LATE DISTRIBUTION
FOR COUNCIL DECEMBER 10, 1996
A26
ADMINISTRATIVE REPORT
Date: December 3, 1996
Dept. File No.
TO: Vancouver City Council
FROM: General Manager of Engineering Services
SUBJECT: Municipal Access Agreement with MetroNet Vancouver
RECOMMENDATION
A. THAT the General Manager of Engineering Services and Director
of Legal Services be authorized to conclude negotiations of,
and execute and deliver, a legal agreement with Metro
Vancouver Fiber Services Inc. (doing business as MetroNet)
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.
B. THAT MetroNet be permitted to install and operate a fibre
optics network for the provision of broadband services in the
City of Vancouver once it has executed a legal agreement with
the City of Vancouver and performed any preconditions to such
installation and operation as are set out in such legal
agreement.
COUNCIL POLICY
Execution of legal agreements by the Director of Legal Services requires
Council approval.
The terms of this agreement are consistent with the Telecommunications
Policy as adopted by Council on
July 30, 1996.
PURPOSE
This report seeks Council approval to permit MetroNet to install a fibre
optic network to provide broadband services in the City of Vancouver
subject to the execution of a Municipal Access Agreement by the General
Manager of Engineering Services and the Director of Legal Services; the
general terms and conditions for which are described in this report.
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BACKGROUND
In adopting the Telecommunications Policy in July of this year, the City
formally recognized the increasingly important role that
telecommunications plays in the economy of Vancouver. The City
committed to facilitate the rapid deployment of advanced
telecommunications services, to encourage the development and use of
such services, and to work toward making access equitable and
affordable. The City further committed to maintain its authority to
regulate equitable access to rights-of-way, secure valuable compensation
for their use, and minimize negative impacts associated with their use.
Consistent with this Telecommunications Policy is the introduction of
MetroNet into the Vancouver market. Bringing competition to Vancouver
has the potential to improve the affordability and accessibility of
advanced telecommunications services for all sectors of the economy. It
will further help position Vancouver as a world class business
environment.
MetroNet's affiliate in Calgary (Metro Calgary Fiber Services Inc.) is a
telecommunications company that provides broadband and other advanced
telecommunication services to commercial and institutional customers.
It's business in Calgary is the provision of full service high speed
metropolitan area networks, including broadband services and private
local network access. MetroNet Vancouver plans to provide similar
broadband services in Vancouver.
MUNICIPAL ACCESS AGREEMENT
MetroNet Vancouver has approached the City for permission to install a
fibre optics network for the provision of broadband services throughout
the City of Vancouver, starting with sections of the downtown core.
Staff started negotiations with MetroNet in July of this year and have
reached agreement in principle on the following general set of terms and
conditions:
TERM: 20 years.
TAXES: MetroNet to pay all municipal taxes and all other
City-imposed fees, such as those for parking clearance,
temporary special zone and other permits except
encroachment fees under the Encroachment Bylaw.
LICENCE FEE: 2% of the gross broadband revenue attributable to
MetroNet's broadband fibre optic network within
Vancouver.
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DARK FIBRE: Within each fibre optic cable laid by MetroNet (except
for connections running from the street to a private
customer's site), the City will receive a licence to use
four fibres for its own use. The licence will be for 20
years at a nominal fee of $1.00 per year.
RELOCATION: Costs of relocating the fibre optic cable where required
by the City would be borne by MetroNet.
LIABILITY: The City would not assume liability for loss or damage to
the cable or MetroNet's operations, except as set out in
the agreement.
OTHER TERMS AND
CONDITIONS: Any other terms and conditions as are deemed acceptable
or necessary by the General Manger of Engineering
Services and the Director of Legal Services.
A draft legal agreement has been prepared by the Director of Legal
Services, and is the basis of the above summary as well the basis of
continuing negotiations with MetroNet.
MetroNet is aware that the City intends over time to pursue a number of
general public policy issues, if possible through application to the
CRTC. However, it is not known at this time whether or not the CRTC
would have the jurisdiction or be prepared to consider these issues.
Some of the issues include the following:
- Revenue increases if the public cost in the private use of the
right-of-way is greater than 2%.
- Optimal allocations of the available broadband capacity in the
public interest.
- The City's right-of first refusal to acquire the facilities in the
event the company closes operation.
- The potential extension of this agreement to other
telecommunication companies.
MetroNet is anxious to proceed quickly with installation and will
commence construction as soon as the access agreement is executed.
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IMPACT OF THE REQUEST FOR INFORMATION FOR BROADBAND SERVICES
On July 30, 1996 staff reported to Council on the potential of
establishing a partnership arrangement in the provision of
telecommunication infrastructure. As a result of Council's
support, a Request For Information (RFI) was issued on October 31, 1996
to determine interest in this partnership by telecommunication interest.
The RFI closes on November 29, 1996 and MetroNet has indicated an
interest in responding.
It is not expected that the Municipal Access Agreement with MetroNet
would impact the RFI for the following reasons:
- No commitments were made to MetroNet with regard to City
telecommunications.
- The RFI is not intended to grant exclusivity in the use of public
right-of-way. Even if MetroNet is unsuccessful in the RFI, they
would have rights to access the City's rights-of-way.
CONCLUSION
Staff recommend that Council allow installation of the fibre optic
network to proceed 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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