AGENDA TITLE:
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Adopt a Resolution Authorizing City Manager to Execute Telecommunication Pole Attachment License Agreement with Race Communications, LLC of San Francisco (EU)
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MEETING DATE:
January 15, 2025
PREPARED BY:
Hasan Shahriar, Engineering & Operations Manager
recommendation
RECOMMENDED ACTION:
Adopt a resolution authorizing the City Manager to execute a Telecommunication Pole Attachment License Agreement with Race Communications, LLC of San Francisco.
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BACKGROUND INFORMATION:
The use of the internet by the public increased significantly in recent years as streaming of video and audio became commonplace among users of household and wireless devices.
Race Communications, LLC (Race) utilizes fiber optic cable to provide reliable and high-speed internet and advanced communication at an affordable price. Working in partnership with the California Public Utilities Commission and many non-profit community advocacy groups, Race focuses on improving connectivity in communities that larger carriers have long ignored.
Race has thousands of miles of fiber network already built in various California locations, including Merced, Stanislaus, Kern, Tulare, Sutter, Mono, Butte, Colusa, San Bernardino, Riverside, San Diego, and Los Angeles counties. Race proposes to extend their fiber optic service network to Lodi by attaching infrastructure to Lodi Electric Utility (LEU) owned poles. The Federal Communications Commission (FCC) mandates rules governing pole attachment practices, including fair access to poles and setting standards for fees. State and local governments cannot take actions that effectively prohibit telecommunications deployment. Public utilities cannot deny access on a discriminatory basis but can deny pole attachments under specific circumstances like when there is insufficient capacity on the pole, safety concerns, reliability issues, or if the attachment would violate engineering standards.
LEU’s process to approve includes requiring applicant to submit an application with details about the intended attachment, adhering to safety and engineering standards, paying a fee based on pole space used in addition to any other City encroachment fees, etc. and paying the cost to upgrade or replace a pole should the proposed pole attachment exceed existing infrastructure loading capabilities.
Upon review of the proposed project by Race, LEU staff determined that their proposal is feasible and meets the specified design and construction requirements of the City.
Race will pay LEU an annual pole attachment fee of $21.94 per pole which covers the applicable portion of the annual cost of owning and maintaining a pole. The fee has been calculated by LEU’s rate consultant based on accepted methodology identified in Assembly Bill (AB) 1027 which identifies a framework for calculating pole attachment rates and the principle that the resulting pole attachment rates do not subsidize or over-charge communication providers. AB 1027 allows utilities to recover the annual ownership cost of associated utility poles including ongoing maintenance costs and annual capital costs (depreciation). Costs are based on a utility’s current asset values and maintenance costs. The annual cost is calculated based on the attachment’s share of the utility pole’s capacity. This methodology adheres to FCC requirements for fees to be “nondiscriminatory” and reflect a “reasonable approximation of locality’s reasonable costs.” LEU reserves the right to adjust the fee periodically to address cost fluctuations per the Agreement. The initial term of the Agreement is three years, with an option to renew for one year.
Race is required to obtain all necessary permits as well as cover all costs associated with installing, relocating, maintaining, replacing and removing their equipment. This Agreement maintains all rights and access by LEU to its utility poles, including for emergency purposes.
STRATEGIC VISION:
5A. Infrastructure: Invest in innovative infrastructure with a high Return of Investment.
FISCAL IMPACT:
Approximately $130,000 annually will be paid in pole attachment fees by Race to LEU.
FUNDING AVAILABLE:
Not applicable.
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Jeff Berkheimer
Electric Utility Director
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Scott R. Carney
City Manager