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THIS IS A DRAFT COPY ONLY AND IS NOT AN OFFICIAL COPY
OF THE FINAL, ADOPTED ORDINANCE
ORDINANCE G-XXXX
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO
AMEND THE PHOENIX CITY CODE BY ADDING A NEW
CHAPTER 5D TITLED NETWORK INFRASTRUCTURE
SERVICES.
__________
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF PHOENIX as
follows:
SECTION 1. ARTICLE I. PURPOSE, FINDINGS AND DEFINITIONS
SEC. 5D-1. PURPOSE AND FINDINGS.
A. THE PURPOSE OF THIS CHAPTER IS TO ESTABLISH A POLICY
GOVERNING THE MANAGEMENT OF PUBLIC HIGHWAYS FOR THE
PROVISION OF NETWORK INFRASTRUCTURE SERVICES. THE POLICY
ENABLES THE CITY TO:
1. ISSUE LICENSES TO NETWORK INFRASTRUCTURE SERVICE
PROVIDERS WHO USE THE PUBLIC HIGHWAYS TO PROVIDE
SERVICES ON A COMPETITIVELY NEUTRAL AND
NONDISCRIMINATORY BASIS, EXCEPT IN CASES WHERE STATE
LAW FORBIDS ESTABLISHMENT OF A LICENSE REQUIREMENT;
2. MANAGE THE PUBLIC HIGHWAYS IN ORDER TO MINIMIZE THE
IMPACT AND COST TO PHOENIX CITIZENS FOR THE PLACEMENT OF
FACILITIES WITHIN PUBLIC HIGHWAYS;
3. MANAGE THE HIGHWAYS TO MAXIMIZE THEIR EFFICIENT USE,
THEREBY MINIMIZING THE FORECLOSURE OF FUTURE ADDITIONAL
USES OF SUCH RIGHTS-OF-WAY; AND
4. PROVIDE FOR THE COMPENSATION FOR THE COMMERCIAL USE
OF PUBLIC HIGHWAYS TO PROVIDE SERVICES.
B. THE PHOENIX CITY COUNCIL FINDS THAT THE PUBLIC HIGHWAYS
CONSTITUTE A VALUABLE PUBLIC ASSET:
1. HAVING BEEN ACQUIRED AND MAINTAINED BY THE CITY OVER
MANY YEARS AT GREAT TAXPAYER EXPENSE;
2. PROVIDING UNIQUELY VALUABLE PROPERTY THAT NETWORK
INFRASTRUCTURE SERVICE LICENSEES MAY WISH TO USE FOR
PROFIT-MAKING PURPOSES THAT MAY NOT NECESSARILY BENEFIT
ALL THE RESIDENTS OF THE CITY; AND
3. REPRESENTING PUBLIC INVESTMENTS FOR WHICH THE
TAXPAYERS ARE ENTITLED TO A FAIR MONETARY RETURN ON THE
CITY’S PAST AND FUTURE INVESTMENT IN THE CITY’S
INFRASTRUCTURE.
C. THEREFORE, IN THIS ARTICLE THE PHOENIX CITY COUNCIL INTENDS:
1. TO CONSERVE THE LIMITED PHYSICAL CAPACITY OF THE
PUBLIC HIGHWAYS HELD IN PUBLIC TRUST BY THE CITY; AND
2. TO ASSURE THAT THE CITY’S CURRENT AND ONGOING COSTS
OF GRANTING AND REGULATING PRIVATE ACCESS TO AND USE OF
THE PUBLIC HIGHWAYS ARE FULLY PAID BY THE PERSONS
SEEKING SUCH ACCESS AND CAUSING SUCH COSTS.
SEC. 5D-2. DEFINITIONS.
FOR THE PURPOSE OF THIS CHAPTER, UNLESS THE CONTEXT OTHERWISE
REQUIRES, THE FOLLOWING TERMS, PHRASES, WORDS, AND THEIR
DERIVATIVES SHALL HAVE THE MEANINGS GIVEN HEREIN.
ANNUAL MINIMUM FEE (AMF) MEANS THE ANNUAL FEE THAT IS REQUIRED FOR
USE OF THE CITY RIGHT-OF-WAY FOR THE INSTALLATION AND OPERATION OF
THE NETWORK FACILITIES TO PROVIDE FIBER-OPTIC SERVICES.
