So 20 percent of 147 5/16/00 STREETS, SERVICES - BILL 000121 the --
Of the customers, I'm talking about of the customers. Twenty percent of your customer base would be Philadelphia?
What's that in natural numbers? "Twenty percent of," what does that mean? Does that mean 10,000 customers, 20,000 customers? What does that represent.
And what would the other four counties cumulatively account for in terms of customers?
An the additional 80 percent of our business, and we're just talking about, you know, our Year projections. 148 1 5/16/00 STREETS, SERVICES - BILL 000121
So, you know, roughly between -- I want to say 50 and 100,000 lines, with to 20,000 of those 50 to 100,000 lines 6 being Philadelphia County. 7
So conceivably, I 8 mean, 50 percent of your customer base could be 9 Philadelphia customers. 10
Well, we anticipate that if we did get 20,000 customers from Philadelphia, given the nature of the media and marketing campaign we would take on, that we would also get an additional amount of customers from the other areas. I guess the assumption I'm giving you now is if get 20,000 customers from Philadelphia, we would probably have on the order of 100,000 customers over the entire 5-county area. And I can't stress enough that these are very fluid numbers at this point.
I understand. I guess what I'm getting at is that we may provide the bulk of your business, but we get the minimum number of jobs in Philadelphia. And I know we're not supposed to depend 149 5/16/00 STREETS, SERVICES - BILL 000121 on legislation based on that, but we have a responsibility also, especially when you go back to some of my earlier questions, where conduits and services are being provided within the City of Philadelphia or under our streets, we -- and I appreciate the services that will be made available to customers, but they have to pay for that. See, customers aren't going to get this for free. So Philadelphia taxpayers will be paying for a service, we provide the right-of-way, the City of Philadelphia provides the rights-of-way, without any compensation. And in addition, we don't even get to get the employees, but the counties outside will employ the bulk of, if not all of, the employees. We get nothing in return. I just have a little problem with that. That's why I go back to original statement. I think we need to look at more closely at what can the City benefit by in terms of compensation for the use of our land, our ground, our air rights, what have you. And I'm not being argumentative. We 150 5/16/00 STREETS, SERVICES - BILL 000121 have a responsibility here: to create jobs, to keep revenue going. And if we keep losing our customers, which are our taxpayers, you will eventually will lose a customer base also. Now, Bucks County may pick them up, but I don't care about Bucks County because they, obviously, don't care about us, so we're only worried about Philadelphia residents. Councilmember Rizzo?
I'd like to talk a little bit more about the workforce that you plan to hire. I heard you say that the switch and other components would be installed by contractors that you would hire to do that. Do you have experience installing this equipment in other places, Richmond, Virginia?
Is the company that installed that equipment in Richmond, Virginia, going to be one of the people that bid on doing the work here?
Yes. Basically, the company installing our switch -- that will install our switch here is Lucent Technologies. We're 151 5/16/00 STREETS, SERVICES - BILL 000121 buying a Lucent switch in order to avoid the warranty of the switch, we have Lucent handle the installation of that switch at our sites.
So let's move beyond the actual installation of the switch by Lucent. What other -- those other contractors that you referred to that you'd be hiring to install those other components, could you describe the magnitude of that, that will occur in the City of Philadelphia and the selection process for those contractors? And obviously --
Yes. Basically, the selection process will be based on cost, on ability, on reputation, on company, on contractors that have done this type of work before with a track record, and we would seriously consider those. We're interested in a quality build-out, but at the same time, we don't want to spend too much on doing so.
Describe how big it is, how small it is because I can't get a feel for how much work this project is going to generate within the City of Philadelphia, whether it's one contractor working one day a week or 20 152 5/16/00 STREETS, SERVICES - BILL 000121 contractors working 24/7. Could you just kind of describe how big a deal this is for Philadelphia.
My name's Dave he Heffline. The construction phase will begin at our switching in Warminster. And as Martin said, it will work its way south into Philadelphia. Once we enter Philadelphia, we have approximately 70 miles of plant to build. We hope to build at a rate of 5 to 7 miles per week. That will involve various crews. Each crew can build approximately a mile and a half or maybe two miles a week. So we figure probably three aerial construction crews working the underground portions. The construction that we actually have to do the excavation will be minimized. We are working with Bell Atlantic to utilize all of their conduits where available. That work will be done by Bell Atlantic. They require -- or one of their approved contractors, they require someone to do that pulling through their conduit because it's into their manholes and to minimize damage in their facilities. That's something that they 153 5/16/00 STREETS, SERVICES - BILL 000121 require us to do.
How many jobs -- I mean, for three line crews, you're talking four men, women to a crew?
Three to five men per a crew, depending on the type of crew, yes. A fiber crew's around five, the support wire crew is usually three.
