HomeMy WebLinkAbout2006-07-11 - AGENDA REPORTS - AT&T PUBLIC BENEFITS AGMT (2)NEW BUSINESS
11040:9
SUBJECT:
DEPARTMENT:
Agenda Item•
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval:
Item to be presented by:
July 11, 2006
Kevin . o. ,
PROPOSED PUBLIC BENEFITS AGREEMENT WITH AT&T
CALIFORNIA
Administrative Services
RECOMMENDED ACTION
Council approve Public Benefits Agreement with AT&T California, subject to the approval of
the City Attorney.
BACKGROUND
In March of 2006, City staff was approached by representatives of AT&T with the specific
interest of working with the City to execute a Public Benefits Agreement that would allow
AT&T California (AT&T) to provide competitive television video services for residents by
means on the Internet. This proposed agreement would allow AT&T to provide television video
services, via their Project Light Speed initiative, to residents without a formal cable franchise
agreement. The proposed agreement is in advance of any future State legislation that would
ultimately regulate telecommunication providers (such as AT&T and Verizon) through a
state-wide franchise.
Staff has worked diligently with AT&T representatives to negotiate a proposed Public Benefits
Agreement that concurrently attempts to balance several competing public policy matters,
including:
Provisions that secure similar and additional benefits beyond what may be provided within
future legislation enacted by the State.
Agreement language addresses key issues that the League of California Cities is advocating
for inclusion within proposed state-wide franchising legislation (AB 2987).
'R E
• Benefits incurred by the community through the availability of competitive television[ video
services.
In developing this proposed Public Benefits Agreement, staff reviewed similar agreements that
AT&T executed with other cities and has kept up-to-date on the changing landscape of proposed
state legislation. Staff also had the opportunity to speak with representatives from the League of
California Cities concerning this proposed agreement. League representatives have indicated that
they are supportive of the approach to developing this proposed Agreement. The key provisions
included within the proposed Public Benefits Agreement between the City and AT&T include:
• Guarantees that the City maintains continued control of access to the public
rights-of-way.
• Compensation in the form of 5% of annual gross revenues to the City for use of the public
rights-of-way.
• Safeguards that address key City issues such as Public, Education, and Government
(PEG) Programming and customer service standards.
• Provisions that require AT&T to make a dedicated PEG channel available on its system
for transmission of Public Access Programming;
• Financial support for PEG Programming - Future potential maximum of $150,000.
Traditionally, when negotiating franchise agreements with cable operators, municipalities have
sought to secure agreements encompassing a 15- to 20 -year term. Such terms provide
municipalities with identified public benefits and eliminates the need to expend significant staff
time to negotiate new agreements on a frequent basis.
In consideration of the potential pending State legislation, AT&T indicated they are willing to
provide the City with an agreement that covers a period of three years. AT&T indicated they
would be willing to provide the City with a longer-term agreement; however, AT&T would insist
that any agreement that specifies a term beyond three years also include a "change of law"
provision. A change of law provision would allow AT&T to terminate its agreement with the
City should future State legislation pass that is more favorable towards AT&T's business
interests. In addition, AT&T has indicated that it would be willing to include a provision in the
proposed Public Benefits Agreement that would provide the City with similar early termination
flexibility should future state legislation ultimately be more advantageous then the negotiated
Public Benefits Agreement.
ALTERNATIVE ACTIONS
1. Do not approve proposed Public Benefits Agreement with AT&T California, and continue to
monitor potential State-wide Franchising legislation.
2. Other action as identified by the City Council.
FISCAL IMPACT
As proposed, the Public Benefits Agreement between the City and AT&T California would
provide revenues during the life of this three-year agreement that include:
1. Operational and capital PEG support in the amount of $0.50 per month, per subscriber.
2. A potential capital grant of up to $150,000 at the conclusion of the Public Benefits Agreement
in the event that the City or a non-profit agency assume day-to-day personnel and operational
responsibility for the Santa Clarita Public Access Studio.
ATTACHMENTS
Proposed Public Benefits Agreement between City of Santa Clarita and AT&T California
available in the City Clerk's Reading File