######### **Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of ) CS Docket No. 97-98

Amendment of Commission's )

Rules and Policies )

Governing Pole Attachments )

)

In the Matter of ) CS Docket No. 97-151

Implementation of Section 703(e) of )

The Telecommunications Act of 1996 )

**CONSOLIDATED PARTIAL ORDER ON RECONSIDERATION**

**Adopted: May 22, 2001 Released: May 25, 2001**

**By the Commission:**

Table of Contents

Paragraph

I.  INTRODUCTION...........................................................................
    1

II. BACKGROUND
    ............................................................................
    7

III. ORDER ON
     RECONSIDERATION......................................................
     10

## COMPLAINT PROCEDURES AND NEGOTIATED AGREEMENTS......\... 10

## BASIC CONCEPTS USED IN THE FORMULA ................................. 15

1.  Use of Actual
    Costs................................................................
    15

2.  When Net Pole Investment is Zero or
    Negative................................ 22

3.  Case by Case
    Applications........................................................
    39

## THE SPACE FACTOR................................................................. 42

1.  Average Pole Height
    ............................................................. 46

2.  Safety
    Space........................................................................
    47

3.  Minimum Ground
    Clearance...................................................\... 48

4.  Telecom Formula Space
    Factor................................................... 49

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a.  Counting Attaching Entities.........................................
    49

b.  Average Number of Attaching Entities............................. 50

i\. Geographic Areas ....................................... 60

ii. Presumptive Averages .................................. 65

## OVERLASHING .....................................................................\... 69

1.  Space Occupied by Third Party Overlashing
    .................................... 69

2.  What the Third Party Overlasher
    Pays............................................ 72

3.  Wind and Weight Load Factors
    .................................................... 73

4.  Shared One-Foot Usable Space
    ................................................... 75

5.  Cable Operator Not a Utility Obligated to Provide for
    Overlashing........... 77

6.  Notice to Utility Pole Owner
    ...................................................... 78

7.  Dark Fiber
    ...........................................................................
    82

## CONDUIT ISSUES...................................................................... 83

1.  Space Factor in
    Conduit............................................................
    86

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a.  Total Duct or Conduit Capacity......................................
    87

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b.  Occupied Capacity, the Half-Duct Presumption.................... 91

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2.  Net Linear Cost of Conduit
    ........................................................ 95

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a.  Net Conduit Investment (LEC-Owned Conduit) .................. 97

b.  Net Conduit Investment (Electric Utility-Owned Conduit)....... 101

## FERC AND ARMIS ACCOUNTS USED IN THE FORMULAS ............ 104

1.  Electric Utility Accumulated Deferred Income Taxes Poles
    (Correction)... 105

2.  Carrying Charge Accounts
    (LECs)............................................... 106

3.  Carrying Charge Accounts
    (Electric)............................................. 112

4.  Investment Accounts
    (Electric)................................................... 116

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IV. FINAL REGULATORY FLEXIBILITY
    CERTIFICATION........................\... 125

V.  PAPERWORK REDUCTION ACT OF 1995 ANALYSIS............................
    129

VI. ORDERING
    CLAUSES.....................................................................
    130

APPENDIX A - Revised Rules

APPENDIX B - List of Parties Filing in *Fee Order* Reconsideration
Proceeding

APPENDIX C - List of Parties Filing in *Telecom Order* Reconsideration
Proceeding

APPENDIX D-1 - Section 224(d) *Cable Formula* (LECS)

APPENDIX D-2 - Section 224(d) *Cable Formula* (Electric)

APPENDIX E-1 - Section 224(e) *Telecom Formula* (LECS)

APPENDIX E-2 - Section 224(e) *Telecom Formula* (Electric)

APPENDIX F-1 - Conduit Formula (LECS)

APPENDIX F-2 - Conduit Formula (Electric)

I.  INTRODUCTION

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1.  In this Consolidated Partial Order on Reconsideration
    (\"*Reconsideration Order*\"), we consolidate two reconsideration
    proceedings raising similar and interrelated issues concerning the
    rates, terms and conditions of access for attachments by cable
    operators and telecommunications carriers to utility poles, ducts,
    conduits and rights-of--way pursuant to Section 224 of the
    Communications Act of 1934, *as amended* (\"Pole Attachment
    Act\")[^1] and Subpart J of the Commission\'s Rules.[^2] On February
    6, 1998, we released a Report and Order, *Implementation of Section
    703(e) of the Telecommunications Act of 1996*, *Amendment of the
    Commission\'s Rules and Policies Governing Pole Attachments*, CS
    Docket No. 97-151, FCC 98-20 (\"*Telecom Order*\"),[^3] adopting
    rules implementing section 703(e) of the Telecommunications Act of
    1996 (\"1996 Act\")[^4] relating to pole attachments.[^5] On April
    3, 2000, we released a Report and Order, *Amendment of Rules and
    Policies Governing Pole Attachments*, CS Docket No. 97-98, FCC
    00-116 (\"*Fee Order*\")[^6] addressing concerns about the
    application of our formula for determining reasonable rates for pole
    attachments. We have determined that it is in the interest of
    administrative efficiency and regulatory effectiveness to
    consolidate these two reconsideration proceedings.[^7]

2.  In the *Telecom Order*, we implemented Section 703(e) of the 1996
    Act[^8] by prescribing regulations,[^9] effective February 8,
    2001,[^10] to ensure that a utility[^11] complies with the Pole
    Attachment Act's requirements for just and reasonable rates, terms
    and conditions and nondiscriminatory access for pole attachments
    used to provide telecommunications services.[^12] Among other
    things, the *Telecom Order* considered the 1996 Act, *Telecom Order*
    comments and *Telecom Order* reply comments filed in response to the
    *Telecom Order Notice*.[^13] Increases in prescribed rates for
    telecommunications services attachers pursuant to section 224(e) of
    the Pole Attachment Act are to be phased in over five years
    beginning February 8, 2001.[^14]

3.  Appeals of the *Telecom Order* were consolidated in the United
    States Court of Appeals for the 11^th^ Circuit and resulted in a
    decision, *Gulf Power, et al. v. FCC and USA* (\"*Gulf Power
    II*\").[^15] That decision was stayed by the 11^th^ Circuit Court of
    Appeals and the Commission filed a petition for certiorari with the
    United States Supreme Court which was granted. Because two issues,
    the application of the Pole Attachment Act to wireless
    telecommunications service providers and the effect of Internet
    service on pole attachments are the subject of the appeal of *Gulf
    Power II*, we decline to address those issues at this time, pending
    the issuance of a final mandate from the courts. In addition, the
    regulatory status of cable Internet access is the subject of an
    ongoing Notice of Inquiry (\"NOI\"),[^16] the resolution of which
    may affect our determination of this issue. Therefore, we reserve
    review of our position that wireless telecommunications service
    providers are covered by the Pole Attachment Act and that Internet
    service is neutral for purposes of determining the character of the
    attachment as cable or telecommunications. However, these two issues
    remain open and will be the subject of a later order once we have
    received guidance from the courts and have had an opportunity to
    review the additional comments received in the NOI proceeding.

4.  In the *Fee Order*, we adopted rules based on the comments filed in
    response to the *Fee Order Notice.*[^17] We also considered the
    *Telecom Order* comments and reply comments when relevant to the
    issues addressed. Among other things*,* the *Fee Order* addressed
    the use of certain presumptions in our rate calculation methodology,
    the carrying charge rate elements used in our formulas, the use of
    gross versus net data in our formulas used to determine a maximum
    just and reasonable rate for pole attachments, the regulatory
    accounts to be used in our formulas, and the formula used to
    determine a maximum rate for attachments to conduit.

5.  In this *Reconsideration Order*, we grant in part and deny in part
    petitions for reconsideration and/or clarification of our *Telecom
    Order* (\"*Telecom Order* petitions\"). Nine *Telecom Order*
    petitions were filed, and in response 15 parties filed *Telecom
    Order* reconsideration comments and nine parties filed *Telecom
    Order* replies.[^18] In this *Reconsideration Order*, we also grant
    in part and deny in part petitions for reconsideration and/or
    clarification of our *Fee Order* (\"*Fee Order* petitions\").[^19]
    Five *Fee Order* petitions were filed and in response two parties
    filed *Fee Order* reconsideration comments and four parties filed
    *Fee Order* replies.[^20]

6.  In this *Reconsideration Order*, we

\(a\) affirm our decision not to impose additional regulation on the
negotiation process or on the rules for resolution of pole attachment
complaints;[^21]

(b) affirm the continued use, in the pole attachment rate calculation
    formulas, of specific regulatory accounts maintained by utilities
    that identify the actual costs incurred by the utilities for the
    poles, ducts, conduits and rights-of-way that are the subject of the
    attachment;[^22]

(c) reconsider and clarify the way in which entities are counted for the
    purpose of allocating and apportioning costs of unusable space for
    telecommunications attachers after February 8, 2001;[^23]

\(e\) reconsider and clarify the geographic areas used to determine
average numbers of attaching entities for use in calculations of the
formulas for telecommunications pole attachment rates, and establish two
presumptive averages that may be used in our formulas after February 8,
2001;[^24]

\(f\) affirm and clarify our decisions regarding third party
overlashing;[^25]

(g) affirm the presumption that a pole attachment occupies one foot of
    usable space occupied and that this presumption is rebuttable by
    either party;[^26]

\(h\) affirm that the formula adopted in the *Fee Order*, for
calculating the rate for use of capacity in a conduit, is applicable to
telecommunications systems; affirm the use in the formula of the actual
percentage of the conduit capacity occupied, with a rebuttable
presumption that an attacher occupies one-half duct;[^27] affirm our
decision that there is no unusable capacity in a conduit;[^28] and
affirm our decision that a utility may not exclude reserved capacity
within a conduit system when calculating total capacity upon which the
pole attachment rate in a conduit is based;[^29]

\(i\) affirm our position that complaints regarding nondiscriminatory
access, rates, terms and conditions for non-traditional pole
attachments, such as attachments to rights-of-way, wireless attachments
and transmission facilities attachments, will be considered under our
rules on a case-by-case basis;[^30]

(j) reconsider and clarify our methodology for calculating maximum pole
    attachment rates when the net pole investment becomes zero or
    negative.[^31]

(k) decline to reconsider at this time and reserve for later review, our
    decision that Internet service has a neutral affect on an attacher's
    classification as a cable system or telecommunications system;

(l) decline to reconsider at this time and reserve for later review, our
    decision that providers of wireless telecommunications services are
    entitled to the benefits and protection of the Pole Attachment Act;
    and

(m) amend our rules to reflect our decisions in this *Reconsideration
    Order*.

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II. BACKGROUND

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7.  In 1978, Congress enacted section 224 of the Communications Act[^32]
    granting the Commission authority to regulate the rates, terms, and
    conditions governing pole attachments, requiring that such rates,
    terms and conditions be just and reasonable.[^33] The Commission is
    authorized to adopt procedures necessary to hear and to resolve
    complaints concerning such rates, terms, and conditions.[^34]
    Congress sought to constrain the ability of utilities to extract
    monopoly profits from cable television system operators in need of
    pole, duct, conduit or right-of-way space for pole attachments.[^35]

8.  Section 224(d)(1) of the Pole Attachment Act defines a just and
    reasonable rate as ranging from the statutory minimum based on the
    additional costs of providing pole attachments, to the statutory
    maximum based on fully allocated costs.[^36] The additional, or
    incremental, costs are the costs that would not be incurred by the
    utility *but for* the pole attachments.[^37] The maximum rate,
    identified as a percentage of fully allocated costs, refers to the
    portion of operating expenses and capital costs that a utility
    incurs in owning and maintaining pole attachment infrastructure that
    is equal to the portion of space on a pole,[^38] or capacity of a
    duct, conduit, or right-of-way,[^39] that is occupied by an
    attacher.[^40] The Commission developed a methodology[^41] to
    determine the maximum allowable pole attachment rate under section
    224(d)(1) of the Pole Attachment Act which is referred to as the
    *Cable Formula*.[^42]

9.  Subsequently, Congress enacted the 1996 Act \"to accelerate rapidly
    private sector deployment of advanced telecommunication and
    information technologies and services.\"[^43] The 1996 Act amended
    section 224 in several important respects. Section 703(6) of the
    1996 Act added a new subsection 224(d)(3),[^44] that expanded the
    scope of section 224 by applying the *Cable Formula* to rates for
    pole attachments made by telecommunications carriers[^45] in
    addition to cable systems,[^46] until a separate methodology becomes
    effective for telecommunications carriers in 2001.[^47] Section
    703(7) of the 1996 Act added new subsections 224(e)(1-4), which set
    forth a separate methodology to govern charges for pole attachments
    used to provide telecommunications services beginning February 8,
    2001 (\"*Telecom Formula*\").[^48] Further, the 1996 Act gave cable
    operators and telecommunications carriers a right of
    nondiscriminatory access to utility poles, ducts, conduit and
    rights-of-way.[^49] In the *Local Competition Order*, we adopted a
    number of rules implementing the new access provisions of section
    224.[^50]

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III. ORDER ON RECONSIDERATION

## COMPLAINT PROCEDURES AND NEGOTIATED AGREEMENTS 

10. Our pole attachment rules were established in 1978, and have been
    refined through rulemakings and enforcement actions.[^51] These
    rules apply when parties are unable to arrive at a negotiated
    agreement and an aggrieved party files a complaint.[^52] Section
    224 (e) (1) of the Pole Attachment Act indicates that application of
    the Commission's rules will apply only when the parties fail to
    resolve a dispute.[^53] Our rules require that a complaint include a
    brief summary of the steps taken to resolve the problem prior to
    filing a complaint.[^54]

11. Utilities must provide a cable television system[^55] or
    telecommunications carrier[^56] with nondiscriminatory access[^57]
    to any pole, duct, conduit or right-of-way owned or controlled by
    it, at just and reasonable rates, terms and conditions.[^58] In the
    *Telecom Order*, we concluded that the current complaint procedures
    are adequate to establish just and reasonable rates, terms, and
    conditions for pole attachments, and determined that the existing
    methodology for determining a presumptive maximum pole attachment
    rate for telecommunications carriers, as modified, facilitates
    negotiation because the parties can identify an anticipated range
    for the pole attachment rate.[^59] We rejected proposals to require
    uniformity of terms in pole attachment agreements stating that
    \"\[w\]hile we do not agree that all pole attachment agreements have
    to be identical, differing provisions must not violate the statutory
    requirement that terms be just, reasonable, and
    nondiscriminatory.\"[^60]

