JOHN D. NEWMAN ATTORNEY AT LAW SAN FRANCISCO, CALIFORNIA 94105-3801 TELEPHONE FAX E-MAIL: VIA EMAIL & VIA HAND DELIVERY October 6, 2015 The Honorable City Council of The City of San Jose 200 E. Santa Clara Street San Jose, CA 95113 Re: Agenda Item 4.6 Master Agreement For Non-Exclusive Installation And Property Use Dear Honorable Mayor Liccardo and Honorable Councilmembers: Introduction AT&T appreciates the City's efforts to develop a Master Agreement which may streamline the process for encouraging infrastructure investment by the wireless industry on properties owned or controlled by the City on private property and the public right of way ("PROW") without requiring each individual agreement to be submitted to the City Council for prior review and approval. Going smart,... going fast,... and going responsibly, are all worthy goals embraced by AT&T. AT&T would like recognize and thank City staff for their willingness to meet with us over the last week to listen to our concerns about the Master Agreement, and to consider revisions to the prior draft. We believe that another week or two of working together to clarify language in the Master Agreement could remove uncertainty and encourage AT&T to consider future investment on City owned or managed properties. If the City Council may not be inclined to allow additional time for further vetting of the Master Agreement, then at a minimum, we request the City Council to address three specific problems in the current Master with accompanying specific text solutions to clarify and improve the Master Agreement. AT&T respectfully requests that you consider the following revisions:
JOHN D. NEWMAN ATTORNEY AT LAW The City Council of San Jose October 6, 2015 Page 2. Specific Requests For Revisions To Master Agreement. I. Master Agreement To Apply Only To Small Cells In Public Right of Way ("PROW"). Given the City Council's desire to accelerate the adoption of a new Usage Fee formula to support an RFP for replacement of LED lights on light standards located in the PROW, the scope of the Master Agreement should be limited to "small cells" in the PROW. AT&T requests that the Master Agreement apply (I) only to small cells which are (2) located in the PROW. Recital A of the Master Agreement should be deleted, and revised to read as follows: 'A. WHEREAS, CITY owns or controls public rights of way ("PROW") including existing improvements owned by City that may lie within the PROW, such as light poles and utility cabinets"'. Most municipalities separate wireless facility agreements (and regulation of facilities) between facilities located on private property, and those located in the PROW. There are many reasons for this, including pre-emptive regulatory statutes such as California Public Utilities Code Section 7901, which confers rights of telephone companies to access and utilize the PROW. Therefore, the distinction between agreements for cell sites in the PROW and private property has long been recognized under State law, and the City should advance master agreements which recognize this well-established distinction. 2. Provide A Working Definition of "Small Cell" Recital B expresses the City's intent for the Master Agreement to apply to "small cells"; however, there is no definition of"a small cell"! The absence of such a definition creates ambiguity concerning the scope of the wireless facilities intended to be covered by the Master Agreement. A definition of "small cell should be included in the Master Agreement to resolve this ambiguity. 1 Please note that all references to the defined term "Property" should be removed, and the defined term "PROW" should be inserted in each place.
JoHN D. NEwMAN ATTORNEY AT LAW The City Council of San Jose October 6, 20 I 5 Page 3. A proposed simple definition of"small cell'" taken a from a recent Federal Communications Commission Infrastructure Order to be contained in revised Recital B would be as follows: ''B. WHEREAS, Company desires to construct and install at no cost to CITY, certain "small cells" (small cells are defined to mean low-powered wireless base stations that function like cells in a mobile network but provide significantly smaller coverage area than traditional macrocells) and appurtenant structures in the PROW for the purpose of providing its services consisting of radio and wireless transmission for use by handheld wireless telephones, tables, mobile, computers, global positioning devices, and other devices that use a wireless signal for use by the public (collectively "SERVICES'") and City desires to have the SERVICES available in accordance with the terms and conditions herein; and'" 3. Confirmation That Master Agreement Including Usage Fee Does Not Apply To Macrocells After meeting with your City staff, AT&T had been assured (a) that the Master Agreement would acknowledge in some manner that it was not intended to apply to larger macrocells located on private property, and (b) that any Usage Fee in this Master Agreement would not be applied to AT &T's existing macrocells. Regrettably, the Master Agreement does not acknowledge either of these important elements. AT&T requests that these be addressed in the Master Agreement with a new Recital C 2 : New Recital C "C. WHEREAS, the scope of this Master Agreement including the Usage Fee (as defined in Section 3 below) is not intended to be applied to existing or future macrocell wireless facilities located on private property owned or controlled by the CITY, and'" Conclusion AT&T does not believe that this unprecedented Usage Fee pricing model is a cure all for wireless facilities on City-owned property or in the PROW. Indeed, AT&T believes that the adoption of the Usage Fee in its current form will deter wireless service providers from considering locations owned or controlled by the City. 'Existing Recital C should become Recital Q, and other subsequent Recitals should also be re-lettered accordingly.
