PCC Chapter 5D --- Network Infrastructure Services, 6-6-2024 version_.pdf

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ORDINANCE G- 
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;
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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 OR, IF 
THE CUSTOMER’S INTERNET ACCESS IS PROVIDED THROUGH AN OPEN 
ACCESS WHOLESALE SERVICE, THE FEE-PAYING CUSTOMER OF THE 
INTERNET SERVICE PROVIDER.   
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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 DEFINED BY A.R.S. §9-505), VIDEO SERVICES (AS DEFINED BY 
A.R.S. §9-1401), COMMERCIAL MOBILE RADIO SERVICE (AS DEFINED IN A.R.S. 
§9-581), OR TELECOMMUNICATIONS SERVICES (AS DEFINED IN A.R.S. §9-581).
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NETWORK INFRASTRUCTURE SERVICE PROVIDER MEANS THE PERSON OR 
COMPANY OFFERING NETWORK INFRASTRUCTURE SERVICES. 
OPEN ACCESS WHOLESALE SERVICE MEANS A TYPE OF NETWORK 
INFRASTRUCTURE SERVICE WHERE THE FIBER-OPTIC CONNECTION TO THE 
END-USER CUSTOMER IS LEASED, RENTED, OR MADE AVAILABLE TO AN 
INTERNET SERVICE PROVIDER THAT OFFERS INTERNET ACCESS SERVICES 
DIRECTLY TO THE END-USER CUSTOMER.  
OPEN ACCESS WHOLESALE SERVICE PROVIDER MEANS THE PERSON OR 
COMPANY THAT HAS A LICENSE TO OFFER NETWORK INFRASTRUCTURE 
SERVICES WITHIN THE CITY LIMITS WITH THE PRIMARY PURPOSE TO LEASE, 
RENT, OR MAKE ITS FACITLITES AVAILABLE TO INTERNET SERVICE 
PROVIDERS THAT WILL, IN TURN, OFFER INTERNET SERVICE DIRECTLY TO 
THE END-USER CUSTOMER. 
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, 
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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. FEE PAYMENTS.  ALL PAYMENTS FOR PERMITS, INSPECTIONS,
AND RIGHT-OF-WAY MANAGEMENT (ROWM) FEES SHALL BE MADE
WITHIN 30 DAYS OF THE DATE ON THE INVOICE.  ANY FEES NOT
PAID ON A TIMELY BASIS IS SUBJECT TO COLLECTIONS ACTION
AND FEES AFTER 120 DAYS PAST DUE.  THE COLLECTIONS FEE
WILL BE ADDED TO THE PAST DUE AMOUNT AND MUST BE PAID TO
HAVE THE ACCOUNT CURRENT.  WHILE IN COLLECTIONS STATUS
FOR ANY PAYMENTS, THE LICENSEE WILL NOT BE ABLE TO
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SUBMIT PERMITS, PERFORM CONSTRUCTION WORK IN THE ROW, 
OR REQUEST TRACS PERMITS. 
 
6.  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. 
 
a. IF LICENSEE IS OFFERING INTERNET SERVICES DIRECTLY 
TO THE END-USER CUSTOMER AND IS THE INTERNET 
SERVICE PROVIDER (ISP), THE LICENSE FEE LICENSE SHALL 
BE THE GREATER OF THE TWO OPTIONS: EITHER THREE (3%) 
PERCENT OF GROSS REVENUES, OR THE ANNUAL MINIMUM 
FEE. 
 
b. IF LICENSEE IS PROVIDING OPEN ACCESS WHOLESALE 
SERVICE THAT LEASES, RENTS, OR OTHERWISE PROVIDE ITS 
FACILTIES TO AN INTERNET SERVICE PROVIDER TO OFFER 
INTERNET ACCESS TO END-USER CUSTOMERS, THE LICENSE 
FEE SHALL BE THE GREATER OF THE TWO OPTIONS: EITHER 
SIX (6%) PERCENT OF GROSS REVENUES DERIVED FROM THE 
LEASE, RENT, OR AVAILABILITY OF ITS FACILITIES TO 
INTERNET SERVICE PROVIDERS, OR THE ANNUAL MINIMUM 
FEE. 
 
c. ANNUAL MINIMUM FEE.  AFTER 12-MONTHS FROM THE 
DATE THAT THE LICENSE IS EXECUTED, AND ON EACH 
SUCCESSIVE ANNIVERSARY OF THAT DATE, THE LICENSEE 
SHALL CALCULATE THE ANNUAL MINIMUM FEE (AMF) 
PAYABLE TO THE CITY.   
 
i) THE AMF FOR JANUARY 2024 THROUGH DECEMBER 
2029 IS $6.00 (SIX 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. 
 
d. IF LICENSEE IS PROVIDING INTERNET SERVICES DIRECTLY 
TO THE END-USER CUSTOMER AND THE 3% OF GROSS 
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REVENUES EXCEEDS THE AMF, THEN THE LICENSEE SHALL 
ONLY REMIT THE 3% OF GROSS REVENUES TO CITY. 
 
i) IF 3% OF GROSS REVENUES DOES NOT EXCEED THE 
AMF, THEN LICENSEE SHALL REMIT THE AMF TO CITY.   
 
e. IF LICENSEE IS PROVIDING ITS FACILITIES AS OPEN 
ACCESS WHOLESALE SERVICES TO INTERNET SERVICE 
PROVIDERS AND THE 6% OF GROSS REVENUES EXCEEDS 
THE AMF, THEN THE LICENSEE SHALL ONLY REMIT THE 6% OF 
GROSS REVENUES TO CITY. 
 
i) IF 6% 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. 
 
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 
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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.
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