ADMINISTRATIVE REPORT

Date: August 23, 2001
Author/Local: T. Hammel/7370

RTS No. 02269

CC File No. 1203

Council: September 18, 2001

TO:	Vancouver City Council
FROM:	General Manager of Engineering Services
SUBJECT:	Interim Municipal Access Agreement with Crystal Decisions, Corp.

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 Crystal Decisions, Corp. permitting it to install and operate a fibre optic network in the City of Vancouver 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.

COUNCIL POLICY

Execution of legal agreements by the Director of Legal Services and General Manager of Engineering Services with respect to access to City streets 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 Crystal Decisions, Corp. ("Crystal Decisions") to allow them to install fibre optic cable in the City of Vancouver (the "City").

BACKGROUND

Crystal Decisions is a local hi-tech company that provides software and services related to information management. The company has grown recently and currently has over 800 employees and offices at three downtown locations. They are planning to install fibre optic cables to provide connectivity between their offices and telecommunications carrier central offices for their internal business functions. They are unable to lease these services from commercial carriers economically. They are planning to install the fibre optic cable in ducts owned by BCHydro.

Over the past year, Council has approved general terms for interim agreements to allow WFI Urbanlink Ltd. (360networks), Novus Telecom Inc., Bell Intrigna Inc., Wispra Networks Inc. and Urban Networks Inc. to install fibre optic cable in the City. These interim agreements all expire 90 days after the final decision (including appeals) on Vancouver's application to the CRTC concerning access to City streets by telecommunications companies. 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 all appeals of the CRTC Decision 2001-23, when such fees will be determined in accordance with the final decision and collected retroactively from the date of installation of fibre optic cable. Council also approved terms and conditions for an interim agreement with TeraSpan Networks Inc. to do a pilot fibre optic installation in Gastown. This differs from the other agreements in that TeraSpan agreed to pay a fixed fee rather than have a fee apply retroactively based on the final outcome of all appeals of the CRTC decision, to provide more certainty on the fee amount.

The CRTC decision was released on January 25, 2001 and subsequently, the City filed an appeal to the Federal Court. On May 14, 2001 the Federal Court granted the City's request for leave to appeal and we expect the Federal Court will hear that appeal by the Spring of 2002. A further appeal to the Supreme Court of Canada, with leave of that Court, is a possibility, which would mean that this matter may not be resolved for a few years.

DISCUSSION

As the decision is under appeal, the form of interim agreement currently being used is appropriate to ensure consistent treatment of telecommunication companies and preserve the City's ability to recover access fees retroactively. To allow Crystal Decisions to install and operate a fibre optic network in the City of Vancouver it is proposed to enter into an agreement with this company which issubstantially in the form of the interim agreement previously entered into with other telecommunications carriers.

The installation of fibre optic cable in ducts owned by BCHydro makes this arrangement different than other agreements the City has entered into with telecommunications companies. The City has advised both BCHydro and Crystal Decisions that the City expects to negotiate one agreement with BCHydro as the duct owner to cover all installations of fibre optic cables in their ducts. This agreement would contain some provision for fees being payable to the City for BCHydro's use of its electrical ducts in City streets for purposes of providing services other than electrical power transmission and distribution. Once that agreement has been finalized, it would replace the proposed agreement with Crystal Decisions.

Most interim agreements entered into with telecommunications carriers contain a provision that no street access fees would be collected until the final resolution of all appeals of the CRTC decision. Instead of this arrangement, Crystal Decisions has opted to pay a set fee amount for street access to provide more certainty with respect to the fee. The fee amount will be $10/m/year.

Other proposed terms and conditions in the agreement with Crystal Decisions would be as follows:

· Term of 5 years subject to earlier termination by the City on notification following the final ruling on the CRTC decision, or by Crystal Decisions on removal of the fibre
· City to approve the locations of fibre and other equipment
· Crystal Decisions to 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.
· Crystal Decisions to provide as-built information relating to their facilities
· Crystal Decisions to indemnify the City to the satisfaction of the Director of Legal Services
· Crystal Decisions to pay for relocation costs where requested by the City

CONCLUSION

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

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