Report Prepared by: Jeff Bennyhoff, Director of Information Technology
Title
SUBJECT: Adoption of a Resolution Approving a Master License Agreement (“MLA”) Template to Utilize City-Owned Vertical Infrastructure Within the City’s Public Right-of-Way for Small Cell Telecommunication Facilities
REPORT IN BRIEF
Considers the adoption of a resolution approving a template for a master license agreement for small cell telecommunication facilities on City-owned vertical infrastructure within the public right-of-way; and authorize the City Manager or Deputy City Manager to execute MLAs with wireless telecommunication providers.
RECOMMENDATION
City Council - Adopt a motion:
A. Adopting Resolution 2021-108, a Resolution of the City Council of the City of Merced, California, approving a Master License Agreement (MLA) template to utilize City owned vertical infrastructure within the City’s public right-of-way for small cell telecommunication facilities; and,
B. Authorizing the City Manager or the Deputy City Manager to execute future MLAs with telecommunication carriers and execute all necessary documents; and,
C. Authorizing the Finance Offer to collect revenue and appropriate funds from all MLAs.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to modifications as conditioned by Council; or,
3. Refer to staff for reconsideration of specific items as requested by Council; or,
4. Deny; or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Merced City Charter section 200
CITY COUNCIL PRIORITIES
Adopted FY 2021/22 Goals & Priorities
DISCUSSION
The City owns hundreds of streetlight poles and other vertical infrastructure in the public right-of-way that can be utilized for small cell wireless communication facilities. Telecommunication carriers have a strong desire to place active electronics, known as “Small Cells” to increase the coverage and speed of their networks on City owned vertical infrastructure. Traditionally these Small Cells provide 4G and 5G internet services, but the carriers could also provide other telecommunication services on the vertical infrastructure as well.
In September 2018, the Federal Communication Commission (“FCC”) released a Declaratory Ruling and Third Report and Order (18-133). The order changed provisions in the Telecommunication Act that limits the compensation and discretionary/regulatory authority that local governments may impose on wireless communication providers for access to their vertical infrastructure. One example of this discretionary/regulatory authority change is the City must approve all small cell vertical infrastructure applications within 90 days. This 90-day windows is colloquially known as a the “Shot Clock”. If the City does not approve the application within 90 days the application is automatically “Deemed“ approved via this Third Report and Order ruling 18-133.
The Third Report and Order (18-133) does remove discretionary/regulatory authority that local governments may impose on wireless communication providers. However, the California Public Utilities Code (PUC 7901) does allow municipalities the authority to regulate the public right-of-way. Municipalities “shall have the right to exercise reasonable control as to the time, place, and manner in which roads, highways, and waterways are accessed.”
As a result, the City has authority to control some, but not all aspects, of small cell infrastructure on City owned vertical infrastructure. The City drafted a Master License Agreement template to administer a small cell program that will retain as much regulatory authority as possible for small cell technology on city-owned vertical infrastructure in the public right-of-way.
The City released a draft Request for Information (RFI) for a MLA in November 2019. Only one vendor responded to the RFI and provided minor comments of changes they would like to see to the MLA. At the conclusion of the RFI no telecommunication providers were interested in placing small cell asset on City-owned vertical infrastructure. In early 2021, Verizon contacted the City with interest in the MLA. The City again reissued the draft MLA to other major wireless carriers asking for additional input or changes to the master license agreement template. Verizon was the only vendor that responded. Based upon feedback from Verizon the City altered its MLA template to be more business friendly while at the same time following the authority with the FCC Third report and Order, 18-133.
The MLA will allow the City to process applications within mandated 90 day “shot clock.” The MLA will allow telecommunication providers to sign a single agreement that will allow them to place small cell equipment on any numbers of vertical infrastructure poles without need to sign a separate agreement for each pole.
The MLA will ensure the City treats each carrier fairly and equitably as it will provide the same terms and conditions to each carrier that is interested in placing small cell technology on city owned vertical infrastructure. Without a MLA the City may need to enter several different contracts with unique terms and conditions. The MLA will allow staff to administer the small cell program in a manner that is equitable and efficient for all carriers that are interested in signing the MLA. Without a MLA the City may struggle to meet the FCC imposed “shot clock” deadline to review and process small cell applications.
The MLA will not affect the existing terms or leases the city has with carriers for large wireless communication facilities. Wireless communication facilities agreements will be bifurcate into two types of agreements, the MLA, covering small cells, and wireless communication facilities, which cover large cell phone towers.
Below outlines some of the key provisions of the MLA.
The term on the MLA is for ten (10) Years.
Each telecommunication provider must pay a $8,000 MLA administrative cost recovery application fee.
Before installation of all Small Cell technology on City owned infrastructure, the Licensee must apply for a “Site License” with details about the individual location, and include receiving all required permits.
Following the Declaratory Ruling and Third Report Order the City can receive a rate of $270 per year for each vertical pole attachment. The MLA does grant the City the option to conduct a cost study. If the cost study finds the administrative cost to be greater than $270 the City may adjust the rate.
At a future date the City will bring forward to Council proposed ordnance changes to address the change required in MMC20.58 to account for small cell infrastructure.
IMPACT ON CITY RESOURCES
The City is entitled to the cost-recovery and will use the FCC 18-133 safe harbor rate of $270 per year as the pole attachment in the public right-of-way. As the MLA does not require carrier to disclose the timeframe, or the numbers of poles they wish to provide telecommunication services on, the City does not know the estimated revenue we will receive for the small cell program. The City will also receive MLA administrative fees that allow the City to recover cost directly related to reviewing and entering into the MLA with carriers. Once the implementation process is complete for the first agreement staff will be able to better identify where the funding should be received and how it will be used on an on-going basis. This will come back to Council as part of the budget process.
ATTACHMENTS
1. Resolution 2021-108
2. Master License Agreement Template