appropriately balances Congress' intent to have a nationwide network 
implementation as soon as possible with the rights of States to conduct 
their own RAN deployment if, and only if, they can meet the 
requirements under Section 6302(e)(3). We seek comments on this 
preliminary conclusion and any alternative processes that meet the 
requirements of the Act.
---------------------------------------------------------------------------

    \78\ Following denial of the application for a spectrum capacity 
lease in Section 6302(e)(3)(C)(iii)(II), FirstNet would remain the 
licensee of the spectrum in question. See 47 U.S.C. 
1442(e)(3)(C)(iii)(II).
---------------------------------------------------------------------------

    Beyond the above scenarios, if a State initially enters into a 
spectrum capacity lease with FirstNet and receives all

[[Page 13345]]

necessary approvals, because of FirstNet's authority to enter into 
contracts with State and local agencies, we preliminarily conclude that 
a State may ultimately seek to have FirstNet, assuming mutually 
acceptable terms, take over some or all RAN responsibilities in the 
State through a contractual agreement.\79\ Given the benefit to the 
nation of a functioning network within all States, we believe this 
capability is important in the event, for example, that a State plan 
fails after approval and execution of a spectrum capacity lease. We 
seek comments on these preliminary conclusions.
---------------------------------------------------------------------------

    \79\ How such an agreement or the circumstances giving rise to 
the agreement, if permitted, would be treated by the FCC or NTIA 
under Section 6302(e)(3) would depend on such decisions, rules, or 
regulations of the FCC or on NTIA's decisions. See 47 U.S.C. 
1442(e)(3).
---------------------------------------------------------------------------

    Finally, under Section 6302(e)(3)(C)(iv), if the FCC disapproves an 
alternative State plan, the construction, maintenance, operation, and 
improvements of the radio access network in that State will proceed in 
accordance with the State plan proposed by FirstNet.\80\ Thus, we 
preliminarily conclude that once a plan has been disapproved by the 
FCC, subject only to the additional review described in Section 
6302(h), the opportunity for a State to conduct its own RAN deployment 
under Section 6302(e) will be forfeited, and FirstNet may proceed in 
accordance with its proposed plan for that State.\81\ This certainty of 
obligation is important for both FirstNet planning regarding self-
sustainability and to ensure that the network is built in a timely 
manner. We seek comments on these preliminary conclusions.
---------------------------------------------------------------------------

    \80\ 47 U.S.C. 1442(e)(3)(C)(iv).
    \81\ Id. Sec.  1442(h) (describing the jurisdiction and standard 
of review for reviewing the disapproval of a plan by the FCC).
---------------------------------------------------------------------------

D. Customer, Operational and Funding Considerations Regarding State 
Assumption of RAN Construction and Operation

i. Overview
    Having discussed above many of the procedural aspects of a State's 
decision to assume RAN responsibilities, we turn to some of the 
potential substantive ramifications of such a decision. Importantly, 
and as is also discussed above, these ramifications can reach beyond 
the borders of the State making the decision. They include potential 
effects in and outside the State on public safety customers, FirstNet's 
costs and available funding nationally, including its ability to meet 
substantial rural milestones, and the purchasing power of FirstNet on 
behalf of public safety. In addition to these critical considerations, 
in order to achieve the goals of the Act following a State decision to 
assume RAN responsibilities, FirstNet and such a State must in all 
cases define and implement a potentially complex operational 
relationship to serve public safety.
    In arriving at the preliminary interpretations below, we endeavored 
to remain faithful to the balance Congress struck between the 
deployment of a nationwide network as soon as practicable, and the 
right of States to deploy their own RAN under the conditions outlined 
in the Act. The most difficult of these preliminary interpretations 
relate to areas where the Act is either completely silent or provides 
only inferential guidance. These include topics such as who actually 
provides service to public safety entities in opt-out States, who 
receives and may use fees from such services and for what purposes, and 
whether Congress intended the right to opt-out under the Act to 
include, particularly with respect to fees for use of excess network 
capacity, the right to fundamentally affect the complex funding 
structure of the FirstNet program in all other States in favor of the 
State opting out.
    We discuss below preliminary conclusions regarding these issues, 
but expect the highly complex legal and operational landscape in these 
areas to also mature over time, particularly in light of FirstNet 
consultations, including most importantly the comments received from 
this Second Notice.
ii. Customer Relationships in States Assuming RAN Construction and 
Operation
    The Act does not expressly define which customer-facing roles are 
assumed by a State or FirstNet with respect to public safety entities 
in States that have assumed responsibility for RAN construction and 
operation. Generally speaking all wireless network services to public 
safety entities will require technical operation of both the RAN, 
operated by the State in this case, and the core network, operated by 
FirstNet in all cases as we preliminarily concluded in the First 
Notice.\82\ We received predominantly supportive comments in response 
to this preliminary conclusion in the First Notice, with some 
commenters suggesting flexibility, on a State-by-State basis, in the 
precise delineation of technical and operational functions performed by 
the FirstNet core network and States assuming RAN responsibilities in 
such States.\83\ A core network, for example, would typically control 
critical authentication, mobility, routing, security, prioritization 
rules, and support system functions, including billing and device 
services, along with connectivity to the Internet and public switched 
network. The RAN, however, would typically dictate, among other things, 
the coverage and capacity of last mile wireless communication to 
customer devices and certain priority and preemption enforcement points 
at the wireless interface of the network. Either alone is an incomplete 
network and each must work seamlessly with the other. As a result, 
FirstNet and such States must similarly work together to ensure that 
public safety is provided the critical wireless services contemplated 
by the Act.
---------------------------------------------------------------------------

