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HomeMy WebLinkAboutWD-39-98 v THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON X~~!5t~~X~~~x REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE c- \ File # Dl-.J .1<. JULY 13,1998 Res. # G PA'" 40:l.- (/7 By-Law # Date: Report #: WD-39-9B'i1e #: Subject: TELECOMMUNICATIONS - ACCESS TO MUNICIPAL RIGHTS-OF- WAY Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report WD-39-98 be received; 2. THAT the Federation of Canadian Municipalities (FCM) Action Plan on Telecommunications be received for information; 3. THAT Council endorse the following five principles outlined in the FCM Model Municipal Access Agreement: (a) municipal governments must have the ability to control the number and types of aboveground telecommunications pedestals, kiosks, etc., and the location of underground infrastructure; (b) the use of municipal rights-of-way by telecommunications companies must not impose financial costs on municipal governments and taxpayers; (c) municipal governments must not be responsible for the costs of relocating telecommunications infrastructure if relocation is required for planning or other reasons deemed necessary by the municipal government; (d) municipal governments must not be liable for any economic loss, legal costs or physical restoration costs resulting from the disruption of telecommunications services arising out of the actions of a municipal government unless grossly negligent; and (e) municipal governments must receive revenues over and above their direct costs in providing access to rights-of-way as proper compensation for the use of municipal property for profit. RECYCLED I'%;\, P4PIER PAPER '<:!:1 RECYCLE TH~ IS PRINTED ON RECYCLED PAPER 1 1 0 1 REPORT WD-39-98 PAGE 2 REPORT 1.0 ATTACHMENTS No.1: Correspondence dated July 23, 1997, from the Federation of Canadian Municipalities 2.0 BACKGROUND The FCM has written to municipalities across Canada asking for their political and financial support in its defence and promotion of municipal interests as they relate to use of municipal rights-of-way by telecommunications companies (refer to Attachment No. I). In particular, FCM is asking municipalities to: a) Formally endorse the five principles which form the basis of its model agreement on use of municipal rights-of-way by telecommunications compames; b) Refuse to sign any agreements with telecommunications firms which do not respect the five principles; and c) Contribute to a "Municipal Right-of-Way Defence Fund," which would be used to defend the municipal position before the CRTC and the courts, if necessary. 3.0 THE FIVE PRINCIPLES TO APPLY IN MUNICIPAL RIGHTS-OF-WAY AGREEMENTS 3.1 Often, substantial costs are imposed on Canadian municipalities from the use of their rights-of-way by telecommunications firms. For example: a) Municipal taxpayers are exposed to additional construction and maintenance costs for municipal infrastructure due to the presence of telecommunications duct banks in the rights-of-way, which can increase costs, for instance, by necessitating the locating, digging, and supporting of ducts to avoid damage. nz J __ ~ REPORT WD-39-98 PAGE 3 b) Municipalities are exposed to further costs if telecommunications equipment has to be relocated, and may be liable for any economic losses, legal costs, or physical restoration costs resulting from disruption of telecommunications services from municipal action. 3.2. In recognition of the financial impact incurred by municipalities across Canada and the taxpayers' right to be properly compensated for private use of public property, the FCM is asking member municipalities to endorse the following principles that would apply in negotiations with telecommunications firms: a) Municipal governments must have the ability to control the number and types of aboveground telecommunications pedestals, kiosks, etc., as well as the location of underground infrastructure. b) The use of municipal rights-of-way by telecommunications companies must not impose any financial burden on municipal governments and taxpayers. c) Municipal governments must not be responsible for the costs of relocating telecommunications infrastructure if relocation is required for urban planning or for other reasons deemed necessary by the municipal government. d) Municipal governments must not be liable for economic loss, legal costs or physical restoration costs resulting from the disruption of telecommunication services arising out of the actions of a municipal government. e) Municipal governments are entitled to receive revenues over and above direct costs associated with rights-of-way as compensation from corporations using public (municipal) property for profit, as federal and provincial governments do today. 3.2.1 FCM has prepared a model agreement reflecting the above principles, which municipalities could use in their negotiations with cable and telecommunications firms. 11 03 REPORT WD-39-98 PAGE 4 3.2.2 FCM is urging member municipalities to reject any agreements with telecommunications firms that are unwilling to abide by the principles. The FCM principles have been designed to seek legitimate compensation for the costs and risks imposed on municipalities through the use of municipal rights-of-way. 3.2.3. However, the FCM principles and progress on negotiations with telecommunications firms will be the subject of a future report by staff to Council. 3.3 CONTRIBUTION TO "MUNICIPAL RIGHTS-OF-WAY DEFENCE FUND" 3.3.1 All FCM member area municipalities have been requested to contribute to the "Municipal Right-of-Way Defence Fund" as a means of defraying the costs of defending municipal rights before the telecommunications industry and the CRTC. At the present time, the Municipality has not begun negotiating with the telecommunications firms and therefore payment to the fund may be unnecessary. 