Use of Abandoned (Decommissioned) Gas Mains for

Telecommunications Purposes -

Agreement with Consumers Gas

The Works and Utilities Committee again recommends the adoption of the report dated March 11, 1998, from the Commissioner of Works and Emergency Services embodied in the communication dated April 21, 1998, from the City Clerk.

The Works and Utilities Committee reports, for the information of Council, having requested that where there is no existing agreement in place, the Commissioner of Works and Emergency Services be requested to submit a report to the Committee on any requests by cable companies to install new equipment prior to approval, and on an overall plan for such installations.

The Works and Utilities Committee submits the following communication (April 21, 1998) from the City Clerk:

City Council, at its meeting held April 16, 1998, had before it Clause No. 11 of Report No. 3 of The Works and Utilities Committee, headed AUse of Abandoned (Decommissioned) Gas Mains for Telecommunications Conduit Purposes - Agreement with Consumers Gas@.

Council directed that the aforementioned Clause be struck out and referred back to the Works and Utilities Committee, with a request that the Commissioner of Works and Emergency Services submit a further report to the Committee outlining a comprehensive policy for the use of public rights-of-way for the development of a telecommunications infrastructure network.

 (Clause No. 11 of Report No. 3 of

The Works and Utilities Committee, headed

AUse of Abandoned (Decommissioned) Gas Mains for

Telecommunications Conduit Purposes - Agreement with Consumers Gas@)

(City Council on April 16, 1998, struck out and referred this Clause back to the Works and Utilities Committee, with a request that the Commissioner of Works and Emergency Services submit a further report to the Committee outlining a comprehensive policy for the use of public rights-of-way for the development of a telecommunications infrastructure network.)

The Works and Utilities Committee recommends the adoption of the following report (March 11, 1998) from the Commissioner of Works and Emergency Services:

Purpose:

To authorize an agreement between The Consumers Gas Company Limited (Consumers Gas) and the City to permit the refurbishing and use of abandoned (decommissioned) gas mains within public road allowances for the purposes of a conduit structure for fibre optic cable.

Funding Sources, Financial Implications and Impact Statement:

The proposal will result in revenue generation potential for the City in accordance with the formula set out in the body of this report. No costs to the City are involved.

Recommendations:

(1)That City Council authorize the entering into of an agreement with The Consumers Gas Company Limited (and/or other parties as may be necessary) to permit the refurbishment and use of abandoned (decommissioned) gas mains within public road allowances for the purposes of a conduit structure for fibre optic cable, with such agreement generally containing the terms and conditions set out in this report, and such other terms and conditions as may be required by the City Solicitor, in consultation with the Commissioner of Works and Emergency Services;

(2)that the City Solicitor be authorized to prepare and introduce in Council a by-law to authorize the entering into and execution of this agreement; and

(3)that the appropriate City officials be authorized and directed to take the necessary action to give effect to the foregoing.

Background:

The Consumers Gas Company Limited and Metronet Communications Group Inc. have approached City staff with a proposal to utilize abandoned (decommissioned) gas mains located within public road allowances as a conduit structure for fibre optic telecommunications cable. Staff have met with representatives of the firms on a number of occasions, and based on the discussions, have concluded that the scheme is supportive of the City=s dual objectives of fostering the development of a competitive, state-of-the-art telecommunications infrastructure to benefit the business community and to enhance economic development, while realizing direct revenue and services to the City.

Comments:

Introduction:

The former City of Toronto Council, at its meeting of June 23 and 24, 1997 authorized an agreement between Metronet Communications Group Inc. and the City involving:

(i)a lease of a decommissioned high pressure watermain system in the downtown core and other City-owned decommissioned pipe located within the (former) City of Toronto, in accordance with a Request for Proposals, for the purposes of installing, maintaining and operating a high speed fibre optic telecommunications network and sub-leasing space for third party-owned cables within the pipes; and

(ii)a licence by way of a Municipal Access Agreement to allow Metronet to enter upon the Public Highways under the jurisdiction of the (former) City of Toronto for the purposes of installing, maintaining and operating the network throughout the City, subject to the City=s requirements and permissions for construction within the street allowance.