12. Electric utilities urge us to declare negotiated agreements for pole
    attachments inviolate, asserting negotiated market-based rates
    assure just compensation for pole attachments.[^61] Electric
    utilities assert there is a robust and competitive free market for
    pole attachments and that utilities lack any incentive to
    discriminate against attaching entities.[^62] UTC/EEI argues that a
    negotiated rate reflects an entire package of benefits that
    attaching entities reap from access to utility infrastructure:
    time-to-market, dispute avoidance, and maintenance, construction and
    partnership, as well as non-infrastructure opportunities such as
    service resale.[^63] UTC/EEI continues to urge that we impose
    additional regulation on the negotiation process or, in the
    alternative, that we impose additional regulation on the complaint
    process that is favorable to a utility.[^64]

13. Contrary to UTC/EEI\'s argument, the record as a whole does not
    demonstrate that the market for pole attachments is fully
    competitive or that the utilities now lack any incentive to
    discriminate against attaching entities. As the Court stated in
    *Gulf Power II*, [^65] contrary to American Electric's
    assertions,[^66] the original purpose of the Pole Attachment Act, to
    prevent utilities from charging monopoly rents to attach to their
    bottleneck facilities, did not change with the 1996 Act.[^67]
    Nothing in the record demonstrates that the utilities' monopoly over
    poles has since changed. Upon consideration of the record, we affirm
    our decision not to impose additional regulation on either the
    negotiation process or the rules for resolution of complaints
    arising out of failed negotiations.[^68] We reject assertions by
    utilities that our rules frustrate negotiations.[^69] To the
    contrary, our experience has taught us, and the record gained
    through these proceedings demonstrates, that without our rules and
    the use of presumptions in a formula methodology, attaching entities
    would not be able to challenge any rate offered by a utility.[^70]
    There would be no reasonable negotiation without a benchmark rate
    against which to compare the utility\'s proposed rate. We continue
    to reject arguments[^71] by utilities that attaching parties should
    be required to take exception to terms or conditions when the pole
    attachment agreement is negotiated or be estopped from filing a
    complaint about those issues.[^72]

14. We do not suggest that good faith negotiations require use of
    identical rates, terms or conditions in pole attachment
    agreements.[^73] We encourage, support and fully expect that
    mutually beneficial exchanges will take place between the utility
    and the attaching entity.[^74] When utilities and attaching entities
    are innovative and provide mutually beneficial negotiated
    alternatives to the maximum rates, competition and the deployment of
    services to all communities will be fostered, resulting in the
    successful implementation of the 1996 Act. However, we do require
    that differences in rates, terms and conditions for pole attachments
    among attaching entities, be based on legitimate exchanges of
    consideration and not on discriminatory factors such as favoring an
    affiliated services provider over an unaffiliated entity. We will
    carefully scrutinize any differences in rates, terms and conditions
    in any complaint action, and the burden will be on the utility to
    demonstrate that any differences are nondiscriminatory.

## BASIC CONCEPTS USED IN THE FORMULA 

1.  Use of Actual Costs

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15. In response to the *Telecom Order Notice* and the *Fee Order
    Notice,* several electric utilities submitted comments supporting a
    rate calculation methodology which would substitute replacement
    costs in the rate formula in lieu of the actual costs reflected in
    the utility's regulatory accounts.[^75] There was also comment by
    attaching entities opposing the use of anything but historical costs
    to both the *Telecom Order Notice*[^76] and the *Fee Order
    Notice*.[^77] In the *Telecom Order*, we stated that we had not
    sought comment on this issue and we declined to address the
    utilities\' proposals to do so.[^78] In response to the *Fee Order
    Notice,* we adopted the *Fee Order* in which we rejected utilities'
    arguments that pole attachment rates should be based on replacement
    costs and we affirmed the use of historical costs in our pole
    attachment rate methodology.[^79] We stated that the continued use
    of historical costs accomplishes key objectives of assuring, to both
    the utility and the attaching parties, just and reasonable rates;
    establishes accountability for prior cost recoveries; and accords
    with generally accepted accounting principles. [^80]

16. Electric utilities continue to urge that we abandon our use of
    regulatory accounts based on historical costs.[^81] Petitioners
    assert that pricing methodologies for use in pole attachment
    formulas should reflect replacement costs or the rates calculated
    are not constitutional because they cannot provide just
    compensation.[^82] American Electric asserts that we should review
    the constitutionality of the rate methodology in light of the *Gulf
    Power I* decision, which held that the mandatory access provisions
    of the 1996 Act amendments to the Pole Attachment Act constitute a
    taking of property.[^83] UTC/EEI asserts the proper measure of just
    compensation is the \"fair market value\" of the property at the
    time of the taking.[^84] Southern Co. argues that in instances where
    there is no clear market value, several different proxies for market
    value have been used to determine just compensation, including
    replacement costs.[^85] American Electric attempts to demonstrate
    that replacement costs are necessary to provide just compensation
    for pole attachments.[^86]

17. We affirm our decision that the *Cable Formula,* which includes
    regulatory accounts maintained using historical costs, encompasses
    the statutory directive to provide just and reasonable rates for
    pole attachments,[^87] adding certainty and clarity to
    negotiations.[^88] We have been presented with no persuasive
    evidence[^89] that utility owners do not recover a just and
    reasonable compensation[^90] for pole attachments from use of the
    *Cable Formula*.[^91] The application of the well-established *Cable
    Formula*, with technical adjustments adopted from time to time, is
    consistent with establishing a just, reasonable, and
    nondiscriminatory maximum pole attachment rate as envisioned by
    Congress.[^92] The statute requires the Commission to develop a
    methodology to compensate the pole owner for its actual costs
    associated with the amount of space used by an attacher.[^93]
    Congressional intent to rely on existing regulatory accounts and
    avoid a prolonged rate making process is realized in the
    Commission's regulations.[^94]

18. Both the decision in *Gulf Power I* [^95] and *Gulf Power II* [^96]
    support our analysis on the issue of just compensation. While the
    decisions recognize that the Pole Attachment Act and the
    Commission's rules invoke constitutional standards because of the
    mandatory access requirements, neither the statute nor the
    Commission's rules were found to be facially unconstitutional. In
    both cases, the 11^th^ Circuit Court of Appeals held that the issue
    of just compensation was not ripe for review because the utilities
    had not shown that the 1996 Act nor the Commission's rules would
    operate to deny them just compensation in every case.[^97] As the
    Court stated in Gulf Power II, \" . . . we are not confident, given
    the record at hand, that the formula will deny just compensation in
    all cases.\"[^98] Indeed, as the Supreme Court stated in *Duquesne
    Light Company v. Barasch*, (\"*Duquesne Light*\"),[^99]
    \"\[f\]orty-five years ago in the landmark case of \[*Hope Natural
    Gas*[^100]\], this Court . . . held that the \'fair value rule\' is
    not the only constitutionally acceptable method of fixing utility
    rates. In \[*Hope Natural Gas*\] we ruled that historical cost was a
    valid basis on which to calculate utility compensation.\"[^101]

19. Several parties observe that the Commission applies a different
    methodology in the context of universal service requirements and
    interconnection agreements as opposed to pole attachments. They
    argue that consistency demands that the same pricing methodology be
    applied throughout the 1996 Act. We disagree that the Commission's
    continued use of a historical cost methodology in the pole
    attachment context is arbitrary and capricious. As explained in
    detail below, the Commission had a rational basis, amply supported
    by record evidence, for choosing different pricing methodologies in
    these different contexts.[^102]

20. In the Universal Service Order[^103] and Local Competition
    Order,[^104] the Commission reasonably and in detail explained that,
    in connection with universal service requirements and
    interconnection agreements, ratemaking on the basis of
    forward-looking economic cost would best effectuate the new
    competitive objectives of the 1996 Act. These objectives were to
    stimulate direct competition in local telecommunications markets, to
    ensure the efficient use of existing telecommunications network
    facilities, and to encourage new entrants to make economically
    rational decisions about whether or how to enter a local
    telecommunications market.[^105] The Commission found the use of a
    forward-looking cost methodology particularly important in this
    context because we determined that a firm compares forward-looking
    costs with existing market prices, in making decisions about entry,
    expansion, and price.[^106]

21. By contrast, the predominant legislative goal for Congress in
    enacting the Pole Attachment Act was \"to establish a mechanism
    whereby unfair pole attachment practices may come under review and
    sanction, and to minimize the effect of unjust or unreasonable pole
    attachment practices on the wider development of cable television
    service to the public.\"[^107] Due to the local monopoly in
    ownership or control of poles, the legislative record indicated that
    some utilities had abused their superior bargaining position by
    demanding exorbitant rental fees and other unfair terms in return
    for access by cable companies to their pole space.[^108] This actual
    and potential anti-competitive behavior prompted Congress to pass
    the Pole Attachment Act. It was in this context that the Commission,
    guided by Congressional direction to use existing accounting
    measures to determine costs, decided to employ a historical cost
    based pole attachment formula in implementing the Pole Attachment
    Act.[^109] There is nothing novel about the Commission's use of a
    historical cost methodology in the context of regulating monopoly
    rates. For example, to carry out the statutory goal of section
    623(b) of the Communications Act -- i.e., to ensure that individual
    retail subscribers of monopoly cable providers were not exploited
    \-- the Commission, in addition to using a benchmark approach, also
    adopted a historical, cost-of-service alternative methodology for
    the cable television industry.[^110]

22. Since 1978, the Commission has applied an embedded cost methodology,
    which has been upheld by the United States Supreme Court.[^111] The
    Commission's continued use of a historical cost methodology in the
    pole attachment context is consistent with Congressional
    expectations. Specifically, while the Commission's pole attachment
    formula has been in place since 1978, Congress did not directly or
    by implication instruct the Commission to deviate from the use of
    historical costs when it amended the Pole Attachment Act in
    1996.[^112] By comparison, the local competition provisions of the
    Telecommunications Act of 1996 contemplated some degree of departure
    by the Commission from its past practice of setting rates on the
    basis of rate based/rate-of-return regulation.[^113] Specifically,
    section 252(d)(1)(A)(i) requires that rates be based on the \"cost\"
    of providing the interconnection or network element \"determined
    without reference to a rate-of-return or rate-based
    proceeding.\"[^114]

23. In addition, the benefits of using a forward-looking cost
    methodology are less pronounced in the pole attachment context than
    in the universal service/interconnection context. The Pole
    Attachment Act protects cable and telecommunications attachers from
    monopoly prices set by utilities that are not necessarily in direct
    competition with the attachers, although there may be potential for
    direct competition.[^115] The Pole Attachment Act does not set out a
    scheme for attachers to access the network elements of a utility's
    core business. The majority of poles nationwide are owned or
    controlled by electric utilities, with the remaining poles owned or
    controlled by telephone companies.[^116] Thus, while in some cases
    pole owner and attacher may both provide telecommunications
    services, most typically a cable attacher or telecommunications
    attacher is seeking relief under the Pole Attachment Act from the
    rates, terms and conditions imposed by an electric utility pole
    owner. In the telecommunications interconnection context, on the
    other hand, the statute sets out a scheme for determining rates
    solely between competing telecommunications carriers. Thus, rate
    regulation in the context of pole attachments is not focused
    primarily on the same concerns that predominate with
    interconnection.

24. In addition, the assets being regulated in the two contexts are very
    different. The Pole Attachment Act addresses access to poles, ducts,
    conduits and rights-of-way, in contrast to the unbundled elements of
    an incumbent's telecommunications network that are addressed in the
    interconnection context. These telecommunications network elements,
    in contrast to poles, ducts and conduits, are subject to a rapidly
    changing technology. A forward looking cost pricing methodology
    reflects the cost of replacing the functions of an asset using the
    most efficient technology available so as to appropriately capture
    the technological changes that are occurring.[^117] As a result, new
    entrants are given the proper cost signals to decide whether to
    construct their own networks or to use the incumbent's. In the
    context of pole attachments, there has been significantly less
    change in the nature of the asset since their deployment decades
    ago, so it is not as critical to employ a formula that accounts for
    such factors. Indeed, given the nature of the pole attachment asset,
    the two methodologies -- i.e., historical and forward looking \--
    may likely produce similar cost results in the pole attachment
    context.[^118] In addition, cable attachers frequently do not have a
    realistic option of installing their own poles or conduits both
    because, in many cases, attachers are foreclosed by local zoning or
    other right of way restrictions from constructing a second set of
    poles of their own and because it would be prohibitively expensive
    for each attacher to install duplicative poles.[^119] Thus, because
    attachers frequently do not face a realistic \"make or buy\"
    decision, the benefits of giving proper cost signals to new entrants
    are less pronounced in the pole attachment context. Moreover, the
    pole attachment formula does account for the costs incurred when
    poles are replaced by utilities in the normal course of their
    business because the formula uses actual year end asset and expense
    data from records maintained and publicly reported as part of the
    utilities' regulated core electric or telephone business services.
    In fact, if a utility is required to replace a pole in order to
    provide space for an attacher, the attacher pays the full cost of
    the replacement pole.[^120]

25. We have recognized that the continued use of the historical cost
    based pole attachment formula brings certainty to the regulatory
    process. For more than two decades,[^121] the pole attachment
    formula has provided a stable and certain regulatory framework,
    which may be applied \"simply and expeditiously\" requiring \"a
    minimum of staff, paperwork and procedures consistent with fair and
    efficient regulation.\"[^122] We have found that switching to a
    methodology based on forward-looking economic costs would
    significantly change and burden the Commission's processes,
    requiring the Commission to develop a new formula, which would
    necessitate a protracted rulemaking proceeding involving complicated
    pricing investigations.[^123] We have acknowledged that, in certain
    contexts, setting prices on the basis of forward-looking economic
    costs has advantages, such as giving the appropriate signal for new
    entrants to invest in network facilities; but, as explained above,
    these advantages are less pronounced in the pole attachment context
    because pole attachers are less likely to build, or may be
    prohibited from building, their own poles and conduit.[^124] We have
    concluded and continue to find that, in the context of pole
    attachments, the continued use of historical costs accomplishes the
    key objectives of assuring just and reasonable rates to both the
    utility and the attaching parties, establishing accountability for
    prior cost recoveries, and encouraging negotiation among the parties
    by providing regulatory certainty.[^125] For the reasons stated
    above, we will continue to calculate maximum pole attachment rates
    under the Pole Attachment Act using regulatory accounts based on
    historical costs.

