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Guidebook for Developing and Managing Airport Contracts (2010)

Chapter: Chapter 3 - Communication and Utility Services

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Page 30
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
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Page 30
Page 31
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
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Page 31
Page 32
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
×
Page 32
Page 33
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
×
Page 33
Page 34
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
×
Page 34
Page 35
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
×
Page 35
Page 36
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
×
Page 36
Page 37
Suggested Citation:"Chapter 3 - Communication and Utility Services." National Academies of Sciences, Engineering, and Medicine. 2010. Guidebook for Developing and Managing Airport Contracts. Washington, DC: The National Academies Press. doi: 10.17226/14482.
×
Page 37

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30 Communication services are those that relate to public telephones, administration tele- phones, wireless, internet, antennas, and fiber leases. The agreements can cover construction and/or installation, operations, or management, or can be concession agreements related to business ventures that rely on these products and services. Utilities for use on-airport are typi- cally not governed by a contract; however, easements for utility pipes, conduits, lines, and poles are sometimes granted. The critical issues associated with these types of contracts are discussed below. 3.1 Critical Issues—Fiber, Cable, and Internet Airports often enter into contracts with tenants or other users that result in a sharing of infra- structure or services. As it relates to communications or utilities, these contracts may pertain to the sharing of fiber already run through an airport building, internet access that an airport can legally share with or sell to others, wireless systems and or distributed antennae systems, telephone ser- vice, or utility easements. Critical issues include the following: • Rate methodology for recovery of costs • Limits of liability • Rights regarding resale • Firewall and virus protection 3.1.1 Rate Methodology for Recovery of Costs An airport may choose to lease all or part of its fiber network to a user. In doing so, it is important to establish a rate proportionate to the amount of fiber leased (e.g., a rate per linear foot of fiber). See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt from the PIT agreement providing examples of linear rates. 3.1.2 Limits of Liability In allowing a user access to the airport’s infrastructure, it is critical that sponsors protect them- selves from claims of liability that pertain to elements of the service they cannot influence. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt from the PIT fiber lease agreement which provides that the Authority shall not be liable for damages arising out of or relating to the agreement. C H A P T E R 3 Communication and Utility Services

3.1.3 Rights Regarding Resale To maintain additional control over its own infrastructure, a sponsor should prohibit the re- sale of any service obtained through a fiber lease. Airports may also find they can share internet service with tenants, thereby reducing airport costs of paying for that service from an internet service provider. The agreement for this sort of service is relatively straightforward. Contract language should clearly state what is provided (generally, access to the internet through the sponsor’s system), the price for this access, and a start-up fee, if applicable. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for language based on the PIT agreement, which provides model ISP contract language to be included. 3.1.4 Firewall and Virus Protection Because the sponsor is permitting an outside user to access its internet, and thereby portions of its network, the sponsor is exposing itself to the outside. Online crime is a real possibility with- out sufficient protection, so it is important to require users to enable adequate protection and to recover costs if a user fails to implement protection. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an example of internet service terms in the PIT agreement. 3.2 Critical Issues—Distributed Antenna Systems The growth of wireless technology in the last two decades has created opportunities for airports to enhance the customer experience through the addition of distributed antenna systems (DAS). These systems also provide opportunities for revenue generation. In implementing a DAS, how- ever, various issues must be addressed to ensure a positive relationship between the provider and the sponsor. Critical issues in distributed antenna systems include the following: • Definition of objectives • Designated premises • Limitations on advertising • Right to relocate • Specification of services • Rent escalation provisions • Maintenance responsibilities • Ownership of equipment • Airport obstructions compliance 3.2.1 Definition of Objectives When contracting for a DAS, there are objectives implied that the sponsor hopes to achieve through the contract. They are not “requirements” per se, and the tendency would be to exclude them from contract documentation. However, including them can provide the spon- sor with additional documentation to support the initiation or discontinuation of a particu- lar activity. Communication and Utility Services 31

