Input:
	Introduction

Problems for patients associated with dramatic increases in the cost of prescription medications have generated a great deal of interest among the media, interest groups, and legislators alike. Although no broad consensus exists regarding the causes of—and thus solutions to—the rapid increase in many pharmaceutical prices, policymakers have explored a number of options, including the recycling of unadulterated surplus drugs.
Currently, many health care institutions, especially long-term care facilities (LTCFs), routinely dispose of medications that otherwise have a useful life. This practice typically occurs when drugs are dispensed to patients but remain unused because the patient switches medication, is discharged, or dies. Studies have estimated that more than one billion dollars worth of drugs are discarded each year in the United States. One way to counter this costly practice is to recycle the unused medications. However, the ability to implement recycling programs may be constrained by federal and/or state law.
Current regulation of pharmaceuticals and those who dispense them consists of a complex system of federal and state laws. There are three federal laws discussed below that may impede the practice of recycling medications. At the state level, state controlled substances laws, pharmacy laws, and other rules promulgated by state boards of pharmacy govern practices relating to the manufacture, distribution, and possession of medicines. Nevertheless, state legislatures that have implemented drug recycling programs appear to tailor them to conform to existing regulations. State laws vary greatly regarding who may return and accept the medications, which medications may be recycled, and the procedures in place to safeguard against adulteration or unlawful possession of the medications.

	Federal Laws Affecting Reuse of Drugs

Federal laws regulating pharmaceuticals pose potential obstacles to the implementation of drug recycling programs. Specifically, many of the medications covered by recycling programs are considered controlled substances and thus are subject to the requirements of the Controlled Substances Act (CSA). Furthermore, most, if not all, of the drugs in question also require a prescription in order to be dispensed, and therefore are regulated by the Federal Food, Drug, and Cosmetics Act (FFDCA) —thus adding another layer of federal statutory regulations. Additionally, programs to recycle medications may also encounter logistical problems relating to billing under the Health Insurance Accountability and Portability Act (HIPAA).

		Controlled Substances Act

One potential impediment to drug recycling programs is the CSA. Enacted in 1970 with the main objectives of combating drug abuse and controlling traffic in controlled substances, the CSA created a regulatory regime criminalizing the unauthorized manufacture, distribution, dispensation, and possession of the substances covered by the act. Enforced by the federal Drug Enforcement Agency (DEA), the CSA establishes civil as well as criminal sanctions for its violation.
The CSA is relevant to drug recycling programs because most, if not all, of the costly medications the programs seek to recycle are considered controlled substances under the CSA. Practitioners who dispense or administer controlled substances listed on Schedules II through V, including substances that may not require a prescription, must register with the DEA. Entities that apply for federal registration to handle controlled substances and those so registered must provide effective controls and procedures to guard against theft and diversion of controlled substances in accordance with security requirements. These requirements vary depending on the type of activity and the substances.
However, unlike hospitals and pharmacies, most long-term care facilities (LTCFs) are not registrants. Due to the stringent safety standards imposed on registrants, registration may not be feasible or cost-effective for many facilities to implement. Because of the prohibition against handling or possessing controlled substances without DEA registration, the CSA seems to preclude LTCFs—or any entity not registered with the DEA—from effectively participating in a drug recycling program. As a result, the DEA distribution system, which is designed to prevent diversion by establishing a closed distribution loop among registrants for purposes of tracking all entities that handle controlled substances prior to dispensing, often prevents LTCFs from returning such drugs to pharmacy stock and forces them to destroy any unused controlled substances.
An alternative to recycling programs that LTCFs may wish to pursue is the installation of automated dispensing systems (ADS). Similar to a vending machine, an ADS is stocked with drugs by a pharmacy, which controls the device remotely and programs it to dispense drugs on a single-dose basis. The DEA recently promulgated a rule to allow this practice as a way to "mitigate the problem of excess stocks and disposal." Using this system, the drugs are not deemed to be dispensed until provided by the ADS, so any unused drugs remain in pharmacy stock.

		Federal Food, Drug, and Cosmetics Act

Recycling programs must also comply with statutes that regulate the safety and efficacy of prescription drugs. Federally, this regulation occurs under the FFDCA. One of the purposes of the FFDCA is to ensure drug safety by prohibiting the introduction of adulterated or misbranded foods, drugs, or cosmetics into interstate commerce. Therefore, programs to recycle unused prescription drugs may encounter barriers if such recycling could lead to drug adulteration or misbranding.
The federal Food and Drug Administration's (FDA) policy guidance reflects these concerns. In guidance that dates back to 1980, the agency states, "[a] pharmacist should not return drug products to his stock once they have been out of his possession. It could be a dangerous practice for pharmacists to accept and return to stock the unused portions of prescriptions that are returned by patrons, because he would no longer have any assurance of the strength, quality, purity, or identity of the articles." However, the FDA has no specific regulations regarding drug recycling programs and leaves these programs to the discretion of the state so long as state legislation does not offend applicable regulations relating to the safety and efficacy of prescription medications.

		Health Insurance Portability and Accountability Act

A smaller administrative obstacle to the effective implementation of drug recycling programs is the billing requirements under HIPAA. This law requires electronic transactions for operations conducted by pharmacies—the entities that are responsible for accepting unused medications in many recycling programs. Every transaction that occurs within a pharmacy must be part of the HIPAA Transactions Code Set. However, there is currently no code for returning an unused drug to stock for credit. Without this code, such transactions cannot be properly documented and accounted for, posing an obstacle for pharmacists and doctors who would participate in drug recycling programs.

	Current State Practice

In recent years, several states have attempted to combat waste associated with discarding unused medications by creating drug recycling programs. These programs aren't "as simple as returning 'leftovers.'" Rather, most state legislation typically specifies who may return the unused medication, who may accept the medication, what types of medications may be returned, and to whom the medications may be redistributed. This section provides examples of current practices regarding such recycling programs.

		Authorized Participants

Most laws specify who may return, who may accept, and/or who may receive unused medications. Some states allow patients to donate, while others restrict the practice to pharmacies, doctors and wholesale distribution centers. Iowa, which falls in the former category, allows any person to donate unused medications. In contrast, California law allows donations only from drug manufacturers, licensed health care facilities, and pharmacies.

		Authorized Medications

Some states do not place restrictions on the drugs included in their recycling program, while others specify the types they will accept. For example, Nebraska restricts its drug repository program to cancer drugs. Wisconsin began its recycling program as a cancer drug repository, but later expanded it to include prescription drugs and supplies for all other chronic diseases such as diabetes.

		Additional Precautions

States also impose restrictions to ensure that the medications are safe. Safety requirements are fairly uniform across most states. They typically require that medications be in their original, unopened sealed packaging or in single unit doses that are individually contained in unopened, tamper-evident packaging. Most states also prohibit the return of medications that will expire within six months or appear to be adulterated or misbranded in any way.
Despite the precautions states have attempted to build into their recycling programs, some people remain unconvinced that these programs are completely safe. Critics argue that insufficient safety controls may lead to adulterated, dangerous medicines, and drugs that land in the wrong hands. They also argue that the actual process of repackaging medications can pose safety hazards. Nevertheless, states seem intent on continuing to tailor their legislation in order to conform to existing law, while simultaneously acting as laboratories to test new cost-effective measures.

Output: In recent years, the rising costs of prescription drugs have motivated various policymakers to implement cost-saving measures. In some cases, states have pursued programs to collect and redistribute unused medications that would otherwise be discarded. However, the ability to implement these so-called drug recycling programs may be constrained by federal or state law or both. For example, medications classified as controlled substances are regulated by the Controlled Substances Act (CSA). Furthermore, drugs that require prescriptions, as many controlled substances do, are regulated by the Federal Food, Drug, and Cosmetics Act (FFDCA). Additionally, programs may encounter logistical problems related to billing under the Health Insurance Portability and Accountability Act (HIPAA), which is not designed to accommodate drug recycling. Despite these hurdles, states have begun to implement drug recycling programs. Although the details of the laws vary among states, most contain strict rules to ensure the safety of the medications. This report provides an overview of the federal laws that may affect state drug recycling programs, as well as examples of these state programs.