So they would be a aerial line construction crew? Would PECO Energy be one of those companies that would be considered for that construction?
So Exelon would be one of the companies and -- go ahead.
Yes. Actually, if I may, we are currently using Exelon to do the engineering part of our network and part of the make-ready cost apportioning of our pulls at this point, so we are using PECO.
So the only -- at this time, the only known company from outside the region is a company that's going to install the 154 5/16/00 STREETS, SERVICES - BILL 000121 switch?
That's correct. But I believe Lucent, that's installing the switch, will use CWA contractors to install that switch.
Do any of the companies named in the title as only the existing facilities, do they have a right to say no to you?
Well, under the Telecommunications Act, companies that own poles must make them available to companies such as mine, to telecom companies, for attachment. So Bell and PECO must make those available to me for attachment. I'm looking at the ordinance.
I believe the companies that -- telecommunications companies such as Bell that own the duct, yes, I believe they must make that available to me. PECO, I also believe that 155 5/16/00 STREETS, SERVICES - BILL 000121 they should also, although I have to check. But they make it them available anyway at this point. Railroads right-of-way, I don't think -- they're not affected by the FCC, so I don't think they have to make it available if they don't want to at this point.
Yes. Under the Telecommunications Act of 1996, local governments must make their rights-of-way available to us for occupancy. They cannot be a barrier to our entry, under Section 253-C of the Telecom Act and must provide access to the rights-of-way on a nondiscriminatory basis. Also, under State law, since I'm a public utility, I have the right to occupy the public rights-of-way, subject to, quote, reasonable regulations set forth by a local government.
Is that true of 156 5/16/00 STREETS, SERVICES - BILL 000121 every company that seeks to come into the City?
The Telecommunications Act, as a telecom company, yes; as a public utility company, I have additional rights that grant me to occupy the rights-of-way. So I have twofold right, subject to reasonable regulations of cities which are limited to administrative regulations, such as time and place of occupancy, I believe, requiring a company to place facilities underground, such as Center City, requiring a company to pay fees to recover administrative costs for the occupancy of rights-of-way, and also the requirement of the company to indemnify the City for any reasons whatsoever. As a matter of fact, a recent Federal District Court decision in the Eastern District of Pennsylvania, that case being PECO Energy Company versus the Township of Haverford, stated exactly those points. It basically struck down a Haverford ordinance because the township was acting under unlimited discretion as to company's ability to occupy the rights-of-way. And as I stated before, the Federal Court held that a company's discretion is limited 157 5/16/00 STREETS, SERVICES - BILL 000121 -- excuse me, the local government's discretion with respect to rights-of-way occupancy for telecommunications companies under Section 253, under the Telecom Act, are limited to the following, and I quote: Requiring a company to place its facilities underground rather than overhead, consistent with the requirements imposed on other utility companies. 2. Requiring a company to place its facilities underground rather than overhead, consistent with requirements imposed on other companies, regulating the time or location of excavation to preserve effective traffic flow, prevent hazardous road conditions, or minimize noise impacts, enforcing local zoning regulations, and requiring a company to indemnify the City against any claims of injury arising from the company's excavation. Any other requests or demands would tentatively fly in the face of Section 253-C of the Telecom Act.
Well, would we, for example, have the right to an investigation or an 158 5/16/00 STREETS, SERVICES - BILL 000121 examination of the finances of the company, or do we have to accept your conclusion that you are a solvent company?
With respect to solvency, that is regulated by the Public Utility Commission. When I applied for certification with the Public Utility Commission, I do undergo a financial analysis, and I do provide my financial records -- under seal, of course -- to the public utility, and they did look at that issue. Public utility companies, such as mine, are under the exclusive regulation and domain of the Public Utility Commission of Pennsylvania.
But public utilities, aren't they required to furnish their services to everybody?
Well, I live at 5635 North 16th Street, and I've been looking through your bill to see if that's covered. It does not 159 5/16/00 STREETS, SERVICES - BILL 000121 appear to be covered.
Where -- what I'm asking for here is for the layout of my backbone fiber network. What that does is, it connects me to all Bell Atlantic central offices in Philadelphia. From those central offices, I'll be able to reach your home, which is called, "the last mile." I will lease that from Bell Atlantic.
The last mile. Okay, I want to explain that to my wife tonight, what we're called. (Laughter.)
