Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

Date: March 27, 1999

TO:

Vancouver City Council

FROM:

General Manager of Engineering Services in consultation with the General Manager of Corporate Services

SUBJECT:

Pay Telephone Agreements

 

RECOMMENDATIONS

GENERAL MANAGER’S COMMENTS

COUNCIL POLICY

Execution of legal agreements by the Director of Legal 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 permit competitive pay telephone service providers (CPTSP) to install pay telephones on public property. This permission will be subject to the execution of Pay Telephone Agreements with the General Manager of Engineering Services, the General Manager of Corporate Services, and the Director of Legal Services containing general terms and conditions which are described in this report.

BACKGROUND

On June 30, 1998 the CRTC deregulated pay telephone service. This means that companies other than BC Tel are now able to provide pay telephone service in Vancouver. This will improve the range of telephone services available to the public and ensure they are provided at competitive rates.

The City currently has a pay telephone access agreement with BC Tel. Under the terms of this agreement, the City receives 10% of gross revenue from each phone. BC Tel has about 90 pay telephones located on the street ROW and in City owned buildings. (The Parks Board has a separate exclusive agreement with BC Tel.) The low number of pay telephones indicates that the City is currently under serviced, and can easily support a larger number of them.

This agreement with BC Tel has a ten year term which expires in October 2005. The City has advised BC Tel that we intend to renegotiate the agreement, so that all companies providing pay telephone service in the City will have similar agreements. Additionally, the new agreements will significantly increase the revenue from the City’s pay telephones, as the CPTSPs are offering higher revenue than what we are currently receiving, and the City will be requiring BC Tel to pay the same amount.

DISCUSSION

There are currently twenty-nine CPTSPs registered with the CRTC and the number is steadily increasing. However, the majority of the registered CPTSPs are currently only providing service in eastern Canada.

Under the arrangement proposed in this report, the City would allow new entrants into the City subject to their agreement to the standard terms and conditions outlined in this report. Consideration was also given to requesting bids from companies and signing an exclusive contract with one or two companies. However, at this early stage in the deregulation of pay telephone services, experience with current companies is limited. Over the next few years, there will likely be a number of mergers, take-overs, as well as new entrants into the market. Therefore, staff believe that the City will be in a better position to evaluate the industry and consider exclusive contracts in a few years. For this reason, a five year term is proposed. Staff will report back at the end of that period on alternative arrangements for these agreements.

Staff have been involved in negotiations with CPTSPs over the past few months, and anticipate entering into an agreement with the following general terms:

· A minimum annual payment of $200 per phone.
· The City will receive a licence fee equal to 15% of all gross revenue attributed to the phone.
· The CPTSP will provide up to 10% of the pay phones in City mandated locations. The minimum annual payment would not apply to these phones.
· The CPTSP is responsible for the cost of relocating or removing their plant where required by the City.
· The contract will have a term of 5 years.
· One speed dial button on each phone will be reserved for use of the City’s choice. e.g. transit information at no cost to the City or user.
· Advertising and speed dial buttons will be permitted on the phones, subject to City approval.
· The City will approve all pay phone locations.
· The CPTSP will commit to minimum maintenance and graffiti removal standards.
· The agreement will cover phone locations located in the street right-of-way and in City owned buildings, but not in parks.

Staff have already had discussions with two new pay telephone companies that have agreed to the above general terms. Staff feel that 15% of all gross revenue is reasonable and is higher than what we are currently receiving from BC Tel. Additionally, having up to 10% of the phones in City mandated locations, will allow the City to provide pay telephone service in areas where it is needed.

CONCLUSION

Staff recommend that Council allow installation of CPTSP pay phones to proceed subject to the execution of a Pay Telephone Agreement to the satisfaction of the General Manager of Engineering Services, the General Manager of Corporate Services, and the Director of Legal Services.

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ag990427

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