Input:
	Background

Currently, public safety officials primarily communicate with one another  using LMR systems that support voice communication and usually consist  of handheld portable radios, mobile radios, base stations, and repeaters,  as described:
Handheld portable radios are typically carried by emergency  responders and tend to have a limited transmission range.
Mobile radios are often located in vehicles and use the vehicle’s  power supply and a larger antenna, providing a greater transmission  range than handheld portable radios.
Base station radios are located in fixed positions, such as dispatch  centers, and tend to have the most powerful transmitters. A network is  required to connect base stations to the same communication system.
Repeaters increase the effective communication range of handheld  portable radios, mobile radios, and base station radios by  retransmitting received radio signals.
Figure 1 illustrates the basic components of an LMR system.
LMR systems are generally able to meet the unique requirements of  public safety agencies. For example, unlike commercial cellular networks,  which can allow seconds to go by before a call is set up and answered,  LMR systems are developed to provide rapid voice call-setup and group- calling capabilities. When time is of the essence, as is often the case  when public safety agencies need to communicate, it is important to have  access to systems that achieve fast call-set up times. Furthermore, LMR  systems provide public safety agencies “mission critical” voice  capabilities—that is, voice capabilities that meet a high standard for  reliability, redundancy, capacity, and flexibility. Table 1 describes the key  elements for mission critical voice capabilities, as determined by the  National Public Safety Telecommunications Council (NPSTC).
According to NPSTC, for a network to fully support public safety mission  critical voice communications, each of the elements in table 1 must  address part of the overall voice communications services supported by  the network. In other words, NPSTC believes a network cannot be a  mission critical network without all of these elements. Furthermore, unlike  commercial networks, mission critical communication systems rely on  “hardened” infrastructure, meaning that tower sites and equipment have  been designed to provide reliable communications even in the midst of  natural or man-made disasters. To remain operable during disasters,  mission critical communications infrastructure requires redundancy, back- up power, and fortification against environmental stressors such as  extremes of temperature and wind.
Nationwide, there are approximately 55,000 public safety agencies.  These state and local agencies typically receive a license from FCC to  operate and maintain their LMR voice systems. Since these systems are  supported by state and local revenues, the agencies generally purchase  equipment and devices using their own local budgets without always  coordinating their actions with nearby agencies, which can hinder  interoperability. Since 1989, public safety associations have collaborated  with federal agencies to establish common technical standards for LMR  systems and devices called Project 25 (P25). The purpose of these  technical standards is to support interoperability between different LMR  systems, that is, to enable seamless communication across public safety  agencies and jurisdictions. While the P25 suite of standards is intended to  promote interoperability by making public safety systems and devices  compatible regardless of the manufacturer, it is a voluntary standard and  currently incomplete. As a result, many LMR devices manufactured for  public safety are not compatible with devices made by rival  manufacturers, which can undermine interoperability.
The federal government plays an important role in public safety  communications by providing funding for emergency communication  systems and working to increase interoperable communication systems.  Congress, in particular, has played a critical role by designating radio  frequency spectrum for public safety use. Furthermore, Congress can  direct action by federal agencies and others in support of public safety.  For example, through the Homeland Security Act of 2002, Congress  established DHS and required the department, among other things, to  develop a comprehensive national incident management system  comprising all levels of government and to consolidate existing federal  government emergency response plans into a single, coordinated  national response plan.
The number of licenses excludes the 700 MHz public safety broadband license, the 4.9  GHz band, and public safety point-to-point microwave licenses. for public safety broadband use.its Public Safety and Homeland Security Bureau (PSHSB), which is  responsible for developing, recommending, and administering FCC’s  policies pertaining to public safety communications issues. FCC has  issued a series of orders and proposed rulemakings and adopted rules  addressing how to develop a public safety broadband network, some of  which are highlighted:   In September 2006, FCC established  In 2007, FCC adopted an order to create a nationwide broadband  network with the 10 MHz of spectrum designated for a public safety  broadband network and the adjacent 10 MHz of spectrum––the Upper  700 MHz D Block, or “D Block.” As envisioned by FCC, this  nationwide network would be shared by public safety and a  commercial provider and operated by a public/private partnership.  However, when FCC presented the D Block for auction in 2008 under  these conditions, it received no qualifying bids and thus was not  licensed. Subsequently it was found that the lack of commercial  interest in the D Block was due in part to uncertainty about how the  public/private partnership would work. Although many stakeholders  and industry participants called for the D Block to be reallocated to  public safety, an alternate view is that auctioning the D Block for  commercial use would have generated revenues for the U.S.  Treasury. As noted previously, a provision in pending legislation, the  Middle Class Tax Relief and Job Creation Act of 2012, reallocates the  D Block to public safety.
In 2007, FCC licensed the 10 MHz of spectrum that FCC assigned for  public safety broadband use to the Public Safety Spectrum Trust  (PSST), a nonprofit organization representing major national public  safety associations. This 10 MHz of spectrum, located in the upper  700 MHz band is adjacent to the spectrum allocated to public safety  for LMR communications. As the licensee, the PSST’s original  responsibilities included representing emergency responders’ needs  for a broadband network and negotiating a network sharing  agreement with the winner of the D Block auction. However, since the  D Block was not successfully auctioned, FCC stayed the majority of  the rules guiding the PSST.
In 2009, public safety entities began requesting waivers from FCC’s  rules to allow early deployment of broadband networks in the 10 MHz  of spectrum licensed to the PSST, and since 2010, FCC granted  waivers to 22 jurisdictions for early deployment.  These jurisdictions  had to request waivers because the rules directing the deployment of  a broadband network were not complete. In this report, we refer to the  22 entities receiving waivers as “waiver jurisdictions.” As a condition  of these waivers, FCC required that local or regional networks would  interoperate with each other and that all public safety entities in the  geographic area would be invited to use the new networks. In  addition, FCC required that all equipment operating on the 700 MHz  public safety broadband spectrum comply with Long Term Evolution  (LTE), a commercial data standard for wireless technologies.shown in table 2, of the 22 jurisdictions that successfully petitioned for  waivers, only 8 received federal funding. Seven waiver jurisdictions  received funding from NTIA’s Broadband Technology Opportunities  Program (BTOP), a federal grant program authorized through the  American Recovery and Reinvestment Act of 2009 that had several   As  purposes, including promoting the expansion of broadband  infrastructure.
In January 2011, FCC adopted rules and proposed further rules to  create an effective technical framework for ensuring the deployment  and operation of a nationwide, interoperable public safety broadband  network. As part of this proceeding, FCC sought comment on  technical rules and security for the network as well as testing of  equipment to ensure interoperability. The comment period for the  proceeding closed on April 11, 2011, and FCC received comments  from waiver jurisdictions, consultants, and manufacturers, among  others. As of February 7, 2012, FCC did not have an expected  issuance date for its final rules.
In addition to FCC, DHS has been heavily involved since its inception in  supporting public safety by assisting federal, state, local, and regional  emergency response agencies and policy makers with planning and  implementing interoperable communication networks. Within DHS,  several divisions have focused on improving public safety  communications. DHS also has administered groups that bring together  stakeholders from all levels of government to discuss interoperability  issues:
The Emergency Communications Preparedness Center (ECPC) was  created in response to Hurricane Katrina by the 21st Century  Emergency Communications Act of 2006 to help improve  intergovernmental emergency communications information sharing.
The ECPC has 14 member agencies with a goal, in part, to support  and promote interoperable public safety communications through  serving as a focal point and clearing house for information. It has  served to facilitate collaboration across federal entities involved with  public safety communications.
SAFECOM is a communications program that provides support,  including research and development, to address interoperable  communications issues. Led by an executive committee, SAFECOM  has members from state and local emergency responders as well as  intergovernmental and national public safety communications  associations. DHS draws on this expertise to help develop guidance  and policy. Among other activities, SAFECOM publishes annual grant  guidance that outlines recommended eligible activities and application  requirements for federal grant programs providing funding for  interoperable public safety communications.
Within Commerce, NTIA and NIST are also involved in public safety  communications by providing research support to the PSCR program.  The PSCR serves as a laboratory and advisor on public safety standards  and technology. It provides research and development to help improve  public safety interoperability. For example, the PSCR has ongoing  research in many areas related to communications, including the  voluntary P25 standard for LMR communication systems, improving  public safety interoperability, and the standards and technologies related  to a broadband network. PSCR also conducts laboratory research to  improve the audio and video quality for public safety radios and devices.

