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HomeMy WebLinkAbout03-10-1995 City Council agendaI 13777 FRUITVALE AVENUE SARATOGA, CALIFORNIA 95070 (408) 867 -3438 COUNCIL MEMBERS: March 10, 1995 Ann Marie Burger Paul E. Jacobs Gillian Moran To: City Council Karen Tucker Donald L. Wolfe From: City Manager Subject: Reservation of Rights Letter With Pacific Bell RECOMMENDED ACTION 1. Move to approve the reservation of rights letter and direct the City Manager to execute same on behalf of the City. 2. Direct the City Manager to continue negotiations with Pac Bell to conclude a formal agreement for construction of a fiber optic system in the City for approval by the City Council. BACKGROUND As the City Council is aware, the staff has been meeting for some months with representatives from Pacific Bell to negotiate an agreement with them which allows the company to rebuild its telephone transmission lines using fiber optics. At the same time the staff has been working with staff representatives of other cities in Santa Clara County to develop a master construction agreement for the Pac Bell rebuild conversion to allow broad band services, including "video dial- tone" for all Pac Bell customers in the county. This process is proceeding and should be completed in the next couple of months. Pac Bell has also been pursuing its rebuild program in other parts of the state and has just recently completed an agreement with the City of San Diego which Pac Bell is suggesting as a model for use by other cities rather than the model master agreement being prepared by the local cities staff group. In the interim Pac Bell is requesting that the City approve a reservation of rights letter which would allow Pac Bell to undertake preliminary, pre- construction work in Saratoga which would take from four to eight weeks to complete. DISCUSSION Pac Bell initially presented a reservation of rights letter which would have allowed all work to commence, including construction, without reference to the formal execution of any future agreement. Rather, both pending federal legislation and regulation would act as the "contract" by which Pac Bell would construct and operate the Printed on recycled paper. as the "contract" by which Pac Bell would construct and operate the new fiber optic system. This is unacceptable to the City staff for a number of reasons. Primarily it is because the letter does not address any of the telecommunications policy issues which the City Council has adopted. Also, it will be some time before federal legislation is enacted and then transferred into Federal Communications Commission (FCC) regulations. Developing a stand alone agreement using either the San Diego model or the local cities model will give the City much greater safeguards that its concerns are being properly addressed before construction goes forward. As a result the City Attorney, working with the City staff, has redrafted the reservation of rights letter consistent with the discussions held with Pac Bell representatives on February 14th and contained in my letter to George Granger of Pac Bell on February 15th. This letter is attached to this report as is the original reservation of rights letter submitted by Pac Bell. The revised letter allows Pac Bell to do preliminary pre- construction work, following an appropriate period of public notification, and contemplates that a formal agreement would be negotiated and presented to the City Council in a couple of months. The revised letter was sent to Pac Bell in early March for review and approval but as of the writing of this report (March 10th) the staff has not received a positive reply. Nevertheless, this letter is as far as the staff feels it is prudent for the City to proceed as this time and, therefore, the letter is being brought to the City Council for approval. CONCLUSIONS AND RECOMMENDATIONS It is the conclusion of staff that if Pac Bell accepts this reservation of rights letter that we can successfully conclude negotiations on a formal agreement by early May. If they cannot accept the approach contained in the letter then like Milpitas the process may be a protracted one extending into the summer. While all of us are anxious to have this new system constructed and in place to provide new and expanded service to telephone customers in almost all areas of the City, we are not anxious to do so if the rights and concerns of the City are not fully safeguarded and addressed at the same time. It is therefore the recommendation of the staff that the City Council approve the reservation of rights letter and that it further instruct staff to continue negotiations with Pac Bell to complete a formal agreement consistent with the telecommunications policy of the City for further review and approval by the City Council once negotiations have been completed. Attachments: 1. Pac Bell Reservation of Rights Letter dated 2/14/95 2. City Letter to George Granger dated 2/15/95 3. City Attorney Redrafted Reservation of Rights Letter Christopher L. Rasmussen 2600 Camino Ramon, Room PACI FIC BELL Senior Counsel San Ramon, California 94583 rte. (510) 823 -8387 A Pacific Telesis Company February 14, 1995 Mr. Harry Peacock City Manager 13777 Fruitvale Avenue Saratoga, California 95470 Dear Mr. Peacock: I have been asked to communicate with you respecting our broadband deployment plans. As you know, we have had a number of conversations with the City relating to our deployment of an advanced broadband telecommunications network throughout California, including within the City of Saratoga. We are upgrading our existing telephone network in Saratoga to enable us to bring a number of exciting new video and telephony services to the residents of Saratoga. In George Granger's letter of January 6, 1995, we clarified several issues of specific concern to you. We are currently negotiating with the Joint and Telecommunications