    \82\ See 79 FR 57059 (September 24, 2014).
    \83\ See, e.g., Comments of the State of Florida at 3-4 (stating 
``Florida acknowledges that the Act requires FirstNet to build the 
core network. The Act, does not however, prohibit any other party 
from building and operating a core network, as long as it meets the 
interoperability and operational standards promulgated by FirstNet. 
Florida encourages FirstNet to remain flexible when creating its 
network architecture to provide options for the various States to 
best meet their broadband needs in support of their public safety 
missions.'') available at http://www.regulations.gov/#!documentDetail;D=NTIA-2014-0001-0013; See also, e.g., Consolidated 
Response of the MACINAC Initiative to the Request for Information 
For Comprehensive Network Solution(s) and Public Notice and Comment 
Request for Comments at 8 (stating ``MACINAC is not interested in 
operating a core, nor is it advocating for State-run cores; instead 
we are suggesting that when considering the line of demarcation 
between RAN and core, FirstNet must be careful to respect the 
distinction between technology [the hardware, software, and 
standards] and the policy and operation of the core services. Public 
safety entities will be unlikely to support the network unless 
FirstNet provides States and local governments the means to control 
and manage services such as billing, location, and device 
services.'') available at http://www.regulations.gov/#!documentDetail;D=NTIA-2014-0001-0008.
---------------------------------------------------------------------------

    These technical and operational functions and interactions between 
the RAN and core network, however, can vary to a limited extent that 
would not necessarily jeopardize the interoperability goals of the Act. 
FirstNet preliminarily concludes that it will maintain a flexible 
approach, advocated by some States in their comments to the First 
Notice, to such functions and interactions in order to provide the best 
solutions to each State so long as the interoperability and self-
sustainment goals of the Act are achieved.\84\ The allocation of such 
technical and operational functions,

[[Page 13346]]

however, does not entirely dictate who assumes public safety customer-
facing roles, such as marketing, execution of customer agreements, 
billing, maintaining service responsibility, and generating and using 
fees from public safety customers. States assuming RAN responsibilities 
could, for example, operate as partial resellers or enter into Mobile 
Virtual Network Operator (``MVNO'')-like arrangements \85\ with 
FirstNet to use part or all of its core network to offer service to 
public safety entities in a State. Alternatively, such States could act 
as a RAN supplier to FirstNet, customizing the RAN to local needs but 
placing the responsibility with FirstNet to market, serve, and bill 
public safety entities in the State. There are a variety of such 
possible arrangements, and we preliminarily conclude below that the Act 
provides sufficient flexibility to accommodate many of them so long as 
the interoperability and self-sustainment goals of the Act are met.
---------------------------------------------------------------------------

    \84\ FirstNet is continuing to review comments in response to 
the preliminary conclusions in its First Notice and makes no final 
determinations with respect thereto in this Second Notice.
    \85\ In a traditional MVNO relationship, a mobile operator 
supplies the RAN and some components of the core network to the 
MVNO.
---------------------------------------------------------------------------

    We first note, as we preliminarily concluded in the First Notice, 
that the State decision is as to whether to control deployment of the 
RAN, not the core network, and as is discussed above, the RAN alone is 
insufficient to offer wireless service. Under Section 6302(f), FirstNet 
is authorized to charge States assuming such RAN responsibilities user 
fees for ``use of elements of the core network.'' \86\ This clause 
could be interpreted as evidence of Congress' contemplation of such a 
State's use of the FirstNet core network to provide service to public 
safety entities in a resale or MVNO-like arrangement. But there are a 
variety of circumstances, other than providing end user services, under 
which a State may want to use elements of the FirstNet core network. 
For example, the FirstNet core network would have to be used to enable 
RAN sharing as specified by the Interoperability Board Report in 
connection with a CLA between the State and a third party. In addition, 
if the State itself subscribed to FirstNet services, because the State 
is responsible for the RAN, the State and FirstNet would have to 
negotiate an agreement addressing, among other things, State use of the 
core network. Thus, this clause alone does not, generally speaking, 
appear to indicate one way or another who is to be the customer-facing 
service provider in a State that has assumed RAN responsibility and 
could provide flexibility in this regard.
---------------------------------------------------------------------------

    \86\ 47 U.S.C. 1442(f).
---------------------------------------------------------------------------

    Similarly, Section 6302(e)(3)(D) indicates that such a State is to 
``operate . . . the State radio access network'' and ``maintain ongoing 
interoperability with the [NPSBN].'' \87\ Neither of these requirements 
necessarily indicates a customer-facing role. The State is expressly 
operating the RAN, not the NPSBN as a whole in the State. Thus, these 
clauses similarly do not appear to be restrictive in this regard.
---------------------------------------------------------------------------

    \87\ Id. Sec.  1442(e)(3)(D).
---------------------------------------------------------------------------

    The Act requires that States seeking to obtain grant funds or 
spectrum capacity leasing rights must demonstrate ``comparable . . . 
quality of service to that of [FirstNet].'' \88\ This provision implies 
that States building and operating a RAN are at least providing a 
``quality of service'' to someone. For example, the clause could mean 
that because the RAN is part of the network that FirstNet is using to 
provide service to a public safety customer, the State must demonstrate 
that this ultimate level of service from FirstNet will not be 
diminished relative to what FirstNet would provide under its plan. 
Alternatively, the provision could be interpreted as contemplating a 
State providing a quality of service to end user customers. Again, this 
clause does not appear to clearly require one or the other customer-
facing roles.
---------------------------------------------------------------------------