4.0 CONCLUSION 4.1 Staff concur with the recommendations as contained in this report, and will prepare a further comprehensive report to Council at a later date, as further details regarding this matter become available. Respectfully submitted, Reviewed by ~~ Stephen A. Vokes, P. Eng., Director of Public Works ~ W. H. Stockwell, Chief Administrative Officer ASC*SA V*ce 08/07/1998 attachment 1 i 04 ", Deputy Mayor Jae Eadie Winnipeg, Manitoba President President Maire suppleant Claude Cantin Quebec (Quebec) Premier vice-president First Vice-President Mayor Uopold Belliveau Moncton, New Brunswick Second Vice-President Deuxieme vice-president Councillor Joanne Monaghan !Gtimat, British Columbia Third Vice-President Troisicme vice-president Deputy Mayor Grant Hopcroft London, Ontario Vice-President at Large Vice-president hors-cadre James W. Knight Executive Director Directeur general * COUNCIL DIRECTION Federation of Canadian Municipalities Federation canadienne des municipalites 0-17 JUL 30 II 38 ~ff '97 July 23, 1997 Her Worship Mayor Diane Hamre Municipality of Clarington 40 Temperanc~ Street Bowmanville, .Ontario L 1 C 3A6 AGENDA Dear Mayor Hamre: TELECOMMUNICA TIONS: ACCESS TO MUNICIPAL RIGHTS-OF-WAY I am writing to provide an update on developments in the telecommunications field and their impact on municipal governments across . Canada. I am also writing to urge you to join with municipal governments across Canada in reviewing your municipality's policies respecting the granting of access to rights-of-way to telecommunications companies. The purpose is to ensure that no costs and liabilities are imposed on municipal governments and taxpayers as a result of the useot public rights-ot-way by the telecommunications industry. The federal TelecommunicationsAct (the Act), which came intq force in 1993, gave cable television companies the same legal iight of access to municipal rights-of-way which telephone companies had enjoyed tor years. Under the Act, telecommunications companies must obtain the consent of the municipality before accessing municipal rights-ot-way. If the municipality does not comply, companies may apply to the Canadian Radio-Television and Telecommunications Commission (CRTC) for access, thus circumventing the municipality. Neither the Act, the CRTC, nor Industry Canada, has provided guidance on what terms and conditions the CRTC would deem reasonable for municipal governments to set before granting access. .. ./2 REPORT WD-39-98 A TT ACI-MENT NO. 1 24, rue C1a(ence Street, Otrawa, Ontllrio KIN 5P3 . Telephonerrelephone: (613)241-5221 o FaxlTelecopieur: (613) 241-7440 International Office/Bureau international: Telephone/Telephone: (613) 241-84840 FaxlTelecopieur: (613) 241-7117 11 05 -2- Municipal governments shoulder both direct and indireGt costs and liabilities resulting from the use of their rights-of-way by cable television and telephone companies, both of which are feder~IIy regulated. As.a result of recent and impending federal deregulation of the telecommunications industry, competition, and technological convergence between services offered by cable television and telephone companies, those costs and liabilities are increasing rapidly. So too are the difficulties caused by the crowding of privately-owned infrastructure in public rights-of-way, especially in urban areas. Direct costs for municipal governments include: additional construction and maintenance costs for municipal sewer and water facilities due to the presence of telecommunications duct banks in the rights-of-way; reduced pavement life due to telecommunications cuts; administration of right-of-way access. requests, 'plan . reviews, approvals, inspections, staff .training;andadditional costs in relocating municipal and private infrastructure in rights-of-way when neCessitated forplanning, and development reasons. Indirect costs include: liability for economic losses, legal costs or phYSical restoration costs resulting from disruptions to telecommunications infrastructure and services caused by municipal crews; and lost opportunity costs through inadequate or non existent revenues from telecommunications firms using municipal property for profit, including both provincially/territorially regulated taxes and user fees negotiated directly between the municipal government and the telecommunications firm. In order to protect municipal taxpayers from the growing costs and liabilities arising from the use of rights-of-'way by telecommunications companies,. FCM developed and circulated a model Municipal Access Agreement to all member municipalities in .1995. FCM encouraged members to apply the FCM Model Agreement in negotiating access to their rights-of-way with telecommunications companies. The FCM Model Agreement was provided also to Stentor Telecom Policy Inc., the alliance representing Canada's major telephone companies, and the Canadian Cable Television Association (CCTA). The industry is now fully aware of municipal concerns respecting rights-of-way and agreements respecting the principles of the FCM Model Agreement have been negotiated, for example, in the Cities of Vancouver and Edmonton. FCM's position is that municipal governments must be able to control the quantity and location of telecommunications infrastructure on municipal property as well as acCess to municipal rights-of-way. Any costs and liabilities created as a result of the use of municipal rights-of-way should be borne exclusively by the corporations, not municipal governments and taxpayers. Finally, municipal governments should receive revenues over and abov.e their expenses as proper compensation for the use .../3 1 j G 6 " -3- of municipal property for profit. With video-on-demand, video game, Internet and competing telephone and cable television services available, FCM believes that telephone and cable television companies should no longer enjoy the rights and privileges of monopoly utility companies: Each municipal government in Canada has a responsibility to ensure that, in granting access to its rights-af-way, the interests of the community and taxpayers are]n no way compromised. During the past year, FCM refined its economic and legal arguments and continued to promote its position with member municipalities, the telecommunications industry and federal regulators. In February 1997, FCM made its first-ever intervention before the CRTC to insist that the municipal consent provisions of the Act be honoured by telecommunications firms before they begin work on municipal property. The case involved the applications by Bell Canada and Telus Multimedia Inc. to offer trial Internet and video-on-demand services in Repentigny, London, Edmonton and Calgary. The CRTC's ruling on May 8th neither supported nor opposed the municipal position, stating simply that no specific remedial actions were required at that time.. Municipal governments. have made it clear to FCM that they want to see national concerted action in defeJ;1ce of municipal rights. Through their experience in dealing with telecommunications firms, our members have concluded that working together through FCM is the most effective and economical means to protect their fundamental rights respecting control of rights-of-way, to recover substantial costs being imposed on them by telecommunications firms using rights-of-way, and to secure new sources of revenue worth potentially tens of millions of dollars annually. The stakes on this issue are enormous and affect every municipality in Canada. Municipal governments in the United States, for example, generate hundreds of millions of dollars annually from telecommunications companies in right-of-way