Middle Mile Construction and Marketing Agreement Contract.docx

MIDDLE MILE FIBER CONSTRUCTION

AND MARKETING AGREEMENT

RECITALS

APPENDICES

MIDDLE MILE FIBER CONSTRUCTION

AND MARKETING AGREEMENT

MIDDLE MILE FIBER CONSTRUCTION AND MARKETING AGREEMENT (Agreement") is made and entered into on this _____ day of November 2023 by and between ________________________ a company licensed to do business in the State of Nevada (“the Provider), and the State of Nevada (“Customer”), as represented by the Governor’s Office of Science, Innovation and Technology (“OSIT”). Provider and Customer are hereinafter collectively referred to as “the Parties.”

RECITALS

WHEREAS the Customer has secured funding from two different federal government agencies and the State of Nevada, Department of Transportation, to construct and own the following middle mile fiber routes,

a) The Interstate 80 Route – United States Department of the Treasury (Treasury)– Capital Project Fund. The approval to use $76.6 million of the State of Nevada’s Coronavirus Capital Projects Fund (CPF) funding to design, build, operate and maintain a buried, multi-duct route that spans the entirety of Interstate 80 in Nevada between mile-marker 0 at the Utah/Nevada border to mile marker 410.67 at the California/Nevada Border. This build is entirely in the Interstate 80 Nevada Department of Transportation (NDOT) Right of Way.

b) The Eastern Nevada Middle Mile (Eastern Route) – National Telecommunications and Information Agency (NTIA) Middle Mile Grant Program. The State of Nevada has applied for and received an NTIA Middle Mile grant to design, build, operate and maintain a buried, multi-innerduct route from a major Internet Exchange in Las Vegas (7135 S. Decatur Blvd, Las Vegas, NV, United States) to an interconnect point at Interstate 80 in Wells, NV (577 Wells Ave, Wells, NV 89835). This route follows Interstate 15 to the US Route 93 interchange in eastern Clark County, and then along US 93 Route from Interstate 15 North to Wells, NV. The route is expected to be placed entirely within the NDOT Right of Way.

WHEREAS Provider has submitted a detailed proposal to Customer to undertake the role of Fiber Construction and Marketing Partner for the Middle Mile Projects, which role encompasses the following tasks:

· Finalize Middle Mile Project construction design and specifications.

· Conduct environmental assessment and obtain all necessary environmental approvals for the Middle Mile Project.

· Obtain all necessary access permits to construct the Middle Mile project.

· Construct the broadband infrastructure necessary for the Middle Mile Project.

· Prior to completion of construction of the network begin to market the infrastructure and pre-sell dark fiber leases prior for each middle mile project prior to project completion.

· Analyze and determine the parameters around the Fiber Marketing Partner offering its own Lit Transport, Lit Bundled Transport and Commodity Internet Access Services, Dark Fiber Leases and Conduit Leases to third party service providers and other customers.

· Comply with all State and federal reporting requirements.

WHEREAS, Customer has selected Provider’s proposal to deliver such construction, marketing, lit fiber, dark fiber lease and conduit lease services over other proposals in a fair and competitive bid evaluation process, WHEREAS, this Agreement for the design, construction, installation and/or provisioning of Fiber Assets, Fiber Equipment, marketing services for lit fiber, dark fiber lease and conduit lease services on the two State of Nevada owned routes will fulfill an important state and public need for the delivery of improved technology, infrastructure, and services to support future statewide communication operations, economic development, social and community interests, WHEREAS, the Customer has agreed with the NITA and the Treasury to treat the construction of each route as a separate project and the Provider has agreed to comply with the separate and distinct reporting obligations for construction of each route in accordance with the requirements of the NTIA and Treasury, WHEREAS, NRS 333.700 authorizes officers, departments, institutions, boards, commissions, and other agencies in the Executive Department of the State Government which derive their support from public money in whole or in part to engage, subject to the approval of the Board of Examiners (BOE), services of entities as independent contractors; and WHEREAS, it is deemed that the service of the Provider herein is both necessary and in the best interests of the State of Nevada.

NOW, THEREFORE, in consideration of the mutual covenants, conditions, agreements, and undertakings contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

1.0 Definitions: The following terms in this Agreement shall have the meanings ascribed to them in this Article, or, if defined elsewhere in the text, as stated where defined.

1.1 “A Location” means the beginning point of a middle mile fiber segment. These are usually designated as the eastern most or northern most point of a middle mile fiber segment.