    \88\ Id. Sec.  1442(e)(3)(D)(iii).
---------------------------------------------------------------------------

    Another important provision relevant to this determination 
precludes States that assume RAN responsibility from ``provide[ing] 
commercial service to consumers or offer[ing] wholesale leasing 
capacity of the network within the State except directly through 
public-private partnerships for construction, maintenance, operation, 
and improvement of the network within the State.'' \89\ This provision 
could imply that such States are otherwise contemplated to provide 
commercial services to non-consumers (e.g., public safety entities) 
within that State. This interpretation, however, based on implication, 
is not required by the provision, which could merely be formulated to 
avoid precluding the intended use of the State RAN for service 
provision by FirstNet to public safety. The implication may support the 
flexibility discussed above, although Congress was express and overt 
elsewhere in the Act in authorizing a customer-facing relationship.\90\
---------------------------------------------------------------------------

    \89\ Id. Sec.  1442(g)(1).
    \90\ We note that Section 6212 separately precludes FirstNet 
from providing services directly to consumers, and such a 
prohibition would presumably cover FirstNet's offer of services in a 
State that has assumed responsibility for a RAN, raising the 
question as to why the preclusion of Section 6302 is necessary 
unless Congress assumed such States were customer-facing to public 
safety entities. See 47 U.S.C. 1432, Sec.  1442. Because Congress 
permitted such States to enter into agreements to exploit the excess 
network capacity in such States, the Section 6302 provision serves 
to limit the type of such agreements to the specified PPPs. Id. 
Sec.  1442(g). Without this provision, States could enter into 
agreements to exploit excess capacity where the paying party was not 
aiding in the ``construction, maintenance, operation, and 
improvement of the network.'' Id. Sec.  1442(g). Thus, the provision 
can serve a separate purpose.
---------------------------------------------------------------------------

    Section 6208 and Section 6302 expressly authorize FirstNet and a 
State assuming RAN responsibilities, respectively, to enter into 
CLAs.\91\ Only Section 6208, however, which authorizes ``[FirstNet] . . 
. to assess and collect . . . fees,'' identifies ``user or subscription 
fee[s] . . . including . . . from . . . any public safety entit[ies].'' 
\92\ That is, Congress expressly authorized both FirstNet and States to 
enter into CLAs, but only expressly provided for FirstNet to charge 
public safety entities for user or subscription fees. Because Congress 
took the step of expressly authorizing the State to exploit federally-
licensed spectrum using one method (public private partnerships 
(``PPPs'')/CLAs), and, unlike FirstNet, not another (subscriber fees), 
a potential interpretation of the Act with respect to these provisions 
is that FirstNet is intended to be the customer-facing service provider 
for public safety entities in States that assume RAN responsibilities, 
or is at least the only entity permitted to assess subscription fees to 
public safety entities. Such an interpretation would also be supported 
by the existence of provisions under the Act, more fully discussed 
below, requiring FirstNet to reinvest subscriber fees as well as excess 
network capacity fees into the network, whereas the only reinvestment 
provision expressly applicable to States assuming RAN responsibilities 
concerns excess network capacity fees. This too could indicate that 
such States, as RAN providers, were not intended to assess subscription 
fees because if they were intended to do so, Congress would have 
required their reinvestment into the network (as they did with State 
CLA fees).\93\
---------------------------------------------------------------------------

    \91\ Id. Sec.  1428(b), Sec.  1442(e)(3)(c)(i)(II).
    \92\ See id. Sec.  1428.
    \93\ 47 U.S.C. 1442(g)(2) (requiring revenues gained by a State 
from such a leasing agreement to be reinvested in the network).
---------------------------------------------------------------------------

    We preliminarily conclude, however, that although the above 
provisions could indicate a Congressional intent to have FirstNet be 
the primary customer-facing entity at least with regard to the fees 
assessed public safety entities, a reasonable interpretation of all the

[[Page 13347]]

provisions discussed above, including both operational and fee-related, 
would not preclude opt-out States, as sovereign entities, from charging 
subscription fees to public safety entities if FirstNet and such States 
agreed to such an arrangement in the spectrum capacity lease with the 
States, and the arrangement was part of an alternative plan approved by 
the FCC and NTIA. We seek comments on this preliminary conclusion.
    In addition to affording flexibility with respect to FirstNet's 
role, because of the lack of definitive language in the Act discussed 
above, we also preliminarily conclude that the Act does not require 
that such States be the customer-facing entity entering into agreements 
with and charging fees to public safety entities in such States. In 
particular, our conclusion is based on the absence of provisions in the 
Act requiring such a result, as discussed above, and the inclusion of 
provisions, such as those regarding the assessment and reinvestment of 
subscriber fees, that at least clearly authorize, if not contemplate 
the opposite result.
    Accordingly, we preliminarily conclude that the Act provides 
sufficient flexibility, as discussed above, to allow the determination 
of whether FirstNet or a State plays a customer-facing role to public 
safety in a State assuming RAN responsibilities to be the subject of 
operational discussions between FirstNet and such a State in 
negotiating the terms of the spectrum capacity lease for such State, in 
addition to the approval of the State's alternative plan by the FCC and 
spectrum leasing rights and any grant funds by NTIA. We seek comments 
on these preliminary conclusions.
    Our preliminary interpretations above attempt to maintain the 
balance between, on the one hand, construction of a nationwide 
architecture and interoperable operation of the network, and on the 
other hand, a State's opportunity to design and deploy a RAN that meets 
the particular coverage, capacity, and other needs of the State. Our 
interpretations leave room for the flexibility advocated by some States 
in response to our First Notice in order to provide the best solutions 
in each State while adhering to the goals of the Act.
    However, under all these possible scenarios--where an opt-out State 
or FirstNet is playing customer-facing service provider roles to public 
safety entities--the splitting of responsibilities for the network at 
the interface between the RAN and core network will present substantial 
operational complexities. A resale or MVNO-like arrangement permitting 
States that assume RAN responsibilities to offer service to public 
safety entities could create disparities in, among other things, terms 
and conditions, service/feature offerings and availability, priority 
and preemption governance schemes, and pricing and billing practices 
between opt-out States and opt-in States. These disparities, in 
addition to jeopardizing interoperability, could also reduce 
subscription to and use of the NPSBN by adding complexity, 
implementation risk, and confusion among public safety entities. 
Although some of these disparities could be addressed in the opt-out 
process and network policies implemented by FirstNet, and/or mitigated 
in agreements between FirstNet and opt-out States, such a structure 
could be inconsistent with the goals of the Act to establish ``a 
nationwide, interoperable public safety broadband network . . . based 
on a single, national network architecture.'' \94\
---------------------------------------------------------------------------

