HomeMy WebLinkAbout2001-09-19 City Council6
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: UTILITIES
DATE:SEPTEMBER 19, 2001 CMR: 326:01
SUBJECT:RESOLUTION ADOPTING A CHANGE TO THE FEES FOR DARK
FIBER LICENSING
RECOMMENDATION
Staff recommends that the City Council approve:
1.The proposed Rate Schedule EDF-1, with revised prices for Dark Fiber Licensing,
and
2.A resolution to adopt the revised Utilities Rate Schedule EDF-1 for Dark Fiber
Licensing, which are subject to annual CPI changes.
BACKGROUND
On August 5, 1996, (CMR:361:96) Council approved the establishment and funding for a
dark fiber-optic ring in and around Palo Alto with the intent of enhancing the deployment
of advanced broadband telecommunications services in Palo Alto. The purpose of the
fiber ring was to provide for the licensing of a dark fiber network to telecommunication
service providers. This was intended to minimize the proliferation of multiple network
build-outs and provide competitive telecommunications services in Palo Alto.
As part of the dark fiber licensing business, a price structure was developed for licensing
dark fiber based on a formula that utilized a minimum and maximum price, with
discounts for distance, ring redundancy, quantity of fibers, and quantity of buffer tubes
(groups of 12 fibers) used. Prices were also established and utilized for advanced
engineering fees, interconnection fees, and drop cable management fees.
CMR:326:01 Page 1 of 3
Council formalized the pricing structure in the approval of the original contract with the
City’s first dark fiber license customer in April 1997. In March 2000 (CMR:164:00), the
pricing structure was amended to make dark fiber leasing more competitive for large
fiber counts over long distances. The only other price changes have been annual CPI
adjustments to Exhibit F-0 of the Council approved contract.
DISCUSSION
The Council-approved dark fiber license agreement (CMR: 177:97) allows the adjustment
of fiber fees annually for the local consumer price, index (CPI). Historically this
adjustment was recorded annually in a change to the exhibits to the license agreement.
However, staff recommends that the rate schedule EDF 1 also reflect the CPI adjustments
consistent with current practice under existing contracts. The attached EDF-1 is adjusted
to match the current applied CPI. In the future, the EDF-1 and the exhibits to the license
agreement will be adjusted at the same time.
In addition, staff has changed sections to the EDF-1 to more clearly address certain fees
and rates more clearly as described in the following summary:
Section C- III:
Section C- IV:
Section C- V:
Section D:
Group all discussion of backbone fees and discounts in one section.
Separate out and declare drop cable fees.
Adjust disconnection and reconfiguration fees to reflect true costs.
Adjust rates annually in accordance with the CPI.
RESOURCE IMPACT
Approval of the Rate Schedule EDF-1 will:
1. Improve customer understanding of the dark fiber rates and assist in the marketing of
the service, and
2. Recoup actual costs for disconnection and reconfiguration services.
CMR:326:01 Page 2 of 3
POLICY IMPLICATIONS
This recommendation does not represent a change to existing City policies and is
consistent with the Council approved Utilities Strategic Plan to deliver products and
services for competitive markets.
ENVIRONMENTAL REVIEW
Adoption of the resolution to establish Rate Schedule EDF-1 does not constitute a project
under the California Environmental Quality Act.
ATTACHMENTS
A: Resolution
B: Rate Schedule EDF-1
PREPARED BY:
DEPARTMENT HEAD:
CITY MANAGER APPROVAL:
Blake Heitzman
Interim Manager,
~of Utilities
EM~Y HARRISON
Assistant City Manager
CMR:326:01 Page 3 of 3
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
ADOPTING REVISED UTILITY RATE SCHEDULES EDF-I OF
THE CITY OF PALO ALTO UTILITIES RATES AND CHARGES
PERTAINING TO DARK FIBER LICENSING SERVICES
The Council of the City of Palo Alto does hereby RESOLVE as
fol!ows:
SECTION i.Pursuant to Section 12.20.010 of the Palo
Alto Municipal Code, Utility Rate Schedule EDF-I (Dark Fiber
Licensing Services) is hereby amended to read in accordance with
Sheets EDF-I-I through EDF-I-3, inclusive, attached hereto and
incorporated herein. The foregoing Utility Rate Schedule shal!
become effective September 19, 2001.