See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for the LAS technical services concession contract description of services to be provided in connec- tion with a distributed antenna system. 3.2.2 Designated Premises Because of the uncertainty regarding the final locations of antennae and other equipment, LAS is very specific regarding the creation of an exhibit, which identifies the designated premises. The detailed process of creating this exhibit ensures accuracy and allows the sponsor to make sure that space shared with other users is identified as such. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for a description of exhibit creation as detailed by the LAS agreement. 3.2.3 Limitations on Advertising The LAS DAS agreement protects the sponsor from users that implement advertising on or around its equipment without permission. Distinction is made regarding the difference between advertising for itself or for third parties, with the sponsor maintaining the right to charge for third- party advertising according to its accepted rate schedule. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for details on the LAS contract language pertaining to advertising component charges for third parties. 3.2.4 Right to Relocate As with most types of agreements where the tenant or user installs equipment, an airport spon- sor must retain the right to relocate this equipment. It is particularly interesting that in the case of LAS, the cost of any said relocation is to be borne by the tenant. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for the LAS agreement which includes language that explicitly states Clark County’s right to relo- cate any portion of the premises for the purpose of accommodating airport expansion, develop- ment, etc. 3.2.5 Specification of Services The activities required of a DAS concessionaire are more complex than may be realized by many. LAS is careful to state the specific requirements of the concessionaire to ensure all desired activi- ties are provided. A section is dedicated to the administrative tasks required, and another to scoping the actual services. Included among the administrative functions are managing the RF environment, recommending technical standards, maintaining a system frequencies database, providing interference studies and resolutions, attending meetings concerning RF issues, and pro- viding regular updates on various issues. The scope of services should consider up-and-coming technologies and services to incorporate as a way to address airport user needs. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an RFP by the LAS detailing administrative task proposals as well as scope of services propos- als as they relate to the concessionaire. 3.2.6 Rent Escalation Provisions Airport sponsors should, wherever possible, insist on provisions that permit rent increases in reasonable increments. This is especially important in the fields of wireless and communications 32 Guidebook for Developing and Managing Airport Contracts

technology, where new advances can create new revenue opportunities with very little lead time. The LAS agreement includes a provision that permits Clark County to adjust rent 3 years from the anniversary date of the contract, and every 3 years after that. There is no cap on the adjustment, but the concessionaire can cancel the agreement entirely if the increase is unacceptable. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt from LAS’ agreement regarding rental rate and fee adjustment provisions. 3.2.7 Maintenance Responsibilities Because a DAS involves the installation of equipment by a third party, airport sponsors should ensure that facilities and maintenance responsibilities are clearly identified and differentiated by responsible party. County responsibilities should include maintenance and repair of terminal buildings, properties, common use areas, HVAC, and utilities. The third party installer’s respon- sibilities should acknowledge any improvements, decorations, equipment, and furnishings that it installs. The installer shall also be responsible for connections of all utilities, removal of waste, and general maintenance of interior premises. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt based on LAS agreement, which identifies language pertaining to respon- sible parties and their DAS activities within the premises. 3.2.8 Ownership of Equipment Another issue to be resolved when a third party installs equipment concerns the ownership of the equipment at the end of the agreement term. In many airport contracts where equipment is installed, the economics of the agreement allow the airport to maintain ownership because the net book value is zero at the termination date. If the economics of a DAS agreement are similar, and a sponsor is willing to undertake the required maintenance, the airport operator should seek similar rights. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for language expounding on ownership derived from the LAS DAS agreement. 3.2.9 Airport Obstruction Compliance Because some of the DAS equipment may be on the exterior of the terminal, sponsors should also include specific articles or paragraphs describing the mandated compliance with regulations regarding airport obstructions, airspace, FAR Part 77, and other potential hazards. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for text from the LAS agreement outlining regulations and requirements pertaining to airport obstructions, airspace, and other hazards, that must be adhered to by the third party. 3.3 Critical Issues—Telephone Service to Airport Sponsor Airports often have hundreds or thousands of employees, many of whom have telephones in their workspace. Some employees also travel as part of their job, which adds the need for remote telephone access to the required telephone services for an airport sponsor. This service is expen- sive and should be engaged through an agreement which provides for all services that may be required at the best price possible. Communication and Utility Services 33