JoHN D. NEWMAN ATTORNEY AT LAW The City Council of San Jose October 6. 2015 Page 4. Having noted that AT&T has grave concerns with the current Usage Fee approach in the Master Agreement, AT&T also appreciates the City Council's desire to try and solicit private companies to participate as quickly as possible in replacing the City's lighting elements on light standards located in the PROW with more efficient "green" LED technology. If the Master Agreement is carefully limited in scope to "small cells" in the PROW and the City Council confirms that the Usage Fee will not be applied to macrocells on private property owned or controlled by the City, then the Master Agreement may be workable on this limited basis. Finally, please know that AT&T values its relationship with the City, and we will continue to consider individual siting opportunities for new investment on a case by case basis. Those new opportunities will not be considered with the Usage Fee contained in the Master Agreement, but rather pursuant to pricing arrangements based upon (1) location and (2) square footage.
McGuireWoods LLP Los Angeles, CA 90067 Phone: www.mcguirewoods.com Direct: i McGUIREWffiDS October 6, 2015 Via electronic mail City of San Jose ("City") c/o City Clerk 200 E. Santa Clara Street San Jose, California 95114 city.clerk@sanjoseca.gov Re: City of San Jose City Council Meeting- October 6, 2015 Agenda Item 4.6- Agreement for Non-Exclusive Installation and Property Use of Telecommunications Facilities in the Right-of-Way and on City-Owned Property As you may know, this firm represents Verizon Wireless with respect to the abovereferenced matter. As you may recall, a representative for Verizon Wireless spoke at the City Council meeting on September 22nd about its concerns regarding the then current draft of the proposed template Agreement for the Non-Exclusive Installation and Property Use of Telecommunications Facilities in the Right-of-Way and on City-Owned Property ("Agreement"). After the City Council decided to postpone its vote on the Agreement for an additional week, our office immediately set up a call with the City attorney's office to discuss some of Verizon Wireless' concerns in detail on September 23rct. Soon after that call, our office submitted formal comments to the Agreement to the City attorney's office on September 24th. We have not received any additional comments or revised drafts of the Agreement from the City attorney's office since that time. We have now reviewed the most current draft of the Agreement, which we understand was only made available on the City website since approximately 5 pm on Friday, October 2nd. While the current draft of the Agreement posted on the City agenda for its October 6th meeting contains some additional clarity on the fee structure, there are still some ambiguities with respect to the fee structure and material concerns for V erizon Wireless remain unaddressed in the current draft. On behalf of Verizon Wireless, we respectfully request pos~ponement of a vote on the adoption of the Agreement so Verizon Wireless may have additional time to review and respond to the most recent form presented by the City. There are still material non-standard wireless industry provisions which would preclude Verizon Wireless from entering into the current draft of the Agreement. Again, due to the scope of the required changes, we believe it would be more efficient to continue to address the material issues now rather than go through a secondary review process with City staff and City Council. 71464858.1
Verizon Wireless is very interested in entering into the Agreement with the City to provide improved cellular and data coverage as well as bring a substantial revenue stream to the City. Verizon Wireless is more than willing to work with urgency to finalize a form of the Agreement that is reasonably acceptable to Verizon Wireless. With the diligent cooperation of the City and its counsel, we propose finalizing the Agreement within six ( 6) weeks. 71464858.1
NOSSAMAN ATTORNEYS AT LAW LLP San Francisco, CA 94111 T F VIA EMAIL city.clerk@sanjoseca.gov Carl L. Blumenstein D Refer To File#: 000013-0372 October 6, 2015 City of San Jose c/o City Clerk 200 E. Santa Clara Street San Jose, CA 95114 Re: Agenda Item 4.6 for Tuesday, October 6, 2015: Proposed Master Agreement for Non-Exclusive Installation and Property Use of Telecommunications Facilities in the Right-of-Way and on City-Owned Property ("Master Agreement") Dear Honorable Mayor Liccardo and Honorable Councilmembers: This law firm represents T-Mobile West LLC. As you may know, T-Mobile provides wireless communications services, for voice and high-speed data, to thousands of San Jose citizens. T-Mobile presently leases in excess of20 sites from the City for antennas and other wireless facilities, at a combined rent of roughly $700,000 annually. After the close of business on Friday, October 3, we noticed for the first time on the City's agenda for the October 6 City Council meeting a revised version of the proposed Master Agreement. That Master Agreement, if adopted, would affect T-Mobile's existing facilities as well as additional facilities that T-Mobile may seek to erect on City-property for years to come. By this letter, we respectfully request that the City Council continue the hearing for adoption of the Master Agreement. A several-week continuance will allow T-Mobile and other affected wireless carriers to work cooperatively with City staff in order to develop an agreement that will achieve the City's goals, while also ensuring the carriers' ability to provide wireless services on a cost-effective, modern and practical basis. T-Mobile has had only limited time to review the proposed Master Agreement, and additional time is necessary to fully analyze its proposed terms. Based on its initial review, TMobile has serious concerns about a number of provisions in the proposed Master Agreement, concerns that we believe could be productively addressed through further communications with City staff. We summarize our present concerns in the following two sections of this letter. (All section references are to the proposed agreement.) 9677854.v2 nossaman.com
City of San Jose October 6, 2015 Page 2 A. Principal Concerns 1. Chilling-Effect on Wireless Business. Taken as a whole, the provisions ofthe proposed Master Agreement would likely have the effect of forcing wireless facilities entirely off of City-owned property. The Master Agreement is not at all in keeping with agreements executed by other municipalities. Such a result could severely impact the ability to provide highquality wireless service in the City. Further, an enactment that effectively forces T-Mobile to operate on private property may well violate the law. 2. Uncertainty Regarding Facilities Covered. The proposed Master Agreement does not clearly define which are the "smaller" sites that are subject to its provisions and which sites are not governed by this Agreement. Also, there is a lack of clarity as to how the proposed Master Agreement applies, if it does, to the existing agreements under which T-Mobile is operating dozens of antenna facilities. 3. Arbitrary and Discretionary Usage Fees. The proposed Agreement, and specifically Section 3(B), permits the City's Director of Economic Development, in his or her discretion, to agree to a discount in the usage fee for antenna facilities in underserved areas. But, there is no specification of how that determination is to be made, or whether one or more carriers will be required to provide information to permit such a determination to be made. T-Mobile is also concerned about the prior paragraph which permits discretionary increases or decreases of the usage fee based on subjective comparisons to undefined "typical installations." Another concern is that there is no certainty regarding the amount of fees to be charged after the Master Agreement expires. 4. Lack of Permitting I Aooroval Process. As is typically done in other municipalities, T-Mobile requests that the Master Agreement specify a process and timing for submission and approval of requests to modify and upgrade equipment (and generally to process applications and permits when proposed sites are initially submitted). While sections 3(A)(l) and 3(B)(2) provide that fees may be charged for certain modifications, there are no accompanying procedures. Also, under its agreements with the City for existing antenna facilities, there is no requirement for permits or approvals for modifications that do not increase the footprint of the equipment, thereby allowing like-kind upgrades or modifications. T -Mobile requests that these existing arrangements be "grandfathered" so that its existing rights are not adversely affected. T -Mobile also has procedural concerns about the relocation and removal provisions, discussed below. B. Additional Concerns, Including More Specific Language Issues. 5. Recital A. In the second to-last-line of this paragraph, the phrase "does not include" appears to be a typographical error and should read "does include." 6. eclion l(c) Relocation and Removal. As drafted, the City can require T-Mobile to relocate its facilities for any reason or no reason, and can do so multiple times during the 15-9677854.v2
City of San Jose October 6, 2015 Page 3 year term. Under those provisions, it is not workable, as a business proposition, fort-mobile to invest in facilities and operate antennas on City property. Once an SLA is executed, relocations should only be required in order to carry out a public purpose. Due to the substantial expense of relocating facilities, some sort of cost-sharing should be adopted, especially if the City mandates multiple relocations of the same facility during the lease term. Also, the one-year period for relocating facilities may not be sufficient, especially if the permitting process becomes delayed or without having a permitting timeline identified in the Master Agreement. Also, we find the time periods in proposed Sectionl(C)(V(l) somewhat ambiguous-specifically, what is the interplay between the specified notice periods and the 90-day period for removing an existing facility? 7. Section 2, Term. The 15-year term for the Master Agreement, with no ability of the carrier to terminate early, is problematic in light of the dynamic and technological changes that are typical of the wireless industry. T-Mobile would request that the term be five-years, with automatic renewals of five-year periods thereafter on the same terms. Also, T-Mobile is concerned about the interplay between the terms of the proposed Master Agreement and the particular SLAs; for example, any SLA entered into during later years of the Master Agreement will only be in effect for five years. They should be permitted to continue into the term of the next Master Agreement, which should also automatically renew. 8. Section 6(8). Maintenance. As proposed, this section imposes obligations on the wireless carrier beyond those specified in existing agreements. It is not reasonable to require the carrier or multiple carriers, as non-exclusive users, to take on the affirmative responsibility for removal of rubbish, garbage, debris, or graffiti from the licensed portions of City property at all times. 9. Section 9(a), Pre-payment ofusage Fee. T-Mobile requests that this section be modified so that the usage fee need only be paid until after the City has approved the SLA for the particular antenna facility. This simplifies the process if changes are made to size or RF during the approval process. 10 Secti.on 22, Utilities. This section should specify that the wireless carrier is permitted to access existing power sources, conduits and telecommunications services at each site. 11. Exhibit B, License Fee Schedule. This Exhibit sets fees based on three different "zones," but no map or description of the zones is provided. 9677854.v2