CITY MEANS THE CITY OF PHOENIX, A MUNICIPAL CORPORATION OF THE
STATE OF ARIZONA, AND ALL OF THE TERRITORY WITHIN ITS PRESENT AND
FUTURE CORPORATE BOUNDARIES.
CITY CODE OR CODE MEANS PHOENIX CITY CODE.
COLLECTOR STREET MEANS ALL STREETS THAT PROVIDE DIRECT ACCESS TO
RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR OTHER ABUTTING LAND, AND
FOR TRAFFIC MOVEMENTS THAT CONNECT TO LOCAL OR ARTERIAL STREETS
OR BOTH.
END-USER CUSTOMER MEANS A PERSON OR BUSINESS THAT IS A FEE-PAYING
CUSTOMER OF THE NETWORK INFRASTRUCTURE SERVICE LICENSEE.
FACILITIES MEANS THE PLANT, EQUIPMENT, AND PROPERTY USED IN THE
PROVISION OF NETWORK INFRASTRUCTURE SERVICES AND NOT OWNED BY
THE CITY, INCLUDING BUT NOT LIMITED TO WIRES, PIPES, CONDUITS,
PEDESTALS, AND OTHER APPURTENANCES PLACED IN, ON, OR UNDER PUBLIC
HIGHWAYS.
GROSS REVENUES INCLUDES ALL REVENUES COLLECTED BY THE LICENSEE
IN THE DELIVERY OF INTERNET ACCESS TO END-USER CUSTOMERS OR
REVENUES COLLECTED IN THE FORM OF RENT OR LEASE PAYMENTS,
INCLUDING THE FEE FOR SERVICE INSTALLATION AND ACTIVATION, MONTHLY
FEE FOR INTERNET ACCESS, THE RENT OR LEASE PAYMENTS FROM THIRD-
PARTY USE OF LICENSEE’S FIBER-OPTIC CIRCUITS, THE RENT OR LEASE
PAYMENTS FOR CUSTOMER-PREMISE EQUIPMENT, AND ANY PROPERTY OR IN-
KIND CONTRIBUTIONS (SERVICES OR GOODS) RECEIVED BY LICENSEE FROM
ITS CUSTOMERS WITHIN THE CITY. GROSS REVENUES DOES NOT INCLUDE
LICENSE FEES COLLECTED FROM CUSTOMERS PURSUANT TO PARAGRAPH
5D-5(B)(4).
LICENSE MEANS THE NON-EXCLUSIVE AUTHORIZATION GRANTED BY THE CITY
TO CONSTRUCT, OPERATE, AND MAINTAIN FACILITIES WITHIN ALL OR PART OF
THE CITY AND TO OCCUPY OR USE THE STREETS WITHIN THE CITY. THE
LICENSE SHALL BE EVIDENCED BY A SEPARATE GRANTING ORDINANCE AND
LICENSE DOCUMENT AND SUBJECT TO THE TERMS OF THIS CHAPTER.
LICENSEE MEANS THE PERSON OR ENTITY TO WHICH LICENSE IS GRANTED
FOR THE CONSTRUCTION, OPERATION, MAINTENANCE, AND
RECONSTRUCTION OF FACILITIES AND NETWORK INFRASTRUCTURE TO
PROVIDE SERVICES TO END-USER CUSTOMERS.
LICENSE FEE MEANS EITHER THREE PERCENT (3%) OF GROSS REVENUES, OR
THE AMF, WHICHEVER IS HIGHER.
LOCAL STREET MEANS ALL STREETS THAT PROVIDE DIRECT ACCESS TO
RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR OTHER ABUTTING LAND AND
FOR LOCAL TRAFFIC MOVEMENTS, AND THAT CONNECT TO COLLECTOR OR
ARTERIAL STREETS OR BOTH.