SECTION 2.The Council finds that the revenue derived
from the authorized adoption enumerated herein shall be used only
for the purposes set forth in Article VII, Section 2, of the
Charter of the City of Palo Alto.
SECTION 3.The Council finds that the adoption of this
resolution does not constitute a project under the California
Environmental Quality Act, California Public Resources Code section
21080, subdivision (b) (8).
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Mayor
APPROVED:
City Attorney City Manager
Director of Utilities
Director of Administrative
Services
DARK FIBER LICENSING SERVICES
UTILITY RATE SCHEDULE EDF-1
A.APPLICABILITY:
This rate schedule applies to various customers receiving Dark Fiber Services from the City of Palo Alto
Utilities (CPAU). The schedule specifies that interconnection fees must be prepaid by the customer to
Connect its facilities or buildings to the City’s Dark Fiber Network (BackBone). The schedule also specifies
the annual usage fees in return for the privilege of using the Backbone.
B. TERRITORY:
Within the incorporated limits of the City of Palo Alto and land owned or leased by the City.
C.FEES:
I. ADVANCED ENGINEERING FEES:
The Advanced Engineering Fee is a non-refundable fee required for preparing an engineering
study which produces a detailed estimate of the cost and time required for the City of Palo Utilities
to provide customers dark fiber connectivity. If the project is constructed, the Advance
Engineering Fee will be credited against the Interconnection Fee. The Advanced Engineering Fee
is required to start any project and is charged in multiples, based on the number of laterals
proposed, ok singularly, if only the Backbone is involved.
Advanced Engineering Fee (per project or per new lateral proposed) ..................................$500.00
Special Conditions (projects requiring expert assessment) ............................................By Estimate
DARK FIBER INTERCONNECTION FEES:
The Dark Fiber Interconnection Fee covers the cost of installing lateral connections and associated
equipment as specified in the Advanced Engineering Study. The Dark Fiber Interconnection Fee is
project-specific, the value of which is a resultant of the Advanced Engineering Study.
Dark Fiber Interconnecfion Fees ....................................................................................By Estimate
Ill. DARK FIBER BACKBONE LICENSE FEES:
The current values or ranges for each of these price components are shown below for 2001 billing.
The License Fee includes the cost of splicing the Backbone at all intermediate Splice Points.
Fiber Price Range:
The minimum rate (P~) is $522 per fiber mile per year ($/FMY)
The maximum rate (Pmax) is $2,905 per fiber mile per year ($/FMY)
Fiber Discounts: The following discounts apply.
Fiber quantity discount: The discount for quantifies of fibers licensed on a specific path ranges
from $0 tO $581 per fiber mile per year ($/FMY).
Buffer tube discount: The Discount for numbers of full buffer tubes licensed on a specific path
ranges from $0 to $581 per fiber mile per year ($/FMY).
Route length discount: The route length discount ranges from $0 to $755 per fiber mile per year
($/FMY).
Ring topology discount: The ring topology discount for customers contracting for complete tings
ranges from $0 to $232 per fiber mile per year ($/FMY).
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes original EDF-1 dated March 15, 2000
CITY OF PALO ALTO
UTILITIES
Effective 9/19/2001
Sheet No.EDF- 1-1
DARK FIBER LICENSING SERVICES
UTILITY RATE SCHEDULE EDF-1
Length of term discount : The discount for contracting for terms of greater than one year ranges
from $0 to $454 per fiber mile per year ($/FMY).
Public benefit discount: The discount for public facilities providing substantial public benefit
ranges from $0 to $2,383 per fiber mile per year ($~MY).