	Even With Investment of Significant Resources, Current Public Safety Communication Systems Provide Mission Critical Voice Capabilities but Are Not Fully Interoperable

		Public Investment

Congress has appropriated billions in federal funding over the last decade  to public safety in grants and other assistance for the construction and  maintenance of LMR voice communication systems and the purchase of  communication devices. Approximately 40 grant programs administered  by nine federal agencies have provided this assistance for public safety.  Some of the grants provided a one-time infusion of funds, while other  grants have provided a more consistent source of funding. For example,  in 2007, the one-time Public Safety Interoperable Communications Grant  Program awarded more than $960 million to assist state and local public  safety agencies in the acquisition, planning, deployment, or training on  interoperable communication systems.Grant Program has provided $6.5 billion since 2008, targeting a broad  scope of programs that enhance interoperability for states’ emergency  medical response systems and regional communication systems, as well  as planning at the community level to improve emergency preparedness.  See appendix II for more information about the grant programs.
However, the Homeland Security  State and local governments have also invested millions of dollars of their  own funds to support public safety voice communications, and continue to  do so. Jurisdictions we visited that received federal grants to support the  construction of a broadband network have continued to invest in the  upgrade and maintenance of their current LMR voice systems. For  example, Adams County, Colorado, has spent about $19.7 million since  2004 on its LMR system, including $6.9 million in local funds,  supplemented with $12.8 million in federal grants. Mississippi, another  jurisdiction we visited that is constructing a statewide broadband network,  has spent about $214 million on its LMR network, including $57 million in  general revenue bonds and $157 million in federal grants. Officials in  the jurisdictions we contacted stressed the importance of investing in the  infrastructure of their LMR networks to maintain the reliability and  operability of their voice systems, since it was unclear at what point the  broadband networks would support mission critical voice  communications. In addition to upgrading and maintaining their LMR  networks, many jurisdictions are investing millions of dollars to meet  FCC’s requirement that communities use their spectrum more efficiently  by reducing the bandwidth on which they operate.
In addition to direct federal funding, the federal government has allocated  more than 100 MHz of spectrum to public safety over the last 60 years.   The spectrum is located in various frequency bands since FCC assigned  frequencies to public safety in new bands over time as available  frequencies became congested and public safety’s need for spectrum   Figure 2 displays the spectrum allocated to public safety,  increased.which is located between 25 MHz and 4.9 GHz. As noted previously, the  Middle Class Tax Relief and Job Creation Act of 2012 requires FCC to  reallocate the D Block from commercial use to public safety use.
Public safety agencies purchase radios and communication devices that  are designed to operate on their assigned frequency. Since different  frequencies of radio waves have different propagation characteristics,  jurisdictions typically use the spectrum that is best suited to their  particular location. For example, very high frequency (VHF) channels— those located between 30 and 300 MHz—are more useful for  communications that must occur over long distances without obstruction  from buildings, since the signals cannot penetrate building walls very well.  As such, VHF signals are well suited to rural areas. On the other hand,  ultra high frequency (UHF) channels—those located between 300 MHz  and 3 GHz—are more appropriate for denser urban areas as they have  more capacity and can penetrate buildings more easily. When we visited  Adams County, Colorado, we learned that public safety officials in the  mountainous areas of Colorado use the 150 MHz and 450 MHz bands  because of the range of the signals and their ability to navigate around  the natural geography. However, public safety officials in the Denver,  Colorado, metropolitan area operate on the 700 and 800 MHz frequency  bands which can support more simultaneous voice transmissions, such  as communications between fire, police, public utility, and transportation  officials.

		Current Public Safety Communications Capabilities

The current public safety LMR systems use their allocated spectrum to  facilitate reliable mission critical voice communications. Such  communications need to be conveyed in an immediate and clear manner  regardless of environmental and other operating conditions. For example,  while responding to a building fire, firefighters deep within the building  need the ability to communicate with each other even if they are out of  range of a wireless network. The firefighters are able to communicate on  an LMR system because their handheld devices operate on as well as off  network. Currently, emergency response personnel rely exclusively on  their LMR systems to provide mission critical voice capabilities. One  waiver jurisdiction we visited, Mississippi, is constructing a new statewide  LMR system and officials there noted a high degree of satisfaction with  the planned LMR system. They said the new system is designed to  withstand most disasters and when complete, will provide interoperability  across 97 percent of the state. Public safety officials in the coastal region  of the state have already used the system to successfully respond to  problems caused by the Mississippi River flooding in the spring of 2011.
LMR public safety communication systems also are able to provide some  data services but the systems are constrained by the narrowband  channels on which they operate. These channels allow only restricted  data transfer speeds, thus limiting capacity to send and receive data such  as text and images, or to access existing databases. Some jurisdictions  supplement their LMR systems with commercial data services that give  them better access to applications that require higher data transfer rates  to work effectively. However, commercial service also has limitations,  such as the lack of priority access to the network in an emergency  situation.

		Interoperability of Current Communication Systems Remains a Limitation

According to DHS, interoperability of current public safety  communications has improved as a result of its efforts. In particular, the  DHS National Emergency Communications Plan established a strategy  for improving emergency communications across all levels of  government, and as a result, all states have a statewide interoperability  coordinator and governing body to make strategic decisions within the  state and guide current and future communications interoperability.  According to DHS, it has worked with states to help them evaluate and  improve their emergency communications abilities. DHS also helped to  develop the Interoperability Continuum, which identifies five critical  success elements to assist emergency response agencies and policy  makers to plan and implement interoperability solutions for data and voice  communications. Furthermore, DHS created guidance to ensure a  consistent funding strategy for federal grant programs that allow  recipients to purchase communications equipment and enhance their  emergency response capabilities. As we have reported in the past,  interoperability has also improved due to a variety of local technical  solutions. For example, FCC established mutual aid channels, whereby  specific channels are set aside for the sole purpose of connecting  incompatible systems. Another local solution is when agencies maintain a  cache of extra radios that they can distribute during an emergency to  other first responders whose radios are not interoperable with their own.
However, despite decades of effort, a significant limitation of current LMR  systems is that they are not fully interoperable. One reason for the lack of  interoperability is the fragmentation of spectrum assignments for public  safety, since existing radios are typically unable to transmit and receive in  all these frequencies. Therefore, a rural area using public safety radios  operating on VHF spectrum will not be interoperable with radios used in  an urban area that operate on UHF spectrum. While radios can be built to  operate on multiple frequencies, which could support greater  interoperability, this capability can add significant cost to the radios and  thus jurisdictions may be reluctant to make such investments. In addition,  public safety agencies historically have acquired communication systems  without concern for interoperability, often resulting in multiple, technically  incompatible radio systems. This is compounded by the lack of  mandatory standards for the current LMR systems or devices. Rather, the  P25 technical standards remain incomplete and voluntary, creating  incompatibility among vendors’ products. Furthermore, local jurisdictions  are often unable to coordinate to find solutions. Public safety  communication systems are tailored to meet the unique needs of  individual jurisdictions or public safety entities within a given region. As  such, the groups are reluctant to give up management and control of their  systems.