City of San Jose October 6, 20 15 Page 4 Thank you for consideration ofthese matters. Bradford Kuhn Carl L. Blumenstein ofnossaman LLP CLB:pd 9677854.v2
Brenda M. Coleman, Govt. Affairs Manager Sacramento, CA 95815 Telephone: Email: October 1, 2015 Via electronic mail The Honorable Sam Liccardo & Honored Councilmembers City of San Jose C/o City Clerk 200 E. Santa Clara Street San Jose, CA 95114 city.clerk@sanjoseca.gov Re: Master Agreement for Non-Exclusive Installation and Property Use of Telecommunications Facilities in the Right-of-Way and on City-Owned Property Dear Mr. Mayor and Councilmembers, Sprint recently learned that the City of San Jose intends to adopt a Master Non-Exclusive Installation and Property Use Agreement ( Agreement ). We are pleased that San Jose is interested in encouraging mobile broadband infrastructure expansion and appreciate the opportunity to provide feedback regarding substantive provisions of the Agreement. Sprint has reviewed the current draft and has several concerns. Sprint is also aware of pending revisions to the Agreement so is hopeful the concerns identified below will be taken into account. Sprint encourages the City to revisit the overall pricing structure and resulting costs as they are much higher than what Sprint experiences elsewhere. Increasing the cost of providing wireless broadband service inhibits, rather than promotes, broadband deployment to the detriment of all users and the City of San Jose. Of significant concern to Sprint is the City s use of the Effective Radiated Power ( ERP ) Output variable in determining the usage fees. The propagation characteristics of Sprint s higher frequency spectrum requires, all things being equal, Sprint s towers to operate at a higher wattage likely pushing Sprint into a higher ERP rate category compared to other wireless service providers. Sprint respectfully requests that the discriminatory nature of the ERP be reviewed. In addition to the ERP concern, Sprint also has concerns with the following Agreement terms:
Section 1.C. Relocation and Removal The City requests overly broad relocation rights that includes an unreasonable requirement to relocate within 180 days of notice and at carrier s expense. Section 1.B.2. Access The Company is not allowed to access its Licenses Area for routine purposes except during normal business hours and after five business days prior notice to the City. Such an extended timeframe could inhibit carriers from optimizing network performance. In addition, the current language appears to limit emergency access to 1) Antenna facilities located in non-secured areas with repairs being performed during business hours and 2) Antenna facilities located in a secured area whether during business hours or not. The provision does not specifically address emergency repairs in non-secured areas outside business hours, which also should be allowed without advanced permission from the City Section 1.F. No Warranties of Suitability of Property The Agreement does not provide the Company with any warning of or remedy for interference, blocking of degradation of the Company s telecommunications signal and requires the Company to release the City from any liability or loss. There is no limitation as to the cause or source of such interference, blocking or degradation as it may include any type of improvement adjacent to or within the proximity. This is an unacceptable degree of risk and uncertainty. Section 1.G Right of City Access The current terms allows access to Licensed Areas by the City or its agents or subcontractors at any time without notice to the Company. Section 3.A., B.1 and 2. Usage Fees and Adjustments The Usage Fee structure that includes Effective Radiated Power output as one of the drivers of costs is not related to the use of City property and penalizes a carrier for deploying its network in an efficient manner. Moreover, the automatic 3% annual increase in fees also is excessive and not tied to the City s costs of maintaining its rights of way. In addition, an increase in the Usage Fee due to an increase in data transfer capacity appears unwarranted. This criteria is outside the scope of the current Usage Fee drivers that include Zone, ERP and Enclosure Size. Section 13. Frequency Interference The City reserves the right to approve the use of any frequencies even though the Company is authorized to use them pursuant to FCC licensing. Section 22. Utilities The requirement to install separate power meters as opposed to the ability to sub-meter may be inconsistent with electric utility requirements to utilize an existing power panel. Sprint respectfully requests the City of San Jose to take into consideration each of the concerns identified above and provide Sprint with adequate time to evaluate any potential revisions.
Sprint desires to improve its wireless coverage and capacity in San Jose to the benefit of San Jose residents, businesses and the City and looks forward to discussing Sprint s concerns. Should you have any questions please contact George Ghantous, Director of West Regions Operations at Sincerely, Brenda M. Coleman State Government Affairs Manager, Western Region