County of Santa Clara Office of the County Executive County Government Center, East wing 70 West Hedding Steet, 1th Floor ‘San Jose, California 95110 (408) 299.5102 Jeff smith@ceo secgov.or Jeffrey V. Smith ‘County Executive February 28, 2011 Lawrence E. Strickling Assistant Secretary for Communications and Information USS. Department of Commerce, NTIA Herbert C. Hoover Building 1401 Constitution Avenue, N.W. Washington, D.C. 20230 Re: Clarification of Complaint - BTOP Grant Award for BayWEB Project Dear Mr. Strickling; ‘Thank you for your response, dated February 24, 2011, to the letters sent to you on January 18, January 31, and February 15, 2011 concerning the San Francisco Bay Area Wireless Enhanced Broadband (BayWEB) project funded by the Department of Commerce's Broadband Technology Opportunities Program (BTOP). It is helpful to have your analysis laid out in detail. With all due respect, however, I could not disagree more with a number of the statements in your letter. Based on your response, I am all the more concerned that there has not been a comprehensive review of the critically flawed details undergirding the Bay WEB project application. ‘Your letter is formulated more in the tone of advocacy for the interests of Motorola, Inc,, rather than advocacy for the integrity of the grant process. It is simply not acceptable to put Motorola‘s interests above the mandated ARRA principles of integrity and transparency! To set the record straight and elucidate the misconceptions in your letter, Laddress certain statements from your letter below. I do not expect that you will change your decision to allocate the $50 million to Motorola, but I do want you to be fully aware of pertinent information when some investigator subsequently asks why you wasted theLatter to Assistant Secretary Lawrence B. Strickling, Communications and Information US, Department of Commerce, NTIA Clarification of Complaint - BTOP Grant Award for BayWEB Project February 28, 2011 Page 20f5 money by giving it to Motorola despite the fact that it was neither a qualified applicant for the grant, nor honest and transparent in its application. L In paragraph four of your letter, you say, “NTIA .... did not rely on representations made in the application with regard to the BayRICS Policy Group as the basis for awarding the project.” Rather, you say, “we relied on the statements of support received from key governmental units within the Bay Area, including Santa Clara County and the City of San Jose...” ‘Any reliance on statements of support from individual public officials is misplaced, and sole reliance on any statements made prior to full disclosure is irresponsible. The Department of Commerce's decision to award a grant must be made based upon representations in the application, rather than mere evidence of generic political support for overall project goals. In fact, the Department of Commerce Pre-Award Notification Requirements for Grants and Cooperative Agreements, clearly states that “DOC financial assistance must be awarded through a merit-based review and selection process.” Furthermore, in the letter that Mayor Chuck Reed and I sent to you on January 18, 2011, we explained, “Although the County of Santa Clara and City of San José provided letters of support for the grant application based upon the ultimate goals of the project, these letters were given with the expectation that the project would be governed under a legitimate governance structure, such as the Bay Area UASI, and that further information about the public-private partnership and grant application would be provided.” As it turned out, such information was not and has not been forthcoming. nL In paragraph five of your letter, you assert that “Motorola .. . provided substantial supporting documents and information that indicated support from the impacted ‘communities [that demonstrate that public jurisdictions would participate in the project].” You have mistaken political support for actual partnership. Although Motorola’s grant application included letters of support from local Sheriffs and other elected officials, these individuals do not have the authority to commit public resources 173 Fed. Reg. 7696 (Feb. 11, 2008).Letter to Assistant Secretary Lawrence E. Strickling, Communications and Information US, Department of Commerce, NTA, (Clarification of Complaint - BTOP Grant Award for BayWEB Project February 28, 2011 Page 3 of 5 to the project without actions from their governing bodies. Expressed enthusiasm for a potential project means nothing more without the attendant official approval necessary to act upon said enthusiasm. As far as [am aware, none of the local jurisdictions in the Bay Area have taken any official action to commit any resources to the BayWEB project. Indeed, those local agencies could not possibly officially commit such resources because ‘Motorola has not been forthcoming about the total cost of the project. Without such commitments, the project is certain to fail. i. Paragraphs five and six of your letter indicate that you are committed to transferring the grant money to Motorola. However, you must know that a $50 million grant alone will not be enough to make the project work. As I said before, I know of no jurisdictions in the Bay Area that have made any official commitment of resources to the project, Itis unacceptable to tum a blind eye to outstanding questions regarding which entities, if any, will commit to the balance of the enormous costs associated with developing and implementing this project while Motorola solidifies a stranglehold on the region. ‘tis clear that the complete infrastructure project and its operation as a public safety communication system, including all equipment required to use the infrastructure, licensing fees, maintenance, etc., will cost at least ten times the $50 million grant amount, Without a commitment from someone to pay those other costs, the public safety component of the project will fail for everyone except for Motorola. The company will benefit because they will have a new infrastructure for which they can charge access fees in the non-public safety commercial market—an infrastructure pai for by taxpayers. While I can understand why Motorola, as the sole vendor selected for development of this project, may be willing to move forward in the absence of a transparent and accountable governance structure for participating public entities, I fail to understand why the NTIA is so committed to this flawed undertaking. As Mayor Reed and I explained in our letter of January 18, 2011, once Motorola has been locked in as the sole vendor for this system, public entities participating in this region-wide standard will have limited ability to control costs or to negotiate terms such as user fees.Letter to Assistant Secretary Lawrence E. Strickling, Communications and Information US. Department of Commerce, NTIA CClasifcation of Complaint - BTOP Grant Award for BayWEB Project February 28, 2011 Page 4 0f5 W. Paragraph seven of your letter asserts that the “shovel readiness” of the project was not a factor in your decision to award the grant to Motorola. Contrary to your assertion, the Notice of Funds Availability that you signed on January 15, 2010, and published in the Federal Record on January 22, 2010, states that the NTIA will consider the reasonableness of project timelines and associated milestones in evaluating whether ‘projects can be substantially completed within two years and fully completed within three years? To the extent that Motorola’s grant application misrepresented the project as “shovel ready,” Motorola necessarily misrepresented its ability to substantially complete the project within two years and to fully complete the project within three years. Such misrepresentations should have and would have been factored into a comprehensive evaluation of the Motorola grant proposal. v. Paragraph eight of your letter indicates that your Department was “aware of the identity of the applicants seeking an ECC waiver to use 700 MHz spectrum and the scope of the requests to build an interoperable wireless broadband network.” The Department's decision to award the grant to Motorola in spite of the knowledge that the waiver was granted to San Francisco, San José and Oakland —rather than to the BayRICS Policy Group—is simply astonishing. Without access to the spectrum, Motorola cannot complete the BayWEB project as proposed and, therefore, was never qualified to receive the BTOP grant. VL In paragraphs nine and ten of your letter, you express concerns that Motorola may not be able to comply with its obligations under the grant if additional conditions are imposed to protect the public. ‘Those are concerns that really should belong to the grantee, rather than the grantor. It is the grantee’s responsibility to meet its requirements under the grant, whereas it is your responsibility is to assure that the integrity of the grant process is maintained and appropriately account for taxpayer resources. °75 Fed. Reg. 3792, 3800.Latter to Assistant Secretary Laweenee E. Strickling, Communications and Information US, Department of Commerce, NTIA Clarification of Complaint - BTOP Grant Award for Bay WEB Project February 28, 2011 Page Sof 5 In sum, the “take it or leave it approach” that you have tendered is unacceptable. 1 expect the NTIA to advocate for the interests of the people, not the interests of a private company like Motorola. Although your former law firm, Kirkland & Ellis LLP, may be Motorola's advocate because Motorola is its client, the NTIA is not a Motorola client and should be more interested in following rules than in pushing a singular project without regard to misrepresentations made to secure public financing, The County's dedication to transparency, accountability, good governance, and the development of public ‘wireless access and interoperable communications systems for public safety entities in the Bay Area requires that we continue to demand an appropriate governance structure to manage public entities’ participation in the BayWEB project, along with other conditions for proper oversight, as outlined in previous letters to you. Sincerely, Jeffrey V. Smith County Executive C: Honorable Anna G. Eshoo, U.S. House of Representatives Todd J. Zinser, U.S. Department of Commerce