    \94\ Id. Sec.  1422(b). There is also no indication in the Act 
that the State option to assume RAN responsibilities was enacted to 
promote competition between FirstNet and such States.
---------------------------------------------------------------------------

    FirstNet's customer-facing role in providing services to public 
safety entities in opt-out States, although potentially mitigating many 
of the above difficulties, would present different issues, such as RAN 
coverage and capacity planning, investment, and reimbursement debates 
between FirstNet and such States.\95\ Under the variety of possible 
scenarios enabled by commercial network standards, FirstNet and States 
assuming RAN responsibilities will have to work together over many 
years with the best interests of public safety in mind to address 
myriad operational issues.\96\
---------------------------------------------------------------------------

    \95\ We also note that States are not restricted from using 
their own funds to build and operate the RAN, nor are they required 
to apply to NTIA for funding.
    \96\ For example, if FirstNet is the public safety customer-
facing provider, how will future capacity and coverage expansion of 
the RAN be handled between the parties given that FirstNet sales and 
service projections will be driving such investments? Alternatively, 
if the State is the public safety customer-facing provider and wants 
to expand the RAN or services beyond FirstNet's current core 
configuration, how will those arrangements be handled? How will 
roaming agreements between FirstNet and the State, and between 
either FirstNet or the State (as the service provider) and other 
carriers be handled? Regardless of the service provider model in 
States assuming RAN responsibilities, how will radio frequency 
planning be accomplished on State borders? We therefore also seek 
comments on the operational parameters implicated in the shared 
service provision models discussed above.
---------------------------------------------------------------------------

iii. State Use and Reinvestment of Funds Received From Building and 
Operating a RAN
    FirstNet has three primary sources of funding: (1) Up to $7 billion 
in cash; (2) subscriber fees; and (3) fees from excess network capacity 
leases (known as CLAs) that allow FirstNet to sell capacity not being 
used by public safety to commercial entities.\97\ Each of these funding 
sources is critical to offset the massive costs of the nationwide 
broadband wireless network envisioned in the Act and the self-
sustainability required of FirstNet under the Act.
---------------------------------------------------------------------------

    \97\ See generally 47 U.S.C. 1428, Sec.  1457.
---------------------------------------------------------------------------

    State opt-out decisions could, however, depending on the 
interpretations below, materially affect FirstNet's funding and thus 
its ability to serve public safety, particularly in rural States. If a 
State receives approval to opt-out it could theoretically tap into or 
entirely supplant each of the three primary FirstNet funding sources 
within the boundaries of the State. More precisely, depending on such 
interpretations, a State that assumes RAN responsibility could tap into 
or supplant these funding sources in an amount that materially exceeds 
the amount of resources FirstNet (or a reasonable State plan) would 
have allocated to serve that State.\98\
---------------------------------------------------------------------------

    \98\ As used here, resources would be the amounts from all fees 
(including subscriber and excess network capacity) used to cover 
costs in the State. In an opt-out scenario, FirstNet would avoid the 
costs of the RAN, gain core network fees, but potentially lose fees 
that would have exceeded its costs in the State, as discussed 
herein. FirstNet's purchasing power with vendors would also decline 
to the extent of the RAN-related purchases, thereby potentially 
raising FirstNet's costs to the extent of such reduced purchasing 
power.
---------------------------------------------------------------------------

    For example, once a State receives approval of its alternative RAN 
plan from the FCC, the State must apply to NTIA for a spectrum capacity 
lease from FirstNet.\99\ Section 6302(g) then permits a State to enter 
into CLAs, using the spectrum capacity leased from FirstNet to offset 
the costs of the RAN. The Act does not specify the terms governing the 
lease nor the amount of spectrum capacity for which a State may apply, 
only requiring any fees gained to be reinvested into the RAN ``of the 
State.'' \100\ Assuming for the moment that such a State receives all 
necessary approvals and enters into a lease with FirstNet for use of 
all of FirstNet's spectrum capacity in the State, and such a State is 
the billing service provider to public safety entities in the State, 
then all public safety subscriber and excess network capacity fees 
generated in the State would go to and remain in the

[[Page 13348]]

State other than any core network fees assessed by FirstNet.
---------------------------------------------------------------------------

    \99\ 47 U.S.C. 1442(e)(3)(C).
    \100\ Id. Sec.  1442(g)(2).
---------------------------------------------------------------------------