1.2 "Award Amount" means the total funds allocated to complete the terms and conditions under this Agreement.

1.3 "Contract Documents" means all Exhibits and attachments incorporated into this Agreement describing the scope of work and obligations of the parties.

1.4 “Colocation Hut, Hub Shelter, Regeneration Hut” A facility placed along a middle mile fiber optic cable route that houses provider and third-party customer equipment necessary to interconnect with the middle mile network and to regenerate the signal that defines the broadband capacity and speed of the fiber optic network.

1.5 "Contractor" means the person or entity that performs services and/or provides goods and/or services in furtherance of, or in connection with, this Agreement.

1.6 "CPF" means the Capital Projects Fund.[footnoteRef:1] [1: ]

1.7 “Customer” means the State of Nevada, Nevada Governor’s Office of Science, Innovation and Technology (“OSIT”).

1.8 “Customer Agency” means an agency of the State of Nevada.

1.9 “Customer Fiber System” means the conduit, cable, vaults, handholes, interconnect facilities including regeneration facilities and hub shelters constructed for and owned by the Customer.

1.10 "Conduit (Six-Way Conduit)" means an outside tube or encasement with six innerducts especially constructed for the purpose of placing and enclosing fiber optic cable.

1.11 “Conduit Lease” means a transaction by which an empty innerduct in a six way innerduct is leased to a third-party service provider.

1.12 Community Anchor Institutions (CAIs) means schools, libraries, healthcare provider facilities, institutions of higher education, community support organizations or entities, and in the future, other facilities as defined by the State of Nevada and OSIT.

1.13 “Dark Fiber" means optical fiber provided without electronics or optronics and which is not "lit" or activated, of which a designated number of such fiber optic strands will be leased from an existing or newly constructed fiber system.

1.14 “Dark Fiber Lease” a transaction by which dark fiber optic strands are leased to a third-party service provider.

1.15 “Delinquent Account” means accounts for which payment is more than forty-five 45 days past due.

1.16 “Effective Date” is the date this Agreement becomes effective upon approval by the Nevada State Board of Examiners.

1.17 “End Points” means the “Z” Location and the “A” location for a broadband transport service.

1.18 "Federal Interest Period" or "Limited Federal Interest Period". In the case of property associated with a broadband infrastructure project funded with the SLFRF or CPF, and which project is substantially completed by December 31, 2026, the federal interest in SLFRF or CPF broadband infrastructure will last until December 31, 2034 (Federal Interest Period).[footnoteRef:2] [2: See SLFRF and CPF Supplementary Broadband Guidance, May 17, 2023.]

1.19 “Fiber Assets” means existing or newly constructed fiber optic cable, conduit, rights (contractual or otherwise), or property used in connection with the construction, ownership, operation of a fiber optic system for delivery or transmission of broadband services.

1.20 “Fiber Equipment" means equipment used to pass light and Internet Protocol traffic (and therefore broadband traffic) through a fiber optic cable.

1.21 “Fiber Maintenance and Repair” means the act of inspection, maintaining and repairing fiber optic cable strands to maintain the ability of the fiber optic strands to deliver lit fiber services to end customers within the standards of the service level agreement or for dark fiber lease customers to maintain service over dark fibers leased from the Provider.

1.22 “Fiber Relocation” means the requirement to relocate or reconstruct segments of middle mile fiber.

1.23 "Property Standards" means those definitions and standards for real property, equipment and/or supplies set forth in 2 CFR 200, §§ 200.311, 200.313, and 200.314, or as specifically identified in Federal statutes, regulations, or the terms and conditions of the Federal award.

1.24 “Finding of No Significant Impact (FONSI)” means a certification received by the Provider after State and Federal agency environmental review determines there is no environmental impact related to the construction of new fiber along the proposed route between the “Z location” and the “A location”. This certification is required for the vast majority of new fiber construction projects and must be obtained prior to commencing construction activities.

1.25 “Interference” means any occurrence that impairs or interrupts the ability of the fiber optic cables to transmit Internet Protocol voice, video, or data traffic.

1.26 "IRU" means Indefeasible Right to Use, an exclusive and irrevocable right to use optical fiber(s) for a defined period of time as set forth in the IRU Agreement.

1.27 "Lit Fiber Services" means fiber optic cables which have been equipped with the necessary equipment to enable point-to-point transmission or transport of data by an Internet service provider, and all associated activities necessary to provision such services.

1.28 “MCA” refers to this Master Customer Agreement.

