Information about http://www.ci.minneapolis.mn.us/council/2006-meetings/20061020/Docs/WirelessMplsMEMO_Update.pdf
MEMO …
Tags: advance payments, bill beck, broadband initiative, business development division, business information services, chief finance officer, contract language, contract negotiation team, contractual language, financial guarantee, financial guarantees, hofstede, joe caldwell, legal language, member gary, minneapolis city, paul ostrow, performance contract, personal guarantees, travis carter,Pages: 6
Language: english
Created: Thu Oct 12 13:28:50 2006
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MEMO
Minneapolis
City of Lakes
Business Information Services
Business Development Division
To: Council Member Paul Ostrow
Cc: Council Member Diane Hofstede
Council Member Elizabeth Glidden
Council Member Gary Schiff
Council Member Sandra Colvin Roy
Council Member Betsy Hodges
Council Member Barbara Johnson
From: Bill Beck
Subject: Ways and Means Update re: Wireless Minneapolis Contract
Date: 10/10/2006
Council Member Ostrow,
We are now prepared to submit the Ways and Means report specified in CM Schiff's
Broadband Initiative amendment adopted by Council on September 1, 2006. We are very
pleased with the results and have finalized the contractual language requested in the CM
Schiff amendment. This document contains verbatim contract language addressing the five
points in CM Schiff's amendment.
Our contract negotiation team has incorporated legal language supporting the Term Sheet
approved by City Council. Two critical areas of negotiations included the financial guarantees
associated with the City's pre-payment of services and contract language associated with
remedies for non-performance.
Contract language addressing the following points will be distributed to Council members on
Wednesday 10/11/06 and will be included in the W&M committee update for 10/16/06.
The requested update items are as follows:
www.ci.minneapolis.mn.us
· Financial guarantee for pre-payment of services.
a) The Advance Payments shall be guaranteed via letters of credit
("LOC") and or personal guarantees from Joe Caldwell, Travis
Carter and Kurt Lange of Provider or others as approved by the
City's Chief Finance Officer. The LOC shall be in an amount equal
to the total Advance Payments drawn by Provider. The LOC shall
be in a form and substance acceptable to the City's Chief Finance
Officer.
b) The outstanding balance of the Advance Payments shall accrue
interest annually at the rate of six percent (6%) per annum
beginning on the date payment is made by the City to the Provider
("Money Value").
· The required City owned fiber.
· Construction; Payment of Construction Costs.
The City Network shall be constructed in accordance with the
Specifications and with the terms set forth herein. The City shall meet
no less than once a month with USI to review progress of City Network
construction, until Acceptance. Upon Acceptance of the City Network
by City, Provider will transfer and convey to City any and all interest in
the City Network. The City Network shall thereafter become the
property of the City and City shall be the sole owner of the City
Network.
USI agrees to pass-through to the City any net reduction in
construction costs (as compared to this Agreement price) due to
redesign or price changes, which it receives from any construction
subcontractor or material supplier. Any change orders that result in a
net zero impact on cost, that is, arrangements that substitute or trade
changes so as to be cost neutral, must be approved by the City which
approval shall not be unreasonably withheld or delayed. Changes
expected to result in net increase in cost must be approved by the City,
which the City may choose not to approve; provided, the City shall not
unreasonably withhold, condition or delay approval of a change
resulting in a net increase in cost. The City's refusal to permit a
change which is to result in a net increase in cost will not release USI
from its obligation to construct the City Network pursuant to this
Agreement unless the City's refusal to permit a charge requested by
USI renders the performance of this Agreement by USI significantly
more costly or impossible.
· Acceptance. "Acceptance" of the City Network shall occur upon "substantial
completion" of the Specifications as set forth in Exhibit 1.1 as determined in City's
sole discretion. The parties may mutually agree to additional acceptance
procedures beyond that identified in this Agreement, which the parties shall identify
within sixty (60) days of the Effective Date of this Agreement.
· Wholesale access.
i) Provider will provide a full-service wholesale offering with complete
technical functionality (IP addresses, location information, etc.) to
competitive providers and hotspot locations throughout the City.
Wholesale Internet service providers shall be offered layer two (2)
access to the Network to obtain diagnostic information for technical
customer support services. Internet service provider partners will
have equal access to sale of all network services and be provided
with pricing that allows for fair competition with overall network
capacity. Internet service provider partners shall be allowed to
brand their offered services but will be required to comply with
minimum service level requirements and credit approval as
established by Provider.
ii) Provider agrees to work cooperatively with existing hotspot vendors
throughout the City to provide the capability to offer branded
hotspots as well as the ability to offload their network and technical
functionality to Provider.
iii) Notwithstanding the foregoing, Provider will not limit bandwidth,
content or otherwise implement any limitation on the use of access
to bandwidth in order to create or provide a competitive advantage
to Provider or any WISP except when necessary for the purpose of
excluding unaffiliated content providers.
