ADMINISTRATIVE REPORT Date: February 24, 1997 Dept. File No. CC File No. 1203-1 TO: Vancouver City Council FROM: General Manager of Engineering Services SUBJECT: Municipal Access Agreement with Broadband Solutions Network Inc. 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 Broadband Solutions Network Inc. 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 Broadband Solutions be permitted to install and operate a fibre optics network 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 Broadband Solutions to install a fibre optic network 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. BACKGROUND In adopting the Telecommunications Policy in July of last 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 competition into the Vancouver market. On January 28, 1997 Council authorized staff to execute a Municipal Access Agreement with MetroNet, a telecommunications company and potential competitor to Broadband Solutions. Bringing more 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. Broadband Solutions is a Vancouver-based telecommunications company that provides broadband and other advanced telecommunication services to commercial and institutional customers. The company will offer local private-line services special access digital communication services, advanced high speed data communication services and switched services, all running over fibre optic networks. Broadband Solutions is starting its network operations in Vancouver and plans to provide similar telecommunication services across Canada with future expansion into the United States. MUNICIPAL ACCESS AGREEMENT Broadband Solutions has approached the City for permission to install a fibre optics network for the provision of telecommunication services throughout the City of Vancouver. Staff started discussions with Broadband Solutions late in 1996 and anticipate that this Agreement will contain similar terms and conditions to those in the Metronet agreement. In summary these terms and conditions are: TERM: 20 years. TAXES: Broadband Solutions 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 revenue attributable to Broadband Solution s fibre optic network within Vancouver as set out in the agreement. DARK FIBRE: Within each backbone fibre optic cable installed by Broadband Solutions (which excludes the 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 Broadband Solutions. LIABILITY: The City would not assume liability for loss or damage to the cable or Broadband Solutions s operations, except as set out in the agreement. OTHER TERMS Any other terms and conditions as are deemed AND acceptable or necessary by the General Manager CONDITIONS: of Engineering Services and the Director of Legal Services. Broadband Solutions is anxious to proceed quickly with installation and will commence construction as soon as the municipal access agreement is executed. 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 closed on November 29, 1996, and Broadband Solutions has indicated an interest by responding. A progress report on this issue along with recommendations for proceeding will be before Council shortly. It is not expected that the Municipal Access Agreement with Broadband Solutions would impact the RFI for the following reasons: - No commitments will be made to Broadband Solutions in the municipal access Agreement with regard to City telecommunications. - The RFI is not intended to grant exclusivity in the use of public right-of-way. Even if Broadband Solutions 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. * * * * *