1.29 “Monthly Recurring Charges” or "MRC" means charges for Lit Service(s) or Dark Fiber Service(s) that accrue to the Customer monthly.

1.30 "Maintain" or "Maintenance" or derivatives thereof means the activity of assuring continuing operational status of the system through repair, replacement or otherwise, but excludes relocation or additions of fiber conduit, fiber equipment or assets into the rights-of-way.

1.31 “Middle Mile Project” refers fiber optic based broadband infrastructure, commonly referred to in the industry as "middle mile", that traverses major Interstate and US Highways in a state. It passes by rural population centers and through rural areas terminating in cities like Las Vegas and Reno. The Middle Mile Project for this contract encompasses the construction and marketing of two separately funded, long-haul (over 60 miles in length) middle mile spans, namely, the Eastern Nevada Middle Mile (US 93) and the I-80 project.

1.32 “New Fiber” or “Newly Constructed Fiber” or “New Construction” means new fiber optic cable and supporting components or infrastructure placed aerially or buried. Newly Constructed Fiber for this Contract should strictly follow the fiber construction specifications outlined in the relevant Exhibits.

1.33 "Notice to Proceed" means a written notice given by Customer to Contractor fixing the date on which the Contract times will commence to construct a segment or segments of fiber optic cable between defined end points Commencement of construction and initiation of service, will require a "Notice to Proceed”.

1.34 "NTIA" means the National Telecommunications and Information Agency.

1.35 "OSIT" means the Nevada Governor's Office of Science, Innovation and Technology.

1.36 “Outside Plant Materials” means all materials necessary to construct Newly Constructed Fiber to include but not be limited to fiber, conduit, handholes, vaults, markers, cabinets, construction hardware, electronics, shelters, and pole attachment materials.

1.37 "One Time Construction Charges" means the build-out costs associated with the construction of the Middle Mile project, including the costs of construction of network facilities, design, engineering, and project management leased lit service, leased dark fiber and/or self-provisioning (own) fiber. For the purposes of this agreement, one time construction charges paid by the customer are limited to the amount of grant funds for the I-80 route and the amount of grant funds from the NTIA and matching funds from the State of Nevada Department of Transportation for the Eastern NV Middle Mile.

1.38 “Provider Equipment” means any equipment, owned by a service provider, used for, or which supports, transmission of light and Internet Protocol (IP) traffic (and therefore broadband traffic) through a fiber optic cable.

1.39 "Project Property" means the broadband infrastructure constructed and/or installed pursuant to Provider's contract with Customer OSIT.[footnoteRef:3] In the case of these two projects, all project property is owned by the State of Nevada. [3: See guidance from U.S. Treasury at: https://home.treasury.gov/system/files/136/SLFRF-and-CPF-Supplementary-Broadband-Guidance.pdf#:~:text=Title%20to%20real%20property%20or%20equipment%20acquired%20or,Period%2C%20the%20ISP%20and%20any%20successors%20or%20transferees%3A

1.40 “Planned Services Date” means the date that represents service initiation that Provider offers a Lit Service, Dark Fiber lease or Conduit lease to third party customers Customer.

1.41 "ROW" means the right-of-way granted by NDOT, City, County, landowners, or federal agency to allow occupancy to locate, operate, construct, reconstruct, maintain any fiber assets or fiber equipment.

1.42 “State” means the State of Nevada and any State agency identified herein, its officers, employees and immune contractors as defined in NRS 41.0307

1.43 "State Materials" means any data, state records, state software, research, studies, photographs, documents, drawings, models, materials, or information provided by the State to Provider in the course of this Contract.

1.44 “Service Level Agreement” or SLA – the standards of service for uptime, latency, packet loss, jitter, oversubscription and other technical standards for a Lit Fiber Service. For this agreement, SLA standards for Lit Fiber Service is enumerated in Exhibit A.

1.45 “Subcontractor” means any third person or entity hired by or performing work pursuant to a request of the Provider as part of, or related to, any project or work arising from this Agreement.

1.46 “Z Location” means the origin location for a broadband transport service, usually a customer’s operating office or premise, where a broadband connection originates. All Z locations are connected to specific A locations via fiber optic cable.

ARTICLE II

NEW CONSTRUCTION

2.2.1 Creating and adhering to a detailed project schedule for the engineering, design, construction, and test of the entirety of the Middle Mile Project.