NETWORK INFRASTRUCTURE SERVICE MEANS WIRED TRANSMISSION
TECHNOLOGY THAT PROVIDES AN END-USER CUSTOMER CONNECTIVITY TO
THE INTERNET FOR A FEE. THE SERVICES SHALL NOT INCLUDE CABLE
SERVICES (AS GOVERNED BY A.R.S. §9-505), VIDEO SERVICES (AS GOVERNED
BY A.R.S. §9-1401), COMMERCIAL MOBILE RADIO SERVICE (AS DEFINED IN
A.R.S. §9-581), OR TELECOMMUNICATIONS SERVICES OFFERED BY A
TELECOMMUNICATIONS CORPORATION (AS DEFINED IN A.R.S. §9-581).
NETWORK INFRASTRUCTURE SERVICE PROVIDER MEANS THE PERSON OR
COMPANY OFFERING NETWORK INFRASTRUCTURE SERVICES.
PUBLIC HIGHWAY OR HIGHWAY MEANS ALL ROADS, STREETS AND ALLEYS AND
ALL OTHER DEDICATED PUBLIC RIGHTS-OF-WAY OF THE CITY. A BRIDGE
OWNED BY THE CITY OR OTHER PARTIES IS NOT A PUBLIC HIGHWAY OR A
HIGHWAY; USE OF A CITY BRIDGE MAY REQUIRE A BRIDGE MASTER LICENSE
AGREEMENT OR A REVOCABLE PERMIT.
RESIDENTIAL UNIT AS USED TO CALCULATE THE AMF MEANS ANY PROPERTY
USED AS A RESIDENCE, REGARDLESS OF ZONING CLASSIFICATION. IF
LICENSEE HAS A CONTRACT TO PROVIDE FIBER-OPTIC SERVICES TO A
MULTIPLE DWELLING UNIT COMPLEX, INCLUDING CONDOMINIUMS OR
APARTMENTS, LICENSEE SHALL INCLUDE THE TOTAL NUMBER OF
RESIDENTIAL UNITS AVAILABLE WITHIN THE PROPERTY FOR CALCULATION OF
THE AMF.
RIGHTS-OF-WAY OR ROW SHALL HAVE THE SAME MEANING AS PUBLIC
HIGHWAY OR HIGHWAY.
TELECOMMUNICATIONS CORPORATION MEANS A CORPORATION WITH A VALID
CITY TELECOMMUNICATIONS LICENSE WHICH MAY PROVIDE END-USER
CUSTOMERS CONNECTIVITY TO THE INTERNET FOR A FEE UNDER THE TERMS
OF ITS TELECOMMUNICATIONS LICENSE.
ARTICLE II. LICENSE TO OCCUPY RIGHTS-OF-WAY
SEC. 5D-3. LICENSE REQUIRED.
NETWORK INFRASTRUCTURE SERVICE PROVIDER SHALL NOT INSTALL,
MAINTAIN, CONSTRUCT, REPAIR, OR OPERATE FACILITIES IN ANY PUBLIC
HIGHWAY IN THE CITY, OR PROVIDE SERVICES BY MEANS OF SUCH FACILITIES,
UNLESS A LICENSE TO USE THE HIGHWAYS TO SERVICES HAS FIRST BEEN
GRANTED BY THE PHOENIX CITY COUNCIL UNDER THIS CHAPTER.
SEC. 5D-4. LICENSE TERM.
LENGTH OF LICENSE. ANY LICENSE GRANTED BY THE CITY PURSUANT TO
THIS CHAPTER SHALL COMMENCE UPON APPROVAL. THE LICENSE SHALL BE
EFFECTIVE FOR A PERIOD OF FIVE (5) YEARS, AND SUBJECT TO THE
CONDITIONS AND RESTRICTIONS PROVIDED IN THE LICENSE AND THIS
CHAPTER.
5D-5. COMPENSATION.
A. LICENSEE SHALL:
1. PAY ANY APPLICABLE TRANSACTION PRIVILEGE TAX OR
APPLICABLE USE TAX, AS MAY BE SPECIFIED FROM TIME TO TIME
IN CHAPTER 14 OF THE PHOENIX CITY CODE.