	Planning for a Nationwide Public Safety Broadband Network Progresses, but Such a Network Will Not Support Mission Critical Voice for the Foreseeable Future

		Federal Role

Numerous federal entities have helped to plan and begin to define a  technical framework for a nationwide public safety broadband network. In  particular, FCC, DHS, and Commerce’s PSCR program, have  coordinated their planning and made significant contributions by  developing technical rules, educating emergency responders, and  creating a demonstration network, respectively.
Since 2008, FCC has:
Created a new division within its PSHSB, called the Emergency  Response Interoperability Center (ERIC), to develop technical  requirements and procedures to help ensure an operable and  interoperable nationwide network.
Convened two advisory committees, the ERIC Technical Advisory  Committee and the Public Safety Advisory Committee, that provide  advice to FCC. The Technical Advisory Committee’s appointees must be federal officials, elected officers of state and local  government, or a designee of an elected official. It makes  recommendations to FCC and ERIC regarding policies and rules for  the technical aspects of interoperability, governance, authentication,  and national standards for public safety. ERIC’s Public Safety  Advisory Committee’s members can include representatives of state  and local public safety agencies, federal users, and other segments of  the public safety community, as well as service providers, equipment  vendors, and other industry participants. Its purpose is to make  recommendations for a technical framework that will ensure  interoperability on a nationwide public safety broadband network.
Defined technical rules for the broadband network, including  identifying LTE as the technical standard for the network, which FCC  and public safety agencies believe is imperative to the goal of  achieving an interoperable nationwide broadband network. In addition,  FCC sought comments on other technical aspects and challenges to  building the network in its most recent proceeding, which FCC hopes  will further promote and enable nationwide interoperability. FCC  officials said they continue to monitor the waiver jurisdictions that are  developing broadband networks to ensure they are meeting the  network requirements by reviewing required reports and quarterly  filings.
Since 2010, DHS has:
Partnered with FCC, Commerce, and the Department of Justice to  conduct three forums for public safety agencies and others. These  forums provided insight about the needs surrounding the  establishment of a public safety broadband network as they relate to  funding, governance, and the broadband market.
Coordinated federal efforts on broadband implementation by bringing  together the member agencies of ECPC. Also, ECPC updated its  grant guidance for federal grant programs to clarify that broadband  deployment is an allowable expense for emergency communications  grant programs. These updates could result in more federal grant  funding going to support the development of a broadband network.
Updated its SAFECOM program’s grant guidance targeting grant   applicants to include information pertaining to broadband deployment,  based on input from state and local emergency responders.
Worked with public safety entities to define the LTE standard and  write educational materials about the broadband network.
Partnered with state and regional groups and interoperability  coordinators in preparing broadband guidance documentation.
Represented federal emergency responders and advocated for  sharing agreements between the federal government and the PSST  that will enable federal users, such as responders from the Federal  Emergency Management Agency, to access the broadband  network.
Since 2009, PSCR has:
Worked with public safety agencies to develop requirements for the  network and represents their interests before standards-setting  organizations to help ensure public safety needs are met.
Developed a demonstration broadband network that provides a  realistic environment for public safety and industry to test and observe  public safety LTE requirements on equipment designed for a  broadband network. According to PSCR representatives, the  demonstration network has successfully brought together more than  40 vendors, including manufacturers and wireless carriers. Among  many goals, PSCR aims to demonstrate to public safety how the new  technology can meet their needs and encourage vendors to share  information and results. FCC requires the 22 waiver jurisdictions and  their vendors to participate in PSCR’s demonstration network and  provide feedback on the challenges they have faced while building the  network. PSCR representatives told us that the lessons learned from  the waiver jurisdictions would be applied to future deployments.
Tested interoperable systems and devices and provided feedback to  manufacturers. Currently, there are five manufacturers working with  PSCR to develop and test systems and devices.

		Broadband Network Could Improve Incident Response

With higher data speeds than the current LMR systems, a public safety  broadband network could provide emergency responders with new video  and data applications that are not currently available. Stakeholders we  contacted, including waiver jurisdictions, emergency responders, and  federal agencies, identified transmission of video as a key potential  capability. For example, existing video from traffic cameras and police car  mounted cameras could provide live video feeds for dispatchers.  Dispatchers could use the video to help ensure that the proper personnel  and necessary equipment are being deployed immediately to the scene of  an emergency. Stakeholders we contacted predict that numerous data  applications will be developed once a broadband network is complete,  and that these applications will have the potential to further enhance  incident response. These could range from a global positioning system  application that provides directions based on traffic patterns to a 3D  graphical floor plan display that supports firefighters’ efforts to battle  building fires. In addition, unlike the current system, a public safety  broadband network could provide access to existing databases of  information, such as fire response plans and mug shots of wanted  criminals, which could help to keep emergency responders and the public  safe. As shown in figure 3, moving from lower bandwidth voice  communications to a higher bandwidth broadband network unleashes the  potential for the development of a range of public safety data applications.
Besides new applications, a public safety broadband network has the  potential to provide nationwide access and interoperability. Nationwide  access means emergency responders and other public safety officials  could access their home networks from anywhere in the country, which  could facilitate a better coordinated emergency response. Interoperability  on a broadband network could allow emergency responders to share  information irrespective of jurisdiction or type of public safety agency. For  example, officials from two waiver jurisdictions indicated that forest fires  are a type of emergency that brings together multiple jurisdictions, and in  these situations a broadband network could facilitate sharing of response  plans. However, an expert we contacted stressed that broadband  applications should be tailored to the bandwidth needs of the response  task. For example, responders should not use high-definition video when  grainy footage would suffice to enable them to pursue a criminal suspect.

		Limitations of Broadband Results in Continued Reliance on LMR Voice Systems

A major limitation of a public safety broadband network is that it would not  provide mission critical voice communications for many years. LTE, the  standard FCC identified for the public safety broadband network, is a  wireless broadband standard that is not currently designed to support  mission critical voice communications. Commercial wireless providers are  currently developing voice over LTE capabilities, but this will not meet  public safety’s mission critical voice requirements because key elements  needed for mission critical voice, such as push-to-talk, are not part of the  LTE standard. While one manufacturer believes mission critical voice  over LTE will be available as soon as 5 years, some waiver jurisdictions,  experts, government officials, and others told us it will likely be 10 years  or more due to the challenges described in table 3.
Absent mission critical voice capabilities on a broadband network,  emergency responders will continue to rely on their current LMR voice  systems, meaning a broadband network would supplement, rather than  replace, LMR systems for the foreseeable future. Furthermore, until  mission critical voice communications exist, issues that exacerbated  emergency response efforts to the terrorist attacks on September 11,  2001—in particular, that emergency responders were not able to  communicate between agencies—will not be resolved by a public safety  broadband network. As a result, public safety agencies will continue to  use devices operating on the current LMR systems for mission critical  voice communications, and require spectrum to be allocated for that  purpose. Additionally, public safety agencies may be reluctant to give up  their LMR devices, especially if they were costly and are still functional.  As jurisdictions continue to spend millions of dollars on their LMR  networks and devices, they will likely continue to rely on such  communication systems until they are no longer functional.
In addition to not having mission critical communications, emergency  responders may only have limited access to the public safety broadband  network from the interior of large buildings. While the 700 MHz spectrum  provides better penetration of buildings than other bands of the spectrum,  if emergency responders expect to have access to the network from  inside large buildings and underground, additional infrastructure will need  to be constructed. For example, antennas or small indoor cellular stations  could be installed inside buildings and in underground structures to  support access to the network. FCC is seeking comment on this issue as  part of its most recent proceeding. Without this added infrastructure,  emergency responders using the broadband network may not have  access to building blue prints or fire response plans during building  emergencies, such as a fire. In fact, one jurisdiction constructing a  broadband network that we visited told us their network would not support  in-building access in one city of the jurisdiction because the plan did not  include antennas for inside the buildings.
A final limitation to a public safety broadband network could be its  capacity during emergencies. Emergencies tend to happen in localized  areas that may be served by a single cell tower or even a single cellular  antenna on a tower. With emergency responders gathering to fight a fire  or other emergency, the number of responders and the types of  applications in use may exceed the capacity of the network. If the network  reaches capacity it could overload and might not send life saving  information. Therefore, the network would have to be managed during  emergencies to ensure that the most important data are being sent, which  could be accomplished by prioritizing data. Furthermore, capacity could  be supplemented through deployable cell sites to emergency locations.