If you vote in favor of this ordinance, you will have a choice in communication services shortly from Cavalier, and you will not be just limited to Bell Atlantic at this point. And I'm sure your constituents would enjoy having a competitive choice in telecommunications services and also a --
Well, I'll tell you, I'm not sure. When I was a young man like 160 5/16/00 STREETS, SERVICES - BILL 000121 Councilman DiCicco, telephone service was much better than it is today. We used to laugh at reports we'd hear about service in Europe where there was difficulty making calls or connecting. Today in City Hall, it is almost impossible, if I am at home and a call comes in to the office and the office wants to connect that call to me at home or somewhere out in the field, we are as likely to be disconnected as we are to be connected. It never used to happen that way. And I think there's been a terrible state of deterioration in the furnishing of telephone services, just simple ordinary telephone services, and we spend much time just trying to correct each other and talk to each other. If I call the City Solicitor and the City Solicitor wants to get another attorney on the phone who's working on the case, we're probably going to have our phone disconnected. And so, I'm kind of cynical about these advanced services.
I'd be happy to be in the old days, when if I wanted to make a 161 5/16/00 STREETS, SERVICES - BILL 000121 connection, we could make the connection. I don't know what causes this.
Well, basically, if you allow competitive forces such as me to come into the City to compete against Bell Atlantic, service will improve on either side because we're fighting for the customers. Right now, the City of Philadelphia has a centrex system that's supplied by Bell Atlantic, I believe, and that's where you're talking about having problems with connecting one City department with the other.
Well, they all happen to be Bell Atlantic in the Philadelphia area now.
Well, if you allow a company like mine to come in with the competitive forces, it will not only force the incumbent to improve their service, but it will force me to provide better service 'cause then you'll just drop my service if you're not happy with it and go back to Bell or vice versa. So it gives you choice.
Mm-hmm. Let me ask 162 5/16/00 STREETS, SERVICES - BILL 000121 you about. . So you're saying everybody in Philadelphia will have your services available to them, that the list of addresses of various places merely indicates where work has to be done?
And that overwhelmingly, you seem to be utilizing other people's lines or ducts?
No, we will use -- I mean, our backbone, which will be the our main service platform for Philadelphia, that's what's described there. From that platform, we'll just lease the last mile in some circumstances; many in other circumstances, we'll build out to the customer. But in some circumstances, we'll lease the last mile from Bell Atlantic. And in that way, we'll be able to reach just about every potential customer in the City of Philadelphia. The way it's planned out, we'll be able to hit every neighborhood.
Tell me what this means on , the bottom paragraph, the first sentence. "The permission granted by this ordinance is conditioned upon the approval of the 163 5/16/00 STREETS, SERVICES - BILL 000121 Department of Streets as to the construction and the installation of Cavalier's facilities at any location along the specified route and is not a guarantee that Cavalier's facilities can be placed at any particular location along that route." Who wanted that language; did Cavalier want it or did the City want that language? And what does it mean?
The City Law Department wanted that language. Basically, these ordinances are a product of Jerry Clark, who's an attorney for the City that drafts these ordinances. It's standard language. It's conditioned upon the approval of the Department of Streets. As you know, the Department of Streets has approved, we have met with John several times, Mr. Cunningham, and he has approved our routes, we had engineers meet with him. And there's been a letter sent by Commissioner Moy, the Streets Commissioner, stating that he does approve of this ordinance and has no opposition to it.
So from a procedural perspective, Cavalier Telephone has satisfied 164 5/16/00 STREETS, SERVICES - BILL 000121 every regulatory requirement required right now by the City of Philadelphia pursuant to this ordinance and other enacted legislation that allows us to occupy the rights-of-way. And I believe John Cunningham here could testify to that effect.
Yeah, but what does that mean? Does that mean if you want to place something somewhere, the City has the right to say you have the right to place it somewhere along this route, but maybe not at this specific place you want to place it?
Councilman, this is John Cunningham again from the Streets Department.
You're absolutely correct. The ordinance basically gives you the conceptional route.
The word "conceptional," I have to tell you, in this City Council is not a good word to use, not these days, 'cause in so many cases when we ask for information as to what the new administration is doing, we're told they've arrived at a conceptual 165 5/16/00 STREETS, SERVICES - BILL 000121 agreement, and what that means is, there are no 3 terms to this agreement, we just have a general concept that we've agreed with.
It is a defined route. However, the safety net there in the language that you're referring to gives the City, through the Streets Department, the opportunity to review the proposal in a very detailed manner, so there may be physical encroachments that prevent the route, as so proposed. For example, there may be some other utilities that are in the way of that route, there may be -- that street may be under construction, that street may be under a pavement guarantee of some kind. So this is saying that you do not have a pure right to be in there no matter what, so we do have the final say to authorize that.
In reference to the question that Councilman Cohen just asked, the 166 5/16/00 STREETS, SERVICES - BILL 000121 majority of your system's going to be attached to PECO Energy existing facilities, and as you know, there are construction standards. You get to a particular pole that the spacing between the facilities doesn't exist, if you change that pole out, who pays? You. Now, my question. We have enough clutter -- and I don't suggest that your facilities are clutter, but we've got cable TV aerial services, we've got Bell Atlantic aerial services, we've got cable, Bell, electric, so we've got a lot of wires on the people's houses. I would then guess that you will not just be running wires on the PECO poles, that you'll have drops to -- no? You will have no wires going from the pole to the customer's home?
