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ITEM 23
City Council Memorandum Development Services Memo No.
DS22-017
Date:
September 22, 2022
To:
Mayor and Council
Thru:
Joshua H. Wright, City Manager
Andy Bass, Deputy City Manager
Ryan Peters, Strategic Initiatives Director
Derek D. Horn, Development Services Director
Louis Kneip, Development Engineering Manager
From:
Dennis Aust, Telecommunications and Utility Franchise Manager
Subject:
Adoption of Resolution No. 5615, authorizing a license agreement between Level 3 Communications, LLC, and the City of Chandler for the Use of Public Property for the Establishment of Class 4 and Class 5 Communications Systems.
Proposed Motion:
Move City Council approve Resolution No. 5615, authorizing the Mayor to execute the license agreement between Level 3 Communications, LLC, and the City of Chandler for the Use of Facilities in the City’s Rights-of-Way and Public Places to Establish Class 4 and Class 5 Communications Systems, and authorizing the City Manager or designee to execute other documents as needed to give effect to the agreement.
Background:
Level 3 Communications (a subsidiary of CenturyLink Communications) has filed an application with the City to install, operate and maintain an underground fiber communications system that may provide both Class 4 telecommunications (lit services) and Class 5 non-telecommunications services (dark fiber). The agreement provides terms for both services and is similar to agreements the City has with other providers. This item is for a five-year nonexclusive agreement.
In 2013, Level 3 acquired a license with Chandler and, in 2014, Time Warner Telecom acquired a license with Chandler. In 2016, Level 3 acquired Time Warner Telecom and, in 2017, Level 3 became part of CenturyLink. This agreement consolidates both the Time Warner Telecom network agreement and the Level 3 network agreement under one license. The combined network footprint totals 40,418 linear feet. All future expansions of the network are anticipated to be done under the umbrella of the CenturyLink Communications brand, which enjoys certain privileges as the incumbent local exchange carrier for telecommunications in Chandler.
Financial Implications:
The City has received a $3,000 application fee to cover the City’s cost for the processing of this application. A transaction privilege tax of 2.75% will be paid on any non-interstate telecommunications services (Class 4). Fiber that is not exempted by federal or state law and is used for non-telecommunications services (Class 5) is subject to an annual $2.46 per linear foot fee as prescribed by the City’s Fee Schedule. Based on the existing 40,418 linear foot network, Level 3 is expected to pay $99,428 annually to the City.
Attachments
Resolution No. 5615
Agreement for Use of Public Property
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