The Agreement that followed set out the parties= rights and obligations related to such work and included a comprehensive compensation package to the City with substantial direct revenues accruing. The Metropolitan Toronto Council, at its meeting of August 13 and 14, 1997, among other things, approved the installation of the telecommunications network within the limits of Metro roads located in the former City.

Subsequently, City Council, at its meeting of October 6 and 7, 1997, endorsed a Standard Form Municipal Access Agreement to be entered into by parties wishing to access (former) City of Toronto streets for the purposes of installing telecommunications cables and auxiliary equipment.

Proposal:

Consumers Gas and Metronet Communications Group Inc. wish to enter into an agreement to utilize abandoned (decommissioned) gas mains in the public road allowances for the purposes of providing a conduit structure to carry fibre optic telecommunications cables, and require the City=s consent to this arrangement. The Consumers Gas arrangement with Metronet involves two aspects:

(i)lease of the abandoned (decommissioned) gas mains on a non-exclusive basis, but with Metronet having first rights of refusal. Compensation would be in the range of $2.00 to $2.50; and per metre of pipe per annum which reflects the return on active gas main to Consumers Gas; and

(ii)under a separate agreement, a non-regulated affiliate, Consumers Gas Energy Inc., would act as Metronet=s project (construction) manager or agent for work related to the decommissioned gas mains and handle aspects such as construction, maintenance, permitting operations, locates, and infrastructure management. A fee would be involved. Consumers Gas representatives advise that the term of such agreement would not be dependent on the term of the pipe access agreement. In this regard, I also understand that charges by Consumers Gas to Metronet would be competitive with other contractors and would not involve any Asurcharge@ in lieu of higher lease fees for Item (i) above.

Consumers Gas states that about 42 km of abandoned gas main would likely be used for the Metronet network. Metronet would be responsible for all of the pipe refurbishment costs, but would not take ownership of the pipes. Metronet would own appurtenances installed on the pipes as well as the fibre optic network, including telecommunications improvements. In the event small portions of the pipes are missing, the links that would be constructed to connect the pipes would be deemed to be part of the abandoned gas main. Letters of Intent have been entered into between Consumers and Metronet, and resolution of the City participation remains the last outstanding item to completing these arrangements.

City Interests:

In addition to the obvious advantages to the proponents of the proposed use of abandoned gas mains for telecommunications purposes (in Consumers Gas case, the ability to realize a return on an unutilized asset, and for Metronet, the ability to deploy its telecommunications at a quicker rate with potentially far less capital cost), the concept, in principle, also holds promise from the City=s perspective.

In accordance with the City=s agreement with Metronet, payments are made to the City in part based on Metronet=s revenues. If these can be accelerated by virtue of the network being installed more efficiently, then the City will benefit. Of course, this is also consistent with the overriding objective of facilitating a competitive telecommunications infrastructure in Toronto and the resulting economic development enhancement. Finally, the use of the existing abandoned structures in the streets will result in far less disruption of the streets than would otherwise be possible if new conduit were to be laid. This will reduce construction impacts on pedestrian and vehicular flows and avoid damaging the pavements.

Terms of Agreement:

The following list outlines the key issues and basic terms that should be addressed in an agreement between Consumers Gas and the City for the grant of permission to utilize decommissioned gas mains in the City streets for telecommunications purposes.

(1)Permission to use the decommissioned gas mains for telecommunications purposes would only be granted to parties with a valid Municipal Access Agreement (and only in the areas where the MAA is applicable) with the City, and would be non-exclusive, to ensure that only authorized parties are carrying out work within the public road allowance.