access fees. FCM's Executive Committee has designated the telecommunications issue as a policy priority for 1997-98. FCM is implementing a national plan of action to raise awareness of the financial and liability implications for municipal governments, increase solidarity on the basic principles of the FCM Model Agreement, seek the agreement of the telecommunications industry to these principles, and to defend the municipal position before the CRTC Or the courts should this become necessary. Given the costs and difficulties associated with defending municipal rights before the multi-billion dollar telecommunications industry and the CRTC, the active political and financial support of all member municipalities on this issue is required. That is why the Action Plan includes a request to each member municipality for an equitable per ca'pita contribution to the "Munipipal Right-of-Way Defence Fund", .. ./4 1 j G 7 -4- I am pleased to report that FCM's Policy Statement respecting access to rights-of-way received.. the unanimous approval of delegates at FCM's 60th Anniversary Annual Conference held June 6-9 in Ottawa. I am equally pleased that the FCM Action Plan on Telecommunications received the strong support of the FCM Big City Mayors Caucus at its May 9th meeting in Quebec City. For your information, I have enclosed a copy of the Policy Statement, Model Access Agreement, Action Plan, and draft GUidelines for the Municipal Right-of-Way Defence Fund. I also enclose a copy of telecommunications motions which were adopted by the FCM Big City Mayors Caucus in May and should be adopted by each member council of FCM. I urge your council to adopt these motions at its earliest opportunity and to join in solidarity with municipal governments across Canada in defending the fundamental rights and interests of municipal governments. Numerous members of FCM have already done so and pledged or sent in their contributions to the Municipal Right-of- Way Defence Fund. These include Vancouver, New Westminster, Surrey, Edmonton, London, Metro Toronto and Pointe Claire. Please inform FCM of the results of this initiative in your community. I would also ask that you advise FCM of all new applications by telecommunications firms for access to rights-of-way and of any disputes with telecommunications firms which might exist or arise in your municipality. Yours sincerely, :. (~":~~rn:;.:..,:n. '.':' -'i-;;.~';'o:;:-~-;--.I i "'~' A"..." I. 10,' t J ,; '" I ! :~:.~:l!\ .'.___.._____~_ ! i :\:-;~< :W.._ -; f ::f';.II'~...:JlI ---. ;:: ._za', ~ .:;.....~ .":~~Ij r ... .r Ie' 1 ~?J :.. ""'-'.- n: _.. ..:. _"J:..~ __ , i f'llJPi ~.\.. I; -1 1.-':':._..':.- .~~~ -...--.T-....-..-..) !-..... -. .-.--. .- .,. --.i.n. .. _._____;l ;-. . ......._....t. '......_... _"_._ ,.,. '_....~.._~.__... JE/dm:sd Enclosures 1. Policy Statement 2. Model Access Agreement 3. Action Plan 4. Guidelines for Municipal Right-of-Way Defence Fund. 5. Telecommunications Motions for Action n' n ..."._J , i "... -- "'. -I. '--.' _'____'--1 -,-., '.~ -"-... -~-_..:-.. ...--....----...--.-J .,'.". - .......J.........-.......-....-.: . '.... .. ---f...--...--..._..i ; I . _~.-_ __ ."._ ..! J ,n' . . : ',. 0-:---' --Zy:--" C -" ... 11 '. ..-.... . -.","'.. .:.::- '~<~.,'~::':":::::!",'!".. 1 i G 8 July 18, 1997 MUNICIPAL RIGHT-OF-WAY DEFENCE FUND ADMINISTRATIVE GUIDELINES One or more test cases will be identified by the FCM Subcommittee on Telecommunications, which reports to the FCM National Board of Directors and Executive Committee via the Standing Committee on National Transportation and Communications. Should negotiations with the telecommunications industry prove unsatisfactory, a test case brought to the CRTC by a municipality in dispute with a telecommunications firm or vice versa shall be eligible for FCM political support and financial support from the Municipal Right-of-Way Defence Fund according to the criteria below. 1. Fund Contributions: A. Each FCM member municipality is requested to contribute 3~ per capita based on the 1991 census (basis of 1996-97 FCM membership billing); B. Municipalities which are members of regional govemments which own rights- of-way are requested to contribute 2rp per capita and the regional government is requested to contribute 1 rp per capita; C. Saskatchewan municipalities are requested to contribute 2~ per capita due to SaskTel's current exemption from Telecommunications Act; 2. Case Evaluation: A. The case must involve a CRTC-regulated telecommunications firm; B. The case should be encompassing enough to clearly demonstrate a precedent that may be referenced nationally; C. The case should be straightforward in that the request for access to rights-of- way and the requirement by the municipality for a formal agreement is clear; D. The case should be one that will not present undue hardship to customers where access to service is denied pending resolution; E. The affected municipality must be able to provide a documented history to the satisfaction of the FCM Subcommittee on Telecommunications; F. The municipality must be willing to provide, inasmuch as it is able, administrative time and financial support to the process for items such as research costs, in-house legal costs, report and administrative approvals, etc.. . . . ./2 1 i G 9 -2- 3. Disbursement of Funds A. All funds shall be used for outside costs relating to necessary research, meetings, legal work and other costs relating to negotiations with the telecommunications industry and interventions before tile CRTC and the courts, providing the work is done at the request of FCM. FCM will continue to provide in-kind support through staff salaries, supplies, etc.; B. Disbursements shall be approved by the National Board of Directors upon the recommendation of the Standing Committee on National Transportation and Communications and the Subcommittee on Telecommunications; C. In the event of insufficient time, disbursements may be approved by the Executive Director upon the recommendation of the Subcommittee on Telecommunications, in which case the Board of Directors shall be so advised at its next meeting; D. Only cases approved by FCM as described above shall be eligible for funding from the Municipal Right-of-Way Defence Fund. 1 1 0 -2- 4. Negotiations with Stentor, the CCT A and the Federal Government: Once the research is complete, FCM, in consultation with members, will launch a new round of negotiations with Stentor Telecom Policy and the Canadian Cable Television Association (CCTA) to try to reach agreement on the principles of the FCM Model Agreement. If a satisfactory agreement is reached, it would be presented jointly to the CRTC and Industry Canada as the basis upon which the Telecommunications Act should be interpreted. If a guarantee could be provided that the Act would, indeed, be interpreted in conformity with the agreement, the FCM campaign would end. Otherwise, a case would have to be brought to the CRTC either by FCM or the industry. 