Well, in some circumstances, we may, but for the vast majority, we will lease the last mile from Bell Atlantic, using their existing --
I'm -- I'm sorry again. I lost all the word at the end.
In some circumstances, 167 5/16/00 STREETS, SERVICES - BILL 000121 we'll build out to the end-user, to their facility or their building. For the vast majority, we will lease the last mile of copper from Bell Atlantic, from the Bell Atlantic central office that will be collocated in.
So when we look down a residential City street, we will not see another wire either mid-span or from the pole to a customer's house?
So we will not see 50 new wires going up and down the street?
Yes. We're not going to add to that clutter. We're going to add our lines only to the specified route here, that's it. From there, we will lease the last mile to Bell, thus minimizing the clutter, if you will, to the end-user.
Councilman, maybe you could explain better to me than the speaker. Is there going to be more the clutter or not? And where will it be, if there is any? 168 5/16/00 STREETS, SERVICES - BILL 000121
It's going to be somewhere but not in the last mile. (Laughter.)
Let me add this. Basically, we're putting up 72 strands of fiber lines, which are about an inch thick, they're about this much around (indicating), which carry an extreme amount of capacity. Once we put these fibers up there, we will force the other competitors probably to upgrade their systems. They currently have those big copper wires for transport, and those copper wires can be replaced by the thin little wires like mine. So as technology evolves and as competition puts pressure on the incumbent, their wires are probably doing to diminish in size. Why? Because they'll replace their copper plant for transport with fiber. That's a potential 169 5/16/00 STREETS, SERVICES - BILL 000121 outcome of competitive pressure, so you'll see less clutter, arguably.
Well, one of the problems we now have with clutter is the fact that when PECO Energy or Bell Atlantic of Pennsylvania puts new facilities up, and I see Commissioner Joe James sitting back there, that I know sometimes for years and years and years, they just abandon a lot of the facilities in place because there's costs associated with removing, until someone figured that there was a lot of copper wire just hanging around in the air, and then they hired a contractor to go retrieve all of that. But there are miles and miles of clutter -- since we're calling it clutter, let's call it clutter -- out there that's never been retrieved, just deactivated and abandoned in place. And occasionally, I spot something since I have a little background in this stuff, and they'll take down miles of wire that's been just abandoned and not used. And, again, the City streets, you go into some of our neighborhoods, they're just absolutely overwhelmed with wires. And I'm glad to hear that at least the last mile 170 5/16/00 STREETS, SERVICES - BILL 000121 -- but, again, I think you have to answer Councilman Cohen's question. If not there, where?
Well, where we're going to put our network -- we don't intend on abandoning a fiber network. Other plants are just copper plants for transport for the main backbone used by the incumbent are obsolete, I would argue, but fiber will not be obsolete in the foreseeable future so --
What I responded to is that you said that you were going to drive the competition to upgrade to a possible thin conductor that would replace this humongous thing, and my rationale is, yeah, they might go to a small fiber cable, but you can bet they're going to leave that other thing up there because there's a lot of costs associated with removing it, unless it's got a salvage value.
Actually, pole space is at a premium, so the pole owners would probably want to make sure that in their contract there, the people not abandon their wires. If, for example, a company such as mine, let's say, were to abandon 171 5/16/00 STREETS, SERVICES - BILL 000121 their wires or something there, we still have to pay the pole owners, you know, money for the attachment. So it doesn't make sense. You'd want to get rid of them because you have an economic incentive to get rid of them. If not, you're still stuck paying a lease for years and years and years.
Sounds like the tear-down provision you and I worked very diligently on with the wireless communication. Do you know that Martin is a former City Solicitor, who was the gentleman who worked very hard with me on the wireless communication?
On that act? I did not know. To the Streets Department representative, how many of these applications are we getting from companies for fiber optic or. . .
Well, we have -- in 1996, we had one telecom company in Philadelphia. We have currently 12 at the moment. The number of miles has increased from approximately 50 miles to 80 miles per year. So we are being inundated.
We are being what? 172 5/16/00 STREETS, SERVICES - BILL 000121
Right. I'm going to try to avoid some of these more sensitive words.
There certainly has been a land rush on the public rights-of-way, and every city in the country is contending with this issue, and we're no different in that area.
And how many of them have not been granted, the right to use the rights-of-way as of now?
Well, not counting 173 5/16/00 STREETS, SERVICES - BILL 000121 Cavalier, these are -- they're in transition at the moment. I would say probably two or tree.