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2.  When Net Pole Investment is Zero or Negative

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26. In enacting the Pole Attachment Act, Congress directed the
    Commission to institute an expeditious program for determining just
    and reasonable pole attachment rates that would necessitate a
    minimum of staff, paperwork and procedures consistent with fair and
    efficient regulation.[^126] Congress determined that the rates
    should permit the utility to recover its fully allocated costs, as
    defined by Section 224(d)(1). Congress stated that although there
    may be some difficulty in determining certain components of a
    utility\'s operating expenses and actual capital costs, special
    accounting measures or studies should not be necessary because the
    majority of cost and expense items attributable to utility pole
    plant were already established and reported to various regulatory
    bodies and therefore the information was already a matter of public
    record.[^127] Congress did not expect the Commission to re-examine
    the reasonableness of the cost methodologies that various regulatory
    agencies had sanctioned; it recognized that the Commission would
    have to \"make its best estimate\" of some of the less readily
    identifiable costs.[^128]

27. Under Section 224(d)(1), fully allocated costs refer to the portion
    of operating expenses and capital costs that a utility incurs in
    owning and maintaining poles that are associated with the space
    occupied by pole attachments.[^129] The Commission originally
    derived the formulas for determining maximum allowable pole
    attachment rates under the Pole Attachment Act by applying the
    legislative direction in individual complaint cases.[^130] These
    cases led to a generally applicable formula for calculating the
    maximum just and reasonable rate:[^131]

    ![](media/image1.wmf){width="4.513888888888889in"
    height="0.4583333333333333in"}

The second component of the overall formula is the net cost of a bare
pole. This net cost equals a factor, 0.85 for electric utilities or 0.95
for telephone companies,[^132] multiplied by the net investment per
pole, as shown in the following formula:

Net Cost of a = [Factor x Net Pole Investment]{.underline}

Bare Pole[^133] Number of Poles

28. The final component of the pole attachment formula is the carrying
    charge rate. Carrying charges are the costs incurred by the utility
    in owning and maintaining poles regardless of the presence of pole
    attachments. The carrying charges include the utility\'s
    administrative, maintenance, and depreciation expenses, a return on
    investment, and associated income taxes. To help calculate the
    carrying charge rate, we developed formulas that relate each of
    these components to the utility\'s *net* pole investment.

29. The pole attachment formulas rely on the investment and expense data
    utilities maintain in, or derive from, their accounting records. The
    investment data take two forms: \"gross\" data, which provide the
    original cost of the plant being considered; and \"net\" data, which
    adjust the gross data to reflect accumulated depreciation and
    deferred income taxes associated with that plant. The pole
    attachment formulas generally allocate the costs of owning and
    maintaining poles on the basis of net pole or net plant
    investment.[^134] In the *Fee Order,* we affirmed our long practice
    of calculating pole attachment rates using net book costs,
    continuing to allow the use of gross book costs if all parties
    agreed to that usage.[^135] We concluded that the important goal is
    to ensure that like figures are used, whether net or gross. We
    affirm our continued use of net figures in the formulas unless the
    parties agree otherwise, with the following limited exception.

30. In certain cases, negative net asset values for poles may occur as a
    result of the way the Commission calculates depreciation rates. We
    generally prescribe depreciation rates at levels sufficient to give
    a telecommunications utility an opportunity to recover its plant
    investment, including poles, on a straight-line basis over the life
    of the associated plant. In order to accomplish this, we calculate
    depreciation rates by using the following formula:

Depreciation Rate = [100% - Accumulated Depreciation % - Future Net
Salvage %]{.underline}

Average Remaining Life

The depreciation rate determined by this formula is then applied to the
gross pole value. In the above formula, accumulated depreciation is the
portion of the pole investment that has been charged to depreciation
expense in previous periods. Future net salvage is the estimated
difference between the amount the utility would receive as salvage for
sale of retired poles and the utility\'s estimated cost of removal.
Average remaining life is the estimated future life expectancy of the
investment.

31. As accumulated depreciation rises, for plant with high removal costs
    such as poles, the application of the depreciation rate formula can
    lead to a net asset value becoming negative. This is because, in
    computing the net pole investment, the formula subtracts from gross
    pole investment an accumulated depreciation that includes both a
    recovery of original investment and a recovery of costs of removal
    (less salvage). Because gross pole investment only includes the
    original cost of the poles, subtracting both components from the
    gross pole investment may lead to a zero or negative net pole
    investment. The carrying charge formulas compute percentages for
    each element (administrative, maintenance, and depreciation
    expenses, taxes, and rate of return) which are added and then
    multiplied against the net pole investment. For example, if the
    carrying charge formulas yield 10% for each element, the carrying
    charge rate would be 50%. This rate would then be multiplied by net
    pole investment (expressed on a per pole basis as net cost of a bare
    pole) and the percentage of usable pole space occupied by the
    attachment, to determine the maximum just and reasonable rate per
    pole. When the net pole investment is zero or negative, the formula
    cannot be calculated properly. In those instances, our pole
    attachment formula, using net figures, cannot be used to calculate a
    maximum rate based on fully allocated costs.

32. In the *Fee Order,* we affirmed the calculation of net cost of a
    bare pole as total investment in poles less accumulated
    depreciation[^136] for poles and less accumulated deferred income
    taxes.[^137] We also affirmed our adjustment to a utility\'s net
    pole investment of 15% for electric utilities and 5% for LECs to
    eliminate the investment in crossarms and other non-pole related
    items.[^138] In the *Fee Order*, we attempted to adjust the formula
    for application in situations that involve negative net pole
    investment by eliminating the cause of the negative results. We
    concluded that the accumulated depreciation attributable to removal
    costs should be removed from the total accumulated depreciation when
    calculating net pole investment. We redefined net pole investment in
    those cases involving negative net pole investment as follows:

![](media/image2.wmf){width="4.611111111111111in"
height="1.0416666666666667in"}

where Accumulated Depreciation (Poles) includes *only* that portion of
Account 3100 which arises from the depreciation of Account 2411.

33. *Fee Order* petitioners urge us to modify or clarify our methodology
    for avoiding negative pole cost. TxCTA and USTA urge us to review
    paragraphs 62-70 of the *Fee Order* in which we sought to adjust the
    formula for application to a negative rate base.[^139] USTA asserts
    that our correction for the alleged negative rate situation assumed
    a level of accounting detail that may not exist.[^140] USTA asserts
    that LECs do not keep that level of detail in the accounting
    records.[^141] USTA further explains that if we eliminate the
    removal costs from accumulated depreciation in Account 3100 we must
    also do the same in the application of accumulated deferred income
    taxes in Accounts 4100 and 4340. USTA adds that they have been
    working with the Commission to reduce the accounting burdens on LECs
    and that in the foreseeable future, the reporting requirements may
    be even less comprehensive than they are today.[^142] In the
    alternative, TxCTA again calls on us to set the maximum rate at the
    last point a positive valuation existed under the current
    formula.[^143] Verizon supports USTA's alternative method for
    estimating the amount of removal costs when calculating net pole
    investment.[^144]

34. NCTA asserts USTA's solution would not effectuate the Commission's
    intention to \"unbundle accumulated depreciation so that the amounts
    already recovered through advance expensing of anticipated net
    salvage would be removed.\"[^145] According to NCTA, the negative
    net salvage associated with additions to the depreciation reserve
    varies substantially over time and necessary records do not appear
    to be publicly available.[^146]

35. On reconsideration of this matter, we modify and clarify our
    guidance to utilities and attaching entities on how to apply the
    formula in those cases where the net pole investment is zero or
    negative. Our proposal in the *Fee Order* was predicated on a belief
    that the depreciation attributable to removal costs was
    identifiable. *Fee Order* petitioners and other parties request
    clarification or reconsideration of our adopted solution on this
    issue.[^147] We also have received inquiries outside of the
    reconsideration proceedings concerning implementation of our
    solution. Many parties representing LECs as well as attaching
    entities have observed that the records of LECs are not sufficiently
    detailed for identifying the portion of accumulated depreciation
    that represents pole removal costs.[^148] Furthermore, they observe
    that adjustments to the accumulated deferred taxes reported in
    Accounts 4100 and 4340 would also need to be modified to the extent
    that they arose from the depreciation of removal costs.

36. As an alternative, USTA proposes a method of estimating the amount
    of pole removal costs that should be excluded from the rate
    formula.[^149] Specifically,

The FCC should allow LECs to identify the portion of accumulated
depreciation that is \'attributable to poles\' by subtracting the
\'future net salvage\' component from the pole depreciation rate. For
example, if the depreciation rate for poles is 7 percent, and 3 percent
represents future net salvage, the portion \'attributable to poles\'
would be 4 percent. The LEC would then calculate net pole investment by
subtracting 4/7ths of the balance in the Accumulated Depreciation
Account 3100 (Poles) from Gross Pole Investment in Account 2411.[^150]

37. This approach raises concern because it suggests that only the
    current relative relationship between gross pole investment and
    future net salvage value should be considered as a basis for the
    proration necessary to calculate the required data. This overlooks
    the dramatic change in the relative relationship between gross pole
    investment and future net salvage value over the period for which
    depreciation adjustments are needed; because future net salvage
    value now comprises a far greater percentage of gross pole
    investment than in the past, an adjustment on this basis would be
    overstated. The same would be true of any corresponding adjustment
    to deferred income taxes. Therefore, on this basis, we disagree with
    USTA\'s claim that this approach provides a reasonable estimate of
    the amount of removal costs that should be removed from the
    formula.[^151]

38. Some commenters continue to advocate relying upon the last rate
    calculated using a positive net pole investment.[^152] This
    calculation is readily achievable based on publicly available data.
    However, this calculation would not reflect subsequent changes in
    the carrying charges. While we encourage parties to negotiate rates
    using this method if they choose, we do not at this time believe
    that it is the most reasonable method for addressing the problem.

39. On reconsideration, we find that our approach in the *Fee Order*
    failed to acknowledge that the utilities' recovery through
    depreciation of the future costs of removing poles should be
    reflected in the rate. Moreover, because utilities install poles
    over time at various original costs and because net salvage
    estimates vary over time, the extraction of depreciation due to net
    salvage costs from accumulated depreciation would be exceedingly
    difficult. Current ARMIS and FERC accounting reports do not provide
    information with respect to the net salvage effect. Due to the
    limitations of available data and the complex relationships between
    rate calculation factors, we believe that the solution we prescribe
    must be simple yet equitable and produce consistent results. We have
    determined that the most reasonable and efficient method is to apply
    the formula using gross figures rather than net figures, with the
    exception of the rate of return element of the carrying charges
    which is always a net calculation. For example, we currently
    allocate administrative expenses by dividing total administrative
    and general expenses by net plant investment. This yields a
    percentage that is applied against the net cost of a bare pole. In
    contrast, a gross approach to allocation would, for example, divide
    total administrative and general expenses by gross plant investment.

40. With the exception of the maintenance component, the expense
    accounts upon which the pole attachment rates rely are not kept by
    type of plant. Because utilities cannot directly measure the amount
    of administrative expenses or taxes that are incurred because of
    poles, we must allocate administrative expenses and taxes to poles
    on some rational basis. In the Pole Attachment Order, we determined
    that allocation of expenses based on net pole investment was
    reasonable. We continue to agree with the Pole Attachment Order that
    the appropriate figures to use in the normal situation are the net
    figures. However, in the unusual situations where net pole
    investment is zero or negative, we find application of the formula
    using gross figures, with the noted net adjustment to the return
    element, to be appropriate.

41. In proposing this methodology, we acknowledge that only the
    administrative and tax elements of the carrying charges are affected
    by the change. The maintenance, depreciation and return elements
    yield the same maximum rate whether net or gross figures are used.
    The administrative and tax elements may be higher or lower due to
    the different ratios of accumulated depreciation and accumulated
    deferred taxes to gross total plant as opposed to gross pole plant.
    The rate of return element will be negative and is subtracted from
    the positive elements of the carrying charge. We believe this result
    is reasonable because the utility has, in effect, already recovered
    more than the original cost of its pole plant through depreciation
    charges. While this \"over-recovery\" is necessary to defray the
    costs of disposing of the poles when they are retired from service,
    the utility has the use of any \"over-recovered\" amounts throughout
    the poles\' useful lives. Our conclusion that the utility\'s pole
    attachment rates should reflect the over-recovery in the form of a
    negative rate of return carrying charge properly recognizes this
    fact.