5. Hearings of the CRTC: Through its Subcommittee on Telecommunications, FCM will identify a , dispute between a municipality and a telecommunications firm which would best serve as a precedent case for all municipalities if brought before the CRTC. With the support of FCM, the member municipality in question will bring the dispute to the CRTC. Alternatively, FCM may be forced to defend a municipality in a dispute which the industry may bring to the CRTC. Depending on the length and complexity of the hearings, legal and other costs could range from $100,000 to $400,000. 6. Constitutional Court Challenge Stentor has suggested that it is prepared to mount a constitutional law challenge to the municipal consent provisions of the Telecommunications Act should matters not unfold to its satisfaction. Defending municipal rights in such a case could well cost more than intervening before the CRTC. Further fundraising as necessary would be undertaken should a constitutional court ch,allenge be mounted. j 1 (May 1997) Working together through FCM is the most effective and economical means for Canadian municipal governments to protect their fundamental rights respecting control of municipal rights-of-way, to recover substantial costs being imposed on them by telecommunications firms using rights-of-way, and to secure new sources of revenue worth potentially tens of millions annually. 1. Awareness and Solidarity: FCM will advise all member municipalities of the financial and liability implications of the rights-of-way issue and request municipal councils to endorse the five principles contained in the FCM Model Agreement and. commit to reject any agreements with telecommunications firms which do not respect these principles. 2. Fundraislng: FCM will start to raise funds from member municipalities. Member municipalities will be asked to contribute 3 cents per capita based on the 1991 census. In areas where both a regional municipality and its constituent municipalities are responsible for rights-of-way, the regional municipality will be asked to contribute 1 cent per capita and its constituent municipalities 2 cents per capita. All funds will be dedicated to the telecommunications issue for outside costs relating to necessary research, legal and other costs regarding interventions before the CRTC and the courts. FCM will continue to provide in-kind support through staff salaries and supplies. 3. Research on Legal Position and Valuation Principles: Once sufficient funds have been acquired, FCM will undertake research, using outside expertise where necessary, to prepare a strong legal position favouring. municipal authority over rights-of-way and to establish sound principles for the valuation of municipal rights-of-way in Canada. .../2 12 MOTIONS ON TELECOMMUNICATIONS FOR ADOPTION BY FCM MEMBERS .1.1 ; 1. ThaLeach member of FCM receive the FCM Action Plan on Telecommunications . ~ information; 2. that each member of Council of FCfv1' endorse the following five principles outlined in the FCM Model Municipal Access Agreementbefore: (a) municipal governments must have the ability to control the number and types of aboveground telecommunications pedestals, kiosks, etc., and the location of underground infrastructure; (b) the use of municipal rights-of-way by telecommunications companies must not impose financial costs on municipal governments and taxpayers; (c) municipal governments must not be responsible for the costs of relocating telecommunications infrastructure if relocation is required for planning or other reasons deemed necessary by the municipal government; (d) municipal governments must not be liable for any economic loss, legal costs or physical restoration costs resulting from the disruption of telecommunications services arising out of the actions of a municipal government unless grossly negligent; and (e) municipal governments must receive revenues over and above their direct costs in providing access to rights-of-way as proper compensation for the use of municipal property for profit. 3. that each member of Council establish a policy by resolution or by-law, as may be necessary, whereby access to municipal rights-of-way will be denied to any telecommunications firm which does not agree in writing to the five principles as set out above; 4. that each member municipality,. contribute; on a per capita basis",to the "Municipal Right-of-Way Defence Fund" as detailed in the enclosed Guidelirfes to be used by FCM to protect the fundamental rights of municipal govemments respecting control of municipal rights-of-way, to help municipal government recover substantial costs being imposed on them by telecommunications firms, and to help municipal governments secure new sources of revenue worth potentially tens of millions of dollars annually. fMotions adopted by the FCM Big city Mayors Caucus - May 9, 1991] i3 FEDERATION OF CANADIAN MUNICIPALITIES POLICY STATEMENT ON TELECOMMUNICA TION~ TELECOMMUNICATIONS - ACCESS TO MUNICIPAL RIGHTS-QF-WA Y HISTORY AND LEGISLATIVE BACKGROUND As telecommunications networks were built in Canada, it became common practice for municipal govemments to grant free right-of-way access to telecommunications companies. The new Telecommunications Act (the Act) came into force in 1993 and significantly deregulated the industry. In May 1995, the Canadian Radio-Television and Telecommunications Commission (CRTC) released a report entitled "Competition and Culture on Canada's Information Highway: Managing the Realities of Transition". In addressing the issue of competition, one of the three broad policy areas in the report, the Convergence Report stated that "there was wide support for the operating principle that 'fair' and 'substantial' competition is in the best interests of consumers". It went on to note that "competition is generally recognized as the best means of stimulating choice. . . and economic growth". The Convergence Report made no reference to access to municipal rights-of-way nor to the impact that deregulation will have on municipalities. EFFECT OF DEREGULATION ON MUNICIPAL GOVERNMENTS In 1994, FCM struck a national technical committee with representatives from municipalities across Canada to address the potential impact of deregulation on its members. It is clear from recent experiences of municipalities and a review of the Convergence Report and the Act that greater demand is being placed on the limited resources known as rights-of-way. Competition and convergence will mean more requests for access to these municipal rights-of-way