(2)City staff are of the view that Consumers Gas has statutory rights to be in Toronto road allowances for purposes of distributing gas, but this does not extend to any other unrelated use for these pipes. Accordingly, the agreement should limit the use of the decommissioned gas mains only to telecom purposes. Consumers Gas will be responsible to secure any regulatory or other approval (if any) required to authorize this initiative.

(3)The issue of co-ordinating underground road allowance space, particularly in the highly congested downtown area, is very important. We do not want Consumers Gas to Areactivate@ the substantial abandoned gas main network on the basis that there may be an opportunity to use it at some undefined future time for revenue generating purposes unrelated to gas distribution. Co-operation amongst all utilities operating within the tight confines of the road allowance is essential to preserve efficiencies for all. Consumers Gas has acknowledged this issue, noting that the plan now involves approximately 42 km of pipe, and have pledged that requests by other utilities to install plant in an abandoned gas corridor would be Adealt with reasonably@. From the City=s perspective, the agreement must contain the provision that unless the abandoned main has already been refurbished or a plan is actively being developed (i.e., installation within a specified period of time) to do so, the Commissioner of Works and Emergency Services has the right, in his sole discretion, to reallocate the corridor for other municipal or utility purposes.

(4)Permitting and Occupancy of the Street Allowance - Works in the street allowance would be subject to all of the applicable municipal by-laws, usual payments, taxes, fees and permit approval requirements. Consumers Gas would be subject to all of the requirements and conditions for this undertaking that are currently in effect relative to its gas system in the streets.

 (5)Compensation - It should be recognized that entering into an agreement with Consumers Gas to permit the use of abandoned gas pipes for telecommunications purposes would not affect the revenue or dark fibre provisions the City receives from the telecom companies through its lease/licence agreement with Metronet or any future Municipal Access Agreements. On the other hand, staff feel that the City should also participate directly in some reasonable manner in the revenue generation potential of the abandoned gas mains given that Consumers Gas has the ability to generate these additional revenues only by virtue of the fact that it occupies valuable space in the public highways with plant that was originally intended to distribute gas.

Consumers Gas has offered to pay the City an annual fee of $1.00 per metre of refurbished decommissioned gas main, based on the municipal taxation rate currently payable on a four-inch diameter active plastic gas pipe. In view of the payment to be received by Consumers, stated to be in the range of $2.00 to $2.50 per metre per annum, I am prepared to recommend acceptance of a fee within this general order of magnitude. Consumers has indicated that the proposed fee to be charged to Metronet reflects the return it receives currently on its active gas distribution network. To ensure that all of the above parameters remain in relative balance throughout the term of the agreement, while maintaining the general relationship proposed by Consumers, however, I would suggest that the fee to be paid to the City for the use of refurbished decommissioned gas main for telecommunications purposes in the road allowances be set at the greater of:

 (i)the applicable taxation rate of an active four-inch diameter plastic gas pipe; or

 (ii)50 percent of the gross per meter per annum fee (excluding taxes) Consumers Gas charges the telecom operator.

The fee would be exclusive of any other applicable taxes that are currently in effect, or may be imposed in the future by any regulatory body, with such taxes being the responsibility of Consumers Gas and/or the telecom operator. Further, in order to ensure that the per metre fee component is fair and reflective of its value, the agreement with the City should include an undertaking from Consumers Gas that any party seeking access to the decommissioned gas mains would be charged in accordance with the principle set out earlier in this report.

At the time of submission of its annual fee, Consumers Gas would submit appropriate documentation and plans outlining the extent of the system. Confirmation provisions should also be incorporated in the agreement.

(6)In the event an abandoned gas main parallels a decommissioned City watermain and Metronet has not utilized the full capacity of the watermain, the City should receive compensation at a rate equivalent to the City lease with Metronet. This provision may require the involvement of the telecom provider and not Consumers Gas directly.

