Memorandum

City of Lawrence

Legal Department

 

TO:

David L. Corliss, City Manager

Diane Stoddard, Assistant City Manager

Cynthia Wagner, Assistant City Manager

 

FROM:

Toni Ramirez Wheeler, Director

R. Scott Wagner, Management Analyst

 

Date:

May 4, 2011

 

RE:

Next G – Franchise Agreement

 

 

Attached for the City Commission’s consideration is Ordinance 8621 adopting a new franchise agreement with NextG Networks of Illinois, Inc.  On November 30, 2010, the City received the company’s request to install and operate a wireless fiber optic network (NextG Request).  NextG has authority to operate in Kansas pursuant to a Kansas Corporation Commission Order & Certificate issued July 27, 2010.  According to information provided by the company, NextG is a leading provider of wireless networks.  It uses distributed antenna systems on existing public rights-of-way structures such as light poles and traffic signal poles, and connects them via a fiber optic network.  The company is a “carrier’s carrier” whose customers are wireless providers.  NextG uses its networks to enhance capacity to expand their customer’s coverage.  It operates networks in major metropolitan areas throughout the country. 

 

In Lawrence, NextG is proposing an initial network of several nodes that feed back to what is called a HUB site (see attached map).  The installation begins at 31st and Nieder at the location of an existing cellular tower.  The network generally proceeds north along Iowa to 25th Street, west to Lawrence Avenue, north to Clinton Parkway, west to Kasold Drive, and then to 22nd Street, ending at Heatherwood.  Above ground links are show in green, below ground fiber installations are in purple.  The node antennas are low profile.  Please see the attached specification sheet for a location along Kasold Drive (profile sheet).  The company’s website also provides information of existing installations (http://www.nextgnetworks.net/solutions/photosdiagrams.html).

 

Pursuant to K.S.A. 12-2001, the City has the authority to adopt a franchise ordinance authorizing such activity within the public rights-of-way of the City.  Key provisions of the franchise agreement include the following

 

Non-Exclusive Franchise:  Under the ordinance NextG is granted a non-exclusive right to occupy the public right-of-way to construct, maintain and operate its facilities to supply telecommunications services in accordance with its approval from the Kansas Corporation Commission;

Fees: NextG agrees to compensate the City equal to five percent (5) of its gross revenues.  Payments will be remitted on a quarterly basis.  Additionally, NextG will pay a municipal facilities fee of $500 annually per pole if the company installs equipment on City owned light poles or traffic control devices. 

Term:  The initial term of the Franchise Ordinance is five (5) years with the option to renew for an additional five (5) years.

Use of right-of-way – NextG’s use of the right-of-way is subject to the City’s rules, regulations and policies and is subordinate to the City’s use of the right-of-way for public purposes and for the public health, safety and welfare.  NextG agrees to fully repair or replace at its sole expense any sidewalks, paving, utilities, public improvements and other improvements NextG or its representatives damage or injure. 

 

NextG must have plans and specifications related to its proposed installation in the right-of-way reviewed and approved by the City’s engineers.  NextG has to relocate or adjust its facilities in the right-of-way at its expense for public projects. 

 

The agreement also contains a number of standard provisions concerning insurance, transfer and assignment of the franchise agreement, and indemnification of the City. 

 

NextG has also agreed to make available to the City for its municipal uses and its communication needs, two (2) strands of fiber.  This offer by NextG is consistent with what it does in other cities in the country.  The City’s Information Systems Department advises this is valuable to the City’s future operations and communications.  A separate agreement related to the fiber for the City’s network and communications functions will be forwarded to the Commission for review and approval at a later date.  

 

Action Recommended:

City Legal Staff recommends adoption of Ordinance 8621, if appropriate.