in future. Whether due to new companies entering the fray, existing companies wanting to expand their network or from companies "crossing over," municipal rights-of-way are quickly becoming a scarce resource. All municipal govemments have to cope with rising administrative costs and increased liability associated with the presence of these infrastructures in their rights-of-way. The current general practice of providing access to rights-of-way with little consideration of municipal interests is fundamentally unfair, contravenes existing legislation and is inconsistent with the new reality of competition in the telecommunications industry. Under the Act, the right of telecommunications companies to use municipal rights-of-way is subject to municipal consent. Municipal governments may therefore set terms and conditions in return for granting access. Section 43 of the Act provides that "No Canadian carrier or distribution undertaking shall construct a transmission line on, over, under, or along a highway or other public place without the consent of the municipality or other public authority having jurisdiction over the highway or other publiC way." Deregulation and the rapid changes in technology affect municipal governments in two ways. First, with existing technology, telecommunication companies must use municipal rights-of- way. These rights-of-way can only contain a finite number of facilities, inclu~ing municipally owned infrastructure, various utilities and competing telephone an~ cable television wires. Second, a potential source of municipal r:evenue has been created which should allow for cost recovery as well . as additional compensation for the use of pUblic (municipal) assets for profit. i4 ). 2 In early 1995, FCM approached both the Canadian Cable and Television Association (CCTA) and Stentor Telecom Policy Inc. (representing major telephone companies across Canada) to negotiate a model agreement for access to municipal rights-of-way. Stentor noted that it had serious reservations regarding FCM's proposed model agreement, but would be prepared to discuss the matter with FCM. The CCT A also expressed a willingness for dialogue but, to date, no serious negotiations have taken place. FCM's focus since 1995 has been to educate member municipalities on the issue and further develop its position in defence of municipal rights under the Act. On behalf of all Canadian municipalities, FCM intervened in a case before the CRTC in February 1997 in defence of the requirement of municipal consent for access to municipal iights-of- way. In many cities, rights-of-way at many downtown intersections are already at capacity. Municipal govemments must have the ability to assign locations and control the alignments used by each utility and telecommunications company. In addition, it will likely be necessary for municipalities to require joint use of ducts and the construction of common facilities in the future. Above ground facilities including overhead lines, cabinets, kiosks and pedestals have implications Jor the enjoyment of property ~y. private owners and use of rights-of-way of way by citizens. In addition, where these facilities are placed in prominent locations, their negative visual impact reduces market value, thereby -affecting municipal property tax revenue. Municipal govemments must retain the right to determine the location of telecommunications facilities and to require that infrastructure be relocated beJow.grade. . FCM'S POSITION In FCM's model agreement presented to the telecommunications industry in 1995 and to the CRTC in February 1997, FCM established and defended five principles: 1. Municipal govemments must have the ability to control the number and types of aboveground telecommunications pedestals, kiosks, etc., as well as the .Iocation of underground infrastructure. . 2. The use of municipal rights-of-way by telecommunications companies must not impose any financial burden on municipal govemments and taxpayers. 3. Municipal governments must not be responsible for the costs of relocating telecommunications infrastructure if relocation is required for urban planning or for other reasons deemed necessary by the municipal government 4. Municipal governments must not be liable for economic loss, legal costs or physical restoration costs resulting from the disruption of telecommunications services arising out of the actions of a municipal government 5. Municipal governments are entitled to receive revenues over and above direct costs associated with rights-of-way as compensation from corporations using public (municipal) property for profit, as federal and provincial governments do today. SPACE ALLOCATION AND AESTHETICS/ENVIRONMENTAL C.ONCERNS FCM recognizes that all users of rights-of-way should be afforded access on an equitable ., basis. 'providing they endorse the principles outlined above and recogniZe that they have no right 15 3 to i~.~se ad~itional co~~ and liabilities on municipal governments and taxpayers as a result of their aCtivities. JOint use of limited space should be encouraged. The issue of reserve capacity whereby the first company into the right of way would be required to construct additional duct banks for jOint use, is being considered. COST TO MUNICIPAL GOVERNMENTSITAXPA YERS a) Out-of-Pocket Costs Sewer and water facilities are typically deeper than telecommunications facilities due to gravity flow and as proteCtion against freeze-up. Municipal sewer and water facilities are far more difficult to construct than telecommunications duct banks. Municipal taxpayers are exposed to additional construction and maintenance costs for municipal infrastructure due to the presence of telecommunications duct banks in the rights-of-way. '" These costs are due ~ acquisition of sufficient rights-of-way; difficult alignments due to alternate space occupied by duct banks; locating, hand digging and supporting ducts to avoid damaging them; precautions required to avoid employee injury; reduced pavement utility and life cycle due to utility/telecommunication cuts; and administration of rights-of-way, including plan review, approval and inspection. b) Relocation Costs FCM believes that, should relocation of telecommunications equipment become necessary, such should not be done at the cost of the municipality. It is agreed that if a developer's project necessitated the relocation, then that developer should pay the cost of such relocation. If, on the other hand, the relocation is necessitated by a municipality, it should not be responsible for any of the costs, regardless of how soon after installation the relocation was necessitated. Telecommunication companies use municipal rights-of-way knowing full well that ongoing municipal infrastructure maintenance and reconstruction is normal. Yet FCM is aware of one member municipality which needed to rebuild a bridge as it was no longer suitable for its primary purposes. That municipality and its taxpayers were expected to pay the cost of relocating the private telecommunication facilities attached to the bridge. Some measure of relocation is inevitable and this must be seen by utility and telecommunications firms as part of the cost of doing business. These firms must assume the full costs associated with necessary relocations' of their facilities. 