ADMINISTRATIVE REPORT

Date: May 29, 2000
Author/Local: T. Hammel/7370

RTS No. 01513

CC File No. 1203

Council: June 13, 2000

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services
SUBJECT:	Interim Municipal Access Agreement for TeraSpan Networks Inc.

RECOMMENDATION

THAT the General Manager of Engineering Services and Director of Legal Services be authorized to conclude negotiations, and execute and deliver, an interim legal agreement ("the Interim Agreement") with TeraSpan Networks Inc. permitting it to install and operate a fibre optic network in the City of Vancouver, starting with a pilot project in Gastown, on an interim basis incorporating the general terms and conditions outlined in this report and such other terms and conditions satisfactory to the General Manager of Engineering Services and the Director of Legal Services. No legal obligations will be created or will arise until execution of the Interim Agreement.

COMMENTS

The General Manager of Engineering Services and the Director of Legal Services RECOMMEND approval of the foregoing.

POLICY

Execution of legal agreements by the Director of Legal Services and General Manager of Engineering Services requires Council approval.

On July 30, 1996, when dealing with a report on Telecommunications Policies, Council approved a number of goals including one to ensure that the City maintains its authority to regulate equitable access to rights-of-way, secure valuable compensation for their use, minimize negative impacts associated with their use, and utilize them in a manner that furthers other telecommunications policy objectives.

PURPOSE

This report seeks Council approval to authorize staff to negotiate and execute an agreement with TeraSpan Networks Inc.("Teraspan") to allow them to install fibre optic cable in the City of Vancouver (the "City").

BACKGROUND

TeraSpan is a new telecommunications company that has proposed a new method of installing fibre optic cables in City streets. Their method involves narrow saw cuts up to four or five inches deep in the roadway in which small (about 1/8" diameter) conduits containing fibre optic cables are placed and filled with a sealant. From the City's perspective, this method has a number of benefits such as avoiding the detrimental impacts to streets caused by trenching methods normally used by telecommunications and other utility companies.

TeraSpan has asked the City for permission to install and operate a fibre optic network in the City of Vancouver, starting with a pilot project in Gastown which will be approximately 1700 metres long and will provide telecommunications services to some Gastown businesses. The Gastown Business Improvement Association has been consulted and supports the proposed installation. The installation will be piloted to allow the City to evaluate the new technology, particularly the impacts to condition of streets and sidewalks.

Over the past year, Council has approved general terms for interim agreements to allow Worldwide Fiber Inc. (affiliate of Ledcor Industries Limited), Novus Telecom Inc. and Bell Intrigna Inc. to install fibre optic cable in the City. The interim agreements expire 90 days after the final decision on Vancouver's application to the CRTC concerning access to City streets by Worldwide Fiber Inc., Telus, Bell Canada, and Call-Net. At that time, a new agreement with these companies will be negotiated based on that decision. Under the interim agreement, the companies pay the City for up-front costs associated with permit application reviews, inspection of construction, traffic signing costs, lost parking meter revenues and street pavement repairs. While the City will recover these up-front costs, no amount is collected for street access fees until the final resolution of Vancouver's application to the CRTC, when such fees will be determined in accordance with the final decision and collected retroactively from the date of installation of fibre optic cable.

The CRTC has initiated a public proceeding on appropriate terms and conditions for telecommunications companies' use of City streets. To date, city staff have made submissions outlining the City's proposed terms and conditions and methodology for recovering costs and charging street access fees. The Federation of Canadian Municipalities, other cities, and telecommunications companies have also made submissions and exchanged responses to questions requesting clarification of the various submissions. It is expected that it will take at least until the end of the year for the CRTC to issue its decision.

DISCUSSION

To allow TeraSpan to install and operate a fibre optic network in the City of Vancouver, starting with a pilot project in Gastown, it is the intent to enter into an agreement with this company which is substantially in the form of the interim agreement approved by Council for Worldwide Fibre Inc., Novus Telecom Inc., and Bell Intrigna.

The major difference between these agreements and the proposed agreement with TeraSpan is that TeraSpan will pay a nominal fee for street access as TeraSpan opted for an agreement that would provide more certainty with respect to the fee. The nominal fee listed in this agreement is for the pilot portion of the project only. Any expansion will be subject to a renegotiation of the fee based on our experience with the pilot project. With the other interim agreements, no amount is collected for street access fees until the CRTC decision, when such fees will be determined in accordance with the CRTC decision and collected retroactively from the date of installation of fibre optic cable.

The small size and shallow depth of these conduits would make it impractical for the City and outside utility companies to avoid cutting through these conduits when doing construction work in the streets. TeraSpan acknowledges this and agrees that the City will not be responsible for damage to their conduits. Their network loops will have sufficient redundancy to avoid service disruptions if one part of the network is cut.

The interim agreement with TeraSpan would contain the following general terms:

· TeraSpan to pay an access fee of $1.50/m/yr
· Initial installation will be limited to the pilot area with future extensions to be permitted only with approval of the City Engineer
· TeraSpan will be required to contract with an engineering consultant to evaluate the impact of their proposed installation methods on City streets
· Term to be limited to one year or 90 days after a CRTC ruling, whichever comes first
· The City may cancel the agreement if the City Engineer is not satisfied with findings of the consultant report and experience with the pilot
· City to approve fibre locations
· TeraSpan to pay for City costs related to administration and inspection associated with permit approvals, street pavement repairs, traffic signing and lost parking meter revenue
· TeraSpan to provide as-built information relating to their facilities
· TeraSpan to indemnify the City to the satisfaction of the Director of Legal Services

CONCLUSION

Staff recommend that Council allow installation of fibre optic networks in the City byTeraSpan subject to the execution of a Municipal Access Agreement to the satisfaction of the General Manager of Engineering Services and the Director of Legal Services.

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(c) 1998 City of Vancouver