Agenda Index City of Vancouver

ADMINISTRATIVE REPORT

TO: Standing Committee on City Services and Budgets

SUBJECT: Pay Telephone Agreements

RECOMMENDATION

CONSIDERATION

GENERAL MANAGER'S COMMENTS


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 direction on agreements for pay telephone service on the street right-of-way and in City-owned buildings. Any recommendation on this issue would 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 May 6, 1999, staff reported to Council to receive approval to enter into agreements with new pay telephone service providers. At the meeting there were questions raised around the concerns of the police, maintenance and graffiti removal of the telephones, and installation of the pay telephones in a manner sensitive to the street furniture study.

At this meeting it was indicated that the City would risk the CRTC becoming involved and the CRTC could potentially require the City to allow the pay phone providers to locate phones on the City streets if the report was delayed until after the street furniture study was completed. Further legal advice on this matter has concluded that the CRTC does not have the jurisdiction to make such an order and would not do so.

In addition, there are concerns with the performance to date of the new providers registering locations with 9-1-1 properly.

Subsequently, staff have changed the recommendation to Council on this matter and are now recommending that the competitive pay telephone service providers be given limited access and that the existing agreement with BC Tel be renegotiated to provide a premium return to the City for this semi-exclusive arrangement.

CONCERNS

The information requested on the questions raised at the May 6th meeting is detailed below.

Police Concerns

To discuss the topics that were raised by the police at the May 6th meeting, the GVRD 9-1-1 Administrator was contacted. The police had raised concerns regarding the routing of emergency calls outside of the province, using formatted numbers for pay telephones, auto dial 9-1-1 buttons and correct phone number and phone location information. The concerns of the police are concerns of the entire region, not just Vancouver and have been handled by the regional 9-1-1 administrator. The concerns and solutions have been noted below.

Some phone users are not aware of 9-1-1 or are used to contacting the operator to reach emergency services. If a customer dials `0' for the operator on a new pay telephone provider's phone, an operator will be reached that is located outside of the province or even outside of the country. The GVRD administrator has contacted these operator services and given them the proper number for routing any emergency calls to the local 9-1-1. This call routing should be seamless, and is not anticipated by the 9-1-1 administrator to cause problems.

BC Tel has used a certain number format for all of its pay telephones. The phone number is the first field that the 9-1-1 operators see on the screen and they have come to rely on the number format for distinguishing the phone as a pay telephone. However, there is another field that specifically denotes the type of phone that the call is coming from. The 9-1-1 operators have now been instructed to use this field instead of relying on the phone number formats. This is an issue with all pay telephones as there are not enough numbers to continue using the previous system.

The City has included in its draft agreement that no phones located in the street ROW should have an auto dial 9-1-1 button. However, the vast majority of the phones located on private property will have the auto dial buttons because the telephones come standard with this feature. Separate to this agreement, staff are enquiring with Permits and Licencing regarding options for enforcement on private property.

Automatic number and location information (ANI/ALI) information has not always been entered properly in the past for phones belonging to the new pay telephone companies and BC Tel. The GVRD administrator has expressed her concerns to these companies, and now feels that in the past few months the data has been entered in a satisfactory manner. The information that was improperly entered still requires correcting. It is a requirement of the CRTC that all pay phones are registered with emergency services.

Maintenance and Graffiti Removal

Maintenance and graffiti removal on pay telephones will be dealt within the agreement for pay telephone service. The companies will be asked to consult with BIA's on phone locations and to deal with localized concerns, such as graffiti removal. Additionally, the agreement will ask for proof of trained staff and the specialized equipment required for graffiti removal. If the companies do not have the staff and equipment required, the City will ask for proof of a contractor for graffiti removal services. This should provide sufficient proof that the companies are able to remove graffiti and if it is not removed in the time stated in the agreement, the City will remove the graffiti and charge the company.

Street Furniture Study

This study is currently in its very early stages and is not expected to be completed until later this year. At this time it is not known how pay phones will fit into this, therefore flexibility to remove or relocate phones will be important. The proposed agreement does give the City this flexibility and reference to this study will also be made in the agreement to ensure that the new pay telephone providers are fully aware of the needs of the City when the results of the study are known. If this is considered inadequate by Council, then competition could be deferred.

PAY TELEPHONE SERVICE OPTIONS

Outlined below are three options for pay telephone service in the City of Vancouver;

· A renegotiated BC Tel agreement with limited competition
· A renegotiated BC Tel exclusive agreement
· The full competition option that was presented in the last report

The recommended option differs from what was presented in the last report to Council because of the new information that is now known on the jurisdiction of the CRTC in this matter. It is felt that a semi-exclusive arrangement with BC Tel and limited entrance to the new pay telephone providers, (Option One) will provide the City with the stability and known level of service that the City is accustomed to, and at the same time, give the City some experience with the new entrants to the pay telephone market.

Consideration was also given to the possibility of an exclusive agreement with a competitive pay telephone service provider. 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 with the competitors in a few years.

Option One - BC Tel with Limited Competition

One option is to renegotiate the current agreement with BC Tel based on limited competition. In order to gain experience with the competitors, it would be required that a certain minimum number of new locations, possibly 20 each, be available to the new pay telephone service providers on a first-come, first-served basis.

At the end of the term of the BC Tel agreement, the City would have some experience with the new pay telephone providers and be in a better position to decide whether to tender pay telephone service. The City of Calgary recently awarded a semi-exclusive contract to the incumbent telephone provider (Talus) giving them the right of first refusal on locations requested by competitors. Their contract does not specify a minimum number of locations to be made available to the competitors.

The basic terms of the agreement with the competitive pay telephone service providers would be as follows:

· The City anticipates to receive a minimum licence fee of 15% of all gross revenue attributed to the phone

· Speed dial buttons will not be used for 9-1-1 calls

A condition for this semi-exclusive arrangement would be that BC Tel provide a premium return to the City, to be negotiated, over and above the basic terms listed above.

Option Two - BC Tel Exclusive

Another possible option is a BC Tel exclusive agreement. BC Tel has offered to renegotiate the current agreement with the City, which expires in 2005. A condition of an exclusive agreement would be that BC Tel provides a premium return to the City, to be negotiated, over and above the basic terms described in option one.

The City would still be able to gain a limited amount of experience with the competitors through their performance on private property locations or in other municipalities but this experience would not be first hand.

Option Three - Full Competition for Pay Telephone Service

With this arrangement, the City would allow new entrants into the City subject to their agreement to the standard terms and conditions outlined in option one. This would have the City entering into contracts with various new pay telephone service providers and BC Tel. Each application for a pay telephone location would be treated on a first-come first-served basis.

CONCLUSION

The questions raised at the May 6th meeting are addressed in this report. Staff recommend that a semi-exclusive arrangement with BCTel be negotiated to provide a premium return to the City. This arrangement will ensure an orderly transition to a competitive environment in the future when we have more experience with the new competitors and when the street furniture study is completed. Option 2, BCTel exclusive arrangement and Option 3, full competition, are presented as alternatives for consideration.

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