'LIABILITY FCM believes that municipal governments should not pay for any economic losses, legal costs, or physical restoration costs resulting from the disruption of telecommunication services arising out of the actions of a municipality. Rather, the costs of using the rights-of-way should be borne by the user of the rights-of-way. This principle is to be employed even if municipal personnel are negligent . . 1 i 6 4 MUNICIPAL REVENUES As noted above. FCM believes that all out-of-pocket expenses incurred by a municipality in administering the JJse of its rights-of-way should be fully recoverable. The question of whether revenue over and above municipal out of pocket expenses should be sought is more controversial. Historically, municipal governments viewed the utility companies as franchises and as a result gave their consent without any consideration of revenue. In FCM's view, however, deregulation of the industry has forced municipal governments to reconsider the practice of granting access without compensation. FCM believes that private sector companies making profits using public rights-of-way should return some of the revenue to the municipality based on the carrier's gross revenue or meters of right-of-way used. In some jurisdictions in the United States, for example, telcos pay 5 % of gross revenues for access to municipal rights-of-way. FCM believes it is both more fair and consistent with the federal governmenfs user pay philosophy that costs associated with the use of rights-of-way by telecommunications firms be absorbed by the users as opposed to property tax payers. . MODEL ACCESS AGR~ENT A common approach can and should be taken on the issues embodied in the FCM model agreement The model agreement has been made available to all member municipal governments. It has also been the subject of preliminary discussions between individual municipalities and Stentor member companies as well as CCTA member companies. FCM understands that some telecommunications providers have already entered into agreements with host municipalities based on the FCM model agreement. FCM will continue to promote and defend municipal interests through the model agreement and in interventions or discussions with the CRTC and industry associations. Strategies FCM will: a) advise member municipalities to not sign agreements with cable and other communications companies that in any way vary with the basic principles outlined in the FCM model agreement; and b) advise member municipalities to inform FCM when approached by Stentor and CCTA . member companies to sign agreements. Adopted at the 1997 FCM Annual Conference 1 7 MUNICIPAL ACCESS AGREEMENT THIS AGREEMENT made this day of , 199 BETWEEN: (the "Municipality") AND: (the "Company") WHEREAS: (a) The Company operates a communications undertaking by transmitting signals and information through its facilities; (b) The Company is regulated by the Canadian Radio-Television and Telecommunications Commission to operate. in the.area designated in the Company's licence, such area including all or a portion of the land within the boundaries of the Municipality; (c) The Company wishes to install and maintain wires, fibre-optic cables, ducts, conduits, manholes and other accessories, structures and equipment (collectively, the "Equipment") in, on, under, over, along and across highways, stre~ts, road allowances, 1 8 - 2 - lanes, bridges, viaducts and any other ways open to public use (singularly a "Service Corridor" and collectively, the "Service Corridors") within the Municipality; and (d) The Municipality is willing to permit the use of Service Corridors where in its judgment such use will not interfere with its own service requirements and use of the streets including the consideration of the economy and safety and any rights or privileges previously conferred or hereafter conferred by the Municipality by contract or otherwise to others not parties to this Agreement to use any of the Service Corridors; NOW THEREFORE in consideration of the sum of TEN DOLLARS ($10) paid by each of the parties to the others and of the premises mutual covenants herein contained, the Municipality and the Company each agree with each other as follows: 1. The Municipality hereby agrees to permit the Company to use the Service Corridors for the purpose of installing, maintaining and removing the Equipment subject to the terms and conditions hereinafter set forth and in accordance with all federal, provincial and municipal statutes, laws and bylaws or other rules and regulations pertaining to the application and use of the Service Corridors or the Equipment. 2. The Company shall not install any of its Equipment in, on, under, over, along or across a Service Corridor or other Municipal-owned property without first obtaining the written approval of the Municipal Engineer with regard to the proposed location of the Equipment in, under, over, above and across the Service Corridor and second providing plans to the Municipal Engineer, setting out the location of the Service Corridor, copies of which are attached hereto as Schedule "A". 3. Prior to commencing work of any kind in, on, under, over, along or across a Service Corridor or other Municipal-owned property, including the installation, maintenance and removal of its Equipment, the Company shall obtain the prior written approval for such work from the Municipal Engineer and the Municipal Engineer ma.y establish the terms and 19 - 3 - conditions under which the work may be conducted by the Company. As a condition of such approval, the Municipality may, at its sole discretion, require that the Company submit detailed engineering plans to the Municipal Engineer with respect to the work to be conducted on a Service Corridor or on other Municipal owned property. 4. Despite Section 3, the Company may carry out routine maintenance, field testing and subscriber connections without the consent of the Municipality, but in no case shall it carry out any excavation without the Municipality's prior consent. 