(7)With respect to the construction of new links to connect breaks or other gaps in decommissioned gas lines, for the purposes of this agreement, such links will be deemed to be part of the refurbished gas pipe and subject to the City fee if they are also subject to Consumers Gas per metre fee charged to the telecom operator.

(8)City use of capacity in refurbished gas pipe: staff have requested that should the City, at its sole option, wish to utilize sections of decommissioned gas pipe to install fibre optic cable and appurtenances for its own non-commercial purposes, it should have the opportunity to do so subject to paying a reasonable amount to refurbish the pipe, but not the per metre fee. Of course, the Consumers Gas fee to the City would also not be applicable in this instance.

(9)The City, by entering into this agreement would not be representing or assuring that any particular alignment or routing of a segment of abandoned gas pipe would be usable or approved for the purpose of telecommunications conduit.

(10)Term: it is proposed that the agreement be based on a 15-year or lesser term, with renewal considerations.

(11)The ability of Consumers Gas to assign the agreement to a subsidiary or affiliate provided that Consumers Gas remains responsible for the fulfilment of the terms is generally acceptable.

(12)Consumers Gas will agree to fully indemnify the City against all loss and liability, including environmental liability stemming from the permission granted under this agreement.

(13)Consumers Gas shall provide proof of insurance in a form and amount satisfactory to the Chief Financial Officer and City Treasurer, including naming the City as an additional named insured.

(14)The agreement shall contain provisions relating to expiry and termination, including the right for the City to require that all equipment be removed from the pipes, or the pipes relocated and the public highway restored to the satisfaction of the Commissioner of Works and Emergency Services.

(15)The agreement will contain any other provisions deemed appropriate by the City Solicitor, in consultation with the Commissioner of Works and Emergency Services.

Conclusion:

Staff are of the view that the proposal by Consumers Gas and Metronet to utilize abandoned gas mains within public road allowances as a telecommunication conduit structure, under the general framework set out in this report, is a positive initiative for the proponents and the City in terms of facilitating the deployment of a current, competitive telecommunications infrastructure in the City. It will achieve these objectives with less disruption to the street and sidewalk system than would otherwise be possible if new construction were involved. The proposal will enable the efficient use and conservation of structures that are presently located within the road allowance, but not currently in active use. Finally, the City will derive direct revenue from the plan.

Contact Name and Telephone Number:

Andrew Koropeski, Director

Infrastructure Planning and Transportation

Toronto City Works Services

Phone: (416) 392-7711.

The Works and Utilities Committee also submits the following report (May 14, 1998) from the Commissioner of Works and Emergency Services:

 Purpose:

To respond to a request from City Council that the Commissioner of Works and Emergency Services submit a further report outlining a comprehensive policy for the use of public rights-of-way for the development of a telecommunications infrastructure network.

 Funding Sources, Financial Implications and Impact Statement:

 Not applicable.

Recommendation:

That Clause No. 11 in Report No. 3 of The Works and Utilities Committee, recommending that the City enter into an agreement with Consumers Gas Company Limited to permit the refurbishment and use of abandoned (decommissioned) gas mains within public road allowances as a conduit structure, be approved.

Background:

The Works and Utilities Committee, at its meeting of March 25, 1998, in considering a report (March 11, 1998) from the Commissioner of Works and Emergency Services, recommended that the report be adopted in order to authorize an agreement between the Consumers Gas Company Limited and the City to permit the refurbishing and use of abandoned (decommissioned) gas mains within the public road allowances for the purposes of a conduit structure for fibre optic cable. City Council, at its meeting of April 16, 1998, struck out the recommendation and referred the Clause back to the Works and Utilities Committee with a request that the Commissioner submit a further report outlining a comprehensive policy for the use of public rights-of-way for the development of a telecommunications infrastructure network (Clause No. 11 of Report No. 3 of The Works and Utilities Committee).