2. PAY ALL FEES RELATED TO THE PLAN REVIEW AND ISSUANCE
OF CONSTRUCTION PERMITS, INSPECTIONS FEES, RIGHT-OF-WAY
AND TEMPORARY RESTRICTION AND CLOSURE SYSTEM (TRACS)
PERMITS, AND PRE-CONSTRUCTION MEETING FEES. ALSO PAY
ALL FEES RELATED TO PERMITS AND INSPECTIONS THAT MAY BE
REQUIRED BY THE PLANNING & DEVELOPMENT DEPARTMENT.
3. REIMBURSE THE CITY FOR ITS ACTUAL AND DOCUMENTED
COSTS IF THE CITY REASONABLY REQUIRES RETAINING OUTSIDE
PERSONS TO REVIEW PLANS, OUTSIDE INSPECTORS TO MONITOR
THE INSTALLATION OF FACILITIES, AND ANY OTHER
CONSTRUCTION RELATED WORKERS TO MEET TIMEFRAMES
DESIRED BY THE LICENSEE.
4. PAY ALL REASONABLE COSTS ASSOCIATED WITH THE
CONSTRUCTION, MAINTENANCE, AND OPERATION OF ITS
FACILITIES IN THE PUBLIC HIGHWAYS USED TO PROVIDE
SERVICES, INCLUDING REASONABLE COSTS ASSOCIATED WITH
DAMAGE CAUSED TO THE PUBLIC HIGHWAYS.
5. THE CITY’S RIGHT-OF-WAY IS HELD IN PUBLIC TRUST AND IS A
VALUABLE ASSET THAT REQUIRES FAIR AND REASONABLE
COMPENSATION FOR ITS USE BY LICENSEE. THE LICENSE FEE
FOR A LICENSE SHALL BE THE GREATER OF THE TWO OPTIONS:
EITHER THREE PERCENT (3%) OF GROSS REVENUES, OR AN AMF.
a.
AFTER 12-MONTHS FROM THE DATE THAT THE
LICENSE IS EXECUTED, AND ON EACH SUCCESSIVE
ANNIVERSARY OF THAT DATE, THE LICENSEE SHALL
CALCULATE THE AMF PAYABLE TO THE CITY.
i)
THE AMF FOR JANUARY 2024 THROUGH
DECEMBER 2029 IS $9.00 (NINE DOLLARS) MULTIPLIED
BY THE NUMBER OF RESIDENTIAL UNITS THAT
LICENSEE HAS PASSED ON A LOCAL STREET AND A
COLLECTOR STREET WITH ITS FACILITIES. THE AMF
RATE FOR RESIDENTIAL UNITS PASSED SHALL
INCREASE AT EACH FIVE-YEAR RENEWAL BASED ON
THE CUMULATIVE CONSUMER PRICES INDEX ALL
URBAN AREAS (CPI-U) FOR THE MONTH OF JULY
DURING EACH YEAR OF THE LICENSE; PROVIDED
THAT THE ANNUAL FEE FOR EACH RESIDENTIAL UNIT
PASSED SHALL NOT BE LESS THAN THE FEE FROM
THE PREVIOUS FIVE-YEAR LICENSE TERM.
b.
IF THE THREE PERCENT (3%) OF GROSS REVENUES
EXCEEDS THE AMF, THEN THE LICENSEE SHALL ONLY REMIT
THE THREE PERCENT (3%) OF GROSS REVENUES TO CITY.
c.
IF THE THREE PERCENT (3%) OF GROSS REVENUES
DOES NOT EXCEED THE AMF, THEN LICENSEE SHALL REMIT
THE AMF TO CITY.
B. LICENSEE SHALL REMIT QUARTERLY LICENSE FEE PAYMENTS.
1. AT THE END OF EACH CALENDAR QUARTER, LICENSEE SHALL
CALCULATE AND REMIT TO CITY A LICENSE FEE PAYMENT EQUAL
TO THREE PERCENT (3%) OF GROSS REVENUES.
2. QUARTERLY FEE PAYMENT. THE LICENSEE SHALL SEND THE
QUARTERLY LICENSE FEE PAYMENT SO THAT THE PAYMENT IS
RECEIVED BY THE CITY ON OR BEFORE:
a. 1Q (JANUARY 1 - MARCH 31) PAYMENT TO CITY BY MAY 31;
b. 2Q (APRIL 1 – JUNE 30) PAYMENT TO CITY BY AUGUST 31;
c. 3Q (JULY 1 – SEPTEMBER 30) PAYMENT TO CITY BY
NOVEMBER 30;
d. 4Q (OCTOBER 1 – DECEMBER 31) PAYMENT TO CITY BY
FEBRUARY 28.