Group of South Bay Cities, of which Saratoga is a member, a Master Agreement and Settlement which involves our construction and installation of telephony and video dialtone "VDT facilities in the public rights of way within the City's limits and our provision of VDT services to the residents of Saratoga. Because of the possibility of federal legislation which may give the City some authority to regulate such construction, installation and provision of VDT Services, we will agree that the City may reserve any and all rights it may have in the future to regulate or otherwise condition our use of VDT facilities for purposes other than the transport of common carrier and/or telephone services. In return the City agrees to expeditiously issue all necessary permits to allow us to construct and operate such VDT facilities. We agree that the City's issuance of such permits is not a waiver of, and is without prejudice to any right of the City to regulate such VDT facilities, for purposes other than common carrier and telephone services. In return you agree that our acceptance of such permits is not a waiver of, and is without prejudice to any right of ours to contest such regulation by the City. This agreement will be superseded by the above referenced federal legislation and/or Master Agreement, if and when either becomes effective. This Agreement is intended to be a condition to each and all permits issued pursuant hereto. L If these terms and conditions are acceptable to the City, please sign below. Please do not hesitate to call me at (510) 823 -8387 to discuss the matter. Respectfully yours, Christopher L. Rasmussen Senior Counsel Accepted and Acknowledged: (Signature) (Title) (Address) cc: George Granger Tricia Palermo 2 0106640.01 J Sg R. r ill 13777 FRUITVALE AVENUE SARATOGA, CALIFORNIA 95070 (408) 867 -3438 COUNCIL MEMBERS: February 15, 1995 George Granger External Affairs Director Pacific Bell 145 South.Montgomery Sreeet, Rm. 153 San Jose, CA 95110 Subject:.Our Meeting of February 14, 1995 Dear Mr. Granger: Ann Marie Burger Paul Jacobs Gillian Moran Karen Tucker Donald L. Wolfe This letter summarizes our discussion regarding Pac Bell's interest in proceeding to install its fiber optic system in the Saratoga service area. We discussed my December 15, 1994, letter to you which summarized the content of our previous meeting and your written reply. We clarified our concerns regarding universal access and agreed that the issue to be addressed is how residents who live within the corporate limits of the City but not within the Pac Bell service area will be able to avail themselves of the new services the fiber optic system will make possible. We further agreed that an approach to undertake would be to develop a listing of the services to be provided and how someone who is outside the Pac Bell service area will be able to access such services even though they are in the GTE service area of the City.. Of particular importance to the City is the availability of community access programming which is created by the City and West Valley College in both a live and pre- recorded format. We clarified that Pac Bell will meet or exceed all current customer service standards of the FCC, the State and the City. Larry Perlin will provide your office with a copy of the local standards contained in the City Code. We clarified that Pac Bell agrees to compensate the City through a 5% fee on video programming services. We also indicated that, like San Jose, we are exploring the development of a telecommunications service tax which would be levied on telecommunications service users but collected by the service provider much as our current utility users tax on natural gas and electricity is levied on the user but collected by PG &E. Printed on recycled paper. George.Granger February 15, 1995 Page: 2',''. We clarified that the privacy issue can be readily satisfied by Pac Bell's standard operating methods as regulated by the CPUC. We clarified that the technology issues, especially access by the City as noted above for direct broadcast and interconnection to other providers, i.e. GTE, is something which Pac Bell can accomplish. We also discussed a proposed approach to public education and notification based upon the approach Pac Bell has developed and is currently using in the City of San Jose. This approach seems adequate for Saratoga but needs to be coordinated with our Public Works Department before system installation gets underway. 'We discussed the possibility of finding a way to "fast track" Pac Bell's efforts so that Pac Bell can sustain a schedule of work in Saratoga and still meet the needs of the City in terms of written agreements on the above and other technical items. You indicated that Pac Bell is ready to start preliminary, non construction work in Saratoga within four to six weeks. This preliminary work would involve clearing space on existing utility poles for new cable and starting to work with local residents and the City regarding the placement of the node pedestals and connection cabinets for each 480 parcel service node. We stress that we feel it is important to have press notice at least a month in advance of the commencement of this work so the community can be properly notified that Pac Bell personnel will be working throughout the various neighborhoods and in people's back and /or side yards, adjusting lines on existing utility poles. We also need to make certain this work. is coordinated with the work currently underway by the City's cable franchise operator who is finishing up the final neighborhoods with its own fiber optic installation. To this end we discussed two possible avenues down which to proceed. The first would be through the City signing a reservation of rights document which would allow Pac Bell to commence this preliminary work in anticipation of Pac Bell and the City completing