    Generally speaking, States with high-density populations may 
generate subscriber and/or excess network capacity fees for FirstNet 
that materially exceed their RAN costs to FirstNet. Thus, if such a 
State opts out of the FirstNet plan, and the Act is interpreted to 
allow such States to keep any or all of the fees from such States that 
exceed RAN costs within the State (assuming even an expanded RAN in the 
State alternative plan relative to FirstNet's plan), then funding for 
all other States could decline because FirstNet will not receive the 
funding for use outside the State.\101\ That is, because FirstNet must 
aggregate fee amounts across all States for reinvestment and use by all 
States,\102\ if a State is able to withhold fees materially in excess 
of those FirstNet was going to allocate to the State (beyond the 
avoided cost of the RAN and core network fees, and accounting for any 
plan differences between FirstNet and the State), funding for all other 
States would materially decline. This circumstance could have a 
detrimental impact on both the funds available to maintain and improve 
the NPSBN on an ongoing basis as well as adversely affect the cost of 
services to public safety users.
---------------------------------------------------------------------------

    \101\ Funding for that opt-out State's core network would also 
decline, but FirstNet would be able to assess such a State core 
network fees under the Act.
    \102\ See 47 U.S.C. 1428.
---------------------------------------------------------------------------

    Thus, if a State believes it can generate and withhold such fees 
for its own use under the Act, it may have at least a theoretical 
economic incentive to opt-out. Again assuming the Act is interpreted 
this way, our preliminary estimates indicate that very high density 
States may have such an incentive, although only the request for 
proposal processes and actual operations will determine this for 
certain. Accordingly, if the Act is interpreted in this manner, it has 
a built in incentive structure for a few States to opt-out and retain, 
for reinvestment or otherwise in such States, fees that could 
materially reduce FirstNet coverage and services in all other States, 
including States with more rural areas.
    We believe as a general matter that Congress did not intend for a 
few, high-density States to be able to withhold material funding for 
all other States under the Act. Such an incentive structure, even if 
reinvestment in the State network were always required in opt-out 
States, could result in networks that greatly exceed public safety 
requirements in a few opt-out States (or funds diverted to State 
general funds), and networks that do not meet public safety 
requirements and the goals of the Act in the vast majority of States. 
Nothing in the Act indicates that such a result was contemplated, 
particularly given FirstNet's duty to ensure the deployment of a 
``nationwide'' network that includes ``substantial rural coverage 
milestones as part of each phase of the construction and deployment of 
the network.'' \103\ We do not believe this was the balance Congress 
intended to strike between establishing a nationwide network and 
providing States an opportunity, under certain conditions, to customize 
and operate the RAN portion of the network in their States.
---------------------------------------------------------------------------

    \103\ Id. Sec.  1426(b)(1), (3).
---------------------------------------------------------------------------

    Congress' intent in this regard is informed by, among others, the 
provision in Section 6302(e)(3)(D) that requires that a State wishing 
to assume RAN responsibilities demonstrate ``the cost-effectiveness of 
the State plan'' when applying to NTIA not just for grant funds, but 
also for spectrum capacity leasing rights from FirstNet, which are 
necessary for the implementation of a State RAN and could exceed the 
value of any grant funds over the life of the program.\104\ Independent 
of NTIA's determination in assessing such an application, FirstNet, as 
the licensee of the spectrum and an independent entity within NTIA, 
must ultimately decide to enter into such a lease, and thus we analyze 
this provision in considering FirstNet's role and duties in relation to 
the State's proposed demonstration of the plan's ``cost-
effectiveness.'' \105\
---------------------------------------------------------------------------

    \104\ See id. Sec.  1442(e)(3)(D).
    \105\ We note that FirstNet's interpretation of this provision 
and its determination with regard to its duties based on the State's 
proposed demonstration is independent of and does not limit NTIA. To 
the extent the ``spectrum capacity lease'' described in Section 
6302(e)(3)(C)(iii)(II) is a lease of the spectrum itself, rather 
than capacity on the network, under applicable FCC rules the FCC 
``will allow parties to determine precise terms and provisions of 
their contract'' consistent with FirstNet's obligations as a 
licensee under such rules. See Promoting Efficient Use of Spectrum 
Through Elimination of Barriers to the Development of Secondary 
Markets, WT Docket No. 00-230, Report and Order and Further Notice 
of Proposed Rulemaking, FCC 03-113, 18 FCC Rcd 20604, 20637 (2003).
---------------------------------------------------------------------------

    If a State presented a plan for a RAN deployment identical to 
FirstNet's but costing three times as much, a reasonable interpretation 
of this provision would indicate that if material, the amount in 
question would render such a plan not cost-effective (assuming the 
State was not using its own funds or otherwise compensating for the 
cost difference). Two times the cost of the RAN would be wasted for the 
rest of the country. This straight-forward analysis of cost-
effectiveness implicitly takes into account funding on a national 
basis, beyond the border of the State in question, because the State 
itself would receive the same RAN and the cost-inefficiency would only 
affect other States through FirstNet. Thus, by including a cost-
effectiveness test, a straight-forward interpretation of the provision 
would indicate Congress' intent that State opt-out decisions do not 
unreasonably affect the resources of the network as a whole, or at the 
very least that such decisions only allocate resources to provide 
different or greater RAN coverage in a reasonable manner.\106\
---------------------------------------------------------------------------

    \106\ The actual analysis would presumably include any added 
benefits provided by differences in the State RAN plan, which could 
justifiably cost more than the FirstNet RAN plan. But material fees 
captured in the State beyond the cost of even a reasonably enhanced 
RAN plan could result in inefficiencies.
---------------------------------------------------------------------------

    In the case of a high-density State or territory, such as the 
District of Columbia, the value of public safety user fees and CLAs is 
likely much greater than a high-quality network's costs. That is, the 
effective cost of the RAN once subscriber and/or excess network 
capacity lease fees are taken into account is zero, and surplus fees 
are generated. Assuming for the moment that the State could generate 
the same (surplus) CLA fees that FirstNet could in the State, if the 
State were to present a plan that withheld such surpluses in the State 
itself, by analogy to the previous example, the rest of the States 
would be denied the benefits to the NPSBN afforded by the availability 
of such amounts to reduce the overall cost of services. Even if such a 
surplus were reinvested in the State's network, spending the surplus on 
only the network in that State may greatly exceed the reasonable needs 
of public safety in the State relative to those in other States. In 
addition to this inefficiency, if the Act were interpreted not to 
require reinvestment (discussed below) then any surplus fees diverted 
to State general funds would be drained from the FirstNet program and 
public safety in all States, including the opt-out State.
    Exacerbating this effect, a single State (or even a group of 
States) negotiating a CLA for only such a State (or group) could yield 
substantially lower fees overall relative to what FirstNet would have 
generated. In the example above, the District of Columbia alone would 
likely generate lower fees than FirstNet would for the spectrum in the 
District because FirstNet would likely enter into a CLA that spanned 
the entire metro area of Washington, DC, including parts of Maryland 
and Virginia that, from a

[[Page 13349]]

commercial carrier's perspective, are important to the value of the 
spectrum in the District. Furthermore, FirstNet's request for proposal 
process might reveal that a regional or national CLA would generate 
even greater fees attributable to the District (and the District with 
surrounding States) because of the seamless spectrum footprint across 
the region or nation. Of course, the opposite could also be true, that 
for some reason a State or group of States may be able to generate more 
fees from a CLA than FirstNet which, depending on the allocation of 
such fees between the State and FirstNet, could benefit all other 
States relative to the agreement into which FirstNet would have 
entered. These are important considerations materially affecting the 
value of the assets Congress provided to fund the program.
    Accordingly, as a threshold matter, with respect to FirstNet's 
negotiation of a spectrum capacity lease with States seeking to assume 
RAN responsibilities, we preliminarily conclude that Congress did not 
intend such leases to enable materially cost-inefficient RAN plans or, 
more precisely, materially inefficient use of the scarce spectrum 
resources provided to the program, and it would be FirstNet's duty to 
consider the effect of any such material inefficiencies on, among other 
things, more rural States and on the FirstNet program in determining 
whether and under what terms to enter into such a lease.
    The Act directs States with approved alternative RAN plans to 
``apply'' to ``NTIA to lease spectrum capacity from [FirstNet].'' \107\ 
It does not guarantee that NTIA will approve spectrum capacity leasing 
rights for a State, but rather sets out criteria that must be 
demonstrated to NTIA--including the cost-effectiveness of the plan--
prior to receiving approval. FirstNet, however, as an independent 
authority within NTIA and as the licensee of the spectrum, has a duty 
to preserve the meaningful right of States to opt-out under the Act, 
but also additional duties imposed by the Act to ensure the deployment 
of the network nationwide and duties imposed by FCC rules as a licensee 
with respect to the spectrum and any capacity subleases thereof. We 
preliminarily conclude that FirstNet, in the exercise of such duties, 
can and must take into account, among other things, the considerations 
discussed above in whether and under what terms to enter into a 
spectrum capacity lease with a State. We seek comments on this 
preliminary conclusion.\108\
---------------------------------------------------------------------------

    \107\ 47 U.S.C. 1442(e)(3)(iii)(II).
    \108\ We note that even if our preliminary conclusion is 
incorrect in terms of FirstNet's authority to consider the effects 
discussed above, in any event the provisions regarding cost-
effectiveness of the plan, as interpreted by NTIA, would 
nevertheless be a required consideration in the application to NTIA 
for spectrum capacity leasing rights under the Act.
---------------------------------------------------------------------------

    FirstNet's proposed approach, however, would not result in a binary 
FirstNet position. FirstNet, in remaining faithful to the balance 
Congress struck in the Act, would work with States desiring to assume 
RAN responsibilities to evaluate potential ``win-win'' arrangements 
where the assets Congress provided are used efficiently but the right 
of States to assume RAN responsibilities under the Act's criteria is 
preserved. For example, FirstNet and such a State could agree, as part 
of the spectrum capacity lease and ultimately as part of the State's 
alternative plan presented to the FCC and NTIA, to leverage a FirstNet 
CLA if it presents a materially better fee return to the benefit of 
both the State in question and all other States. Such a State could 
become a contracting party with the same covered leasing partner, 
giving the State control of and responsibility for the RAN. If, taking 
into account the above-discussed potential effects on the program, a 
State is nevertheless able to enter into a more favorable CLA with a 
different covered leasing partner, then FirstNet and the State could 
agree on how such an agreement would benefit the State and the network 
as a whole. A variety of approaches could achieve ``win-win'' 
solutions, and FirstNet would be committed to exploring them within the 
bounds of the Act. We seek comments on such approaches.
    With respect to the user fees generated from public safety 
customers in a State, we discussed in the previous section of this 
Second Notice our preliminary conclusion that FirstNet or a State 
assuming RAN responsibilities may ultimately receive such fees 
depending on the arrangement between FirstNet and the State under the 
spectrum capacity lease. Here, for the reasons discussed above, we 
preliminarily conclude that the Act should be interpreted to require 
that States assuming RAN responsibilities that charge end user 
subscription fees to public safety entities must reinvest such fees 
into the network and that FirstNet has a duty to consider both the 
reinvestment of such fees and the cost-effectiveness considerations 
discussed above regarding the distribution of such fees in entering 
into such a spectrum capacity lease.
    An alternative interpretation regarding reinvestment of subscriber 
fees--that Congress intended States to be able to divert such fee 
amounts to State general funds--would seem to have no basis in the 
structure and purposes of the Act, which carefully provides a 
reinvestment requirement for CLA fees assessed by States (and FirstNet) 
and when authorizing subscriber fees by FirstNet.\109\ Subscriber fees 
may ultimately exceed those derived from CLAs in any one State, and it 
would make little sense for Congress to have intended loss of the 
former but retention of the latter for the network, with such losses 
potentially jeopardizing the interoperability and technical evolution 
of the network. At a minimum, the ability of States to provide end user 
services to public safety entities will ultimately depend on the scope 
of the spectrum capacity lease provided by FirstNet. Accordingly, we 
preliminarily conclude that, absent clear language to the contrary in 
the Act, FirstNet could impose such a reinvestment restriction within 
the terms of such a lease. We seek comments on these preliminary 
conclusions.
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    \109\ This would be true even if Congress assumed that some of 
such subscribers could be receiving services for free because the 
same assumption could have been made with respect to FirstNet fees. 
That is, the Act does not require the imposition of fees, only 
authorizes such fees, and then requires that, if assessed, any such 
fees be reinvested.
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    We also preliminarily conclude here that, for the reasons discussed 
above related to CLAs, FirstNet, in the exercise of its duties, can and 
must take into account, among other things, the considerations 
discussed above regarding the effects on other States of a State's plan 
to retain all subscriber fees in determining whether and under what 
terms to enter into a spectrum capacity lease with a State. Consistent 
with our proposed approach to efficiently leverage CLA fees from third 
parties, FirstNet would explore ``win-win'' solutions with States 
desiring to assume RAN and customer-facing obligations if subscriber 
fees with or without CLA fees would materially exceed RAN and related 
costs in a State. We seek comments on these preliminary conclusions.
    We turn now to the interpretation of certain aspects of provisions 
addressing the reinvestment of CLA fees assuming that a State has 
received approval from NTIA and entered into a spectrum capacity lease 
with FirstNet. We note the parallels between FirstNet and the State's 
provisions addressing the reinvestment of fees. Subsection 6208(d) 
requires FirstNet to reinvest those

[[Page 13350]]

amounts received from the assessment of fees under Section 6208 in the 
NPSBN by using such funds only for constructing, maintaining, 
operating, or improving the network.\110\ Such fees under Section 6208 
include basic network user fees and fees related to any CLAs between 
FirstNet and a secondary user.\111\
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    \110\ 47 U.S.C. 1428(b).
    \111\ See id. Sec.  1428(a).
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    Parallel to FirstNet's provision in Section 6208(d), Section 
6302(g)(2) requires that any amounts gained from a CLA between a State 
conducting its own deployment of a RAN and a secondary user must be 
used only for constructing, maintaining, operating, or improving the 
RAN of the State.\112\ However, the exact parallels between the 
reinvestment prohibitions in the Act applicable to FirstNet, and those 
applicable to such States, end there.
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    \112\ Id. Sec.  1442 (g)(2) (emphasis added).
---------------------------------------------------------------------------

    Section 6208(a)(2) authorizes FirstNet to charge lease fees related 
to CLAs. Other than CLAs, however, FirstNet is not expressly authorized 
to enter into other arrangements involving the sale or lease of network 
capacity. In potential contrast, Section 6302(g)(1) precludes States 
from providing ``commercial service to consumers or offer[ing] 
wholesale leasing capacity of the network within the State except 
directly through public-private partnerships for construction, 
maintenance, operation, and improvement of the network within the 
State.'' Section 6302(g)(2), entitled ``Rule of construction,'' 
provides that ``[n]othing in this subsection shall be construed to 
prohibit the State and a secondary user from entering into a covered 
leasing agreement.'' \113\
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    \113\ Id. Sec.  1442(g)(1).
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    These two components of subsection 6302(g) raise questions as to 
whether (1) there is any type of PPP that is not a CLA, and if so, (2) 
whether such a PPP would permit commercial use of such capacity more 
flexibly or less flexibly than a CLA given the difference in their 
respective requirements. That is, do these provisions of the Act 
provide States that assume RAN responsibility more or less flexibility 
in wholesaling capacity than FirstNet? Moreover, if such a non-CLA PPP 
exists, under the second sentence of Section 6302(g)(2), amounts 
generated by such an arrangement, unlike those from a CLA, could under 
the literal terms of Section 6302(g)(2) potentially not be subject to 
reinvestment in the network as that provision states that it is 
revenues gained ``from such a leasing agreement'' (ostensibly referring 
to ``covered leasing agreement'' in the immediately preceding sentence) 
that must be reinvested.\114\
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    \114\ We note, however, that the reinvestment requirement of 
Section 6302(g)(2) actually requires reinvestment in ``constructing, 
maintaining, operating, or improving'' the RAN in the State, which 
are the four items listed as the subject matter of the PPPs of 
Section 6302(g)(1), not the CLA items of Section 6208(a)(1), which 
are ``construct[ing], manag[ing], and operat[ing].'' See 47 U.S.C. 
1442(g), Sec.  1448(a)(1). If Congress had intended to require only 
reinvestment of CLA fees, they may have referenced only the three 
areas that are the subject of CLAs. An alternative interpretation 
could therefore be that ``such a leasing agreement'' of Section 
6302(g)(2) refers back to the term ``wholesale leasing'' in Section 
6302(g)(1), using the term ``agreement'' as a generic reference to 
the PPP. We seek comments on this alternative interpretation. See 
id. Sec.  1442(g)(2), Sec.  1442(g)(1).
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    These potential differences between the Act's treatment of FirstNet 
and States with regard to capacity leases turn on whether Congress 
intended a difference between the definition of CLA, explored in the 
First Notice, and a ``public-private partnership for construction, 
maintenance, operation, and improvement of the network.'' There are 
several differences in statutory language between the two:

    (1) CLAs must be a written agreement, whereas PPPs are not 
expressly required to be in writing;
    (2) CLAs are ``arrangements'', whereas PPPs are 
``partnerships'';
    (3) PPPs must include ``improvement'' of the network in addition 
to the ``construction'' and ``operation'' of the network required by 
both CLAs and PPPs;
    (4) CLAs must include the ``manage[ment]'' of the network 
whereas PPPs must include the ``maintenance'' of the network; and
    (5) PPPs need not expressly permit (i) access to network 
capacity on a secondary basis for non-public safety services and 
(ii) the spectrum allocated to such entity to be used for commercial 
transmissions along the dark fiber of the long-haul network of such 
entity.

    We believe, however, that in practical terms the differences in 
items (1)-(4) above are slight. For example, any significant agreement 
of this type is likely to be in writing, and most such agreements could 
include improvement, management, or maintenance of the network in some 
manner to qualify.
    With regard to item (5) above, interpreted consistent with our 
preliminary conclusions in the First Notice, these ``permit[ted]'' uses 
could provide express flexibility to a CLA party but not a PPP. 
Nevertheless, Section 6302(g)(2) permits States to enter into CLAs, 
indicating an intent to include CLAs within the scope of PPPs.\115\ We 
thus preliminarily conclude that, in practical effect, the literal 
statutory differences result in little difference between the Act's 
treatment of FirstNet and States that assume RAN responsibility. We 
seek comments on this preliminary conclusion.
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    \115\ If the item (5) ``permit[ed]'' uses were interpreted as 
limitations on a CLA partner, which we preliminarily concluded in 
the First Notice was not the case, then Section 6302(g)(2) would 
have the strange result of requiring reinvestment of a narrower 
class of capacity leases but not broader, more flexible leases. 47 
U.S.C. 1442(g)(2). This interpretation makes little sense under the 
framework of the Act, would permit the draining of one of the most 
important sources of funding away from State RANs, and thus we 
preliminarily conclude that Section 6302(g)(2) and the definition of 
CLAs should not be interpreted in this manner. Id.
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    Given this preliminary conclusion, we do not believe Congress 
intended to permit such States to avoid reinvestment in the network 
through use of subtle differences in network capacity arrangements. 
Nothing in the Act indicates that such subtle differences should 
justify driving scarce resources away from the network and thus, 
effectively, public safety entities. Nor does anything in the Act 
indicate that Congress intended the network to be even a partial 
revenue generator for States. Given the provisions of and overall 
framework and policy goals of the Act, we preliminarily conclude that 
Congress intended that any revenues from PPPs, to the extent such 
arrangements are permitted and different than CLAs, should be 
reinvested into the network and that the reinvestment provision of 
Section 6302(g) should be read to require as such.\116\ We seek 
comments on this preliminary conclusion.
---------------------------------------------------------------------------

    \116\ Id. Sec.  1442(g)(2).
---------------------------------------------------------------------------

    Notwithstanding our preliminary legal conclusions above, however, 
fees--either basic user fees or those from PPPs--used for purposes 
other than constructing, maintaining, operating, or improving the RAN 
in a State could potentially severely impact the ability of a State to 
maintain ongoing interoperability and/or maintain comparable security, 
coverage, and quality of service to that of the NPSBN over time. 
Accordingly, we believe the potential loss to the network of either of 
these revenue streams, and thus State commitments to reinvest such 
revenue streams if the final interpretation of Section 6302(g) permits 
such losses, could be considered by NTIA in assessing any State 
alternate plans and related demonstrations by a State, and could be the 
subject of negotiated terms in any spectrum capacity lease between 
FirstNet and such a State in accordance with our preliminary 
conclusions regarding such leases above.

[[Page 13351]]

III. Ex Parte Communications

    Any non-public oral presentation to FirstNet regarding the 
substance of this Second Notice will be considered an ex parte 
presentation, and the substance of the meeting will be placed on the 
public record and become part of this docket. No later than two (2) 
business days after an oral presentation or meeting, an interested 
party must submit a memorandum to FirstNet summarizing the substance of 
the communication. FirstNet reserves the right to supplement the 
memorandum with additional information as necessary, or to request that 
the party making the filing do so, if FirstNet believes that important 
information was omitted or characterized incorrectly. Any written 
presentation provided in support of the oral communication or meeting 
will also be placed on the public record and become part of this 
docket. Such ex parte communications must be submitted to this docket 
as provided in the ADDRESSES section above and clearly labeled as an ex 
parte presentation. Federal entities are not subject to these 
procedures.

    Dated: March 9, 2015.
Stuart Kupinsky,
Chief Counsel, First Responder Network Authority.
[FR Doc. 2015-05855 Filed 3-12-15; 8:45 am]
BILLING CODE 3510-TL-P


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