5. All work conducted by the Company on a Service Corridor or other Municipal- owned property, including installation, maintenance and removal of its Equipment, is subject to the following conditions: (a) all work shall be conducted and completed to the satisfaction of the Municipal Engineer, at the Municipal Engineer's sole discretion; (b) the portions of the Equipment which pass over or under existing utilities or cross. beneath streets shall be placed in a carrier pipe or be . . encased in concrete; (c) if the Company breaks the surface of a Service Corridor, it shall repair and restore the surface of the Service Corridor to substantially the same condition it was in before such work was undertaken by the Company and to the satisfaction of the Municipal Engineer. If the Company fails to repair and restore a Service Corridor to the satisfaction of the Municipal Engineer within twenty (20) days of being notified by the Municipality, the Municipality may effect such repairs and charge ~II normal Municipality costs related thereto to the . Company in accordance with paragraph 11 hereof; 1 ] 20 - 4 - (d) if the Municipality requires the installation, maintenance or removal of the Equipment to be stopped for any reason, the Company shall cease all such installation, maintenance, or removal of the Equipment forthwith upon receipt of notice from the Municipality; and (e) the Company is responsible for all installation, maintenance and removal of the Equipment including the cost of such work. 6. The Company represents and warrants to and covenants and agrees with the Municipality that: (a) after completion of any work related to the installation, maintenance, repair, replacement or removal of the Equipment, the Company shall leave the Service Corridors in a sanitary, neat, tidy and safe condition and free from nuisance, all to the satisfaction of the Municipal Engineer; (b) the Company shall not suffer or permit any lien to be filed or registered against the Service Corridors or other Municipal-owned property; (c) if this Agreement is terminated by the Municipality, all the unfulfilled covenants, indemnities and obligations of the Company hereunder shall survive such termination; and (d) the Municipality has made no representations or warranties as to the state of repair of the Service Corridors or the suitability of the Service Corridors for ~ny business, activity or purpose whatsoever and the Company hereby agrees to take the Service Corridors on an "as is" basis. 1 1 2 1 - 5 - 7. The Company shall provide "as built" drawings to the Municipality within two months of completing the installation of any of the Equipment. 8. The Company shall, at no cost to the Municipality, provide locations of its Equipment within 24 hours of receiving a request by the Municipality. 9, The Company shall provide to the Municipal Engineer a list of 24 hour emergency contact personnel for the Company and shall ensure that the aforementioned list is always current. 10. Upon receipt of thirty (30) days notice from the Mun,icipality, the Company shall, at its own expense, relocate its Equipment within a Service Corridor, or perform any other work in connection with the Service Corridor as may be required by the Municipality, provided that in cases of emergency, the Municipality may take any measures deemed necessary for public safety with respect to the Equipment that may be required in the circumstances as the Municipality shall determine, and the Company shall reimburse the Municipality for all expenses thereby incurred. 11. If the Company fails to complete the relocation of the Equipment in accordance with paragraph 10 or fails to repair the Service Corridors or do anything else required by the Company pursuant to this Agreement in a timely and expeditious manner to the satisfaction of the Municipal Engineer, the Municipality may, but is not obligated to, at its option complete such relocation or repair and the Company shall pay the cost of such relocation or repair to the Municipality forthwith plus an overhead equal to fifteen percent (15%) of such cost and in default of payment thereof, the amount of such cost with interest at the rate of two percent (2%) per annum above the prime lending rate of the Canadian Ir:nperial Bank of Commerce carrying on business in the Municipality shall be due and payable by the Company to the M,unicipality upon receipt by the Company of an invoice setting out such costs and interest. 1 J 22 - 6 - 12. The Municipality is not responsible, either directly or indirectly, for any damage to the Equipment that may occur during its installation, maintenance or removal by the Company, nor is the Municipality liable to the Company for any losses, claims, charges, damages and expenses whatsoever suffered by the Company including claims for loss of revenue or loss of profits, on account of the actions of the Municipality, its agents or employees, working in, under, over, along, upon and across its highways and Service Corridors or other Municipal-owned property, whether or not such damages, losses, costs, actions, causes of action, claims, demands, builders liens, liabilities, expenses, indirect or consequential damages (including loss of profits and loss of use) are related in any way to..negligence or wilful acts or omissions on the part of the Municipality, its officers, employees or agents. 13. The Company covenants and agrees to indemnify and save harmless the Municipality, its agents, officers, elected officials, employees and assigns from and against all losses, claims, including a claim for injurious affection, charges, damages and expenses which the Municipality may'at any time or times bear, sustain or suffer, by reason, or on account of the placement, installation, relocation, maintenance or use of the Equipment in, on, under, over, along or across a Service Corridor, and the Company will, upon demand and at its own sole risk and expense, defend any and all suits, actions or other legal proceedings which may be brought or instituted by third persons against the Municipality on any such claim, demand or cause of action, and will pay and satisfy any judgment or decree which may be rendered against the Municipality in any such suit, action or other legal proceeding, and will reimburse the Municipality for any and all legal expenses incurred in connection therewith. The Company's obligation to indemnify and save harmless the Municipality shall survive the termination of this Agreement. 14. This Agreement, shall commence upon the da.te of execution and shall, unless renewed, terminate 5 years ~fter the first day of the month in which the Agreement is executed. The Agreement shall automatically renew for successive 5 years period without limitation to the number of renewal periods unless either the Municipality or the 1 1 23 - 7 - Company give written notice of cancellation to the other not less than six (6) months prior to the expiration of this Agreement or any renewal term upon whi~h this Agreement shall terminate and on the day so named in such notice this Agreement and all rights and privileges thereund~r shall come to an end, provided that notwithstanding such termination the Company shall continue to be ,liable to the Municipality for all payments due and obligations incurred thereunder prior to the date of such termination. 