Tuesday, December 13, 2011

San Jose Exits Controversial BayWEB 700 MHz Stimulus Project

Early 700MHz LTE Public Safety Network Project Now Expected to Fail 12/13/2011 San Francisco - The City Council of San Jose, California late this afternoon voted unanimously to reject further participation in, and funding of, the controversial federal stimulus supported wireless project called BayWEB. The interoperable regional 700 MHz LTE public safety broadband network was planned to serve scores of municipalities and counties in the greater Bay Area of Northern California.

San Jose, with a 2010 population of 945,942, was slated to be the largest single municipal jurisdiction in that regional array of governments.

Today's vote by the 10-member City Council puts the controversial project at nearly fatally high risk of both grant funding cancellation by the U.S. Department of Commerce, and similar no funding votes by local jurisdictions across the region. Either or both scenarios would cause the project, awarded $50.6 million by Commerce's National Telecommunications and Information Administration (NTIA) to fail. 

Impact on Motorola Seen
Such cancellation, which we now estimate to be highly probable, would be a major blow to the effort of Motorola Solutions, Inc. (NYSE: MSI) to leverage its current 80% share of the American land mobile radio (LMR) public safety wireless equipment market into an equally dominant position in the emerging opportunity in 700 MHz LTE systems.

BayWEB is one of only a handful of federally funded 700 MHz LTE efforts in the nation. Project lead Motorola, Inc. was awarded a $50 million broadband stimulus grant by the U.S. Department of Commerce in August of 2010. Within days of its award, San Jose and Santa Clara County, began raising detailed and serious questions about public ethics, funding, and procurement issues related to BayWEB. This publication was the first to report, on September 29, 2010, that the initial selection process for Motorola to represent a spate of area governments in by the regional public safety network was overseen by four ex-employees of Motorola itself. 

The City is 1 of 3 spectrum license holders for the system, along with Oakland and San Francisco, under the current 700MHz waiver procedure for public safety agencies of the Federal Communications Commission.

In a 10-page Memo to the Council, supported with another 113 pages of exhibits, City Fire Chief William McDonald and mayoral aide Michelle McGurk issued 4 recommendations, all of which were adopted by the body's unanimous voted following about 20 minutes of discussion. Three of the suggestions urged the City to continue participation in regional network development with the BayRICS Joint Powers Authority (JPA) which now governs BayWEB. 

San Jose Fire Chief William McDonald (l) with Mayor Chuck Reed at
September 11th memorial ceremony this year.
The fourth recommendation to Council was to vote not to sign the project's master contract between the regional governments and Motorola, the so-called Build Operate Own and Maintain (BOOM) Agreement. 

Chief McDonald and senior aide McGurk, in the memo supported by Mayor Reed, wrote they advised against City signing of the contract, "Given the significant compromises made in developing the BOOM Agreement, the lack of guarantee that the funds invested will result in a system that meets public safety needs throughout the 10-years of the contract, and the fiscal risks to the Authority and its members."

The BOOM Agreement, first issued as a draft by Motorola to Almeda County Sheriff Gregory Ahern in September 2010, has been negotiated over the intervening 15 month between one designated regional body after another and Motorola. Those negotiations, with both the public and private entities at the table, have been conducted in secret sessions to which the press and public was not allowed access. The first draft of the BOOM Agreement was released by employees of the City of San Francisco following a California Public Records Act (CPRA) request by Reed's office early this year. 
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