a more formal document prior to authorization to commence the actual construction of the fiber optic system. The second would. be to attempt to formalize an agreement or understanding and seeking City Council approval for that document prior to commencement of preliminary work. Two possible forms of the agreement were discussed. The first was the draft agreement developed by the telecommunications working group of Santa Clara County cities which has been circulating since last November. As I understand it, Pac Bell has not as yet responded with its proposed amendments to such an agreement and did express concerns r George...Granger February 15., 1995 Page. 3'.. to us in our meeting that the agreement follows too closely a standard cable television franchise agreement.. Pac Bell feels that this is inappropriate.. The second form, tendered by Pac Bell, is the agreement recently completed with the City of San You furnished us with a copy of that agreement to review and mark up as necessary. We concluded that we would proceed as follows: 1. We would review the reservation of rights letter over the next couple of weeks and amend it to fit our discussions, targeting presentation of the letter to the City Council for approval at its March 15th meeting. 2. At the same time we would review the San Diego agreement and, using it as a model, develop amore formalized understanding of the conditions upon which Pac Bell could proceed to install its fiber optic network. 3. We would attempt to complete review of both documents in time to present same to the City Council on March 15th. However, it is more probable that only the reservation of rights letter would be ready at that time. The letter, if approved by the City Council, would allow Pac Bell to commence preliminary work, as defined, but preclude Pac Bell from commencing actual construction until the formal agreement is approved by the City Council. Finally, let me say that I appreciate the very professional, sensitive approach you and the other representatives from Pac Bell have used in discussing this matter with us. I know that this is of great importance to the company and ultimately to its customers who are our constituents. You have listened carefully to the concerns raised by the City and to the needs we see the system has to address from the perspective of public service. If you have .a different understanding of the content and outcome from our meeting, please reply in writing ASAP. That way we can hopefully iron out any differences and still stay on schedule. Sincerely, Harry Peacock City anager HRP:hrp:jm CC: City Council City Attorney Public Works Director March 14, 1995 Christopher L. Rasmussen Senior Counsel Pacific Bell 2600 Camino Ramon, Room 2W901 San Ramon, CA 94583 Dear Mr. Rasmussen: This reservation of rights letter is with respect to Pacific Bell's broadband deployment plans. As you know, the City has had a number of conversations with Pacific Bell relating to Pacific Bell's deployment of an advanced broadband telecommunications network throughout California, including within the City of Saratoga. Pacific Bell is upgrading its existing telephone network in Saratoga to enable it to bring a number of new video and telephony services to the residents of Saratoga. Pacific Bell is currently negotiating with the Joint and Telecommunications Group of South Bay Cities, of which Saratoga is a member, a Master Agreement and Settlement which involves Pacific Bell's construction and installation of telephony and video dialtone "VDT") facilities in the public rights of way within the City's limits and Pacific Bell's provision of VDT services to the residents of Saratoga. Because of the possibility of federal legislation which may give the City some authority to regulate such construction, installation and provision of VDT services, Pacific Bell agrees that the City may reserve any and all rights it may have in the future to regulate or otherwise condition Pacific Bell's construction and use of VDT facilities for purposes other than the transport of common carrier and /or telephone services. This letter is not intended to allow Pacific Bell to.begin underground construction work in Saratoga, nor to prevent Pacific Bell from beginning aerial construction including clearing space on existing utility poles for new cable and beginning to work with local residents and the City regarding the placement of the node pedestals and connection cabinets for each 480 parcel service node. Pacific Bell shall provide notice at least one month in advance of the commencement of any such work so that the community is notified that Pacific March 14, 1995 Page 2 Bell personnel will be working throughout the various neighborhoods and in people's back and /or sideyards, adjusting lines on existing utility poles. In no event, shall the permission granted by this letter or any aerial construction related thereto be construed to, nor shall it allow Pacific Bell to commence underground construction of the VDT facilities until encroachment permits are issued or a Master Agreement is agreed upon. Pacific Bell agrees that the City's issuance of such permits is not a waiver of and is without prejudice to any right of the City to regulate such VDT facilities, for purposes other than common carrier and telephone services. This agreement will be superseded by a Master Agreement if and when such Master Agreement becomes effective. This agreement is intended to be a condition to each and all permits issued pursuant hereto. If these terms and conditions are acceptable to Pacific Bell, please sign below. Please do not hesitate to call me at (408) 867 -3438 to discuss the matter. Very truly yours, Harry Peacock City Manager Accepted and Acknowledged: (Signature) (Title) (Address) cc: Michael S. Riback, City Attorney City Council Don Brown, City of Cupertino mnrsw \273 \ltr \1995 \rasmussn.msr