IV.DARK FIBER LATERAL CONNECTION FEES:
If a lateral connection requested by the Licensee cannot be installed in existing conduit, or
attached to existing poles from the first demarcation point to the second demarcation point, then
the Licensee may request that the City install new conduit and cable at the Licensee’s sole
expense. In either occasion, the Licensee shall pay an annual Drop/Custom Cable Management
Fee.
Drop Cable Management Fees (per Foot, for the first 12-Fibers) ..................................$0.10-$0.55
Drop Cable Management Fees (per Foot, each additional set of 12-Fibers) .............................$0.55
Custom Cable Management Fees (per Foot, for the first 12-Fibers) .........................................$2.81
Custom Cable Management Fees (per Foot, each additional set of 12-Fibers) .........................$0.55
V.DARK FIBER DISCONNECTION AND RECONFIGURATION FEES:
A Dark Fiber Disconnection Fee will be charged to disconnect any Lateral Connection from the
Backbone. This Fee is required to disdonnect any project and is charged in multiples, based on the
number of laterals requested, or singularly, if only the Backbone is involved.
Dark Fiber Disconnection Fees (per project or per new drop cable disconnected) ...............$320.00
Reconfiguration Fee .......................................................................................................By Estimate
VI.OTHER DARK FIBER FEES:
If the above Fees for a full or partial Contract Year are not paid as required, an Administrative
Charge for processing and simple interest on the unpaid shah accrue and shah be payable until
paid.
Fee for Unpaid Balance of Fees (per month) .......................................................1% of the Balance
Administrative Charge due to Unpaid Balance .....................................................................$200.00
Minimum Total Annual Dark Fiber License Fee ...............................................................$4,378.00
D.SPECIAL NOTES:
1.PREPAYMENT OF FEES:
All advanced engineering fees must be paid, in advance, prior to the scheduling of any investigation
and project estimation. Adjustments will be made if the project requires special conditions. (e.g., high
voltage expertise, pole assessments expertise, etc.).
All interconnection fees must be paid, in advance, prior to the scheduling of any construction or
connection to the City’s Backbone. Customers are responsible for the actual costs. Adjustments will
be made if actual costs vary significantly from estimated costs.
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Supercedes original EDF- 1 dated March 15, 2000
CITY OF PALO ALTO
UTILITIES
Effective 9/19/2001
Sheet No.EDF- 1-2
DARK FIBER LICENSING SERVICES
UTILITY RATE SCHEDULE EDF-1
All recurring Dark Fiber License Fees must be paid to the City aunually, and in advance, in return for
the privilege to use the Licensed Fibers.
2.DARK FIBER PRICING METHODOLOGY:
The City will license Dark Fiber to all interested parties that are willing to agree to the terms and
conditions associated with the Council-approved license agreement. Access and pricing will be
offered in a competitively neutral, non-discriminatory manner. Actual prices paid by a licensee will be
established on a case-by-case basis in accordance with a consistent set of pricing principles that will
be used to determine the pricing for all licensees.
The Annual License Price is a calculated value described by the following parameters: $ per fiber mile
per year ($/FMY). The Annual License Fee is equivalent to [Price] x [Quantity]. Quantity refers to the
number of fiber-miles (FM) actually licensed by the customer.
The annual charge for licensed Dark Fiber on the Backbone will be calculated to be the greater of:
1. the minimum charge for the Licensed Fibers, or
2. the maximum charge for the Licensed Fibers, reduced by the sum of all price discounts to which
the Licensee may be entitled, in accordance with the following formula:
Fiber Price = max [ Pmin, Pmax -- Applicable Discounts]
3.TERM OF LICENSE:
The minimum term for all License Agreements is 1 year. The maximum term is currently limited to
10 years.
4. ANNUAL FEE ADJUSTMENTS:
All fees are subject to annual consumer price index (CPI) adjustments as of January 1 of each year.
CITY OF PAL0 ALTO UTILITIES
Issued by the City Council
Supercedes original EDF-1 dated March 15, 2000
CITY OF PALO ALTO
UTILITIES
Effective 9/19/2001
Sheet No.EDF- 1-3