DEPARTMENT: Finance Department
DEPARTMENT HEAD: Ben Gorzell
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT:
License agreement with Unite Private Networks, LLC, for communication equipment installation in the City Rights-Of-Way.
SUMMARY:
Ordinance approving a license agreement with Unite Private Networks, LLC, a Delaware Limited Liability Company ("UPN") for the use of city rights-of-way for the installation of communications network.
BACKGROUND INFORMATION:
Local Government Code Chapters 283 and 284 grant access to the City's rights-of-way (ROW) for communication companies to install equipment for local exchange telephone service and small-cell networks respectively. Those chapters prescribe regulatory and compensation methodologies for that ROW access. However, some communications companies are installing equipment beyond the scope of Chapters 283 or 284, for which the City receives no compensation under state law. Examples of these services include data center collocation, Ethernet and cloud services.
City Staff negotiated a non-exclusive license agreement with UPN to provide compensation of 3% of gross revenues for those services not addressed by Chapters 283 or 284. The compensation amount agreed to by UPN is identical to that previously agreed to by Zayo and Google Fiber. The agreement includes an audit provision and provides for compliance with City's ROW Management Ordinance and Excavation Manual.
The term of the agreement is twenty (20) years with two successive five (5) year terms. Each party may request amendment to the agreement on the 5th anniversary of the agreement and each subsequent five (5) year period within the term.
ISSUE:
Approval of the License Agreement will provide a mechanism for Communications Companies to provide compensation for services not currently addressed in the Local Government Code.
ALTERNATIVES:
If the license agreement is not approved, a gap in the ROW compensation structure for Com...
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