42. The formula using the gross approach yields the following
    calculation:

+-----------------------------------------------------------------------+
| (A). Gross Plant (Poles)[^153] (G). Administrative Expenses (Total)   |
|                                                                       |
| (B). Net Plant (Poles) (H). Taxes (Total)                             |
|                                                                       |
| (C). Depreciation Rate (Poles) (I). Gross Plant (Total)               |
|                                                                       |
| (D). Maintenance Expense (Poles) (J). Net Plant (Total)               |
|                                                                       |
| (E). Quantity of Poles (K). Usable Space Factor (.074)                |
|                                                                       |
| (F). Authorized Rate of Return (L). Bare Pole Factor (.85 or .95)     |
+-----------------------------------------------------------------------+
| Maintenance = Maintenance Expense (Poles) ÷ Gross Plant (Poles)       |
|                                                                       |
| Element = (D) ÷ (A)                                                   |
+-----------------------------------------------------------------------+
| Depreciation = Depreciation Rate (Poles)                              |
|                                                                       |
| Element = (C)                                                         |
+-----------------------------------------------------------------------+
| Return Element = Rate of Return x Net Plant (Poles) ÷ Gross Plant     |
| (Poles)                                                               |
|                                                                       |
| = \[(F) x (B)\] ÷ (A)                                                 |
+-----------------------------------------------------------------------+
| Administrative = Administrative Expenses (Total) ÷ Gross Plant        |
| (Total)                                                               |
|                                                                       |
| Element = (G) ÷ (I)                                                   |
|                                                                       |
| Tax Element = Taxes (Total) ÷ Gross Plant (Total)                     |
|                                                                       |
| = (H) ÷ (I)                                                           |
|                                                                       |
| Total Carrying Charge = Sum of Maint., Depr., Ret. (-), Admin. and    |
| Tax Elements                                                          |
|                                                                       |
| Max Rate = Space Factor x Bare Pole Factor x Gross Plant (Poles) x    |
| Total Carrying Charges ÷ Quantity of Poles                            |
|                                                                       |
| = \[(K) x (L) x (A) x Total Carrying Charges \] ÷ (E)                 |
+-----------------------------------------------------------------------+

We reiterate that in all other cases, where the net pole investment is
positive, the appropriate figures to use in the formula continue to be
the net figures, unless the parties agree otherwise.

3.  Case by Case Applications

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43. Teligent urges us to adopt more specific rules regarding pole
    attachments in rights-of-way and wireless pole attachments, rather
    than consider those complaints on a case by case basis.[^154] MCI
    petitions us to adopt specific rules for addressing complaints
    concerning rates for access to electric utility transmission
    facilities rather than considering such complaints on a case by case
    basis.[^155]

44. In the *Telecom Order*, we stated that the record was not sufficient
    to enable us to adopt detailed standards that would govern all of
    these situations.[^156] We believe our basic rate methodology is
    adaptable to attachments that fit these categories.[^157] A
    complaint involving a dispute about these attachments would be
    treated as any other pole attachment complaint.[^158] In the
    *Telecom Order*[^159] and the *Local Competition Order*,[^160] we
    recognized guiding principles based on the Pole Attachment Act to be
    used in determining rates for pole attachments, including
    attachments to rights-of-way, wireless attachments and transmission
    facilities attachments. Guiding principles include the
    congressionally mandated methodology,[^161] preference for publicly
    available records when available,[^162] and an acceptable range of
    just and reasonable rates.[^163] We stated that we believed it
    prudent to gain experience through case-by-case adjudication of
    disputes to determine whether additional \"guiding principles\" or
    presumptions were necessary or appropriate for non-traditional
    situations.[^164] We concluded that complaints will be considered on
    a case by case basis.[^165]

45. On reconsideration, we will not adopt separate or detailed
    regulations at this time for considering complaints about rates,
    terms and conditions for nondiscriminatory access for
    non-traditional attachments.[^166] We have not been persuaded that
    our current rules are not satisfactory to provide all parties a
    process by which they may seek appropriate remedies when
    negotiations for attachments fail. We continue to believe it prudent
    to gain experience through case by case adjudication to determine
    whether additional guiding principles or presumptions are necessary
    or appropriate, and this will be accomplished through our existing
    complaint procedures.[^167] We will continue to address complaints
    about just and reasonable rates, terms and conditions, and
    nondiscriminatory access for non-traditional attachments on a
    case-by-case basis.

## THE SPACE FACTOR

46. In the *Fee Order*, we affirmed the use of the *Cable Formula* to
    set rates in disputed pole attachment cases.[^168] As indicated
    above, the basic *Cable Formula* can be stated as follows:

![](media/image3.wmf){width="4.513888888888889in"
height="0.4722222222222222in"}

In order to facilitate the negotiation of just and reasonable rates and
the resolution of pole attachment complaints, we make use of rebuttable
presumptions in the *Cable Formula*.[^169] In the *Fee Order*, we
reviewed the continued applicability of various factors and elements
within the *Cable Formula*, including certain presumptions used to
determine the total usable space or capacity occupied by a pole
attachment.[^170]

47. We first discuss the rebuttable presumption of the amount of space
    occupied by the attachment as a percentage of the total usable space
    on the pole. The *1977 Senate Report* indicated a Congressional
    intent that cable system pole attachments be responsible for no more
    than 12 inches of the usable space on a pole, including actual space
    occupied plus clearance space.[^171] The Commission established a
    rebuttable presumption of one foot as the amount of space a cable
    television attachment occupies when calculating a maximum rate under
    an interim formula.[^172] We subsequently refined our methodology
    for determining the amount of usable space and retained the one foot
    presumption in the *Cable Formula*.[^173] The same presumption also
    applies to telecommunications service providers.

48. The presumptions used in the *Cable Formula* have been repeatedly
    affirmed since the enactment of the Pole Attachment Act.[^174] We
    define total usable space as the space on the utility pole above the
    minimum grade level that is usable for the attachment of wires,
    cables, and related equipment.[^175] In the *Fee Order*, we affirmed
    the use of various presumptions that lead to 13.5 feet as the
    presumptive average usable space on a pole. The *Cable Formula* uses
    a 37.5 foot presumptive pole height, an 18 foot average minimum
    ground clearance, allocation of the 40-inch safety space to usable
    space, and the inclusion of poles of 30 feet or less when
    calculating the costs of a bare pole.[^176] No persuasive evidence
    or arguments have been presented which challenge our long-standing
    presumptions resulting in 13.5 feet as the presumptive usable space.
    Application of these presumptions results in 7.4% as the percentage
    of usable space occupied by a pole attachment.[^177]

49. In the *Telecom Order*, we found that the one foot presumption of
    space occupied should continue to apply where an attaching entity
    has overlashed[^178] its own pole attachments.[^179] We also
    determined that facilities overlashed by third parties onto existing
    pole attachments are presumed to share the presumptive one foot of
    usable space of the host attachment.[^180] We declined to adopt
    procedures to allocate the cost of usable space between a third
    party overlasher and the host attaching entity, in part, because the
    benefit of third party overlashing as an expeditious means for entry
    into the market would be undermined by such procedures.[^181] In
    their filings, the parties raise the following specific issues
    relating to the rebuttable presumptions concerning the percentage of
    space occupied.

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1.  Average Pole Height

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50. Some *Fee Order* petitioners continue to urge that we exclude
    30-foot poles from the average pole height calculation as well as
    the bare pole calculation.[^182] The record in this proceeding
    confirms the prevalent use of 30-foot poles and reflects that
    exclusion of such poles from the *Cable Formula* calculations could
    distort the resulting rate by excluding a significant portion of
    local exchange carrier (\"LEC\") utility plant investment from the
    rate calculation.[^183] We affirm our position that a distorted
    inventory of poles would be reflected if utilities were allowed to
    \"opt out\" or exclude their poles of 30 feet or less when
    calculating their pole attachment rates.[^184]

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2.  Safety Space

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51. UTC/EEI continues to urge that we consider as unusable the 40-inch
    safety space that exists to minimize the likelihood of physical
    contact between employees working on cable television or telephone
    lines and the potentially lethal voltage carried by the electric
    lines, as well as to prevent electrical contact between such
    cables.[^185] No new arguments or evidence was presented in the
    filings and based on our previous reasoning,[^186] that the space is
    usable and used by the electric utility, we reject arguments to
    reduce the presumptive usable space of 13.5 feet by 40 inches.

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3.  Minimum Ground Clearance

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52. Some *Fee Order* petitioners continue to urge that we depart from
    our well-established presumption of an average minimum ground
    clearance of 18 feet.[^187] Ground clearance requirements in the
    National Electric Safety Code (\"NESC\"),[^188] include an average
    amount of sag for cable lines. WorldCom disagrees with petitioners'
    claims that the average line sag should decrease the amount of
    usable space on a pole.[^189] No new evidence or arguments were
    provided that would persuade us to abandon our long-standing
    reliance on the presumptive average minimum ground clearance based
    on NESC standards.[^190]

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4.  Telecom Formula Space Factor

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a.  Counting Attaching Entities

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53. Under the *Cable Formula*, the costs of unusable space are allocated
    based on the portion of usable space an attachment occupies, the
    space factor. Our formula is stated as follows:

    ![](media/image4.wmf){width="4.083333333333333in"
    height="0.4583333333333333in"}

54. Using the presumptions in the *Cable Formula*, this results in a
    space factor of 1/13.5 or .074, multiplied by the net cost of a bare
    pole and the carrying charge rate:

    ![](media/image5.wmf){width="3.236111111111111in"
    height="0.3888888888888889in"}

55. In the *Telecom Order*,[^191] we adopted a formula for the purpose
    of allocating costs of unusable space. Under the *Telecom Formula*,
    pursuant to the specific requirements of the Pole Attachment Act,
    the costs of unusable space are separated from the costs of usable
    space and are allocated based on the number of attaching entities.
    The costs of usable space are still calculated based on the portion
    of usable space occupied. In the *Telecom Order*,[^192] we adopted
    separate formulas for determining the unusable space factor maximum
    rate and the usable space factor maximum rate which, when added
    together, calculate a maximum rate under section 224(e) of the Pole
    Attachment Act.[^193] We now simplify the two formulas into one
    combined formula as follows:[^194]

![](media/image6.wmf){width="6.596527777777778in" height="1.0in"}

56. Using our presumptions in the *Telecom Formula*, this calculation
    can be stated as:

    ![](media/image7.wmf){width="5.8277777777777775in"
    height="0.9847222222222223in"}

    which results in a combined (usable and unusable) space factor of
    between .24 for 2 attachers and .098 for 6 attachers for
    telecommunications attachers, as opposed to .074 for cable
    attachers. The difference between the two rate calculations is then
    phased in over five years, pursuant to the provisions of the Pole
    Attachment Act.

57. In the *Telecom Order*, we recognized that the number of attaching
    entities is a significant factor in determining the maximum rate. We
    concluded that certain entities should be counted as attaching
    entities pursuant to the Pole Attachment Act.[^195] We now
    reconsider and clarify our methodology for counting the number of
    attaching entities used in the *Telecom Formula*. In the *Telecom
    Order*, we stated that for the purposes of allocating costs of
    unusable space, parties to a pole attachment agreement should count
    as separate entities, in addition to telecommunications carriers and
    cable operators, any incumbent or competitive LEC,[^196] all
    governmental agencies that provide cable or telecommunications
    service[^197] and any electric or other utility providing
    telecommunications services, with a physical attachment to the
    pole.[^198] We also included third party overlashers as separate
    entities.[^199]

58. UTC/EEI's *Telecom Order* petition argues that we should consider
    only attaching telecommunications carriers as entities in the
    *Telecom Formula*.[^200] In contrast, ICG asks us to clarify that
    not only electric utilities but all commercial users of a pole,
    duct, conduit or right-of-way are attaching entities for purposes of
    the apportionment of unusable space in the *Telecom Formula*.[^201]
    We clarify our position that all utilities should be counted as
    attaching entities.[^202] In addition, we further reconsider and
    clarify that any entity with a physical attachment to the pole
    should be counted as an attaching entity. Thus, in the case of
    government attachments, we find that any physical attachment by a
    government entity qualifies the government attacher as an attaching
    entity. The statute does not provide an exclusion for
    non-telecommunications attachments. We will continue to exclude a
    government's temporary or seasonal attachments from this category.
    Because of the temporary nature of these attachments, the burden of
    identifying and counting such attachments outweighs any increase in
    accuracy that might ensue from including them. We also reconsider
    our inclusion of third party overlashers as separate entities and
    conclude that they are not to be counted as separate attaching
    entities. This is consistent with our conclusion that an overlashing
    entity does not occupy additional space on a pole. An overlashed
    cable is still only attached to the pole by the original single
    attachment.

59. The term \"attaching entities\" includes, without limitation, and
    consistent with the Pole Attachment Act, any telecommunications
    carrier, incumbent or other local exchange carrier, cable operator,
    government agency, and any electric or other utility, whether or not
    the utility provides a telecommunications service to the public, as
    well as any other entity with a physical attachment to the
    pole.[^203] This is consistent with the language of the statute and
    with Congress\' intent to count all attaching entities when
    allocating the costs of unusable space.[^204] We believe that if
    Congress intended that only telecommunications carriers\' with
    attachments on a pole, or in a conduit, duct or right-of-way, should
    be counted as attaching entities for the purpose of apportioning
    costs of unusable space pursuant to section 224(e)(2), Congress
    would have used the specific term \"telecommunications carrier\" or
    \"provider of telecommunications services\" instead of the more
    general and more inclusive term \"entity\" and \"entities.\"[^205]

60. We find arguments that the pole owner must absorb unfairly the costs
    of government attachments to be unpersuasive. As we stated in the
    *Telecom Order*, because the government attacher and the pole owner
    have a relationship that benefits both parties, we are not persuaded
    that the pole owner is unfairly absorbing the cost of government
    attachments to the extent the pole owner's franchise so provides.
    Moreover, many attachers pay a separate fee to governments for the
    ability to attach to poles in public right of ways in addition to
    the pole rental fee. We also find unpersuasive arguments that the
    non-telecommunications utility pole owner should not be included as
    an attaching entity. We find no reasonable distinction to be drawn
    when comparing telecommunications utility pole owners and
    non-telecommunications utility pole owners that would warrant
    different treatment in counting attaching entities. We do not
    believe that Congress intended for a single attacher, protected by
    the Pole Attachment Act, that uses one foot of space on a pole, to
    pay a higher (double) portion of the unusable space cost than the
    pole owner that controls, and uses a good portion of, the rest of
    the usable space. Therefore, we include the utility pole owner in
    the count, resulting in a minimum of two attaching entities being
    counted.[^206]

61. Upon reconsideration, we find that third party overlashers should
    not be counted as separate entities because they are not occupying
    separately segregated pole space. This conclusion is consistent with
    our finding that overlashing does not constitute a separate
    attachment and our conclusion that all entities with a physical
    attachment should be counted. Our review of the Pole Attachment Act
    leads us to reconsider our previous decision and conclude that the
    term \"attaching entity\" as it is used in the Pole Attachment Act
    is not limited to entities with attachments that meet the definition
    of pole attachment as it is used in the Pole Attachment Act. Rather,
    we conclude that any entity with a physical attachment to the pole
    should be counted. Our rule for counting attaching entities will
    allow parties to pole attachment agreements to calculate an average
    number of attaching entities for use in the *Telecom Formula*.