Comments:

The formulation and evolution of the City=s involvement and encouragement of state-of-the-art telecommunications and high speed data information infrastructure can be traced back to the early 1990's. Particularly with the onset of the economic downturn, it was recognized that Toronto and its businesses faced unprecedented economic challenges and must pursue every opportunity to enhance our competitive positions. The focus was initially the Central Area and the importance of ensuring that unique and persuasive features continue to be offered to maintain a viable business climate in light of incentives being promoted by other municipalities regionally, nationally and outside the country.

The backdrop for this municipal perspective is a telecommunications industry that is undergoing massive change and growth, in terms of technological advances and the convergence of mediums, as well as the regulatory environment. Deregulation initially saw the introduction of competitive long distance services in the early 1990's and, as of this year, the authorization of local competitive carriers. While the regulation of telecommunications is within the purview of the federal government, the municipality does have some authority in terms of approving installations within its rights-of-way and setting out conditions for this type of work.

The fundamental shifts in the competitive telecommunications field and the demand for increased bandwidth and a wide range of voice, video and data services from business have directly led to increasing pressure to develop new networks, based largely on fibre optic technology. One of the key considerations in terms of the feasibility and economic viability of developing such networks is the ability to actually implement a system without incurring the exorbitant costs involved with underground construction in highly congested areas, and of course minimize disruption such construction would have on pedestrian activity and traffic movements.

City's Role:

In 1992, staff of the former City of Toronto sought authority from Council to prepare appropriate specifications and issue a Request for Proposals (RFP) to gauge the interest of the telecommunications industry and establish the conditions under which a communications/data information system could be developed in the downtown core. It was noted that a high pressure water main system comprised of 200 mm to 500 mm diameter pipes built between 1908 and 1932 as a fire fighting network had recently been abandoned and appeared to be ideal as a conduit structure in the core. The conduit system provided by the abandoned water mains could likely be augmented by other abandoned infrastructure such as gas mains or sewers.

Although some delays were incurred for a variety of reasons, an RFP was issued in late 1996. The explicit goals of the exercise and the basis of the City=s telecommunications policies and use of the rights-of-way for such purposes were two-fold:

(i) fostering the development of a competitive, state-of-the-art telecommunications structure to benefit the business community and to enhance economic development; and

(ii) realizing direct revenue and services to the City, recognizing the value in the abandoned pipe systems and the City road allowances.

As a result of submissions received in response to the proposal call, an extensive evaluation and negotiation led the former Toronto City Council in June 1997 to authorize an agreement with Metronet Communications Group Inc., granting a lease of the decommissioned water main system and licence by way of a Municipal Access Agreement to allow Metronet to enter upon the public highways under the jurisdiction of the former City of Toronto to install, maintain and operate a network. The former Metropolitan Council also endorsed the agreement for their roads within the former City boundaries.

Facilitating Competition:

The agreement with Metronet relating to the Municipal Access provisions is non-exclusive. Access by other competitors is also accommodated. With respect to the lease portion for the water main system, terms of the agreement limit the capacity that Metronet may use for its own purposes and require sub-leasing to third parties for the purposes of installing their fibre networks. The agreement also establishes certain performance levels and penalties if such levels are not met to ensure a viable competitive telecommunications network is actually constructed and operational. Finally, certain technical specifications are stipulated to ensure that state-of-the-art technology is installed.

More importantly from a competitive perspective, the former City Council directed staff to develop a standard form Municipal Access Agreement to be entered into by other companies wishing access to the street allowance for the purposes of installing, maintaining and operating telecommunications networks. By working with the terms of the Metronet agreement, the objective in this regard is to facilitate access for legitimate competitors in a consistent, equitable manner. This was approved by Council in October 1997, and also endorsed by the Metropolitan Council.

Direct City Benefits:

The agreement negotiated with Metronet provides substantial benefits to the City in terms of payments for the rights to access the public highways and the lease of the pipe system, and facilities and services to meet the City=s own corporate telecommunications needs.