	Various Challenges Could Jeopardize the Implementation and Functionality of a Public Safety Broadband Network

Although the federal agencies have taken important steps to advance the  broadband network, challenges exist that may slow its implementation.  Specifically, stakeholders we spoke with prioritized five challenges to  successfully building, operating, and maintaining a public safety  broadband network. These challenges include (1) ensuring  interoperability, (2) creating a governance structure, (3) building a reliable  network, (4) designing a secure network, and (5) determining funding  sources. FCC, in its Fourth Further Notice of Proposed Rulemaking,  sought comment on some of these challenges, and as explained further,  the challenge of creating a governance structure has been addressed by  recent law. However, the other challenges currently remain unresolved  and, if left unaddressed, could undermine the development of a public  safety broadband network.
Ensuring interoperability. To avoid a major shortcoming of the LMR  communication systems, it is essential that a public safety broadband  network be interoperable across jurisdictions and devices. DHS, in  conjunction with its SAFECOM program, developed the Interoperability  Continuum which identifies five key elements to interoperable networks— governance, standard operating procedures, technology, training, and  usage—that waiver jurisdictions and other stakeholders discussed as  important to building an interoperable public safety broadband network,  as shown in figure 4. For example, technology is critical to interoperability  of the broadband network and most stakeholders, including public safety  associations, experts, and manufacturers believe that identifying LTE as  the technical standard was a good step towards interoperability. To  further promote interoperability, stakeholders indicated that additional  technical functionality, such as data sharing and roaming capabilities,  should be part of the technical design. If properly designed to the  technical standard, broadband devices will support interoperability  regardless of the manufacturer. Testing devices to ensure they meet the  identified standard could help eliminate devices with proprietary  applications that might otherwise limit interoperability. In its Fourth Further  Notice, FCC solicited input on the technical design of the network and  testing of devices to ensure interoperability.
Creating a governance structure. As stated previously, governance is a  key element for interoperable networks. A governance authority can  promote interoperability by bringing together federal, state, local, and  emergency response representatives. Each of the waiver jurisdictions we  contacted had identified a governance authority to oversee its broadband  network. Jurisdictions we visited, as well as federal agencies, told us that  any nationwide network should also have a nationwide governance entity  to oversee it. Although several federal entities are involved with the  planning of a public safety broadband network, at the time we conducted  our work no entity had overall authority to make critical decisions for its  development, construction, and operation. According to stakeholders,  decisions on developing a common language for the network,  establishing user rights for federal agencies, and determining network  upgrades, could be managed by such an entity. Pending legislation, the  Middle Class Tax Relief and Job Creation Act of 2012, establishes a First  Responder Network Authority as an independent authority within NTIA  and gave it responsibility for ensuring the establishment of a nationwide,  interoperable public safety broadband network. Among other things, the  First Responder Network Authority is required to (1) ensure nationwide  standards for use and access of the network; (2) issue open, transparent,  and competitive requests for proposals to private sector entities to build,  operate, and maintain the network; (3) encourage that such requests  leverage existing commercial wireless infrastructure to speed deployment  of the network; and (4) manage and oversee the implementation and  execution of contracts and agreements with nonfederal entities to build,  operate, and maintain the network.
Building a reliable network. A public safety broadband network must be  as reliable as the current LMR systems but it will require additional  infrastructure to do so. As mentioned previously, emergency responders  consider the current LMR systems very reliable, in part because they can  continue to work in emergency situations. Any new broadband network  would need to meet similar standards but, as shown in figure 5, such a  network might require up to 10 times the number of towers as the current  system. This is because a public safety broadband network is being  designed as a cellular network, which would use a series of low powered  towers to transmit signals and reduce interference. Also, to meet robust  public safety standards, each tower must be “hardened” to ensure that it  can withstand disasters, such as hurricanes and earthquakes. According  to waiver jurisdictions and other stakeholders, this additional  infrastructure and hardening of facilities may be financially prohibitive for  many jurisdictions, especially those in rural areas that currently use  devices operating on VHF spectrum—spectrum that is especially well  suited to rural areas because the signals can travel long distances.
Designing a secure network. Secure communications are important.  Designing a protected and trusted broadband network will encourage  increased usage and reliance on it. Security for a public safety network  will require authentication and access control. By defining LTE as the  technical standard for the broadband network, a significant portion of the  security architecture is predetermined because the standard governs a  certain level of security. Given the importance of this issue, FCC required  waiver jurisdictions to include some security features in their networks  and FCC’s most recent proceeding seeks input on security issues.  Furthermore, FCC’s Public Safety Advisory Committee has issued a  report making several security-related recommendations. For example, it  recommended that standardized security features be in place to support  roaming to commercial technologies. However, one expert we contacted  expressed concern that the waiver jurisdictions were not establishing  sufficient network security because they had not received guidance. He  believes this would result in waiver jurisdictions using security standards  applied to previous networks.
Determining funding sources. It is estimated that a nationwide public  safety broadband network could cost up to $15 billion or more to  construct, which does not take into account recurring operation and  maintenance costs. As noted previously, of the 22 waiver jurisdictions, 8  have received federal grants to support deployment of a broadband  network. Some of the other waiver jurisdictions have obtained limited  funding from nonfederal sources, such as through issuing bonds. Several  of the jurisdictions we spoke with stressed that in addition to the upfront  construction costs, the ongoing costs associated with operating,  maintaining, and upgrading a public safety broadband network would  need to be properly funded. As previously indicated, the ECPC and  SAFECOM have updated grant guidance to reflect changing technologies  but this does not add additional funding for emergency communications.  Rather, it defines broadband as an allowable purpose for emergency  communications funding grants that may currently support the existing  LMR systems. Since the LMR systems will not be replaced by a public  safety broadband network, funding will be necessary to operate, maintain,  and upgrade two separate communication systems.

	Limited Competition and High Manufacturing Costs Increase the Price of Handheld LMR Devices, but Options Exist to Reduce Prices

		Competition for Handheld LMR Devices is Limited

Handheld LMR devices often cost thousands of dollars, and many  stakeholders, including national public safety associations, state and local  public safety officials, and representatives from the telecommunications  industry, attribute these high prices to limited competition. Industry  analysts and stakeholders estimate that the approximately $4 billion U.S.  market for handheld LMR devices consists of one manufacturer with  about 75 to 80 percent market share, one or two strong competitors, and  several device manufacturers with smaller shares of the market.  According to industry stakeholders, competition is weak because of  limited entry by device manufacturers; this may be due to (1) the market’s  relatively small size and (2) barriers to entry that confront nonincumbent  device manufacturers.
Small size of the public safety market. The market for handheld LMR  devices in the United States includes only about 2 to 3 million customers,  or roughly 1 percent of the approximately 300 million customers of  commercial telecommunication devices. According to an industry  estimate in 2009, approximately 300,000 handheld LMR devices that are  P25 compliant are sold each year. Annual sales of handheld LMR devices  are small in part because of low turnover. For example, device  manufacturers told us that public safety devices are typically replaced  every 10 to 15 years, suggesting that less than 10 percent of handheld  LMR devices are replaced annually. In contrast, industry and public safety  sources indicate that commercial customers replace devices roughly  every 2 to 3 years, suggesting that about 33 to 50 percent are replaced  annually. Together, low device turnover and a small customer base  reduce the potential volume of sales by device manufacturers, which may  make the market unattractive to potential entrants.
The size of the market is reduced further by the need for manufacturers to  customize handheld LMR devices for individual public safety agencies.  Differences in spectrum allocations across jurisdictions have the effect of  decreasing the customer base for any single device. As previously  discussed, public safety agencies operate on different frequencies  scattered across the radio spectrum. For example, one jurisdiction may  need devices that operate on 700 MHz frequencies, whereas another  jurisdiction may need devices that operate on both 800 MHz and 450  MHz frequencies. Existing handheld LMR devices typically do not  transmit and receive signals in all public safety frequencies. As a result,  device manufacturers cannot sell a single product to customers  nationwide, and must tailor devices to the combinations of frequencies in  use by the purchasing agency.
Barriers to entry by nonincumbent manufacturers. Device  manufacturers wishing to enter the handheld LMR device market face  barriers in doing so, which further limits competition. The use of  proprietary technologies represents one barrier to entry. The inclusion of  proprietary technologies often makes LMR devices noninteroperable with  one another. This lack of interoperability makes it costly for customers to  switch the brand of their devices, since doing so requires them to replace  or modify older devices. These switching costs may continually compel  customers to buy devices from the incumbent device manufacturer,  preventing less established manufacturers from making inroads into the  market. For example, in a comment filed with FCC, one of the  jurisdictions we visited said that device manufacturers offer a proprietary  encryption feature for free or at only a nominal cost. When a public  safety agency buys devices that incorporate this proprietary encryption  feature, the agency cannot switch its procurement to a different  manufacturer without undertaking costly modifications to its existing fleet  of devices. Switching costs are particularly high when a device  manufacturer has installed a communication system that is incompatible  with competitors’ devices. In this scenario, a public safety agency cannot  switch to a competitor’s handheld device without incurring the cost of new  equipment or a patching mechanism to resolve the incompatibility. Even  where devices from different manufacturers are compatible, a fear of  incompatibility may deter agencies from switching to a nonincumbent  brand. According to industry stakeholders—and as we have confirmed in  the past—devices marketed as P25 compliant often are not interoperable   This lack of confidence in the P25 standard may encourage  in practice.agencies to continue buying handheld LMR devices from their current  brand, placing less established device manufacturers at a disadvantage  and thus discouraging competition.
At the same time that less established manufacturers are at a  disadvantage, the market leader enjoys distinct “incumbency  advantages.” These advantages refer to the edge that a manufacturer  derives from its position as incumbent, over and above whatever edge it  derives from the strength of its product:
According to an industry analyst, some public safety agencies are  reluctant to switch brands of handheld LMR devices because their  emergency responders are accustomed to the placement of the  buttons on their existing devices.
According to another industry analyst, the extensive network of  customer representatives that the market leader has established over  time presents an advantage. According to this analyst, less  established device manufacturers face difficulty winning contracts  because their networks of representatives are comparatively thin.
The well-recognized brand of the market leader also represents an  advantage. According to one stakeholder, some agencies mistakenly  believe that only the market leader is able to manufacturer devices  compliant with P25, and thus conduct sole-source procurements with  this manufacturer. Even where procurements are competitive, the  market leader is likely to enjoy an upper hand over its competitors;  according to an industry analyst, local procurement officers prefer to  buy handheld LMR devices from the dominant device manufacturer  because doing so is an uncontroversial choice in the eyes of their  management.

