R98-147 AUTHORIZING LICENSE AGREEMENT

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, h � , LEGAL DEPARTMENT MEMORANDUM No. 98-20 October 27, 1998 TO: Honorable Mayor an City Council Members FROM: James L. Williams ., City Manager John W. Couter, Corporation CounsG�f/�/ �•- RE: McLeod Franchise The City of Decatur currently has a telecommunications franchise with Consolidated Network, Inc. ("Consolidated"), under the provisions of which Consolidated is permitted to maintain fiber optic cable in the City's right-of-way in exchange for a fee of a certain sum per year per lineal foot. Recently, both Consolidated and the law have changed, necessitating a modification to the existing franchise. First, effective earlier this year, pursuant to newly enacted state legislation, the City adopted Chapter 71 of the City Code, entitled Telecommunications Infrastructure Maintenance Fee (or, "IMF"). This fee, based on a percentage of receipts for calls made in the relevant , jurisdiction (here, the City of Decatur), is now the only fee which may be charged to a ' telecommunications provider. Other fees in existence at the time Chapter 71 was adopted, such as that in the Consolidated agreement, could have continued (although the City had already waived the Consolidated fee in favor of the IMF), but the statute (35 ILCS 635/30) expressly prohibits such other fees for new providers. And that brings us to the other change, involving Consolidated. In September, Consolidated was merged with another corporation, and a new � corporation was formed - McLeod/USA Telecommunications Services, Inc. ("McLeod"). This requires that the City and McLeod enter a new franchise agreement, since the former Consolidated agreement is no longer valid. And, of course, the fee provisions of the McLeod ', agreement will reflect Chapter 71 of the Code, unlike the earlier Consolidated agreement. 'I Staff has reviewed the proposed agreement with McLeod, which is submitted herewith. ' It is substantially similar to the previous Consolidated agreement, except as noted above. I Cities in Illinois cannot prohibit telecommunications providers such as McLeod from using i, public right-of-way, and the proposed franchise provides the City with adequate protections ', and safeguards. Staff recommends approval of the agreement as proposed. ;