With respect to the former, the City is entitled to revenues from Metronet and third-party lease fees based on the lengths of cable installed, a minimum annual pre-payment and a proportion of the firm's gross revenues generated from the Toronto network. A combined minimum amount of $10 million is guaranteed over the first five years of the agreement. (Staff would be pleased to advise Councillors of the details of the business arrangements at an in-camera session, as non-disclosure provisions in the contract do not permit us to release these figures.)

The City's corporate telecommunications needs are also addressed in the agreement. A ADark Fibre Licence@ allocates dark fibre strands for municipal purposes up to the full length of the Metronet fibre backbone, in locations, where and when the City specifies. As well, the agreement entitles the City to the company's Alit@ fibre services at the best industry price. Corporate telecommunications is within the purview of the Commissioner of Corporate Services. This is one of the myriad of municipal activities that is being assessed to achieve efficiencies and savings under amalgamation. The tools provided through the Municipal Access Agreements with telecom carriers will be of substantial value in this regard.

Municipal Access Agreements (MAA):

As noted above, the former City of Toronto and Metropolitan Councils approved a standard form MAA which extended the principles negotiated with Metronet. These are consistent with and supportive of the dual goals of encouraging a competitive, state-of-the-art telecommunication infrastructure in Toronto, and bringing direct revenues and services to the City. The approved arrangement requires an annual payment of 2 percent of a firm's gross receipts generated from a Toronto network up to the year 2001 and 3 percent per year thereafter. Minimum levels are also established at $20.00 per metre of cable in the downtown, and $10.00 per metre beyond.

At the present time, the Metronet agreement and approved standard form MAA is applicable only within the boundaries of the former City of Toronto and former Metropolitan roads. Metronet is aggressively pursuing the expansion of its network in 1998, and other parties have expressed a preliminary level of interest in MAAs. In principle, I am of the view that the agreement provisions should be extended to cover the entire City, and I will be reporting in due course on the appropriate terms. The same fundamental objectives that underlie the current agreements should continue to be the basis for these extensions.

Regulatory Environment:

Regulation of the telecommunications industry, and more particularly rights and responsibilities associated with access to municipal road allowances, is entwined in a complex array of federal and provincial legislation. Several contentious issues remain to be tested and resolved, largely around municipalities= authority to impose fees. On February 6, 1998, the Province passed Regulation 34/98 under the Municipal Act. The effect of this regulation is to prohibit municipalities in Ontario from using the user fee provisions to charge fees to a Aperson who owns or operates a telecommunications business@ with respect to equipment to be located on a municipal highway which will be used as part of the telecommunications business. The City Solicitor has advised that this regulation does not affect the existing Metronet agreement, which was authorized by private legislation obtained by the former City of Toronto, but shall need to be considered with respect to the extension of that agreement or the entering into new agreements with telecommunications providers which extend beyond the boundaries of the former City of Toronto. This regulation does not affect the City=s ability to impose fees upon Consumers Gas as recommended, since Consumers Gas is not operating Aa telecommunications business@.

The Federation of Canadian Municipalities (FCM) has taken a lead role in advocating the interests of its members through its Sub-Committee on Telecommunications chaired by Councillor Howard Moscoe. Initially the concerns stemmed from cable television operations and the lack of clear direction with respect to the fee issue, and to a lesser extent the local phone companies (which are subject to a 5 percent gross receipts tax). However, the recent advent of local competition has introduced significant complications.