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b.  Average Number of Attaching Entities

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62. In the *Telecom Order*, we determined that the most efficient and
    expeditious manner to identify an average number of attaching
    entities, was for each utility to develop its own average number of
    attaching entities.[^207] We concluded that the alternative, the
    Commission undertaking a survey, would be too cumbersome and would
    not necessarily enhance accuracy.[^208] Our decision that the
    utility would establish an average number of attaching entities was
    premised on the belief that utilities not only possess information
    with which to develop an average number of attaching entities, but
    also have both the expertise to structure the development of an
    average and the information reflecting where services are being
    provided. In an effort to have the averages reflect the different
    characteristics of geographic areas\' varying incidents of
    attachments, we required utilities to establish averages based on
    rural, urban, or urbanized service areas as defined by the Bureau of
    Census, United States Department of Commerce (\"Bureau of
    Census\").[^209] The Bureau of Census, identifies all territory,
    population and housing as rural (population under 2,500 and *not* in
    an urbanized area), urban (population over 2,500), or urbanized (a
    central city plus the closely‑settled urban fringe that together
    have a minimum population of 50,000).[^210] We adopted these
    categories because we believed they would equitably reflect the
    different levels of attachment usage based on characteristics of the
    locations.[^211]

63. In the *Telecom Order*, we established the right of attaching
    entities to challenge the average number of attaching entities set
    by the utilities, in the same manner as challenges presently are
    made to other presumptions used in the *Cable Formula*.[^212] For
    example, the challenging party will identify and calculate the
    number of attaching entities on the poles and submit to the utility
    what it believes to be an appropriate average. Where the number of
    poles is too large, and/or complete inspection impractical, we found
    that a statistically sound survey could be substituted.[^213] The
    utility will be afforded an opportunity to justify its averages and
    where the utility\'s average is successfully challenged, the
    resulting figure will be deemed to be the number of attaching
    entities.[^214]

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i.  Geographic Areas

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64. *Telecom Order* petitioners urge that we reconsider the geographic
    areas used by utilities to determine an average number of attachers
    for use in calculations of the formulas for pole attachment
    rates.[^215] Upon presentation of additional information and
    consideration of the record in this proceeding, we modify the
    geographic areas on which a utility will base its average numbers of
    attaching entities.[^216] Confusion has been demonstrated on the
    part of utilities attempting to implement the *Telecom Order*,
    because the term \"urban\" comprises all territory, population and
    housing units in places of 2,500 or more people.[^217] An urbanized
    area may be contained within an urban area, and vice-versa, and it
    has been demonstrated that utilities do not have the ability to
    determine what portion of their service areas fall within a rural,
    urban or urbanized area without unreasonable costs and effort.[^218]
    Further confusion has been demonstrated about the three categories
    of areas for which averages should be prepared because individual
    utilities may have distinct service areas, specific to a state,
    their company or industry, that complicate the development of
    averages as outlined in the *Telecom Order*. These distinct service
    areas may not correspond to the Bureau of Census categories.[^219]
    Some utilities assert it will not be feasible to determine averages
    in any cost-efficient manner,[^220] so we will provide default
    averages for urbanized and non-urbanized areas, for use in the
    absence of utility developed averages.

65. The purpose of having averages based on geographic areas was to have
    pole attachment rates reflect an appropriate average number of pole
    attachments in a particular geographic area as of February 2001,
    when utilities begin calculating rates for telecommunications
    carriers.[^221] It was expected that densely populated areas would
    have more attachments, in response to various communities\'
    diversity of communications and other services.[^222] For instance,
    utility poles in a densely built out urbanized area would be
    expected to have multiple attachments of governmental entities that
    may not exist in a rural area without street or pedestrian
    directional lighting, and multiple service providers. It has been
    suggested by SBC[^223] and USTA[^224] that the development of an
    average number of attaching entities by distinct service area within
    a state, designated as urbanized or non-urbanized, reflecting the
    demographics of the particular service area, would be an efficient,
    cost-effective exercise resulting in averages for areas that share
    similar characteristics relating to pole attachments.[^225] A
    population of 50,000 or greater (urbanized area) is a reasonable
    density in which to expect greater penetration of service providers
    and attachments. The record shows that using urbanized and
    non‑urbanized areas allows a reasonably effective classification of
    poles based upon the actual characteristics of pole inventory of
    different utilities.[^226]

66. We will require utility pole owners to calculate an average number
    of attaching entities by service area.[^227] Where a utility
    territory or service area in which an attaching entity seeks to
    install pole attachments can be identified as either urbanized or
    non-urbanized, the default averages, or the actual averages if
    developed by the utility, for that area should be used. However,
    where a utility territory or service area in which an attaching
    entity seeks to install pole attachments cannot be identified as
    either urbanized or non-urbanized because it crosses into both an
    urbanized and non‑urbanized area, and the utility is unable to
    identify a separate service area as non-urbanized, the default
    averages, or the actual averages if developed by the utility, for an
    urbanized area should be used. If any part of a specific service
    area, as identified by the utility, is urbanized, then all that
    service area would be considered urbanized for pole attachment
    purposes. This will facilitate an equitable calculation of pole
    attachment rates for telecommunications carriers. Utilities that
    have multiple service areas in a state would classify each service
    area, as either urbanized or non-urbanized depending on whether any
    part of the service area is within an area designated by the Bureau
    of Census as urbanized.[^228] Utilities advise this would be
    equitable because in a service area in which any part is considered
    urbanized, the development potential for the entire area to become
    urbanized is great.[^229]

67. We emphasize our preference that each utility use the data it has
    available in its corporate and regulatory records, and not go to
    extraordinary lengths to be precise when reasonable estimates will
    generally provide an equitable process.[^230] The utility shall make
    available its data, information and methodology upon which the
    averages were developed, unless the default averages are used.[^231]
    We clarify that when a distinct area defined by the Bureau of Census
    as urban falls within an urbanized area, a separate average number
    of attaching entities for that urban area is not required. The
    record demonstrates that in some states, and for some utilities,
    there may be no significant difference in the number of attaching
    entities for rural areas and for urban areas that are outside
    urbanized areas.[^232] Therefore, we provide utilities the option of
    using our presumptive averages presented below, or developing
    averages for two areas: (1) urbanized (50,000 or higher population),
    and (2) non-urbanized (less than 50,000 population).[^233]

68. When a utility exercises good faith in determining average numbers
    of attaching entities upon which to base the costs of providing
    unusable space, the burden of proof will be on an attaching entity
    to demonstrate the costs are being unjustly apportioned.[^234] In
    demonstrating its good faith, the utility must make its methodology
    and data publicly available to the attaching entity, upon request
    for information sufficient for an attaching entity to project its
    costs of attaching to that utility\'s infrastructure.[^235] The
    costs of conducting an exercise to determine average numbers of
    attaching entities shall not be directly passed on to the attaching
    entities as make‑ready costs.[^236] Expenses relating to the
    exercise necessary to develop these averages will be shared
    ultimately by all attachers and the utility when, as a reasonable
    business expense incurred as part of doing business, the expense is
    reported to the utility\'s appropriate regulatory accounts and
    factored into the carrying charge rate of the *Cable Formula*. We do
    not believe that such expenses would be within the methodology
    prescribed by Congress for individual payment by each attaching
    entity for a pole attachment.[^237]

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ii. Presumptive Averages

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69. In order to expedite the process of developing average numbers of
    attaching entities, and allow utilities to avert the expense of
    developing location specific averages,[^238] we provide two
    rebuttable presumptive averages for use in our *Telecom
    Formula*.[^239] This gives both small and large utilities the option
    of not conducting a potentially costly and burdensome exercise
    necessary to develop averages based on their company specific
    records. The adoption of presumptive averages should reduce cost and
    effort by all parties. In the *Telecom Order*,[^240] we declined to
    set default presumptions, even though various commenters suggested
    the development of a rebuttable presumption of at least three
    attachers was appropriate.[^241] Comcast encouraged a presumptive
    average of six attaching entities based on our Common Carrier
    Bureau's Fiber Deployment Update - End of Year 1996 (\"*Fiber
    Deployment Update*\").[^242] U S West indicated that having the
    Commission develop the presumptive average would serve efficiency,
    minimize complaints, and place the burden of rebuttal on the pole
    owner.[^243]

70. In the *Telecom Order*, we did not establish presumptions, but said
    we believed the most efficient and expeditious manner to calculate a
    presumptive number of attaching entities would be for each utility
    to develop its own presumptive average number of attaching
    entities.[^244] We now reconsider that decision and set rebuttable
    presumptive average numbers of attaching entities for our two
    categories, urbanized and non-urbanized. We are now persuaded that
    utilities and attaching entities would benefit from our providing
    presumptive averages for their use. Our establishment of presumptive
    averages will expedite the process and allow utilities to avert the
    expense of developing location specific averages.[^245] As with all
    our presumptions, either party may rebut this presumption with a
    statistically valid survey or actual data.[^246]

71. Based on the expanded record, we establish presumptive average
    numbers of attaching entities in a non-urbanized (less than 50,000
    population) area to be three (3) attaching entities, based on
    information presented in the record and the expectation that on a
    pole or in a conduit, for instance, there would be electric,
    telephone and cable attachers.[^247] It is estimated that cable
    systems now provide access to cable television services to over 97%
    of all households with a television.[^248] Electric power and
    telephone service is even more universal. The record supports a
    presumptive average of three attaching entities in non-urbanized
    areas.

72. In an urbanized area that is more densely populated (50,000 or
    higher population), more developed commercially than a non-urbanized
    area, and in which we expect both residential and business
    commercial competition to flourish, we set a presumptive average
    number of attaching entities at five (5) to reflect the inclusion
    of, but not limited to, the following possible attaching entities:
    electric, telephone, cable, competitive telecommunications service
    providers and governmental agencies.[^249] Advanced
    telecommunications capability is being deployed throughout the
    country.[^250] As noted above, competitive services are
    increasing.[^251] The record supports a presumptive average number
    of five attachers in urbanized areas.

## OVERLASHING 

1.  Space Occupied by Third Party Overlashing

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73. Cable companies have, through overlashing, been able for decades to
    replace deteriorated cables or expand the capacity of existing
    communications facilities, by tying communication conductors to
    existing, supportive strands of cable on poles.[^252] The 1996 Act
    was designed to accelerate rapid deployment of telecommunications
    and other services, and to increase competition among providers of
    these services.[^253] Overlashing existing cable reduces
    construction disruption and associated expense.[^254] Accordingly,
    in the *Telecom Order*, we declared our continued approval of, and
    support for, third party overlashing, subject to the same safety,
    reliability, and engineering constraints that apply to overlashing
    one\'s own pole attachment.[^255]

74. We determined that facilities overlashed by third parties are
    presumed to share the presumptive one foot of usable space occupied
    by the host attachment.[^256] We did not dictate how the utility,
    host attaching and third party attaching entities would relate to
    each other for compensation purposes.[^257] We did not require the
    host attaching entity or the third party overlasher to obtain the
    consent of the utility beyond the consent already acquired for the
    host attachment although the utility is entitled to notice of the
    overlashing. We stated that third party overlashing did not
    disadvantage the utility\'s ability to ensure the integrity of its
    poles.[^258]

75. Some *Telecom Order* petitioners continue to urge that we impose
    additional regulation on third party overlashing.[^259] We decline
    to impose additional regulation and clarify several aspects of our
    position regarding third party overlashing.[^260] Allowing third
    party overlashing reduces construction disruption and associated
    expenses which would otherwise be incurred by third parties
    installing new poles and separate attachments.[^261] We clarify that
    third party overlashing is subject to the same safety, reliability,
    and engineering constraints that apply to overlashing the host pole
    attachment.[^262] We affirm our policy[^263] that neither the host
    attaching entity nor the third party overlasher must obtain
    additional approval from or consent of the utility for overlashing
    other than the approval obtained for the host attachment.[^264]

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2.  What the Third Party Overlasher Pays

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76. Some petitioners urge us to specify, or at least clarify, what the
    third party telecommunications carrier overlasher pays to the host
    attacher or the utility pole owner.[^265] We decline to attempt to
    regulate this relationship.[^266] However, if the third party
    overlashing a cable operator\'s pole attachment is a
    telecommunications carrier, then the pole attachment will be
    considered to be used to provide telecommunications services for
    purposes of calculating the pole attachment rate. The maximum rate
    for that overlashed pole attachment would then be calculated using
    the *Telecom Formula* after February 8, 2001.[^267] In some
    instances, the host attaching entity will pay the utility for a
    telecommunications carrier pole attachment.[^268] We have stated
    that the third party overlasher is not separately liable to the
    utility for the usable space which the overlashing shares with the
    host attachment because there would be no additional usable space
    occupied. We expect and encourage the overlashing and host attaching
    entities to negotiate a just and reasonable rate of compensation
    between them for the overlashing, which will represent some sharing
    of the usable and unusable space costs.[^269] Until our intervention
    is necessary to facilitate pole attachments for these parties, we
    will rely on all parties to act in good faith to develop their own
    just and reasonable compensation.

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3.  Wind and Weight Load Factors

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77. *Fee Order* petitioners continue to urge that we allow some factor
    for increased weight and wind load in cases of overlashing.[^270] We
    have reviewed Sections 24 through 26 of the NESC[^271] that address
    loading and structural requirements in detail.[^272] Based on our
    analysis and the record, we continue to believe that an attachment's
    \"burden on the pole\" relates to an assessment of need for
    make-ready changes to the pole structure, including pole change-out,
    to meet the strength requirements of the NESC. For example, if the
    addition of overlashed wires to an existing attachment causes an
    excessive weight to be added to the pole requiring additional
    support or causes the cable sag to increase to a point below safety
    standards, then the attacher must pay the make-ready charges to
    increase the height or strength of the pole. Make-ready costs are
    non-recurring costs for which the utility is directly compensated
    and as such are excluded from expenses used in the rate
    calculation.[^273] The statutory language prescribes that we
    allocate costs based on space occupied, not load capacity.[^274]

78. *Fee Order* petitioners present no new or persuasive evidence that
    the \"burden on the pole\" due to weight and wind load is an
    additional factor for consideration in the determination of the
    amount of space occupied through which some rate increase would be
    calculated. We affirm our position that the costs of the physical
    attachments of an attaching entity are normally paid to the pole
    owner as a condition of attachment, addressing such factors as
    weight, wind load and safety space.[^275] Overlashing does not
    increase the amount of space actually occupied by the attachment.