15. The Company covenants and agrees to pay to the City an annual licence fee of _ for each year or portion thereof in which this Agreement is in effect to cover the approval and administration of the Agreement. 16. The Company further this covenant and agrees to pay _ % of its gross revenue as a fee for using the Service Corridors. 17. Security in a form acceptable to the Municipality in an amount equal to fifty percent of the construction 'costs of the installation of the Equipment shall be deposited with the Municipality prior to any construction. The security will be released by the Municipality to the Company upon acceptance of the installation of the Equipment by the Municipal Engineer. 18. The Municipality and the Company mutually agree that should the Company fan-to carry out any of the terms, covenants and conditions herein contained or default in any of its obligations under the terms hereof or fail within thirty (30) days after receiving written notice from the Municipality to correct any such failure capable of correction, then this Agreement shall thereupon be null and void and of no affect and .the Company shall thereupon remove all its Equipment from the Service.Corridors. 19. This Agreement shall be binding upon and shall enure to the benefit of the parties hereto and their respective suqcessors and assigns. The Company shall not 1 ] 24 - 8 - assign, transfer or sublet any rights or privileges granted hereunder without the prior written consent of the Municipality. 20. No use of a Service Corridor under this Agreement shall create or vest in the . Company any ownership or prope~ rights in a Service Corridor or any other property belonging to the Municipality, and the Company shall be and remain a mere non-exclusive licensee of the Service Corridor and placement of the Equipment in a Service Corridor shall not create or vest in the Municipality any ownership on property rights to the Equipment. 21. Nothing in this Agreement shall be construed as affecting any rights or otherwise of others not a party to this Agreement to use any Service Corridor in accordance with the Municipality's legal authority. 22. The Company agrees that it shall at its own expense procure and carry or cause to be produced and carried and paid for, full Workers' Compensation Board coverage for itself and all workers, employees, servants and other engaged in or upon any work. 23. The Company shall maintain insurance in sufficient amount and description as will protect the Company and the Municipality from claims for damages, personal injury including death, and for claims from property damage which may arise from the Company's operations in the Municipality under this Agreement, including the use or maintenance of the Equipment on or in the Service Corridors or any act or omission of the Company's agents or employees while engaged in the work of placing, maintaining, renewing or removing the Equipment and such coverage shall include all costs, charges and expenses reasonably incurred with any injury or damage. 11 25 - 9 - 24. In addition to the foregoing the Company covenants and agrees that: (a) the limits of liability for Personal Injury, Bodily Injury and Property Damage combined shall be for not less than Five Million ($5,000,000.00) Dollars for each occurrence; (b) the Comprehensive General Liability Insurance shall extend to cover the contractual obligations of the Company as stated within this Agreement; and (c) all policies shall provide that they cannot be cancelled, lapsed or materially changed without at least thirty (30) days notice to the Municipality by registered mail; and 25. Any notice required or permitted to be given hereunder or any tender or delivery of documents may "be sufficiently given by personal delivery or, if other than the delivery of an original document, by facsimile transmission to the Municipality at the following address: Fax Number. and to the Company at the following address: 1 1 26 - 10 - with a copy to: Any notice may also be given by prepaid registered mail mailed within the Province or Territory of and such notice shall be effective five (5) days following the date of mailing, except in the event that there shall be a disruption in postal services at the date of mailing, in which case notice shall be effective by personal delivery or a facsimile transmission as stated above. 26. This Agreement is the entire agreement between the Municipality and the Company regarding the subject of this Agreement and it can be amended or supplemented only by a document executed in writing by both the Municipality and the Company. 27. This Agreement benefits and binds the Municipality and the Company and the successors of each of them. 28. If any term of this Agreement is found to be invalid, illegal, or unenforceable by a court having the juri~9iction to do so, that term is to be considered to have been severed from the rest of this Agreement and the rest of this Agreement remains in force unaffected by that finding or by the severance of that term. 29. This Agreement creates contractual rights only between the Municipality and the Company and not an interest in the Service Corridors and the Company covenants and agrees with the Municipality that the Company shall desist always from any registration of this Agreement or of any right howsoever arising under it. 30. No alleged waiver or breach of this Agreement is effective unless it is an express waiver in writing of the breach in respect of which it is asserted against the party alleged to have given the waiver. No wavier by a party of any breach of this Agreement operates as a waiver of any other breach of this Agreement. 31. In this Agreement, unless the context otherwise requires, the singular includes the plural and the masculine includes the feminine gender and a corporation. 32. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Province or Territory of and the laws of Canada which may be applicable to a party in the Province or Territory of IN WITNESS WHEREOF the parties hereto have executed this Agreement by their duly authorized representatives. 11 27 - 11 - The Corporate Seal of the Municipality ) was hereunto affixed in the presence of: ) ) ) ) Mayor ) ) ) Municipal Clerk ) ) The Corporate Seal of the Company ) was hereunto affixed in the presence of: ) ) ) ) Authorized Signatory . ) ) ) Authorized Signatory ) ) ) CIS CIS 1 i 28 \