SR-101-003-04-05 (6)
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J City of
Santa Monica'"
City Council Report
City Council Meeting: April 25, 2q~6
Agenda Item: ~
To:
From:
Subject:
Mayor and City Council
Jory Wolf, Chief Information Officer
Dark Fiber Lease Agreement with Google Inc. and Dark Fiber Leasing.
Recommended Action
It is recommended that the City Council authorize the City Manager to negotiate and
execute an agreement with Google Inc. for the lease of dark fiber in an amount not less
than $9,636 for one year, with two annual renewal options. It is also recommended
that the City Council authorize the City Manager to negotiate and execute dark fiber
lease agreements with other interested parties should those opportunities exist.
Executive Summary
The City of Santa Monica has built a Municipal Fiber Network (MFN) for delivering
voice, video and data communications to City facilities. The MFN has an abundance of
unused fiber strands, called dark fiber, which could be made available for lease. By
leasing dark fiber, the City will provide businesses in Santa Monica with the ability to
install high speed networks, connect their offices in Santa Monica or to connect their
offices to other businesses in the city and beyond. Leasing of dark fiber will generate
financial returns for the development of the MFN and stimulate economic growth.
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An ad was placed in a local publication to announce the opportunity to lease dark fiber
from the City and to solicit interest. Thus far, Google Inc. has expressed interest in
leasing dark fiber from the City, but it is likely that other businesses will wish to do the
same. Staff recommends that the City enter into a lease agreement with Google Inc. in
an amount not less than $9,636 for one year, with two annual renewal options tied to
the Consumer Price Index. Staff also recommends that the City negotiate and execute
dark fiber lease agreements using established lease rates with other interested parties
should those opportunities exist.
Discussion
Backqround
Like many municipalities, Santa Monica has built an MFN for enhanced delivery of
government services, improving performance and lowering costs of telecommunications
services for City facilities and to stimulate economic growth. The MFN contains a
sufficient amount of unused dark fiber that could be leased to local businesses.
Leasing of dark fiber to local businesses is common for cities and public utilities that
have fiber optic assets. Locally, these cities and public utilities include the City of
Anaheim, City of Pasadena, City of Glendale, City of Burbank, Los Angeles Department
of Water and Power, and City and County of Los Angeles.
Leasing of dark fiber will provide local businesses with the ability to install high speed
networks that connect their offices in Santa Monica or connect their office to other
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businesses in the city and beyond. In addition, leasing dark fiber will generate financial
returns for the development of the MFN and will stimulate economic growth.
Standard dark fiber lease rates have been established and are modeled after rates in
cities of comparable size. They begin with a three mile minimum charge, followed by
additional charges per linear foot of fiber optic cable. A building entrance fee is also
charged if a path needs to be constructed between the business point and demarcation,
and the closest pull box.
Contractor/Consultant Selection
In March 2006, an ad was placed in the Los Angeles Times soliciting interested parties
to contact the City if they are interested in the leasing of dark fiber. To date, the
Information Systems Division has received interest from one vendor, Google Inc. City
staff has reviewed the request and recommends that the City enter into a dark fiber
lease agreement with Google Inc. and to negotiate and execute dark fiber lease
agreements with other interested parties should those opportunities exist.
BudgetlFinanciallmpact
Revenue account 01223.407780, "Dark Fiber Lease," has been established to capture
revenues generated from dark fiber leases.
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Prepared by:
Phil Tong, Senior Administrative Analyst
Approved:
Forwarded to Council:
ry. olf
Chief Information Officer
Information Systems
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Reference
Contract No.
8578 CCS