Critical Issues related to telephone services are as follows: • Vehicle operations on airport • Copyright and patent rights • Work area • Excusable delays • Terms of payment • Description of existing equipment and services desired • Transition plan • Calling cards • Response and communication plan • Systems requirements • Detailed billing • Response to alarms and outages 3.3.1 Vehicle Operations on Airport A contract for providing telephone service may require significant travel to and from the air- port(s) by concessionaire’s vehicles. Given heightened security requirements, it is critical that any contract state very clearly the requirements for operating vehicles on the airport and the provi- sions for escorts, security details, and badging requirements for drivers. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an example of such language, which is found in the agreement for services at the MWAA airports—DCA and IAD. 3.3.2 Copyright and Patent Rights Telephone service, like other services that incorporate technology, is more prone to instances of copyright or patent infringement. Although such an occurrence may not seem likely, spon- sors must protect themselves from liability or damages using language similar to that used in the MWAA agreement. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for language from the MWAA agreement specific to copyright and patent rights as they pertain to services basic to the facility. 3.3.3 Work Area Telephone service often requires the presence of technicians on site to perform routine or emergency maintenance. Often, these service visits require access to very public locations, where an untidy appearance would reflect poorly on the airport. It is therefore important to ensure an agreement includes a provision requiring the provider to maintain a clean work area. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for sample language from the MWAA agreement outlining service provider requirements dealing with work areas and maintenance. 3.3.4 Excusable Delays With complex services such as the provision of telephone service to hundreds of offices and work stations at several locations, delays in execution often occur. Airports have historically been very aggressive in addressing contractor delays in contracts, but, in most cases, the language seeks to 34 Guidebook for Developing and Managing Airport Contracts

protect the airport when the delay is the fault of the contractor. More recently, airports have been including language that identifies delays that are excusable, thereby protecting all parties in such a case. In doing so, the airport can specifically identify the delays that are excusable and eliminate potential situations where the fault for delay is subject to misinterpretation. MWAA incorporates an excusable delay provision, which protects both parties when unforeseeable events occur, but also protects the sponsor by limiting the events under which a concessionaire can make a claim of “unforeseeable delay” See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for details from the MWAA agreement outlining excusable delay provisions for contractors. 3.3.5 Terms of Payment Because phone service is a supply (cost) and not a revenue source, it is critical that the terms of the sponsor’s payments be outlined See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for sample payments language derived from the MWAA document. 3.3.6 Description of Existing Equipment and Services Desired In describing existing equipment and services, sponsors should include the maximum detail possible in order to ensure the provider’s complete understanding of the services required. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for the reference to MWAA RFP language for examples of the appropriate degree of detail regarding scope of services. 3.3.7 Transition Plan Complex utility services are complicated to provide; changing from one provider to another can be even more complex if a well-crafted transition plan is not agreed on. In the case of tele- phone service, for example, airport sponsors should require a transition plan from the provider that shows that the test procedures and cutover plan will minimize disruption to the sponsor. The sponsor also should require an operations and maintenance plan in order to show the pro- cedures the provider will use to accomplish the scope of work. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for good language from MWAA’s RFP describing development of a transition plan and an operations and maintenance plan for procedures relating to the provision of utility services. 3.3.8 Calling Cards For telephone service, sponsors should consider including a requirement for calling cards. Even in the modern age of the mobile phone, airports typically do not supply phones to all staff who may travel for business. For those staff, telephone expenses can be better controlled and monitored through the use of airport-issued calling cards. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for MWAA’s telephone service provider agreement for an example of such a provision. Communication and Utility Services 35