Mm-hmm, all right. I don't know -- I raised earlier the traffic problems. You know, you're kind of telling me that the City has no defense, that if 100 companies wanted to apply and they met the normal tests, that the City would be obligated to permit them all to compete in the City and have a war going on among them. It raises questions. Do the costs -- how do the costs -- I assume the Streets Department, say, in the case of Cavalier, the Streets Department must have spent a lot of time, you had to check out all these streets that are listed here?
You had to figure out whether or not they could use something?
Those costs are not passed on to anyone. 174 5/16/00 STREETS, SERVICES - BILL 000121
That's just a past practice, it's been a service that the City has provided.
It just seems to me totally unfair that small businesses, when they come in for all kind of permits, maybe for paving, for other things that they may need, pay the same fee. And we are entitled to charge fees equivalent to the cost of the service. We can't make a profit on it, as I understand the law. The City always has to be able to justify its fee basis on the basis of cost. Has the Streets Department ever been asked what the cost of the service is?
We have calculated the full cost -- that means the direct cost and the 175 5/16/00 STREETS, SERVICES - BILL 000121 indirect cost, including the City's overhead.
Our hardware and software acquisitions to manage it and any other systems that we will need to match the right-of-way. Councilman, the question that you're having and Councilman DiCicco's having right now is a bit mystifying at the moment, I grant you that. But it will be cleared up within the next couple of weeks when we come to you with our proposal that addresses the cost of operating the right-of-way.
Well, do we -- I don't know whether this is a legal question or not, as a lawyer.
But would those fee charges be applicable retroactively?
I don't believe they're going to be retroactive; it will be going forward.
Well, then wouldn't it be only a sense of caution to not enact any 176 5/16/00 STREETS, SERVICES - BILL 000121 further ordinances until we've had a chance to get consideration of those fee charges? They may be substantial. Now I understand better why the Chair was so concerned before, you know, on the question.
The license agreement that the City has between telecommunications companies, once an ordinance is passed, the telecom company must sign this license agreement with the City of Philadelphia. Specifically in that license agreement, it specifically reserves the City's right to charge any fees or rental fees that the City deems just, and that can be applied retroactively from the date of the signature. So I believe you're covered from that angle.
It can apply -- basically, if there's no fee today and you have a fee tomorrow, it can apply.
For how long, how 177 5/16/00 STREETS, SERVICES - BILL 000121 long after?
I think the language is pretty specific there. It says the City reserves the right to apply this fee or any fee that it may now or in the future apply. I think that's what the language says.
I would like to get an opinion from the City Solicitor.
Councilman, I just want to add to your line of thinking, that it would be most appropriate if you discussed this issue with our attorneys who have been working on this for about a year, and they can give you the best advice on how to go about this.
Are there specific attorneys in the City of Philadelphia?
Just for the record, I think there is one person to testify. And what I'm going to recommend after the testimony is taken, in light of the fact that there are a number of questions that have been 178 5/16/00 STREETS, SERVICES - BILL 000121 raised today, I'm not clear on, and I know some of the members on this committee aren't clear on them, and the fact that this type of business will affect the entire City, I will convene a seminar or a meeting of all of the Councilmembers and those City Solicitor folks who have been working on this legislation in the next week or two to answer any of the questions that Council may have as a result of today's hearing and any other questions. And by then, I would assume that the fee structure -- if that's the proper terminology -- would be coming from the Streets Department. And then, you know, we can wrap up before June 22nd, but I'm going to ask that we hold both of these bills until that time, until the call the Chair.
Could I just raise one question. I was silent when the Chair raised questions of the headquarters, but it seems to me that your figures have to be somewhat skewed when you indicate that you think Philadelphia will only provide 20 percent. You're saying that we as a county will only provide as much business as the 179 5/16/00 STREETS, SERVICES - BILL 000121 four Philadelphia suburban counties around us? That's awfully hard for me to think that that could be so.
Like we said, that was a very rough estimate. We don't know at this point what percentage it will be. I really couldn't tell you at this point. I was just stating 9 percent based on the 5-county area that will be 10 providing service, and 20 percent would be out 11 of 5. That's how we came down to that. 12
When Comcast came in 13 in the cable field, it was very important to us 14 that Comcast showed some real interest in 15 Philadelphia and agreed that they would -- we 16 couldn't compel it, but they agreed they would 17 place their main headquarters in Philadelphia. It 18 indicated a good-faith venture, it gave us some 19 solace in the feeling that probably there'd be 20 more Philadelphians hired. 21 It seems strange to me that you're 22 seeking, I think, to evade certain burdens that 23 businesses sometimes think they assume when they 24 come into Philadelphia, and you're asking us -- 25 maybe you have a right to ask us to go through all 180 1 5/16/00 STREETS, SERVICES - BILL 000121 kinds of inconvenience to give your business an opportunity to compete. It seems to me that a showing of good faith would relate to the question of a headquarters facility. I made a former employer of Councilman Rizzo very uncomfortable by protesting the merger of PECO and Unicom on a number of bases, and a very one important one was their initial refusal to guarantee the maintenance of their headquarters at Market Street for more than just a few years. They have since increased it by four to five years, they increased their guarantee on their retention of employees. And I just wonder why you treat Philadelphia as if you don't have to give any consideration to these questions that are so important to us, to all urban communities that are struggling to maintain vibrancy and vitality in the City. And do you have any comment? I would be pleased to hear it. It troubles me at great length.
