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sr-021412-3fCity Council Meeting: February 14, 2012 Agenda Item: 3—{- To: Mayor and City Council From: Jory Wolf, Chief Information Officer Subject: nLayer Communications, Inc. Internet Protocol Transit (IP Transit) for Lit Fiber Services Recommended Action Staff recommends that the City Council: 1. Authorize the City Manager to negotiate and execute a first modification with nLayer Communications, Inc., an Illinois -based company, to extend the existing IP Transit contract for three years. The total amount of this extension for the three year period will not exceed $300,000, increasing the contract amount to a total not to exceed $367,000. 2. Authorize the Chief Information Officer to issue any necessary change orders to obtain additional IP Transit within budget authority. Executive Summary The City uses nLayer Communications, Inc. (nLayer) to support the City's fiber optic network and free public Wi -Fi services. The City's fiber optic network also leverages niayer's IP Transit to provide local businesses broadband at reduced rates. The recommended modification to the IP Transit contract with nLayer would ensure the City can continue to meet existing contractual obligations to provide IP Transit for the City's lit fiber customers. IP Transit services from nLayer will not exceed $367,000 for the five year period. Discussion The City currently obtains IP Transit from nLayer to support the City's internal network, Library network, and City Wi-Fi hot zones with internet connectivity. In addition, the City connects businesses to the internet through the City's fiber optic network, Santa Monica City Nets°°, providing tech, entertainment, and other businesses broadband at wholesale rates from nLayer and other Internet Service Providers. This modification will increase the bandwidth to service the growing number of customers using the City's lit fiber services. The City obtains revenue from lit fiber customers to cover customer IP Transit 1 expenses and all costs associated with supporting the 10 Gigabit per second fiber optic network. The recommended contract modification is necessary for the City to maintain existing contractual obligations to lit fiber customers using nLayer in conjunction with the City's lit fiber service. The City segments nLayer IP Transit into 100 Megabit per second, 1 Gigabit per second, and 10 Gigabit per second broadband for the City's lit fiber customers. The original agreement was executed in January 2010 to support the service requirements of the City and lit fiber customers at that time. As lit fiber customer demand has increased substantially, the existing contract amount and term requires modification to procure additional IP Transit for recently acquired lit fiber customers. Financial Impacts & Budget Actions The contract modification to be awarded to nLayer is $300,000, for a new contract total not to exceed $367,000. Funds in the amount of $100,000 for FY 2011 -12 are available in the following accounts: C010469.589000 Fiber Optic Network $85,000 M55000612.589000 Telecommunication Services $15,000 TOTAL $100,000 Budget authority for subsequent years will be requested in each budget cycle for Council approval. Future funding is contingent upon Council approval should the city utilize the remaining two year optional extension term. Prepared by: Gary Carter, Senior Administrative Analyst Approved: Information Officer 2 Forwarded to Council: Rod Gould City Manager Reference Contract No. 9547 (CCS).