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4.  Shared One-Foot Usable Space

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79. In the *Telecom Order*, we found that the one foot presumption
    should continue to apply where an attaching entity has overlashed
    its own pole attachments.[^276] We also determined that facilities
    overlashed by third parties onto existing pole attachments are
    presumed to share the presumptive one foot of usable space of the
    host attachment.[^277]

80. *Telecom Order* petitioners urge us to clarify that the presumption
    of one foot of usable space occupied by a pole attachment is
    rebuttable.[^278] The one foot presumption is rebuttable by any
    party.[^279] We decline to abandon or redefine our presumption for
    usable space occupied by a pole attachment, even in instances of
    overlashing.[^280] We have previously considered and rejected ICG\'s
    argument that the one foot presumption is outdated.[^281] The record
    on reconsideration affirms that the sharing and use of the one foot
    presumption, for usable space occupied by a pole attachment, does
    not lead to a distortion of the allocation of the costs of the pole
    in determining a just and reasonable compensation for the
    utility.[^282]

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5.  Cable Operator Not a Utility Obligated to Provide for Overlashing

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81. MCI urges us to classify cable operators and telecommunications
    carriers with pole attachments as utilities and therefore require
    them to act as a utility for a third party overlashing.[^283] The
    Pole Attachment Act does not define utility to include
    attachers.[^284] Section 224(f) of the Pole Attachment Act obligates
    a utility to provide a cable television system or any
    telecommunications carrier with nondiscriminatory access for
    purposes of a pole attachment.[^285] Neither a cable system attacher
    nor a telecommunications attacher has an obligation to act as a host
    and share its pole attachment with a third party overlasher.[^286]

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6.  Notice to Utility Pole Owner

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82. U S West urges us to clarify that the utility pole owner shall
    receive explicit notice of a third party overlasher.[^287] U S West
    asserts that notice to the pole owner of a third party overlasher is
    necessary for the pole owner to determine whether the overlashing
    will endanger the integrity of a pole line or create a hazardous
    condition, as well as to calculate *Telecom Formula* rates after
    February 8, 2001 if the overlasher is a telecommunications service
    provider.[^288] We agree that the utility pole owner has a right to
    know the character of, and the parties responsible for, attachments
    on its poles, including third party overlashers. The pole owner is
    entitled to charge a *Telecom Formula* rate when a pole attachment
    previously used to provide only cable services is used to provide
    telecommunications services, as a result of a third party
    telecommunications carrier overlashing.[^289] When the cable
    operator\'s pole attachment provides transmission of
    telecommunications services, whether for itself or via third party
    overlashing, it will notify the pole owner.[^290] We clarify that it
    would be reasonable for a pole attachment agreement to require
    notice of third party overlashing.

83. In the *Telecom Order*, we concluded that the third party
    overlashing entity should be classified as a separate attaching
    entity for purposes of counting entities using the Telecom
    Formula.[^291] We now reconsider that decision, and based on our
    review of the statute, the record herein and our decision that an
    overlasher shares space with the host attachment, we believe that
    the third party overlasher should not be counted as a separate
    attaching entity.[^292]

84. *Telecom Order* petitioners request that we require cable operators
    to certify that they are *not* providing telecommunications
    service.[^293] We decline to adopt such a regulatory reporting
    requirement as it would impose unnecessary administrative burdens on
    cable operators, utilities, and the Commission.[^294] We affirm the
    requirement that a cable operator notify the utility when the cable
    operator begins providing telecommunications services itself or via
    third party overlashing.[^295] Cable attachers stress that this
    notification should not provide utilities with an opportunity to
    acquire sensitive proprietary and business development, planning, or
    scheduling information that could result in a competitive
    disadvantage to the attaching entity.[^296] We agree. The record
    fails to demonstrate any legitimate purpose for a utility to require
    commercially-sensitive data or information to be provided as a part
    of this notification of a change of service status by a cable
    operator.[^297]

85. Finally, utilities contend[^298] that they are entitled to bill for
    and/or receive interest on any difference in rates between the
    *Cable Formula* rates and the *Telecom Formula* rates, if a cable
    operator fails to notify the utility that the cable operator is
    offering telecommunications services over its pole attachment. Pole
    attachment agreements after February 8, 2001 could be expected to
    include a reasonable mechanism for notification by a cable operator
    of its change of status to a telecommunications carrier. Pole
    attachment agreements could also be expected to include a reasonable
    remedy for a cable operator\'s failure to so notify. Because we have
    not explored the issue of a penalty for failure to notify and have
    no record on the question, we will not make a determination on that
    issue at this time.

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7.  Dark Fiber

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86. *Telecom Order* petitioners continue to urge that we impose
    additional regulation on the leasing of \"dark fiber\" when a pole
    attachment that has been used to provide only cable services would,
    as a result of activation of dark fiber, be used to also provide
    telecommunications services.[^299] We affirm our holding in the
    *Telecom Order* that if an attachment previously used for providing
    solely cable services would, as a result of the leasing of dark
    fiber, also be used for providing telecommunications services, the
    rate for the attachment would be determined using the *Telecom
    Formula*.[^300] However, attaching entities may lease their dark
    fiber to third parties without such leases being considered separate
    attachments and without making an additional payment beyond the
    host\'s existing attachment rate.[^301] The cable system operator
    may lease excess fiber capacity within its existing attachment to
    any party for a negotiated rate without the knowledge or consent of
    the pole owner because the physical attachment will not be altered.
    The dark fibers contained within the attaching host have already
    been taken into account in determining the rent for the attachment.
    The character and content of the services provided do not affect the
    amount of space occupied by the attachment. The type of services
    provided over the attachment only affect the pole attachment rate if
    the services are telecommunications services. If the third party
    leasing the fiber is, or becomes, a telecommunications
    carrier,[^302] then the utility is entitled to compensation for the
    pole attachment based on the *Telecom Formula* and must be notified.

## CONDUIT ISSUES

87. Conduits are structures that provide physical protection for cables
    and allow new cables to be added inexpensively along a pathway or
    route. A conduit consists of one or more ducts, which are the
    enclosures that carry the cables.[^303] Often, when a cable
    operator\'s or telecommunications carrier\'s cables are placed in a
    duct, three or more inner duct are inserted into the duct allowing
    \"one duct to be treated more like conduit.\"[^304] A collection of
    conduits, together with their supporting infrastructure, constitutes
    a conduit system.[^305] A conduit system may vary widely among
    geographic areas,[^306] and between LEC and electric utilities.

88. In the *Fee Order*, we reviewed the *Fee Order Notice* filings as
    well as the *Telecom Order* petition filings[^307] and concluded
    that other than collapsed ducts which are not counted in determining
    total capacity, there is no unusable capacity in a conduit.[^308]
    This was a departure from our conclusion in the *Telecom Order* and
    we now affirm our conclusion in the *Fee Order*. The total capacity
    of a duct or conduit is the entire volume of available capacity in
    the conduit system. All costs associated with the construction of
    the conduit system are considered in determining the cost of this
    total capacity. Essentially, the lack of any unusable capacity in a
    conduit makes the practical application of the Pole Attachment Act
    formulas the same for both cable attachers and telecommunications
    attachers both before and after February 8, 2001.

89. In the *Fee Order*, we adopted a conduit methodology and clarified
    what should be considered the total capacity of a conduit for
    purposes of determining a per unit rate for use of a utility's
    conduit.[^309] Cable operators and telecommunications carriers alike
    will calculate a maximum just and reasonable rate for a pole
    attachment in a conduit by apportioning the cost of providing
    capacity among all entities according to the percentage of capacity
    used by each entity.[^310] Calculation of the maximum rate may be
    simplified by using the presumptions in the formula.[^311] The
    carrying charge rate is calculated for pole attachments in conduit,
    in the same manner as the carrying charge rate in our pole
    attachment formula.[^312] The conduit formula adopted in the *Fee
    Order* and affirmed here is the following:[^313]

    ![](media/image8.wmf){width="3.9722222222222223in"
    height="0.7361111111111112in"}

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1.  Space Factor in Conduit

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90. In the *Fee Order*, we concluded that all costs attributable to
    utilities\' underground conduit systems are costs of providing
    capacity. The regulatory accounts to which LEC and electric
    utilities report their gross conduit investment include the costs of
    installed conduit, original permit, excavation, sewer connections
    and other costs.[^314] For instance, in ARMIS Account 2441 LECs
    report the ". . . original cost of conduit. . . which is reusable in
    place. . . includ\[ing\] the costs of opening trenches and of any
    repaving necessary in the construction of conduit plant.[^315] For
    electric utilities, FERC Account 366 reports the capital costs for
    "installed underground conduit and tunnels used for housing
    distribution cables or wires."[^316] All costs associated with the
    construction of the conduit system are considered in determining the
    cost of this total capacity.

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a.  Total Duct or Conduit Capacity

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91. In the *Fee Order,*[^317] we clarified that a utility may designate
    capacity in a duct for maintenance or emergency use, but that a duct
    so designated is usable in the event it is needed, and therefore is
    part of the conduit capacity. Where duct capacity is set aside for
    future municipal use (in the nature of consideration as a condition
    for a license, franchise, or permit), the utility is compensated for
    those costs as part of its net conduit investment and/or in the
    carrying charge rate.[^318] Collapsed or otherwise damaged ducts are
    no longer available for pole attachments, and should not be included
    in the calculation of total capacity of a conduit or duct in the
    *Cable Formula*.[^319]

92. USTA continues to urge that we declare that costs of ducts reserved
    for maintenance and municipal uses should be treated as "unusable
    space," thus reducing the total capacity used in the denominator of
    the rate methodology formula.[^320] USTA argues because this duct
    space is available for the benefit of all users it cannot be used
    exclusively by the conduit owner or by any party from whom the owner
    can recover attachment charges.[^321] Verizon supports USTA's *Fee
    Order* petition that we should reconsider our treatment that ducts
    reserved for maintenance activities, or that are set-aside for
    municipal use should not be excluded from usable capacity.[^322]
    Verizon asserts that these ducts are not available for pole
    attachments and conduit owners are \"short-changed\" when these
    set-asides are not excluded from usable capacity (i.e. not treated
    as unusable space).[^323]

93. We will not allow capacity designated for maintenance, future
    business plans, or municipal set-asides to be subtracted from the
    total duct or conduit capacity for rate determination purposes. The
    record supports our analysis that capacity in a duct or conduit that
    is usable for any of these purposes is part of the \"total duct or
    conduit capacity.\"[^324] For example, a utility may set-aside
    capacity for maintenance or emergencies so that unoccupied capacity
    is available into which a temporary cable may be placed and spliced
    into a damaged cable.[^325] Capacity so designated is usable in the
    event it is needed, and available for use by the utility at any time
    for any purpose, and is therefore part of the total available
    conduit capacity. Such reservation of capacity is not necessarily
    identified by a specific duct or location, can be created, used,
    withdrawn or discarded at the sole discretion of the utility, and
    must be considered part of the total capacity of the conduit.
    Municipal set-asides are also capacity that may be made available
    for the use of the local government as a condition in a franchise,
    license, right-of-way or other agreement.[^326]

94. Capacity may be reserved, or kept unused to be available to an
    electric utility for expansion of its core business services, but
    that capacity is still part of the total capacity of the duct or
    conduit system and must be made available for pole attachments until
    such time as it is needed by the electric utility under a bona fide
    business plan.[^327] Under the policy articulated in the *Local
    Competition Order*, an electric utility is allowed to reserve
    capacity for future business purposes under a bona fide business
    plan, but must allow that capacity to be used for attachments until
    an actual business need arises.[^328] For whatever reason capacity
    may be reserved or designated for special uses, by or on behalf of
    the utility, and regardless of who may benefit directly or
    indirectly from those uses, the capacity is available for use and
    therefore remains part of the total capacity of the conduit for rate
    determination purposes.[^329]

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b.  Occupied Capacity, the Half-Duct Presumption

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95. Presumptions are used in the *Cable* and *Telecom Formulas* to
    expedite the calculations of a just and reasonable rate so that
    complicated surveys, accounting and calculations may be
    avoided.[^330] In the *Fee Order* and *Telecom Order,* in order to
    identify a rebuttable presumption of the percentage of capacity
    occupied by an attachment in a conduit, we adopted a rebuttable
    presumption that a cable or telecommunications attacher occupies one
    half of a duct.[^331] We stated that we believed that the one half
    duct methodology is a simple and reasonable presumptive
    approximation of the conduit capacity used by a cable operator or
    telecommunications carrier.[^332] This method, patterned after the
    one used by the Massachusetts Department of Public Utilities
    (\"MDPU\"),[^333] and relied on in *Multimedia Cablevision*,[^334]
    allows for determining the cost, per foot or meter, of one duct and
    then dividing by two, instead of actually measuring the actual
    capacity occupied. In situations where the formula, or the
    presumption, is inappropriate, for instance because it has been
    demonstrated that there are more than two users in the duct, or that
    one particular attachment precludes sharing the duct with another
    attachment, the one half duct presumption can be rebutted. If a new
    entity is installing an attachment in a previously unoccupied duct,
    we stated such an entity should be encouraged to place inner duct
    prior to placing its wires in the duct.[^335]