Counselor, before you answer, Councilman Cohen made PECO Energy 181 5/16/00 STREETS, SERVICES - BILL 000121 uncomfortable long before this particular issue.
Yeah, yeah, I did, but on that opposition -- yeah I'm also opposed to do their concern because they are the major force the United States in promoting nuclear energy, yeah. But I don't understand why -- what your attitude is. Maybe it would be a little more costly, but your whole business venture wouldn't be possible if it weren't for the continued health and existence of the City of Philadelphia.
I understand your concerns, and we did give Philadelphia strong consideration. As I responded to Councilman Clarke's questions, I did state that we did look at various buildings within the City of Philadelphia, and we just happened to come across a great deal and a great buy for a building that was pretty much ready to go for a telecommunications standpoint in Bucks County, and that's where we decided to put our headquarters.
Thank you. 182 5/16/00 STREETS, SERVICES - BILL 000121 Any other questions for these witnesses? (No further questions.)
One quick request. After subsequent testimony here, may I be granted the request that I be able to respond to any other testimony that's raised today?
Thank you. Anyone else here who wishes to testify? Please approach the witness table. (Witnesses come forward.)
Thank you, Mr. Chairman and Councilmembers. I appreciate the time this afternoon. I'm the President of the Electricians Union, Local 98, in Philadelphia. I'm speaking for myself and John Dougherty and well over 3,000 members of the Electrician Technicians Local Union here in Philadelphia.
State your name 183 5/16/00 STREETS, SERVICES - BILL 000121 for the record, please.
My name is Harry Foy. We currently represent well in excess of 3,000 members, of which almost 1,000 of them are sound and communication and fiber installers throughout the Philadelphia area. We have been currently involved over the years in the digital divide, as it's been put down here; for the last ten years, in training City residents from the community in the teledata industry to generate wages, City wage tax, health and welfare, pensions, spend their money in the local supermarket, spend their money in the local hospitals, put their kids through the local schools. And we incur this kind of problem on an ongoing basis with entities that come in from out of state. And by the way, we've reached out up to ten times to Cavalier to respond to calls from Local 98 in regards to this work that's now being addressed here this afternoon, and we've received only one return phone call in regards to those calls. Now, we represent all walks of life in Philadelphia -- minorities, women. We currently 184 5/16/00 STREETS, SERVICES - BILL 000121 put well in excess of $1 million a year in training in fiber and telecommunications in the City of Philadelphia. ) Associates, who has pumped hundreds of thousands of tax dollars into this City of Philadelphia, as a local contractor both doing fiber and electrical installations throughout the City. Now, it becomes a problem for us, and we're all for e-business, but when an entity enters the area and they put their major, major facility in outside the City of Philadelphia and that's all lost tax base, all lost tax revenue by City wage tax -- and that's a big installation, let me say that to you right now. A central switch is a massive job, it's a large -- there's more work associated to the installation of that switch than the manning of a switch over the years. So that's a massive project. So we stand here this morning in opposition of this bill -- I'm sorry, this afternoon, we've been here a while. 185 5/16/00 STREETS, SERVICES - BILL 000121 If I can, what I will do is read you a brief statement here because I wasn't totally involved in this all along, but Ed Neilson was and he'd be here this afternoon to read this to you, but unfortunately, or fortunately, whatever way you want to look at it, his wife had a baby boy just the other day and everyone's just getting home. So if you would just bear with me, I'm going read this statement to you and I'm going to be very brief here this afternoon. But we would like to hold this bill up, 'cause I don't think it's good for the City of Philadelphia, I don't think it's good for taxpayers of City of Philadelphia, of which we represent 80 percent of those guys and girls and women and minorities that put money back into the City, where it belongs. "Today I sit in front of this committee to oppose this legislation on behalf of more than 3700 members of the IBEW Local 98 as well as the business manager, John Dougherty. Some people contend that the testimony that I am about do give is self-motivated and another tactic that unions in general use to secure work for 186 5/16/00 STREETS, SERVICES - BILL 000121 their members. I am here for not only work for my membership, however; it is about future jobs for our City residents and the long-term impact in Philadelphia. "Over the last five years, Local 98 has been taking a more active role in City Council to voice our concerns on the many issues and the challenges that come before City Council. As a lifelong resident of Philadelphia, I do not ask anyone in this building for something for myself that will result in personal gain. I do things to help others in my community and those individuals that I represent. "With the breakup of Ma Bells of the world over the last five years, we have had companies come in from City Council telling us how they are going to help our city grow. Through numerous studies, we have seen a declining population in Philadelphia because of the companies, such as Cavalier Communications.
