Committee forwards 10-year Zayo telecommunications franchise renewal; city to collect no franchise fee

The Tacoma Government Performance and Finance Committee voted Feb. 4 to send a proposed 10-year telecommunications franchise agreement with Zayo Group LLC to full City Council for consideration, after staff said outstanding permitting and real-property issues tied to an earlier request were resolved.

City staff told the committee the renewal would extend an existing Zayo franchise that has been in place for more than 10 years and would update terms to reflect edits to the municipal code, including references to Title 10 and Title 16B. The agreement requires bonds, a letter of credit, and insurance consistent with the municipal code, staff said.

Why it matters: the renewal governs Zayo’s work in Tacoma’s public rights-of-way and on utility poles. Because of a prior court ruling commonly referred to in the presentation as the “Auburn case,” state law prevents the city from collecting franchise fees on telecommunications franchises. That leaves permitting fees and pole-attachment charges managed through Tacoma Public Utilities (TPU) and a TPU master pole-attachment agreement as the primary local revenue mechanisms tied to the work.

City staff presentation and details Jeff, a Department of Planning and Development staff member, told the committee the request originally came before the committee in July and was delayed until the permitting and real property services issues were resolved. He said both departments are now satisfied and the city is prepared to advance the ordinance. "Before you today is a request for ordinance from Zayo Telecommunications, in the form of a franchise agreement," Jeff said during the briefing.

Staff described the franchise as largely protective (indemnities, required bonds and insurance tied to existing municipal-code authority) and said the franchise simply authorizes Zayo to operate in the right-of-way and to maintain its fiber and related facilities. Under Tacoma’s processes, Zayo also must work with TPU under a master pole-attachment agreement when poles owned by TPU are involved.

On revenues and pole charges, staff said the city receives permitting fees and TPU collects pole-attachment fees separately; the presentation referenced an illustrative pole charge of about $275 but noted uncertainty about whether that figure is per pole per month or per year. That amount was described as an approximate figure during the discussion and was not confirmed in the meeting record.

Process and next steps Staff outlined the schedule to advance the ordinance: first reading before City Council on Feb. 11, a 15-day public-comment period, final reading on March 2, publication on March 4 and an anticipated effective date in early April.

Committee action A motion to forward the franchise ordinance to full City Council was made, seconded and approved by voice vote. The motion text as recorded in the meeting was to move the communications franchise agreement ordinance with Zayo Group LLC to City Council; the transcript did not record the names of the mover and seconder. The committee voted in favor by voice; no opposing votes were recorded.

What the committee did not decide The committee did not adopt any local franchise fee or alter state law; staff noted the city’s limited ability to impose a franchise fee on a telecom franchise because of the referenced court decision. Questions from committee members focused on pole ownership, how poles are identified, and which entities (TPU or private utilities) regulate pole capacity and attachment fees.

Next steps The ordinance will appear on the City Council calendar for readings on the schedule staff provided. If approved by council, the franchise would take effect per the publication and signature timeline staff described.