HomeMy WebLinkAbout3.A. FTTH Franchise Transfer4 ROSEMOUNT
CITY COUNCIL
City Council Work Session: March 11, 2014
EXECUTIVE SUMMARY
AGENDA ITEM: FTTH Franchise Transfer
AGENDA SECTION:
Updates
PREPARED BY: Dwight Johnson, City Administrator
AGENDA NO. j,
ATTACHMENTS:
APPROVED BY:
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RECOMMENDED ACTION: Discussion
BACKGROUND
Velocity Telephone has indicated that they have a condition purchase agreement to acquire the assets of
FTTH, currently owned by Jeffrey Feldman's company in New Jersey. A condition of closing on the
purchase is receiving an acceptable franchise transfer agreement for the cable TV portion of the business.
Phone and internet services are regulated by the State, not the City.
DISCUSSION
Velocity Telephone has proposed a number of amendments to the current franchise agreement. The
proposed changes broadly relate to the following topics:
• Definition of Gross Revenues
• Technical Standards
• Testing
• Customer Service Standards
• Letter of Credit
• Right of first refusal to purchase system
• Work Performed by Others (subcontracting)
• Addition of the Steeple Center to the list of public buildings to be served
• Buildout
At this writing, staff including Attorney Bob Vose of our City Attorney's office has at least conceptual
agreement on all items above except the Definition of Gross Revenues.
The biggest change relates to Buildout requirements. A new court decision coming out of Prior Lake
indicates that a telephone company with local exchange service is not legally required to buildout beyond
the area it serves with telephone service. Mr. Feldman's company does not qualify as a telephone
company, but Velocity Telephone does. While Velocity is certainly interested in expanding fiber optic
cable in Rosemount, they do not wish to have a legal timetable in the franchise agreement. The whole
franchise agreement being transferred expires in 2017 at which time it can be renegotiated as necessary.
Velocity indicates that they wish to have a franchise agreement in place by the end of March to meet the
terms of the conditional purchase agreement. It is possible that a final franchise transfer agreement could
be ready for the March 18th agreement, but if not, a special council meeting perhaps on March 25th could
be considered.
RECOMMENDATION:
This item is for review and comment at this time.
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