		High Manufacturing Costs and Lack of Buying Power Increase Device Prices

Competition aside, handheld LMR devices are costly to manufacture, so  their prices will likely exceed prices for commercial devices regardless of  how much competition exists in the market. First, this is in large part  because these devices need to be reinforced for high-pressure  environments. Handheld LMR devices must be able to withstand  extremes of temperature as well physical stressors such as dust, smoke,  impact, and immersion in water. Second, they also have much more  robust performance requirements than commercial devices––including  greater transmitter and battery power––to enable communication at  greater ranges and during extended periods of operation. Third, the  devices are produced in quantities too small to realize the cost savings of  mass production. Manufacturers of commercial telecommunication  devices can keep prices lower simply because of the large quantities they  produce. For example, one industry stakeholder told us that economies of  scale begin for commercial devices when a million or more devices are  produced per manufacturing run. In contrast, LMR devices are commonly  produced in manufacturing runs of 25,000 units. Fourth, the exterior of  handheld LMR devices must be customized to the needs of emergency  responders. For example, the buttons on these devices must be large  enough to press while wearing bulky gloves.
In addition, given that the P25 standard remains incomplete and  voluntary, device manufacturers develop products based on conflicting  interpretations of the standard, resulting in incompatibilities between their  products. Stakeholders from one jurisdiction we visited said that agencies  can request add-on features––such as the ability to arrange channels  according to user preference or to scan for radio channels assigned for  particular purposes—which fall outside the P25 standard. These features  increase the degree of customization required to produce handheld LMR  devices, pushing costs upward.
Furthermore, public safety agencies may be unable to negotiate lower  prices for handheld LMR devices because they cannot exert buying  power in relationship with device manufacturers. We found that public  safety agencies are not in an advantageous position to negotiate lower  prices because they often request customized features and negotiate with  device manufacturers in isolation from one another. According to a public  safety official in one jurisdiction we contacted, each agency has unique  ordinances, purchasing mechanisms, and bidding processes for devices.  Because public safety agencies contract for handheld LMR devices in this  independent manner, they sacrifice the quantity discounts that come from  placing larger orders. Moreover, they are unlikely to know what other  agencies pay for similar devices, enabling device manufacturers to offer  different prices to different jurisdictions rather than set a single price for  the entire market. One public safety official told us that small jurisdictions  therefore pay more than larger jurisdictions for similar devices. As we  have reported in the past, agencies that require similar products can  combine their market power—and therefore obtain lower prices—by  engaging in joint procurement.procurement at the state, regional, or national level are likely to increase  the buying power of public safety agencies and help bring down prices.
Therefore, wider efforts to coordinate  Although these factors drive up prices in the current market for handheld  LMR devices, industry observers said that many of these factors diminish  in the future market for handheld broadband devices. As described  earlier, FCC has mandated a commercial standard, LTE, for devices  operating on the new broadband networks. The use of this standard may  reduce the prevalence of proprietary features that inhibit interoperability.  In addition, the new broadband networks will operate on common 700  MHz spectrum across the nation, eliminating the need to customize  devices to the frequencies in use by individual jurisdictions. Together, the  adoption of a commercial standard and the use of common spectrum are  likely to increase the uniformity of handheld public safety devices, which  in turn is likely to strengthen competition and enable the cost savings that  come from bulk production. In addition, industry analysts and federal  officials told us that they expect a heightened level of competition in the  market for LTE devices because multiple device manufacturers are  expected to develop them.

		Options Exist to Reduce the Prices of Handheld LMR Devices

Options exist to reduce prices in the market for handheld LMR devices by  increasing competition and the bargaining power of public safety  agencies. One option is to reduce barriers to entry into the market. As  described above, less established manufacturers may be discouraged  from entering the market for handheld LMR devices because of the lack  of interoperability between devices produced by different manufacturers.  Consistent implementation of the P25 standard would increase  interoperability between devices, enabling public safety agencies to mix  and match handheld LMR devices from different brands. As we have  reported in the past, independent testing is necessary to ensure  compliance with standards and interoperability among products.past several years, NIST and DHS have established a Compliance   In the  Assessment Program (CAP) for the P25 standard. CAP provides a  government-led forum in which to test devices for conformance with P25  specifications. If the CAP program succeeds in increasing  interoperability, it may reduce switching costs—that is, the expense of  changing manufacturers—and thus may open the door to greater  competition. Although CAP is a promising means to lower costs in this  way, it is too soon to assess its effectiveness.
A second option is for public safety agencies to engage in joint  procurement to lower costs. Joint procurement of handheld LMR devices  could increase the bargaining power of agencies as well as facilitate cost  savings through quantity discounts. One public safety official we  interviewed said that while local agencies seek to maintain control over  operational matters—such as which emergency responders operate on  which channels—they are likely to cede control in procurement matters if   As described earlier in this report, DHS provides  doing so lowers costs. significant grant funding, technical assistance, and guidance to enhance  the interoperability of LMR systems. For example, as described in its  January 2012 Technical Assistance Catalog, DHS’s Office of Emergency  Communications supports local public safety entities to ensure that LMR  design documents meet P25 specifications and are written in a vendor- neutral manner. Based on its experience in emergency communications  and its outreach to local public safety representatives, DHS is positioned  to facilitate and incentivize opportunities for joint procurement of handheld  LMR devices.

	Conclusions

An alternative approach to fostering joint procurement is through a federal supply  schedule. In 2008, the Local Preparedness Acquisition Act, Pub. L. No. 110-248, 122 Stat.  2316 (2008), gave state and local governments the opportunity to buy emergency  response equipment through GSA’s Cooperative Purchasing Program. The Cooperative  Purchasing Program may provide a model for extending joint procurement to state and  local public safety agencies. mission critical voice. As a result, a public safety broadband network  would likely supplement, rather than replace, current LMR systems for the  foreseeable future. Although a public safety broadband network could  enhance incident response, it would have limitations and be costly to  construct. Furthermore, since the LMR systems will still be operational for  many years, funding will be necessary to operate, maintain, and upgrade  two separate public safety communication systems.
At the time of our work, there was not an administrative entity that had the  authority to plan, oversee, or direct the public safety broadband spectrum.  As a result, overarching management decisions had not been made to  guide the development or deployment of a public safety broadband  network. According to SAFECOM’s interoperability continuum,  governance structures provide a framework for collaboration and decision  making with the goal of achieving a common objective and therefore  foster greater interoperability. In addition to ensuring interoperability, a  governance entity with proper authority could help to address the  challenges identified in this report, such as ensuring the network is secure  and reliable. Pending legislation, the Middle Class Tax Relief and Job  Creation Act of 2012, establishes an independent authority within NTIA to  manage and oversee the implementation of a nationwide, interoperable  public safety broadband network.
Handheld communication devices used by public safety officials can cost  thousands of dollars, mostly due to limited competition and high  manufacturing costs. However, public safety agencies also lack buying  power vis-à-vis the device manufacturers, which may result in the  agencies overpaying for the devices. In particular, since public safety  agencies negotiate individually with device manufacturers, they are  unlikely to know what other agencies pay for comparable devices and  they sacrifice the increased bargaining power and economies of scale  that accompany joint purchasing. Especially in rural areas, public safety  agencies may be overpaying for handheld devices. We have repeatedly  recommended joint procurement as a cost saving measure for situations  where agencies require similar products because it allows them to  combine their market power and lower their procurement costs. Given  that DHS has expertise in emergency communications and relationships  with local public safety representatives, we believe it is well-suited to  facilitate opportunities for joint procurement of handheld communication  devices.