The telecommunication technology in Philadelphia is growing to be a major issue in and around our region, as we read daily in our local newspapers. With 401 North Broad Street and the project at the 187 5/16/00 STREETS, SERVICES - BILL 000121 old SmithKline building on Spring Garden Street, I can see Philadelphia being a Silicon Valley East, just as many of the pros in the telecommunications market contend it to be, including our own our own Mayor Street. "We have heard many empty promises made to this Council and today we have heard another. The representatives tell us how the competition they are going to provide is great for the members of our community with the money we may save by utilizing their services, but let us look between the lines here, ladies and gentlemen. "Three years ago, a similar company came into town and made promises to this Council to uphold the area's prevailing wage and standards that were established by our forefathers. Let it be known that these standards are recognized by the State, Federal, and City agencies, while performing any and all work in the City of Philadelphia. Being the trustworthy people we were raised to be, we agreed and believed them, and this Council granted them permission to do some of the same things Cavalier is today asking to do. 188 5/16/00 STREETS, SERVICES - BILL 000121 "They talked about the neighborhood participation and local contractors. As they came up from the State of Virginia, like this one, they said that Philadelphia would have an opportunity to grow and its residents would have more choices and a cheaper rate with more competitive companies in the area. "What did we get? A few jobs to get them up and running, lower prices for a few month, and no-long term, good-paying jobs for native Philadelphians. These companies bring technicians and management teams from all across the country to run the operations and facilities as well as servicing and maintaining the equipment they allow us to install. They will hire a local secretary or someone to sweep the floors on off-hours for $6 hour, if they are lucky, but they bring people in from out of state to learn and to do the maintenance of the sophisticated equipment in this growing industry. "These companies that I am talking about bring employees in at a lower rate of pay and pay them through their main offices as if they were not even working in our city. This, in turn, 189 5/16/00 STREETS, SERVICES - BILL 000121 allows them to avoid City wage tax, a tax that we all must pay to keep the government and services operating. They dig up and block up our streets with trucks and equipment from companies from out of state. We see it every day throughout the City, with all the traffic jams. "I personally have met with representatives" -- and this is not me, this is Ed Neilson. "I have personally met with representatives from Cavalier. We went through their game plan together right up until they told me that they could save City residents money by moving their facilities outside the City of Philadelphia. I was told that their main office is going to be in Warminster, PA, by a train station so that people can the take train to work from Philadelphia. They told me they plan to hire City of Philadelphia residents only in a capacity of phone solicitation sales for this great service they want to provide us. "Martin Arias came to town as Cavalier Communications' main man to deliver a Philadelphia deal, after all the City of Philadelphia trained 190 5/16/00 STREETS, SERVICES - BILL 000121 him and taught him all about the legislation process of Philadelphia. Some of you here today may have worked with him on other projects. He wants us to think he is one of us, but he is not. Look at his record. "He abandoned our city a while back when he moved to Virginia. Then he came back to do this deal and set up shop in King of Prussia, once again to avoid city wage tax.
Recommended to his company to purchase a building to employ more than 150 employees in Warminster instead of here in the City of Philadelphia, once again to avoid taxes. Not coming forth to anyone in the City or in this room to ask for assistance or help in an effort to secure a facility. "Now they want the City to help, help Cavalier make money off the hard-working backs of City Council and the residents of our city, not theirs. Not that I think the City needs to get anything, but we continue to concessions to let companies prance through our city without helping our city grow, not even a gesture of any kind for our children or schools, like we see when a Comcast brings legislation before this Council. 191 5/16/00 STREETS, SERVICES - BILL 000121 Comcast wires our police stations and schools and provides a real service to our communities. They employ City residents at all levels Comcast supports our City residents, governments, and charities every opportunity they get. "Let's not make the same mistake again, and if companies want to be so detached from our city, let them detach and save the room for a company who will be a part of our community instead of someone else. " This was sincerely submitted by Ed J. Neilson, Treasurer and Political Director of the Local 98 IBW. And with that, I'll conclude my report, and I appreciate any consideration you will be giving this matter.
Thank you, Mr. Foy. While I agree with many of the statements that you've made and many of the 192 5/16/00 STREETS, SERVICES - BILL 000121 statements that Mr. Neilson submitted in his written testimony on a moral level as it relates to the City of Philadelphia. As you know, there are many things that we are not permitted to act on just because of our moral obligation to the residents of this city. You know, we're governed by laws and regulations, and under the Federal Act of 1996, I don't think we can just merely hold up a piece of legislation or not vote it out of committee favorably based on what we believe the moral obligation of companies doing business in this city have to its residents. I think you may have been in the room 15 earlier before testimony when I suggested that there are a number of issues that are of concern to this committee and others members of City Council, so we are electing to hold the two bills related to telecommunications today for further consideration from the call of the Chair. Is there anyone else here to who wish to testify? Mr. Martin.