The principles that have evolved for Toronto are very similar to those advanced by the FCM. In fact, the FCM has developed a model agreement based on the following:

(1) municipal governments must have the ability to control the number and types of aboveground telecommunications pedestals, kiosks, etc., and the location of underground infrastructure;

(2) the use of municipal rights-of-way by telecommunications companies must not impose financial costs on municipal governments and taxpayers;

(3) municipal governments must not be responsible for the costs of relocating telecommunications infrastructure if relocation is required for planning or other reasons deemed necessary by the municipal government;

(4) municipal governments must not be liable for any economic loss, legal costs or physical restoration costs resulting from the disruption of telecommunications services arising out of the actions of a municipal government unless grossly negligent; and

(5) municipal governments must receive revenues over and above their direct costs in providing access to rights-of-way as proper compensation for the use of municipal property for profit.

These provisions, as well as other significant enhancements, are secured in the Toronto agreement and standard form MAA.

I note that the City Solicitor will be addressing legal issues related to telecommunication installations at the appropriate time and likely in conjunction with my reporting on the extension of the existing terms and conditions discussed above.

Co-ordination of Utilities:

One of the key concerns with the installation of telecommunications networks in the road allowances, particularly in the congested downtown core and high density sub-centres throughout the City, is the physical space constraints. In this regard, the agreements do not guarantee that a corridor will be available in a location the firm wishes to use. Use of the public highway will be under the same conditions as any other private entity or utility. The firms will have to apply for and obtain a street allowance construction permit, street occupation permit, pavement cut permit and public utility co-ordinating committee approval. Work methods will have to conform with standard City of Toronto construction guidelines and specifications including requirements for the installation of underground services. Further, upon completion of any construction, installation, maintenance or operation of the telecommunications system, the public highway will be restored to a safe and proper condition to the satisfaction of the Commissioner of Works and Emergency Services. All permit fees and regulatory taxes which may be imposed will be borne by the firms and are exclusive of revenues accruing to the City under the MAA.

The firms will pay any costs incurred by the City or a utility company for the construction, maintenance or repair of its facilities damaged or disturbed arising from the implementation, operation or abandonment of the network. Infrastructure installed and operated by a firm which interferes with other services located within the highway may be removed and/or relocated at the discretion of the Commissioner of Works and Emergency Services at the expense of the firm.

Consumers Gas Proposal:

My report of March 11, 1998, outlines in some detail the proposal of Consumers Gas seeking permission for the refurbishment and use of abandoned (decommissioned) gas mains within public road allowances as a conduit structure for fibre optic cables.

This proposal is entirely consistent and complementary with the overall principles for a competitive telecommunications industry for Toronto. The use of existing abandoned structures in the streets will result in far less disruption than would otherwise be possible if new conduit were to be installed. This will reduce construction impacts on pedestrian and vehicular flows and avoid damaging the pavements.

The proposal also involves an offer of direct revenue to the City. Although the amount would not be large, it is over and above the revenues that would be paid by the telecom carriers pursuant to their MAAs. Accordingly, it would be in the City's interests to authorize this proposal.

Conclusions:

The consideration of telecommunications networks within the public road allowances of the City of Toronto has been guided by the dual goals of fostering the development of a competitive, state-of-the art telecommunications infrastructure to benefit the business community and to enhance economic development, and realizing direct revenues and services to the City.

Deregulation in the telecommunications marketplace coupled with escalating demand for increased bandwidth has led to a great deal of interest in the installation of fibre networks within road allowances. While it has been the direction of the previous Councils to facilitate this, significant effort has been made to do this in an orderly fashion while recognizing the value of the City=s assets. A competitive bid process set the framework for the business arrangements and terms and conditions related to use of the streets for these purposes, and in turn formed the basis for a standard form Municipal Access Agreement.

This activity has set the stage for Toronto to become a leader in competitive telecommunications and bandwidth services. In addition to facilitate implementation, the City has secured substantial benefits in direct revenues and services to meet its own corporate needs. These provisions should be extended to areas of the City where they are not currently applicable. The Consumers Gas proposal to use decommissioned gas mains as a conduit structure advances these goals and should be endorsed.

Contact Name and Telephone Number:

Andrew Koropeski, Director

Infrastructure Planning and Transportation Division

Phone: 392-7711.