	Recommendation for Executive Action

To help ensure that public safety agencies are not overpaying for  handheld communication devices, the Secretary of Homeland Security  should work with federal and state partners to identify and communicate  opportunities for joint procurement of public safety LMR devices.

	Agency Comments and Our Evaluation

We provided a draft of this report to Commerce, DHS, the Department of  Justice, and FCC for their review and comment. In the draft report we  sent to the agencies, we included a matter for congressional  consideration for ensuring that a public safety broadband network has  adequate direction and oversight, such as by creating a governance  structure that gives authority to an entity to define rules and develop a  plan for the overarching management of the network. As a result of  pending legislation that addresses this issue, we removed the matter for  congressional consideration from the final report.
Commerce provided written comments, reprinted in appendix III, in which  it noted that NIST and NTIA will continue to collaborate with and support  state, local, and tribal public safety agencies and other federal agencies  to help achieve effective and efficient public safety communications.
In commenting on the draft report, DHS concurred with our  recommendation that it should work with federal and state partners to  identify and communicate opportunities for joint procurement of public  safety LMR devices. While DHS noted that this recommendation will not  likely assist near-term efforts to implement a public safety broadband  network, assisting efforts for the broadband network was not the intention  of the recommendation. Rather, we intended this recommendation to help  ensure that public safety agencies do not overpay for handheld LMR  devices by encouraging joint procurement. DHS suggested in response to  our recommendation that a GSA solution may be more appropriate than  DHS contracting activity. Although we recognize that a GSA solution is  one possibility for joint procurement of handheld LMR devices, other  opportunities and solutions might exist. We believe DHS, based on its  experience in emergency communications and its outreach to state and  local public safety representatives, is best suited to identify such  opportunities and solutions for joint procurement and communicate those  to the public safety agencies. In its letter, DHS also noted that it continues  to work with federal, state, local, and private-sector partners to facilitate  the deployment of a nationwide public safety broadband network, and  stressed that establishing an effective governance structure is crucial to  ensuring interoperability and effective use of the network. DHS’s written  comments are reprinted in appendix IV.
Commerce, DHS, the Department of Justice, and FCC provided technical  comments on the draft report, which we incorporated as appropriate.
We are sending copies of this report to the Secretary of Homeland  Security, the Attorney General, the Secretary of Commerce, the  Chairman of FCC, and appropriate congressional committees. In addition,  the report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Contact information and major contributors to  this report are listed on appendix V.

Appendix I: Objectives, Scope, and Methodology

This report examines current communication systems used by public  safety and issues surrounding the development of a nationwide public  safety broadband network. Specifically, we reviewed (1) the resources  that have been provided for current public safety communication systems  and their capabilities and limitations, (2) how a nationwide public safety  broadband network is being planned and its anticipated capabilities and  limitations, (3) the challenges to building a nationwide public safety  broadband network, and (4) the factors that influence competition and  cost in the development of public safety communication devices and the  options that exist to reduce prices.
To address all objectives, we conducted a literature review of 43 articles  from governmental and academic sources on public safety  communications. We reviewed these articles and recorded relevant  evidence in workpapers, which informed our report findings. To identify  existing studies, we conducted searches of various databases, such as  EconLit, ProQuest, Academic OneFile, and Social SciSearch. We also  pursued a snowball technique—following citations from relevant articles— to find other relevant articles and asked external researchers that we  interviewed to recommend additional studies. These research methods  produced 106 articles for initial review. We vetted this initial list by  examining summary level information about each piece of literature,  giving preference to articles that appeared in peer-reviewed journals and  were germane to our research objectives. As a result, the 43 studies that  we selected for our review met our criteria for relevance and quality. For  the 13 articles related to our fourth objective—factors that affect  competition and cost in the market for public safety communication  devices—a GAO economist performed a secondary review and confirmed  the relevance to our objective. Articles were then reviewed and evidence  captured in workpapers. The workpapers were then reviewed for  accuracy of the evidence gathered. We performed these searches and  identified articles from June 2011 to September 2011.
We also interviewed government officials or stakeholders in 6 of the 22  jurisdictions that are authorized to build early public safety broadband  networks and obtained information concerning each objective. In  particular, we obtained information concerning their current  communication systems and its capabilities, including any funding  received to support the current network. We discussed their plan for  building a public safety broadband network and the challenge they had  faced thus far, including the role each thought the federal government  should play in developing a network. We also discussed their views on  the communication device market and the factors shaping the market. We  selected jurisdictions to contact based on three criteria: (1) whether the  jurisdiction received grant funds from the National Telecommunications  and Information Administration (NTIA) to help build the network, (2)  whether the planned network would be a statewide or regional network,  and (3) geographic distribution across the nation. Table 4 lists the  jurisdictions we selected based on these criteria. We selected  jurisdictions based on NTIA grant funding because these jurisdictions had  received the most significant federal funds dedicated towards developing  a broadband network. Other jurisdictions either had not identified any  funding or applied smaller grant funding that was not primarily targeted at  emergency communications. We selected the size of the network,  statewide or regional, to determine if challenges differed based on the  size of the network and the number of entities involved. Finally, we  selected sites based on the geographic region to get a geographic mix of  jurisdictions from around the country. In jurisdictions that received NTIA  funding, we met with government officials and emergency responders. In  jurisdictions that did not receive NTIA funding we met with the  government officials since the network had not progressed as much.
To determine the resources that have been provided for current public  safety communication systems, we reviewed Federal Communications  Commission (FCC) data on spectrum allocations for land mobile radio  (LMR) systems. In addition, we reviewed relevant documentation and  interviewed officials from offices within the Departments of Commerce  (Commerce), Homeland Security (DHS), and Justice that administer grant  programs or provide grants that identify public safety communications as  an allowable expense. We selected these agencies to speak with  because they had more grant programs providing funds or were regularly  mentioned in interviews as providing funds for public safety  communications. We also reviewed documents from agencies, such as  the Departments of Agriculture and Transportation, which similarly  operate grant programs that identify public safety communications as an  allowable expense. The grants were identified by DHS’s SAFECOM  program as grants that can support public safety communications.
To identify the capabilities and limitations of current public safety  communication systems, we reviewed relevant congressional testimonies,  academic articles on the capabilities and limitations of LMR networks, and  relevant federal agency documents, including DHS’s National Emergency  Communications Plan. We interviewed officials from three national public  safety associations—the Association of Public-Safety Communications  Officials (APCO), National Public Safety Telecommunications Council  (NPSTC), and the Public Safety Spectrum Trust (PSST)—as well as  researchers and consultants referred to us for their knowledge of public  safety communications and identified during the literature review process.
To determine the plans for a nationwide public safety broadband network  and its expected capabilities and limitations, we reviewed relevant  congressional testimonies and academic articles on services and  applications likely to operate on a public safety broadband network, the  challenges to building, operating, and maintaining a network. We  interviewed officials from APCO, NPSTC, and PSST, as well as  researchers and consultants who specialize in public safety  communications to understand the potential capabilities of the network. In  addition, we reviewed FCC orders and notices of proposed rulemaking  relating to broadband for public safety, as well as comments on this topic  submitted to FCC.
To determine the federal role in the public safety broadband network, we  interviewed multiple agencies involved in planning this network. Within  FCC, we interviewed officials from the Public Safety and Homeland  Security Bureau (PSHSB), the mission of which is to ensure public safety  and homeland security by advancing state-of-the-art communications that  are accessible, reliable, resilient, and secure, in coordination with public  and private partners. Within Commerce, we interviewed officials from  NTIA and the National Institute of Standards and Technology (NIST), two  agencies that develop, test, and advise on broadband standards for  public safety. We also interviewed officials from the Public Safety  Communications Research (PSCR) program, a joint effort between NIST  and NTIA that works to research, develop, and test public safety  communication technologies. Within DHS, we interviewed officials from  the Office of Emergency Communications (OEC) and the Office of  Interoperability and Compatibility (OIC), two agencies that provide input  on the public safety broadband network through their participation on  interagency coordinating bodies.
To determine the technological, historical, and other factors that affect  competition in the market for public safety devices, as well as what  options exist to reduce the cost of these devices, we reviewed the  responses to FCC’s notice seeking comment on competition in public  safety communications technologies. In addition, we reviewed our prior  reports and correspondence on this topic between FCC and the House of  Representatives Committee on Energy and Commerce that occurred in  June and July of 2010 and April and May of 2011. We also conducted an  economic literature review that included 13 academic articles examining  markets for communications technology and, in particular, how issues of  standards, compatibility, bundling, and price discrimination affect entry  and competition in these markets. These articles provided a historical and  theoretical context for communication technology markets, which helped  shape our findings. We asked about factors affecting the price of public  safety devices, as well as how to reduce these prices, during our  interviews with national public safety organizations, local and regional  public safety jurisdictions, and the federal agencies we contacted during  our audit work. We also interviewed two researchers specifically identified  for their knowledge of communication equipment markets based on their  congressional testimony or publication history. In addition, we interviewed  representatives from four companies that produce public safety devices  or network components, as well as two financial analysts who track the  industry.
We conducted this performance audit from March 2011 to February 2012  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: Federal Grant Programs for Emergency Communications