I know you have a right to do that; I just hope that you'll be very 193 5/16/00 STREETS, SERVICES - BILL 000121 brief and refrain from getting into a courtroom debate here, because we do have a -- we will be having a seminar, as I said, with the members of this committee and other members of City Council to discuss some of the issues that are outstanding.
Because I think it will speed up the process. You have the testimony that was just -- could you write a written response to the committee on that report and send it to the Chair? I think a written response will be made a part of the record and I believe -- you know, so that we don't get into a -- I do believe that a thoughtful written response to the charges made by the IBW could be sufficient. Don't you think, Mr. Chairman?
We will provide 194 5/16/00 STREETS, SERVICES - PUBLIC MEETING you with a copy of the testimony. Thank you. Any other questions? (No further questions.)
This concludes the public hearing on the Committee of Streets and Services. - - -
We will now move into the meeting. The Chair recognizes Councilmember Ortiz.
Okay, I move that Bill No. 166 -- the amendment, actually, to Bill 15 166 be moved. (Duly seconded.)
It's been properly moved and seconded that the amendments to Bill 166 be approved as read into the record. All those in favor of the amendment signify by saying aye. Those opposed? The amendment to Bill 166 is approved. The Chair recognizes Councilmember Ortiz. 195 5/16/00 STREETS, SERVICES - PUBLIC MEETING
I move that Bill 3 166, as amended, be moved out of committee with a favorable recommendation and a recommendation that the rules of Council be suspended so as to permit first reading at the next session of City Council. (Duly seconded.)
Thank you. It's been properly moved and seconded that Bill No. 000166, as amended, be reported out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor of the bill will signify by saying aye. Those opposed, nay? The bill is approved. The Chair recognizes Councilman Ortiz.
Mr. Chairman, I move that Bill No. 183 be moved out of committee with a favorable recommendation and a recommendation that the rules of Council be suspended.
It's been properly moved and seconded that Bill No. 000183 be 196 5/16/00 STREETS, SERVICES - PUBLIC MEETING reported out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor of the bill will signify by saying aye. Those opposed? The bill is approved. The Chair recognizes Councilman Ortiz.
Mr. Chairman, I move that Bill No. 213 be moved out of committee with a favorable recommendation and a recommendation that the rules of Council be suspended so as to permit first reading at the next session City Council. (Duly seconded.)
It's been properly moved and seconded that Bill No. 000213 be reported out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor of the bill will signify by saying aye. Those opposed? 197 5/16/00 STREETS, SERVICES - PUBLIC MEETING The bill is approved. The Chair recognizes Councilman Ortiz.
Mr. Chairman, I move that Bill No. 259 be recommended out of committee with a favorable recommendation and a recommendation that the rules of Council be suspended so as to permit first reading at the next session of City Council. (Duly seconded.)
It's been properly moved and seconded that Bill No. 000259 be reported out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor of the bill will signify by saying aye. Those opposed? The bill is approved. Councilmember Ortiz?
Mr. Chairman, I move that Bill No. 262 be recommended out of committee with a favorable recommendation and a recommendation that the rules of Council be 198 5/16/00 STREETS, SERVICES - PUBLIC MEETING suspended so as to permit first reading at the next session of City Council. (Duly seconded.)
It's been properly moved and seconded that Bill No. 000262 be reported out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at our next session of Council. All those in favor of the bill will signify by saying aye. Those opposed? The bill is approved. The Chair recognizes Councilman Ortiz.
Mr. Chairman, I move that Bill No. 263 be moved out of committee with a favorable recommendation and a recommendation that the rules of Council be suspended so as to permit reading in the next session of City Council. (Duly seconded.)
It's been properly moved and seconded that Bill No. 000263 be reported out of this committee with a favorable recommendation and that the rules of Council be 199 5/16/00 STREETS, SERVICES - PUBLIC MEETING suspended so as to permit first reading at our next session of Council. All those in favor of the bill will signify by saying aye. Those opposed? The bill is approved. Bills 220, 121 and 218 are being held till the call of the Chair. This concludes public meeting and I thank all members for attending. (Adjourned at 4:50 p.m.) - - - 200 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, May 2000, were 8 reported fully and accurately by me, and that this 9 is a correct transcript of same. 10 11 12 13 RE: COUNCIL COMMITTEE ON STREETS AND SERVICES 14 BILL NO.'S 000121, 000166, 000183, 000213, 000218, 000220, 000259, 000262, 000263 15 16 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter