Why FirstNet Does Not Depend on Taxpayer Funding

The FirstNet wireless broadband network provides priority communications to U.S. police, fire, EMS and other first responders. This nationwide dedicated network, which is operated under a competitive contract won by AT&T, serves about 8 million subscribers and approximately 31,000 agencies nationwide. It ensures that public safety voice, video, and data messages get through even when commercial cellular networks are overloaded during large scale planned events as well as emergency events.

So what does it cost taxpayers to operate FirstNet? Not a dime.

How FirstNet Was Funded in the Beginning

It did take some money to create FirstNet, which was legislated in 2012 by Congress in response to life-threatening communications problems that occurred during 9/11, as well as recommendations contained in the 9/11 Final Report of the National Commission.

Spectrum Auction Proceeds Created the Initial Investment

The funding for FirstNet was generated from spectrum auctions.

“The initial plan of the FCC in 2008 was to pair valuable 10Mhz of 700Mhz spectrum with 10Mhz already held by Public Safety,” said Sue Swenson, Former Chair of the FirstNet Authority and an experienced telecommunications executive who previously held high-level roles at companies like PacTel Cellular, Cellular One, T-Mobile, Leap Wireless, and Sage Software. “The result was no winning bidder because the business model was unattractive. Recognizing this, Congress removed spectrum from the auction model in 2012 and directly allocated spectrum and funding to create FirstNet. An auction in 2014 (AWS-3) generated sufficient value to enable FirstNet to receive its funding to execute the legislation passed by Congress.

Congress Designed a Self-Sustaining Model

Not wanting yet another agency reliant on taxpayer-appropriated funds, Congress designed FirstNet to pay for itself. So the money to run it—and to keep upgrading its technology to keep up—ultimately comes from its users’ monthly subscription fees.

“It was a very unique and successful construct to ensure that public safety continues to be funded,” said Swenson.

No Ongoing Appropriations Required

This point bears repeating: The only money FirstNet ever received from Washington was the initial $7 billion from the spectrum auction back in 2014-and nothing since. Most of the money raised by the auction was used to pay down the National Debt. No federal taxpayer money supports this network, ever.

How User Fees Support Network Growth and Improvements

As mentioned earlier, FirstNet invests much of the money it earns on upgrades to better serve its users. Being a self-funded network, FirstNet can upgrade faster because it is not waiting upon annual congressional appropriations battles to get the money it needs.

Subscriber Payments Reinvested into the Network

“The funding to run the FirstNet Authority and reinvest in the network comes from payments AT&T makes to the Authority, from the subscriber fees it collects,” Swenson said. “Those funds do not go into a general fund to be used for anything else; they are reinvested specifically back into public safety.”

Funding Coverage Expansion and New Capabilities

FirstNet’s reinvestments include $8 billion over ten years to add 5G to the network, build 1,000 Band 14 (FirstNet’s exclusive spectrum for first responders) towers to rural and remote areas, and invest in satellite-to-device capabilities. This system allows a standard FirstNet smartphone to connect directly to satellites in areas without cell towers.

Keeping Technology Current without Federal Spending

FirstNet’s reinvestment strategy is designed to keep its technology current without ever asking Washington for money. “We didn’t want a situation where you start with great technology that then lays dormant because there is no way to refresh it,” said Swenson. “We wanted to ensure a continuous opportunity to upgrade the network. As standards evolve, the Board and AT&T make decisions on when to invest. We are keeping pace competitively with 5G, upgrading the core and the radio access network to ensure public safety stays at the forefront of technology.”

Looking Ahead to the Future of FirstNet

This is an important time for FirstNet, as the deadline for Congress to reauthorize its mandate approaches. Legislation is currently making its way through Congress to make this happen.

Maintaining the Authority

There isstrong support for reauthorizing FirstNet for a new ten year term, after the current one runs out in 2027. Maintaining the structure of the FirstNet Authority, whose board members come from public safety, is key to its continued effectiveness.

A Model for the Future

Nine years after coming into service, FirstNet is continuing to help keep Americans safe, by providing reliable communications for first responders. Yet FirstNet is doing this without relying on Congress for funding. Instead, FirstNet’s users are paying for it all.

“FirstNet should be a model for future programs,” said Swenson. “Upon our early visits to Capitol Hill, members of Congress were stunned that we weren’t asking for more money. One senator asked, ‘Are you sure this isn’t like Amtrak, who asks us for money every year?’ And I said, ‘No, sir. It is not like Amtrak. FirstNet pays for itself.‘”

FAQ

How is FirstNet funded?

FirstNet is funded by its public safety users. The federal government does not pay a cent to keep FirstNet running.

Does FirstNet use taxpayer money?

Aside from receiving $7 billion in 2012 to launch FirstNet, the network does not use taxpayer funds.

What is the FirstNet public-private partnership?

The FirstNet public-private partnership is a 25-year agreement between the FirstNet Authority (a federal agency) and AT&T, which runs the network infrastructure.