96. *Telecom Order* petitioners continue to argue that our half-duct
    presumption of capacity occupied by an attachment in a conduit
    system is not an accurate reflection of capacity occupied. *Fee
    Order* petitioners continue to assert that an electric supply cable
    cannot share a duct with a communications cable, and therefore, from
    the electric utility point of view, the communications cable
    occupies the entire duct.[^336] Attachers argue that the presumption
    is too large;[^337] utilities argue that the presumption is too
    small.[^338] Joint Cable Parties and SBC support retention of the
    half-duct presumption.[^339] American Electric argues that electric
    conduit cannot be and is not shared and therefore the one half duct
    presumption leads to under recovery for the electric utility.[^340]
    WorldCom supports our conclusion that electric supply cables, not
    communications cables, effectively exclude other cables from
    occupying the same duct and therefore the one half duct presumption
    for a communications cable is appropriate. WorldCom challenges
    petitioners' claims that we misinterpreted NESC guidelines
    permitting a communications and electric cable to share a duct when
    both are controlled by the same party.[^341]

97. Petitioners have presented no new evidence to persuade us that
    utilities are not justly compensated for use of their conduit by the
    one half duct presumption. We affirm our rebuttable presumption that
    a cable or telecommunications attacher occupies a maximum capacity
    of one half of a duct, when determining a reasonable conduit
    attachment rate.[^342] We have previously considered and rejected
    petitioners\' arguments for a smaller presumption[^343] and electric
    utilities\' arguments that a pole attachment occupies a whole
    duct.[^344] The presumption that a communications cable in a conduit
    system occupies one half of a duct[^345] is based on clear evidence
    that all types of cable -- including electric supply cables when
    controlled by the same party as the communications cable -- may
    share a duct.[^346] We affirm our position that, because the NESC
    rule relied on by the electric utilities does not prohibit the
    sharing of a duct by electric and communications cables when
    controlled by the same party or two communications cables, it is
    reasonable to expect there to be more than one attacher in a
    duct.[^347]

98. The one half duct presumption is rebuttable and the presence of
    inner duct is adequate rebuttal.[^348] Where inner duct is
    installed, either by the attacher or in a previous installation, the
    maximum rate will be reduced in proportion to the fraction of the
    duct occupied. That fraction will be one divided by the actual
    number of inner ducts in the duct. We continue to believe that the
    use of the one half duct rebuttable presumption is a simple,
    expedient and reasonable approximation of the actual capacity
    occupied by a cable operator or telecommunications carrier attaching
    in a conduit system.[^349] When the actual percentage of capacity
    occupied is known, it can and should be used instead of the one half
    duct presumption.[^350]

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2.  Net Linear Cost of Conduit

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99. As stated in the *Fee Order*, in the conduit context, we use the net
    linear cost of the conduit, as compared to the net cost of a bare
    pole, as one factor within the formula for determining a maximum
    permissible rate for attachment within conduit. As the net cost of a
    bare pole reflects the total system investment for the above ground
    pole attachment infrastructure, to arrive at a system investment for
    use in the conduit formula we identify the net linear cost of the
    conduit system. To accomplish this, the utility must first establish
    the Net Conduit Investment.

100. Our goal has always been to adopt a formula which allows the
     parties to calculate the maximum rate using public data when
     available, in a fair and expeditious manner.[^351] We also have a
     policy against requiring additional accounting procedures so long
     as the information is available from the utilities upon reasonable
     request.[^352]

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a.  Net Conduit Investment (LEC-Owned Conduit)

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101. Net Conduit Investment for LEC-owned conduit is calculated as
     follows:

![](media/image9.wmf){width="5.902777777777778in"
height="0.9027777777777778in"}

102. Gross Conduit Investment for the LEC consists of Part 32 Account
     2441.[^353] For LECs, Accumulated Depreciation (Conduit) represents
     the share of ARMIS Account 3100 that corresponds to Account
     2441.[^354] Accumulated Depreciation related to conduit is publicly
     available at the LECs ARMIS Report 43-02.[^355] In the *Fee
     Notice*[^356] we proposed the following formula for the calculation
     of accumulated deferred income taxes for conduit:[^357]

     ![](media/image10.wmf){width="5.707638888888889in"
     height="0.6243055555555556in"}

103. LEC conduit owners objected to this formula on the basis that the
     actual amount of accumulated deferred taxes for conduit is
     available directly from the LEC's books.[^358] BellSouth maintains
     that because it is required to keep separate and accurate records
     of accumulated deferred income taxes for poles and conduit, our
     formula will improperly introduce non‑conduit related deferred
     taxes into rate calculations.[^359] NCTA argued that LECs should
     not use accumulated deferred income tax figures taken from the
     LEC's books because the information is not publicly
     available.[^360]

104. In the *Fee Order*, we concluded that if the LEC conduit owner is
     required to keep this data precisely as required for the formula,
     we will allow them to use it in the rate calculation, as long as it
     was reported to and available through our public ARMIS.[^361] There
     is confusion among utilities and attaching entities whether this
     data is available. Pursuant to our Biennial Regulatory Review,
     Review of Accounting and Cost Allocation Requirements, FCC 99-106
     and Biennial Regulatory Review, Review of ARMIS Reporting
     Requirements, FCC 99-107[^362] we require the LEC conduit owner to
     keep this data as required for the formula because we require LECs
     to use it in the rate calculation.[^363] This data will be
     available at ARMIS Report 43-02 and we will use this data in our
     formulas. Until ARMIS reports for LECs include this required data
     after 2001, we will continue to use the proration method to
     calculate the conduit portion of accumulated deferred taxes for use
     in the formula to calculate the net linear cost of conduit.

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b.  Net Conduit Investment (Electric Utility-Owned Conduit)

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105. Net Conduit Investment for electric utility-owned conduit is
     calculated as follows:

![](media/image11.wmf){width="5.846527777777778in"
height="1.2361111111111112in"}

106. For electric utilities, Gross Conduit Investment is reflected in
     FERC Part 101 Account 366.[^364] Accumulated Depreciation (Conduit)
     represents the share of FERC Account 108 (Accumulated provision for
     depreciation of electric utility plant (Major only) - a composite
     account that is required to be maintained on a subsidiary basis)
     that corresponds to Account 366.[^365] Accumulated Deferred Income
     Taxes for electric utilities represents the share of FERC Accounts
     190, 281, 282, and 283 that correspond to Account 366.[^366]

107. UTC/EEI argues that our conduit formula methodology should reflect
     differences between urban and suburban conduit.[^367] UTC/EEI
     objects to the use of system-wide data because UTC/EEI believes
     system-wide data fails to account for significant differences
     between the cost of deploying conduit in urban and suburban
     areas.[^368] However, in comments to the *Fee Notice*, UTC/EEI
     admitted that costs related to both urban and non urban facilities
     are recorded in the same utility accounts, such as FERC account 366
     (Gross Conduit Investment).[^369] In fact, UTC/EEI further asserts
     that in the absence of their preferred \"market-based\" approach to
     establishing rates, more regulatory certainly and greater market
     stability results from the application of a uniform methodology,
     avoiding different regional or urban/rural formulas.[^370] Upon
     review, we found no new information presented that would persuade
     us to abandon the use of system-wide data in the conduit context,
     as it is used in the pole context. No viable alternate suggestion
     has been offered and we continue to find that the use of
     system-wide data is the most efficient and reasonable methodology.

## FERC AND ARMIS ACCOUNTS USED IN THE FORMULAS 

108. Both telecommunications and electric utilities continue to argue,
     as they have since the implementation of the pole attachment
     formula, that the various permutations of the formulas for poles
     and conduit, for LECs and electric utilities, do not include enough
     FERC or ARMIS regulatory accounts to fully compensate the utilities
     for their costs.[^371] Before discussing the issues raised by the
     parties concerning the accounts used in the formulas, we first
     correct a typographical error appearing in the *Fee Order*.

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1.  Electric Utility Accumulated Deferred Income Taxes Poles
    (Correction)

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109. In the *Fee Order*, we stated the following formula to determine
     the net cost of a bare pole for electric utilities:

![](media/image12.wmf){width="5.361111111111111in"
height="0.5833333333333334in"}

We stated that the Accumulated Deferred Income Taxes represents the
share of composite FERC Account 190 (Accumulated deferred income taxes)
that corresponds to Account 364.[^372] In error, we neglected to include
FERC Accounts 281, 282, and 283 along with Account 190. We now correct
this typographical error so that Accumulated Deferred Income Taxes
represents the share of composite FERC Accounts 190, 281, 282 and 283
that corresponds to Account 364.

2.  Carrying Charge Accounts (LECs)

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110. The carrying charge rate reflects those costs incurred by the
     utility in owning and maintaining pole attachment infrastructure
     regardless of the presence of attachments.[^373] The elements of
     the carrying charge rate are: administrative, maintenance,
     depreciation, taxes and cost of capital (rate of return). To
     calculate the carrying charge rate, we developed formulas that
     relate each element to a utility owner\'s net investment.[^374] The
     carrying charge rate factor of the *Cable Formula* is calculated as
     follows:[^375]

     ![](media/image13.wmf){width="4.902777777777778in"
     height="0.34652777777777777in"}

111. In May 1986, the Commission adopted a new uniform system of
     accounts for all FCC regulated telephone companies.[^376] The
     Commission\'s Annual Report Form M was revised on April 27,
     1989[^377] to reflect the new accounting system in Part 32 that
     replaced the accounting system in Part 31, effective January 1,
     1988.[^378] The *Pole Attachment Order* provided formulas for
     determining a maximum just and reasonable pole attachment rate with
     regulatory accounts identified.[^379] The formula for LECs used
     Part 31 accounts until after adoption of the *New USOA-Part 32
     Adoption*, when the Common Carrier Bureau[^380] responded to a
     request for clarification of what Part 32 accounts would be used in
     place of the Part 31 accounts specified in the *Pole Attachment
     Order*. That guidance was given with the understanding that an
     exact tracking of expenses from Part 31 accounts to Part 32
     accounts was not possible.[^381] In the *Fee Order*,[^382] we
     clarified the Part 32 accounts to be used in the *Cable Formula*
     for LECs utilities.[^383]

112. In the *Fee Order*, we adopted the following formula to determine
     the administrative element of the carrying charge rate of the
     *Cable Formula* for LEC pole owners:[^384]

     ![](media/image14.wmf){width="6.111111111111111in"
     height="0.5416666666666666in"}

     USTA and Verizon ask us to reconsider our decision to exclude
     certain accounts as administrative expenses.[^385] USTA asserts we
     should reconsider our decision to exclude expenses in ARMIS
     Accounts 6110 (network support expenses) which includes costs of
     repairing and maintaining the motor vehicle fleet; 6120 (general
     support expenses) which includes costs of land and buildings,
     office equipment and computers; 6534 (plant operations and
     administrative expenses) which includes costs related to the
     general administration of plant operations; and 6535 (engineering
     expenses) that support all plant operations.[^386] USTA argues that
     we should include all accounts that USTA claims indirectly support
     the administration of poles.[^387] USTA argues that our conclusions
     in the *Fee Order* contradicted the Pole Attachment Order and the
     court's advice in *Alabama Power v. FCC.*[^388]

113. NCTA counters that a one to one mapping of accounts from Part 31 to
     part 32 is not feasible and the accounts included in the formula
     overstate the administrative expenses attributable to poles because
     administrative expenses such as research and development for highly
     complex technological and business planning projects would far
     exceed the administrative oversight for poles.[^389] NCTA points
     out that the conversion to Part 32 actually increased the
     administrative expenses because Account 6720 includes costs that
     were formerly excluded under Part 31 accounting. NCTA notes that
     Account 6720 is a composite account including expenses for
     accounting and finance,[^390] external relations,[^391] human
     resources,[^392] information management,[^393] legal,[^394]
     procurement,[^395] research and development,[^396] and a general
     account labeled \"general and administrative.\"[^397] NCTA
     continues that Account 6535 (engineering expenses) is particularly
     inappropriate because the attacher pays any engineering expenses
     related to the attachment upfront in makeready charges. Referring
     to Account 6110 (network support expenses), NCTA argues that
     vehicle expenses associated with attachments are already included
     in makeready charges.

114. The *Fee Order* did not attempt to establish different accounts to
     be used in the administrative element of the carrying charges. The
     *Fee Order* merely reconciled the accounts formerly listed in Part
     31 to their counterpart accounts in Part 32. This resulted in the
     identification of Accounts 6710 and 6720 to be included in the
     administrative element of the carrying charges. We agree with NCTA
     that these accounts provide a broad spectrum of administrative
     expenses. Contrary to USTA's argument, we did not exclude general
     plant administrative expense accounts from the calculation. USTA's
     citation to *Alabama Power Co. v. FCC*[^398] is not apropos. We are
     using plant-wide accounts representing administrative expenses, not
     pole-only administrative accounts.[^399] The court's reasoning in
     *Alabama Power Co. v. FCC* would apply if we used an administrative
     account that isolated pole administrative expenses and then divided
     that by the net plant investment. The accounts listed by USTA do
     not fall into the category of plant-wide administrative expenses
     that are attributable in any way to poles, and were not previously
     included in the calculation under Part 31. Maintenance expenses are
     already isolated into a pole-related account and are not to be
     included in the administrative element. Capital accounts which are
     not pole investment also should not be included in the
     administrative element.

115. We reviewed and considered the record before us regarding the
     accounts to be used for the administrative element expenses for
     LECs. We do not believe Congress intended us to discover and
     aggregate all *de minimis* expenses which might have some
     intangible nexus to pole attachments. On the contrary, we believe
     Congress gave us a clear mandate *not* to engage in full-scale
     ratemaking exercises every time we had a pole attachment complaint
     before us.[^400] We have chosen not to disaggregate the major
     accounts selected for inclusion in our calculations in order to
     eliminate expenses not directly attributable to administrative
     costs with a nexus to pole attachments, such as corporate strategic
     planning.[^401] On reconsideration, we decline to draw in more
     expenses to the administrative element because we already apply a
     comprehensive set of expenses in conformance with the statutory
     directive to allocate a percentage of operating expenses
     attributable to pole attachments.