Residential Wholesale Master Wholesale
Monthly 35% Discount Monthly 50% Discount
Basic 1-3Mb $ 19.95 $ 12.95 $ 19.95 $ 10.00
Premium - 3-6Mb $ 29.95 $ 19.50 $ 29.95 $ 15.00
Dedicated 5-10M $ 99.95 $ 65.00 $ 99.95 $ 50.00
Agent
Monthly 20% Commission
Basic 1-3Mb $ 19.95 $ 4.00
Premium - 3-6Mb $ 29.95 $ 6.00
Dedicated 5-10M $ 99.95 $ 20.00
Wholesale Master Wholesale
Business
Monthly 35% Discount Monthly 50% Discount
User Access 1-3Mb $ 29.95 $ 19.50 $ 29.95 $ 15.00
User Access - 3+Mb $ 34.95 $ 22.75 $ 34.95 $ 17.50
Facility Access - WIFI $ 79.95 $ 51.95 $ 79.95 $ 39.95
VPN $ 29.95 $ 19.50 $ 29.95 $ 14.95
Agent
Monthly 20% Commission
User Access 1-3Mb $ 29.95 $ 6.00
User Access - 3+Mb $ 34.95 $ 7.00
Facility Access - WIFI $ 79.95 $ 16.00
VPN $ 29.95 $ 6.00
Note: Wholesale category sellers must commit to maintain a volume of 2500 accounts
per month. Master Wholesale category sellers will provide their own internet access
and commit to maintain a volume of 7500 accounts per month.
· Rates for access to City assets.
ii) Pole Attachment Fees; $9.00 per pole per month as long as
Equipment provided by Provider shall be installed on such poles.
iii) Provider shall remit monthly payments at mutually agreed upon
market rates for the use of any City Resource other than City
owned poles.
iv) Electricity charges. If Provider utilizes electrical power supplied by
City for any Equipment installed on a City Resource, the cost of
such electrical power shall be deemed to be included in the
Attachment Fee for such location.
· Negotiated rates for network services.
Residential
Monthly Setup
Basic 1-Mb $ 19.95 $ -
Premium - 3-6Mb $ 29.95 $ -
Dedicated 5-10M $ 99.95 $ -
Commercial Government
Monthly Setup Monthly Setup
User Access 1-Mb $ 29.95 $ - $ 12.00 $ -
User Access - 3+Mb $ 34.95 $ - $ 29.95 $ -
Facility Access - WIFI $ 79.95 $ - $ 79.95 $ -
VPN $ 29.95 $ - $ 29.95 $ -
· Penalties for non-performance.
(a) Outage Credits. In the event of an Outage for Service provided to City or
any governmental agency, Provider shall provide City with an Outage
Credit in accordance with the scale set forth below. An Outage begins
when Provider receives notice from City, or when Provider has actual
knowledge of the failure, whichever occurs first, and the Outage ends
when the affected Service is operational and City is able to use the
Network and obtain Service. In the event City is entitled to receive an
Outage Credit for an Outage, City shall not need to request such Outage
Credit in each instance. If City has not received the Outage Credit within
sixty (60) days after the occurrence of the applicable Outage, then City
shall notify Provider for the right to receive Outage Credits for such
Outage. However, if Provider is the only party with actual knowledge of
the Outage, Provider shall notify City and the Outage Credit shall
automatically be credited to City's account without City having to request
such Outage Credit within the next two (2) billing cycles after the Outage
occurs.
Outage Credits
For each Outage the following Outage Credit per
node involved shall apply:
1. Outage of 2 hours, but less than 3 hours $100/ node involved
2. Outage of 3 or more hours $500/node involved
The above Outage Credits shall be subject to the SLA requirements of
Attachment D.
In no event shall Provider's total penalties for Node Outages exceed
$50,000 per month or $250,000 for consecutive month Outages. Failure
to cure repeated Node Outages in a commercial reasonable time period
shall subject Provider to termination for cause pursuant to Section 38 of
the Agreement.
100% Network Outage
1. If an Outage occurs effecting 100% of the nodes throughout the
Network for any period of time longer than sixty (60) minutes
("Network Outage") City may, in City's sole discretion, impose a
penalty of up to $50,000 per day against the Provider.
2. In no event shall the total penalties for any one (1) Network Outage
occurrence exceed a total of $250,000.
3. If a Network Outage continues uncured for a period of seventy-two
(72) consecutive hours, City shall have the right to hire a third party
to correct such Network Outage and Provider shall be responsible
for all costs and expenses associated with such third party services.
City and Provider agree that a Network Outage which extends
uncured for seventy-two (72) hours or more shall be grounds for
termination for cause of the Agreement in accordance with Section
38 of the Agreement.
In my absence, should you have any questions please feel free to contact James Farstad
at 612.669.2318 or via e-mail at jfarstad@rclient.com.
Thank you,
Bill Beck
Cc: Steven Bosacker
Karl Kaiser
James Farstad