3. FIRST QUARTERLY FEE PAYMENT. THE FIRST QUARTERLY FEE
PAYMENT SHALL BE MADE AFTER CLOSE OF THE QUARTER
DURING WHICH THE LICENSEE BEGINS PROVIDING SERVICE TO
ANY END-USER CUSTOMERS.
4. THE LICENSEE MAY IDENTIFY AND COLLECT, AS A SEPARATE
ITEM ON THE REGULAR BILL OF ANY END-USER CUSTOMER, THE
AMOUNT OF THE LICENSE FEE ON GROSS REVENUES.
5. THE LICENSE FEE WILL NOT BE AN OFFSET TO THE
TRANSACTION PRIVILEGE TAX OR ANY OTHER FEDERAL, STATE OR
LOCAL TAX THAT MAY BE ASSESSED. LICENSEE ACKNOWLEDGES
THAT CITY WILL PASS ON ITS TRANSACTION PRIVILEGE TAX
LIABILITY AS A LICENSOR OF REAL PROPERTY TO LICENSEE AND
LICENSEE SHALL PAY SUCH AMOUNT. LICENSEE MAY IDENTIFY
AND COLLECT, AS A SEPARATE ITEM ON THE REGULAR BILL OF
ANY END-USER CUSTOMER, THE AMOUNT SO PASSED ON.
6. LATE PAYMENT PENALTY FOR ALL FEES. ANY FEE PAYMENT DUE
TO THE CITY THAT IS NOT RECEIVED BY THE DATE SPECIFIED IN
SECTION 5D-5(B)(2) SHALL BE SUBJECT TO A LATE PAYMENT FEE
OF ONE PERCENT (1%) PER MONTH.
SEC. 5D-6. CITY POLICE POWER; CONTINUING JURISDICTION.
A. THE LICENSEE SHALL AT ALL TIMES BE SUBJECT TO ALL LAWFUL
EXERCISE OF THE POLICE POWER BY THE CITY, INCLUDING ANY AND ALL
CHAPTERS, RULES, OR REGULATIONS WHICH THE CITY HAS ADOPTED
OR MAY ADOPT, AND ALL LAWS, RULES, REGULATIONS, ORDERS, AND
POLICIES OF THE STATE AND THE UNITED STATES GOVERNMENT. IN THE
EVENT OF A CONFLICT BETWEEN THIS CHAPTER AND OTHER
PROVISIONS OF THE CITY CODE, THE STRICTER REQUIREMENT SHALL
APPLY.
B. THE CITY SHALL HAVE CONTINUING JURISDICTION AND SUPERVISION
OVER ANY FACILITIES LOCATED WITHIN OR ON RIGHTS-OF-WAY. IT IS
RECOGNIZED THAT THE DAILY ADMINISTRATIVE, SUPERVISORY, AND
ENFORCEMENT RESPONSIBILITIES OF THE PROVISIONS OF THIS
CHAPTER SHALL BE DELEGATED AND ENTRUSTED TO THE CITY
MANAGER OR DESIGNEE TO INTERPRET, ADMINISTER, AND ENFORCE
THE PROVISIONS OF THIS CHAPTER, AND TO PROMULGATE STANDARDS
REGARDING THE CONSTRUCTION, RECONSTRUCTION, RELOCATION,
MAINTENANCE, REPAIR, DISMANTLING, ABANDONMENT, OR USE OF THE
FACILITIES WITHIN THE RIGHTS-OF-WAY.
PASSED by the Council of the City of Phoenix this xxth day of ______________,
2024.
_______________________________
M A Y O R
_______________________________
Date
ATTEST:
__________________________
Denise Archibald, City Clerk
APPROVED AS TO FORM:
Julie M. Kriegh, City Attorney
BY:________________________
________________________
REVIEWED BY:
___________________________
Jeffrey Barton, City Manager
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