2.2.2 Engineering and design of the Middle Mile Project routes.

2.2.3 Completion of all necessary Environmental Categorical Exclusion and Environmental Assessment documents.

2.2.4 Successfully obtaining an Environmental Finding of No Significant impact (FONSI) for the Middle Mile Project.

2.2.5 Successfully procuring all outside plant materials necessary to construct the Middle Mile project.

2.2.6 Constructing the Middle Mile project in accordance with the construction deliverables and specifications outlined in Exhibit C, and in accordance with the detailed project schedule.

ARTICLE III

CONSTRUCTION INVOICES AND PAYMENTS

ARTICLE IV.

DELIVERY OF LIT FIBER SERVICES, DARK FIBER LEASE, CONDUIT LEASE,

COLOCATION SERVICES AND FIBER MAINTENANCE SERVICES

TO THIRD PARTY SERVICE PROVIDERS AND OTHER END CUSTOMERS

4.2.1 No Cost Maintenance and Repair: The Provider shall, at no cost to the Customer, maintain, repair, and relocate both the Customer’s six-way conduit and the general use six-way conduit for the entirety of the term of the agreement and any and all renewal terms. Provider will ensure that use, management and maintenance of the conduit, fiber optics and other related assets will not be used in such a way as to interfere with any other party's use of its fiber optic cable and associated components. The standards of maintenance and repair services are outlined in Exhibit D.

4.2.2 Net Revenue Share to Customer: The Provider shall provide the Customer with an_____% share of all revenues from Lit Fiber Service, Dark Fiber Leases, Conduit Leases, Fiber Maintenance Fees, and Colocation Fees that are derived from the Middle Mile projects. The Net Revenue shall be calculated net of any Federal, State or Local revenue, sales, use and property taxes that accrue to the provider.

4.2.3 Payment to Customer: Payments on net revenues shall be made quarterly commencing three (3) months after the Customer issues the Certificate of Acceptance for the Middle Mile Projects. Payments shall lag revenue receipt by the Provider by one quarter.

4.2.4 Audit and Inspection Rights

: Customer will have a limited right to access the documents and records in Provider’s custody and control that are directly related to the calculation of the Customer’s share of revenue payments hereunder. Customer may exercise their audit right not more than once per calendar year. Provider shall be responsible for the costs associated with any such requested audit.

ARTICLE V

ACCESS TO CUSTOMER MIDDLE MILE FACILITIES

ARTICLE VI

ADDITIONAL OBLIGATIONS OF PARTIES

6.0 Deadline for Invoicing for New Fiber Construction or Services: Provider hereby acknowledges and understands that any federal funding allocated under this Agreement for the purpose of one-time construction charges must be committed for eligible use(s) no later than December 31, 2024. The final deadline for submission of any invoice for payment of one-time construction charges must be committed for eligible use no later than December 31, 2024. The final deadline for submission of any invoice for payment of one-time construction charges shall be September 30, 2026, and NO INVOICE FOR ONE-TIME CONSTRUCTION CHARGES WILL BE ACCEPTED FOR PAYMENT AFTER SEPTEMBER 30, 2026,[footnoteRef:4] unless an extension is authorized by the federal funding source. [4: See Supplementary Broadband Guidance, supra.]

ARTICLE VII

WARRANTIES

7.4 Wages: The Middle Mile Project will comply with the provisions of NAC 338, NRS 338 and 338.035 et seq. with respect to the payment of prevailing wages.[footnoteRef:7] [7: See the Nevada Public Works Project Handbook, June 2021 at https://labor.nv.gov/uploadedFiles/labornvgov/content/PrevailingWage/Final%20PWP%20Handbook%202021%20rev.%2008.07.2023.pdf ]

] [9: See https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/appendix-Appendix%20II%20to%20Part%20200

7.6.3 Clean Air Act: Provider acknowledges and warrants it will comply with Clean Air Act and Federal Water Pollution Act[footnoteRef:11] for contracts that exceed the Simplified Acquisition Threshold (currently $250,000). [11: Clean Air Act (42 U.S.C. 7401–7671q.) and the Federal Water Pollution Control Act (33 U.S.C. 1251–1387), as amended. See Clean Air Act (42 U.S.C. 7401–7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251–1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).

7.7 Work Safety Standards: Provider acknowledges and warrants it will comply with the Contract Work Hours and Safety Standards Act (40 U.S.C. 3701–3708) where applicable.[footnoteRef:13] [13: Where applicable, all contracts awarded by the non-Federal entity in excess of $100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. 3702 and 3704, as supplemented by Department of Labor regulations (29 CFR Part 5).