REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager or his Designee to Execute a Small Cell License Agreement with Crown Castle Fiber LLC, Delegate Authority for Term Extensions, and Find the Project Categorically Exempt Under the California Environmental Quality Act (CEQA)
Report
BACKGROUND
Federal Communications Commission Rules
The Federal Communications Commission (“FCC”) has jurisdiction over interstate telecommunications facilities. On September 26, 2018, the FCC voted to approve a declaratory ruling and order (FCC Order 18-133) enacting new regulations over small cell wireless facility deployment and management of local rights of way.
The Order, which went into effect on January 14, 2019, preempts and limits cities’ ability to regulate the use of city-owned vertical infrastructure for small cell facilities in several important ways, including:
• Reducing the time limit for cities to process applications for small cells to either 60 or 90 days, depending on whether they are being mounted on an existing or new structure;
• Limiting application fees and rents for access to the rights-of-way and municipal infrastructure to cost-based rates, and establishing safe harbor amounts;
• Limiting aesthetic review and requirements (including undergrounding and historic/environmental requirements) to those that are “reasonable,” objective and comparable to requirements for other rights of way users; and
• Requiring cities to publish such aesthetic requirements in advance.
The regulations severely limit the City’s ability to negotiate favorable terms for leasing its vertical infrastructure to carriers.
Master License Agreements
On May 21, 2019, Council approved RTC No. 19-0523 authorizing the City Manager or his designee to execute a small cell license agreement with Cingular Wireless PCS, LLC, dba AT&T Wireless (AT&T). The AT&T agreement was drafted to serve as a template Master License Agreement (MLA) to provide a consistent and comprehensive approach to all and any requests from other wireless carriers wishing to deploy small cell installations in the City.
Subsequently, on December 12, 2019, Council approved RTC No. 19-1214 authorizing the City Manager or his designee to execute a small cell license agreement with GTE Mobilnet of California Limited Partnership, dba Verizon Wireless. On July 28, 2020, Council approved RTC No. 20-0408 to amend the small cell license agreement to include 5G design guidelines.
Crown Castle Fiber LLC has now expressed interest in entering into an MLA similar to those with AT&T and Verizon. This would be the third wireless carrier to enter into an MLA with the City of Sunnyvale.
EXISTING POLICY
Council Policy 7.2.1 - Telecommunications: The purpose of this policy is to enable the City to retain and maintain regulatory authority within the confines of the state and federal legislation.
Sunnyvale Municipal Code (SMC) Section 19.54.160 - Telecommunication Facilities in the Public Right of Way (ROW): The wireless telecommunication facilities ordinance (SMC Chapter 19.54) adopted by the City Council in 2013 includes SMC Section 19.54.160, which regulates telecommunication facilities in the public right-of-way. The regulations adopted by the City Council in 2012 require applications for wireless communication in the public ROW to be submitted to the Planning Division.
ENVIRONMENTAL REVIEW
The action is categorically exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15302(c) for replacement or reconstruction of an existing utility system and/or facilities involving negligible or no expansion of capacity, and pursuant to Section 15303 for installation of small new equipment and facilities in small structures (e.g., the installation of small cell facilities on existing street light poles).
DISCUSSION
The City received a request from Crown Castle Fiber LLC to enter into an agreement with the City for 5G small cell installations. The proposed Small Cell License Agreement (Attachment 1), including the Initial Approved Antenna Design, is based on the MLA approved in RTC No. 19-0523. Installing small cells on City street light poles offers several advantages over the current practice of using wooden power poles. Street light poles are typically hollow, allowing wiring to be concealed and the installation to be more consistent, depending on the pole type. In some cases, poles will be replaced if necessary by Crown Castle, which renews City assets at no cost to the City. City poles offer new options for areas with coverage gaps, particularly where utilities have been undergrounded, and takes pressure off the limited number of wooden poles.
General Overview
The MLA does not grant possessory rights to any individual City owned streetlight, but establishes guiding procedures, terms, and conditions in which a telecom provider may request a site license supplement for deployment of a small cell site. This creates a first-in-time prioritization process to promote a fair and competitively neutral process to all interested telecom providers. The MLA contains the uniform terms and conditions applicable to all wireless facilities on City-owned streetlights, and each individual site license supplement identifies a specific site location with detailed plans of equipment to be deployed. Wireless carriers are still required to obtain all necessary applications and permits to (e.g., planning applications and encroachment permits) and subject to the City’s Wireless Telecommunication Facilities ordinance (SMC Section 19.54.160).
Term
The MLA will have a minimum term of ten (10) years with the option to extend two (2) additional periods of five (5) years each.
In addition, each Site License Supplement shall be a period of ten (10) years and may be extended for two (2) successive five (5) year renewals.
Base Rent
Established by the FCC Order, the annual rent will be set at $270 per pole per year, adjusted annually by 2%.
Processing
Upon approval of the MLA, the telecom carrier is required to complete the City’s process of review by the Planning Division and Public Works Engineering as well as obtaining an encroachment permit for the installation.
Design Standards
Small cell facilities will be of the same or substantially similar design as shown in Exhibit B - Initial Approved Antenna Design of the Small Cell License Agreement. Note that Exhibit B shows a dual light arm, but Crown Castle has confirmed that this design will also apply for single light arms, which are much more common in City of Sunnyvale.
FISCAL IMPACT
The Small Cell License Agreement is expected to generate revenue through annual rent for each small cell attachment to the City’s street light infrastructure (base rent $270 per site adjusted annually by 2%). The initial fiscal impact of this License will be minimal with the assumption that up to 54 poles will be utilized by Crown Castle for their initial build-out. This would result in a total annual revenue to the City’s General Fund of up to $14,580 in the first year.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Authorize the City Manager or his designee to execute the Small Cell License Agreement in substantially the same form as in Attachment 1 to the report, extend the term for two (2) additional five (5) year terms upon mutual written agreement by the parties, and make a finding that the action is exempt from CEQA pursuant to CEQA Guidelines Sections 15302 and 15303.
2. Do not authorize the City Manager or designee to execute the Small Cell License Agreement.
3. Provide staff direction regarding the negotiation of different terms.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Authorize the City Manager or designee to execute the Small Cell License Agreement in substantially the same form as in Attachment 1 to the report, extend the term for two (2) additional five (5) year terms upon mutual written agreement by the parties, and make a finding that the action is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Sections 15302 and 15303.
Staff
Prepared by: Mitchell Lee, Senior Engineer
Reviewed by: Arnold Chu, Assistant City Engineer
Reviewed by: Jennifer Ng, Assistant Director, Public Works
Reviewed by: Chip Taylor, Director, Public Works
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Crown Castle Small Cell License Agreement