REPORT TO COUNCIL
SUBJECT
Title
Authorize the City Manager or His Designee to Execute a Small Cell License Agreement with GTE Mobilnet of California Limited Partnership, dba Verizon Wireless, Delegate Authority for Term Extensions, and Find the Project Categorically Exempt under CEQA
Report
BACKGROUND
FCC Rules
On September 26, 2018, the Federal Communications Commission (“FCC”) voted to approve a declaratory ruling and report and order (FCC Order 18-133) enacting new regulations over small cell wireless facility deployment and management of local rights of way. The FCC has jurisdiction over interstate telecommunications facilities.
The Order that 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 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;
• 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. 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, Verizon Wireless has expressed an interest in entering into a similar MLA with the City.
EXISTING POLICY
Council Policy 7.2.1 - Telecommunications: The purpose of this policy is to enable the City to retain and maintain regulatory authority with 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. This changed the practice prior to 2012, where all such applications were processed by the Department of Public Works through consideration of an encroachment permit.
ENVIRONMENTAL REVIEW
Pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15302, replacement of existing facilities located on the same site as the structure replaced and Section 15303, installation of small new equipment in small structures, the installation of small cell facilities on existing street light poles is categorically exempt from environmental review.
DISCUSSION
The City received a request from GTE Mobilnet of California Limited Partnership DBA Verizon Wireless (Verizon) to enter into an agreement with the City for small cell installations. The proposed Small Cell License Agreement attached (Attachment 1), including the Initial Approved Antenna Design, is based on the MLA approved in RTC No. 19-0523. Using City street light poles, upon which to install small cells, 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 which renews City assets at no cost to the City. City poles offer new options for areas with coverage gaps, taking pressure off the limited number of wooden poles, particularly where utilities have been undergrounded.
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. 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 detail plans and equipment to be deployed. Wireless carriers are still subject to obtaining all necessary applications and permits to (i.e., 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
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.
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 as more poles are utilized more revenue will be received.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk 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, 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, 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: Sherine Nafie, City Property Administrator
Reviewed by: Jennifer Ng, Assistant Director, Public Works
Reviewed by: Chip Taylor, Director, Public Works
Reviewed by: Teri Silva, Assistant City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Small Cell License Agreement