SAFECOM, a program administered by DHS, has identified federal grant  programs across nine agencies, including the Departments of Agriculture,  Commerce, Education, Health and Human Services, Homeland Security,  Interior, Justice, Transportation, and the U.S. Navy that allow grant funds  to fund public safety emergency communications efforts. These grants  include recurring grants that support emergency communications,  research grants that fund innovative and pilot projects, and past grants  that may be funding ongoing projects. While the funding from these  grants can support emergency communications, the total funding reported  does not mean it was all spent on emergency communications. We  provided the amounts of the grants and the years funded when this  information was available.

	Department of Commerce

Two agencies within Commerce—NTIA and NIST—administer grants that  allow funds to be directed towards public safety emergency  communications (see table 5).

	Department of Homeland Security

Two agencies within DHS administer grants that allow funds to be  directed towards public safety emergency communications—the Federal  Emergency Management Agency (FEMA) and the Science and  Technology Directorate. Another agency, OEC, has administered one  such grant program. Furthermore, DHS maintains an authorized  equipment list to document equipment eligible for purchase under its  grant programs, including interoperable communications equipment.(See table 6.)

	Department of Justice

Two offices within Department of Justice, the Community Oriented  Policing Services (COPS) and the Office of Justice Programs (OJP),  administer grants that allow funds to be directed towards public safety  emergency communications (see table 7).
Six additional federal agencies administer grants that can fund public  safety emergency communications, including the Departments of  Agriculture (USDA), Transportation (DOT), Health and Human Services  (HHS), Education, Interior, and the U.S. Navy (see table 8).

Appendix III: Comments from the Department of Commerce

Appendix IV: Comments from the Department of Homeland Security

Appendix V: GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact named above, Sally Moino, Assistant Director;  Namita Bhatia-Sabharwal; Dave Hooper; Eric Hudson; Josh Ormond;  Bonnie Pignatiello Leer; Ellen Ramachandran; Andrew Stavisky; Hai  Tran; and Mindi Weisenbloom made significant contributions to this  report.

Related GAO Products

Emergency Communications: National Communications System Provides  Programs for Priority Calling, but Planning for New Initiatives and  Performance Measurement Could Be Strengthened. GAO-09-822.  Washington, D.C.: August 28, 2009.
Emergency Communications: Vulnerabilities Remain and Limited  Collaboration and Monitoring Hamper Federal Efforts. GAO-09-604.  Washington, D.C.: June 26, 2009.
First Responders: Much Work Remains to Improve Communications  Interoperability. GAO-07-301. Washington, D.C.: April 2, 2007.
Homeland Security: Federal Leadership and Intergovernmental  Cooperation Required to Achieve First Responder Interoperable  Communications. GAO-04-740. Washington, D.C.: July 20, 2004.
Project SAFECOM: Key Cross-Agency Emergency Communications  Effort Requires Stronger Collaboration. GAO-04-494. Washington, D.C.:  April 16, 2004.
Homeland Security: Challenges in Achieving Interoperable  Communications for First Responders. GAO-04-231T. Washington, D.C.:  November 6, 2003.

Output:
Why GAO Did This Study

Emergency responders across the nation rely on land mobile radio (LMR) systems to gather and share information and coordinate their response efforts during emergencies. These public safety communication systems are fragmented across thousands of federal, state, and local jurisdictions and often lack interoperability, or the ability to communicate across agencies and jurisdictions. To supplement the LMR systems, in 2007, radio frequency spectrum was dedicated for a nationwide public safety broadband network. Presently, 22 jurisdictions around the nation have obtained permission to build public safety broadband networks on the original spectrum assigned for broadband use. This requested report examines (1) the investments in and capabilities of LMR systems; (2) plans for a public safety broadband network and its expected capabilities and limitations; (3) challenges to building this network; and (4) factors that affect the prices of handheld LMR devices. GAO conducted a literature review, visited jurisdictions building broadband networks, and interviewed federal, industry, and public safety stakeholders, as well as academics and experts.

What GAO Found

After the investment of significant resourcesincluding billions of dollars in federal grants and approximately 100 megahertz of radio frequency spectrumthe current land mobile radio (LMR) systems in use by public safety provide reliable mission critical voice capabilities. For public safety, mission critical voice communications must meet a high standard for reliability, redundancy, capacity, and flexibility. Although these LMR systems provide some data services, such as text and images, their ability to transmit data is limited by the channels on which they operate. According to the Department of Homeland Security (DHS), interoperability among LMR systems has improved due to its efforts, but full interoperability of LMR systems remains a distant goal.
Multiple federal entities are involved with planning a public safety broadband network and while such a network would likely enhance interoperability and increase data transfer rates, it would not support mission critical voice capabilities for years to come, perhaps even 10 years or more. A broadband network could enable emergency responders to access video and data applications that improve incident response. Yet because the technology standard for the proposed broadband network does not support mission critical voice capabilities, first responders will continue to rely on their current LMR systems for the foreseeable future. Thus, a broadband network would supplement, rather than replace, current public safety communication systems.
There are several challenges to implementing a public safety broadband network, including ensuring the networks interoperability, reliability, and security; obtaining adequate funds to build and maintain it; and creating a governance structure. For example, to avoid a major shortcoming of the LMR systems, it is essential that a public safety broadband network be interoperable across jurisdictions and devices by following five key elements to interoperable networks: governance, standard operating procedures, technology, training, and usage. With respect to creating a governance structure, pending legislationthe Middle Class Tax Relief and Job Creation Act of 2012, among other thingsestablishes a new entity, the First Responder Network Authority, with responsibility for ensuring the establishment of a nationwide, interoperable public safety broadband network.
The price of handheld LMR devices is highoften thousands of dollarsin part because market competition is limited and manufacturing costs are high. Further, GAO found that public safety agencies cannot exert buying power in relationship to device manufacturers, which may result in the agencies overpaying for LMR devices. In particular, because public safety agencies contract for LMR devices independently from one another, they are not in a strong position to negotiate lower prices and forego the quantity discounts that accompany larger orders. For similar situations, GAO has recommended joint procurement as a cost saving measure because it allows agencies requiring similar products to combine their purchase power and lower their procurement costs. Given that DHS has experience in emergency communications and relationships with public safety agencies, it is well-suited to facilitate joint procurement of handheld LMR devices.

What GAO Recommends

The Department of Homeland Security (DHS) should work with partners to identify and communicate opportunities for joint procurement of public safety LMR devices. In commenting on a draft of this report, DHS agreed with the recommendation. GAO also received technical comments, which have been incorporated, as appropriate, in the report.