3.3.9 Response and Communication Plan One of the important aspects of a utility service contract is the degree to which the contract mandates the customer service provisions. Airports must know who to call for help, what staff are assigned to their account, and how quickly they can expect service and problem resolution. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for the MWAA telephone service contract, which has excellent language addressing these issues. 3.3.10 Systems Requirements In the case of all services (even if not directly related to communications or utilities) system requirements should be explicitly detailed. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for MWAA’s telephone service provider agreement for an example of system requirements. 3.3.11 Detailed Billing For any communication service with detailed billing capability, the billing system must be explained in great detail, as should the method for resolving disputes. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt from MWAA’s telephone service agreement which illustrates this point. 3.3.12 Response to Alarms and Outages Communications services contracts should detail how the provider will deal with alarms and outages of service. Similar language should be in place for all communications providers (e.g., mobile phones or internet service). See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for (1) an excerpt detailing the requirements MWAA assigns its telephone service provider and (2) the language used to define the license agreement, which has been taken from the PIT agreement. 3.4 Critical Issues—Utility Leases or Easements Critical issues in utility leases or easements are as follows: • Compliance with safety zones • Ingress and egress • No warranty of suitability • Notice prior to construction or installation • Sponsor’s title • Rights of termination 3.4.1 Compliance with Safety Zones If the license is for lines and utility poles, as it is in the PIT case, then the agreement must call for compliance with FAA regulations, but ideally will call out the specific regulations most likely to be relevant (e.g., Part 77, object-free zones or runway safety areas). See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Ser- vices, for language from the PIT agreement regarding appropriate license terms for adherence to regulations. 36 Guidebook for Developing and Managing Airport Contracts

3.4.2 Ingress and Egress Easements often imply certain ingress and egress paths to the property. Because movement on airport property is so much more restricted than on roads or other property, this type of license should grant explicit, detailed ingress and egress rights, ideally through particular gates if airfield access is granted. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt from PIT regarding developing a provision based on ingress- and egress-related license details. 3.4.3 No Warranty of Suitability With a utility easement, it is likely that, at some point, digging may occur on airport property. Because most airports cannot know what is under the surface of all parts of their property, a license such as the PIT license should offer no warranty as to what is underground, to the extent that is possible. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt from the PIT license providing good language on warranty provisions as they apply to airport grounds. 3.4.4 Notice Prior to Construction or Installation Similarly, the licensee must be required to provide adequate notice prior to any construction or installation. The license should be clear in the chronology of design, airport approval, build- ing permit, construction and/or installation, and the notice periods governing all of these. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for text from the PIT agreement on details about notification to airport on construc- tion or installation. 3.4.5 Sponsor’s Title Because the license contemplated here is an easement, it is critical that language be included that ensures the licensee’s understanding that the sponsor maintains title to the airport and everything on it for the duration of the license. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for an excerpt from the PIT license regarding the authority’s title. 3.4.6 Rights of Termination There is a particularly interesting paragraph in the PIT utility easement. The utilities provided by the licensee in this case are critical to the airport’s community. ACAA recognized that if the license were terminated, the removal of any installed pipes, conduits, utility poles, or wires could cause a major disruption to the community. So, contrary to typical language in airport contracts that gives a sponsor authority to absolutely control their property, this license states explicitly that the easement cannot be terminated as long as the utility product is required in the area. See CRP-CD-81 (enclosed herein), Appendix to Chapter 3, Communication and Utility Services, for a specific paragraph from the PIT utility easement relating to termination of easement in the case of a required utility product. Communication and Utility Services 37

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TRB’s Airport Cooperative Research Program (ACRP) Report 33: Guidebook for Developing and Managing Airport Contracts is a guidebook of best practices for developing, soliciting, and managing airport agreements and contracts for use by a variety of airports.

The agreements referenced in this guidebook range from airline-related agreements to communication and utility service as well as common-use, ground transportation, and concessions agreements for a variety of passenger services. An accompanying CD-ROM provides sample agreements in each of these areas.

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