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3.  Carrying Charge Accounts (Electric)

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116. In the *Fee Order*, we rejected our tentative conclusion to include
     a portion of FERC Account 590 in the maintenance element of the
     carrying charge rate. We concluded that any indefinite and
     uncertain attempt to identify a possibly minute percentage of pole
     related expenses that may be included in Account 590, is outweighed
     by the complexity of arriving at an appropriate and equitable
     percentage of the account.[^402] We also concluded that pole
     related maintenance expenses would be posted to Account 593, which
     is included in our calculation.[^403] Account 590 (maintenance
     supervision and engineering (Major only)) includes the cost of
     labor and expenses incurred in the general supervision and
     direction of maintenance of the distribution system. However,
     direct field supervision of specific jobs are charged to the
     appropriate maintenance account. Operating expense instruction 1
     (supervision and engineering (Major utilities)) states that the
     supervision and engineering includible in the operating expense
     accounts shall consist of the pay and expenses of superintendents,
     engineers, clerks, other employees and consultants engaged in
     supervising and directing the operation and maintenance of each
     utility function.[^404]

117. Account 593 (maintenance of overhead lines (Major only)) includes
     all the cost of labor, materials used and expenses incurred in the
     maintenance of overhead distribution line facilities, the book cost
     of which is includible in Account 364 (poles, towers and fixtures),
     Account 365 (overhead conductors and devices), and Account 369
     (services). In our calculation we include the net investment for
     all three accounts to determine the portion of Account 593
     attributable to Account 364. UTC/EEI and Southern Co. continue to
     argue that Account 590, or a portion thereof, should be included in
     the carrying charge because the expenses relating to the
     maintenance of a distribution system may include poles.[^405] We
     disagreed in the *Fee Order*, and we have been provided no
     additional evidence to rebut the description of Account 590 or that
     \"direct field supervision of specific jobs shall be charged to the
     appropriate maintenance account,\" in this case Account 593.[^406]
     *Fee Order* petitioners do not persuade us that there is any
     significant expense related to poles included in Account 590.

118. This same reasoning applies to Account 594 in the conduit context.
     Account 594 (maintenance of underground lines (Major only))
     includes the cost of labor, materials used and expenses incurred in
     the maintenance of underground distribution line facilities, the
     book cost of which is includible in Account 366 (underground
     conduit), Account 367 (underground conductors and devices), and
     Account 369 (Services). All expenses associated with Account 366,
     the account used to determine conduit investment, are reported in
     Account 594 and no additional accounts should be included as
     maintenance expenses.

119. Petitioners also include a list of FERC accounts that they would
     like included as maintenance expenses in the pole and conduit
     calculations. These include Accounts 580 (operation and
     supervision), 583 (overhead line expenses (Major only)), 584
     (underground line expenses (Major only)), 584 (operation of
     underground lines), 588 (miscellaneous distribution operation
     expenses), 590 (maintenance supervision and engineering-Major
     only), and 598 (maintenance of miscellaneous distribution
     plant).[^407] Accounts 580, 583, 584, and 588 are operational
     accounts to which electric utilities report expenses relating to
     the utility\'s core regulated business services, and not pole or
     conduit expenses.[^408] Account 598 is the miscellaneous account
     related generally to maintenance of equipment on customer premises
     and is not associated with pole or conduit expenses.[^409] We will
     not include any portion of Accounts 580, 583, 584, 588 or 598 in
     the calculation of the maintenance element of the carrying charge
     rate for pole or conduit because the costs or expenses reported to
     these accounts do not reflect a sufficient nexus to the operating
     expenses and actual capital costs of the utility attributable to
     the pole or conduit attachment.[^410] The pertinent maintenance
     expenses are reported in Accounts 593 (poles) and 594 (conduit) and
     we include those in the calculation.

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4.  Investment Accounts (Electric)

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120. In addition to its arguments for including additional accounts in
     the carrying charge component of the pole and conduit attachment
     formulas, Southern Co. argues that additional capital accounts
     should be included in the investment calculation for poles and
     conduit, including FERC Accounts 360 (land and land rights); 365
     (overhead conductors and devices); 368 (line transformers) and
     Accounts 389-399 (General Plant).[^411] UTC/EEI joins in arguing
     for inclusion of Accounts 360, 365, 367 (underground conductors and
     devices), 369 (services), and 397 (communications equipment). We
     calculate net pole or conduit investment for two purposes in the
     formula. First, we calculate net investment to identify the portion
     of net investment that is allocable to the physical attachment. We
     then apply the rate of return against that portion so that the
     utility is fully compensated for the capital investment that is
     being used by the attacher. The only account pertinent to that
     calculation is the pole or conduit investment account.

121. We measure the capital investment that is used by determining the
     percentage of physical space occupied by the attachment. For
     electric utility poles, we use Account 364 (poles, towers and
     fixtures).[^412] Account 364 includes the cost of installed poles,
     towers, and appurtenant fixtures used for supporting overhead
     distribution conductors and service wires. Specific items
     include: 1. Anchors, head arm, and other guys, including guy
     guards, guy clamps, strain insulators, pole plates, etc.; Brackets;
     Crossarms and braces; Excavation and backfill, including disposal
     of excess excavated material; Extension arms; Foundations; Guards;
     Insulator pins and suspension bolts; Paving; Permits for
     construction; Pole steps and ladders; Poles, wood, steel, concrete,
     or other material; Racks complete with insulators; Railings;
     Reinforcing and stubbing; Settings; Shaving, painting, gaining,
     roofing, stenciling, and tagging; Towers; Transformer racks and
     platforms. Even with the 15% reduction for non-pole appurtenances
     such as crossarms, this is still a very generous account, including
     the cost of towers, transformer racks and platforms.

122. The attacher is paying to attach a cable to the pole. The Pole
     Attachment Act requires the attacher to pay a portion of the
     capital costs attributable to the pole. Those costs are fully
     captured in Account 364. The accounts suggested by petitioners
     include capital expenditures which support the utility's core
     business function and are not related to the pole costs. For
     instance, petitioners would like to include tree trimming from
     Account 365 (overhead conductors and devices) in the pole
     investment calculation. However, tree trimming in that account is
     related to the overhead conductors which relate to the core
     business function of the utility. Any excavation relating to the
     installation of the pole itself, including disposal of excess
     material, is already included in Account 364.[^413] If tree
     trimming is required as part of make-ready activity to provide for
     installation of an attaching entity's pole attachment, the attacher
     pays or reimburses that amount as part of make-ready charges.

123. Petitioners also ask to include Account 360 (land and land rights).
     This account includes the cost of land and land rights used in
     connection with distribution operations. It does not include the
     cost of permits to erect poles, towers, etc. which are included in
     Account 364. Electric Plant Instruction 7 states that \"\[t\]he
     accounts for land and land rights shall include the cost of land
     owned in fee by the utility and rights. Interests, and privileges
     held by the utility in land owned by others, such as leaseholds,
     easements, water and water power rights, diversion rights,
     submersion rights, rights-of-way, and other like interests in land.
     *Do not include in the accounts for land and land rights and
     rights-of-way costs incurred in connection with first clearing and
     grading of land and rights-of-way and the damage costs associated
     with the construction and installation of plant. Such costs shall
     be included in the appropriate plant accounts directly
     benefited.*\" (emphasis added). Petitioners propose that they
     should earn a return on the entire amount of Account 360 which
     includes the entire cost of all its land and land rights
     acquisitions which support its distribution system.[^414] Even if
     some costs associated with the land or right of way on which the
     poles are placed are included in this account rather than Account
     364, the utility is enjoying the full use of those rights and the
     attacher's physical occupation of a portion of space on a pole does
     not restrict the utility's use of the land for its distribution
     network. The ratio of space occupied used to determine the capital
     pole investment allocable to the attachment bears no relationship
     to the portion of land on which the pole sits in relation to the
     entire inventory of square footage included in Account 360. In
     addition, an attacher usually pays a separate franchise, permit or
     license fee to the local government or franchising authority for
     the right to operate in the public right of ways. To the extent
     that an attacher wished to place a separate structure (pole, box,
     etc.) on utility property, we would examine any rate issue on a
     case by case basis.

124. Petitioners also suggest that a portion of Account 368 (line
     transformers) benefits other pole users because the lightning
     arresters attached to the transformers to protect the transformers
     may also benefit other pole attachments. Once again, Southern Co.
     proposes using an undisclosed formula for calculating what portion
     of these costs should be attributed to the pole investment.[^415]
     We do not believe that the Pole Attachment Act envisions a drawn
     out ratemaking process to determine whether a lightning arrester,
     whose only function is to protect a piece of equipment which
     supports the utility's core business function of power
     distribution, indirectly benefits other attachers on the pole.
     Neither do we propose a complex ratemaking process to remove every
     possible cost included in Account 364 that does not benefit the
     pole attacher.

125. Another account proposed by UTC/EEI is Account 367 (underground
     conductors and devices) which UTC/EEI proposes to add to conduit
     investment. This account includes the cost installed of underground
     conductors and devices used for distribution purposes. Items
     included are: Armored conductors, buried, including insulators,
     insulating materials, splices, potheads, trenching, etc.; Armored
     conductors, submarine, including insulators, insulating materials,
     splices in terminal chamber, potheads, etc.; Cables in standpipe,
     including pothead and connection from terminal chamber or manhole
     to insulators on pole; Circuit breakers; Fireproofing, in
     connection with any items listed herein; Hollow-core oil-filled
     cable, including straight or stop joints, pressure tanks, auxiliary
     air tanks, feeding tanks, terminals, potheads and connections,
     etc.; Lead and fabric covered conductors, including insulators,
     compound-filled; oil-filled or vacuum splices, potheads, etc.;
     Lightning arresters; Municipal inspection; Permits; Protection of
     street openings; Racking of cables; Switches; and Other line
     devices. All of these items are related to the utility's
     distribution of power.[^416]

126. Account 366 (underground conduit), which we include in the
     investment calculation, includes the cost installed of underground
     conduit and tunnels used for housing distribution cables or wires.
     Items included are: 1. Conduit, concrete, brick and tile, including
     iron pipe, fiber pipe, Murray duct, and standpipe on pole or tower;
     Excavation, including shoring, bracing, bridging, backfill, and
     disposal of excess excavated material; Foundations and settings
     specially constructed for and not expected to outlast the apparatus
     for which constructed; Lighting systems; Manholes, concrete or
     brick, including iron or steel frames and covers, hatchways,
     gratings, ladders, cable racks and hangers, etc., permanently
     attached to manholes; Municipal inspection; Pavement disturbed,
     including cutting and replacing pavement, pavement base, and
     sidewalks; Permits; Protection of street openings; Removal and
     relocation of subsurface obstructions; Sewer connections, including
     drains, traps, tide valves, check valves, etc.; Sumps, including
     pumps; and Ventilating equipment.[^417] All items associated with
     the construction of the conduit are included in this account.

127. Finally, UTC/EEI would like to include the costs of providing
     electric service to its customers homes and the costs of its own
     communications facilities in the pole investment calculation. They
     seek to include Account 369 (services) which covers \"the cost
     installed of overhead and underground conductors leading from *a
     point where wires leave the last pole of the overhead system or the
     distribution box or manhole, or the top of the pole of the
     distribution line, to the point of connection with the customer\'s
     outlet or wiring*.\"[^418] Conduit used for this purpose is also
     included in this account. Account 397 includes the cost installed
     of telephone, telegraph, and wireless equipment for general use in
     connection with utility operations. Neither of these accounts can
     be considered as pole investment.

128. Based on our extensive review of the record and the description of
     the accounts, we affirm that only FERC accounts to be included in
     the investment calculation are Accounts 364 for pole investment and
     Account 366 for conduit investment. Petitioners failed to provide
     any new information and their reiteration of the same arguments
     fail to persuade us to include additional accounts in our
     calculation of the pole or conduit investment. As we have stated
     above, any unusual requests involving access to land or rights of
     way other than for a pole attachment or conduit attachment will be
     considered on a case by case basis. Our inclusion of unrelated
     expenses in certain accounts and our exclusion of possible minor
     expenses in other accounts provides a balanced overall allocation
     of costs while avoiding a prolonged and contentious ratemaking
     process.

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IV. ![](media/image15.wmf){width="0.125in"
    height="0.23680555555555555in"}FINAL REGULATORY FLEXIBILITY
    CERTIFICATION

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```
129. As required by the Regulatory Flexibility Act (\"RFA\"),[^419] an
     Initial Regulatory Flexibility Analysis (\"IRFA\") was incorporated
     in both the *Fee Order Notice* and *Telecom Order* *Notice*[^420]
     and a Final Regulatory Flexibility Analysis (\"FRFA\") was
     incorporated in both the *Fee Order*[^421] and *Telecom
     Order*.[^422] The Commission sought written public comment on the
     proposals in the *Fee Order Notice* and *Telecom Order Notice*,
     including comment on the IRFAs. No comments were received in
     response to the IRFA in either the *Fee Order Notice* or *Telecom
     Order Notice*, nor did we receive any petitions for reconsideration
     of the *Fee Order* FRFA or *Telecom Order* FRFA. The RFA requires
     that an RFA analysis be prepared for notice and comment rulemaking
     proceedings, unless the agency certifies that \"the rule will not,
     if promulgated, have a significant economic impact on a substantial
     number of small entities.\"[^423]

130. The RFA generally defines a \"small entity\" as having the same
     meaning as the terms \"small business,\" \"small organization,\"
     and \"small governmental jurisdiction.\"[^424] In addition, the
     term \"small business\" has the same meaning as the term small
     business concern under the Small Business Act.[^425] A \"small
     business concern\" is one that: (1) is independently owned and
     operated; (2) is not dominant in its field of operation; and (3)
     satisfies any additional criteria established by the Small Business
     Administration (\"SBA\").[^426] As we described in the FRFA
     analyses in the *Fee Order* and *Telecom Order*, we estimate that
     there are small business entities that might be affected by those
     orders.

131. In this *Reconsideration Order*, we affirm most of our prior
     conclusions in the *Fee Order* and *Telecom Order*. We have, among
     other things, amended certain requirements of Sections
     1.1401-1.1418 of our rules.[^427] These amendments serve to
     simplify our formulas for calculating pole attachment rates.
     Specifically, we provide a simplified equation of our formula for
     telecommunications attachers;[^428] we simplify the geographic
     categories for determining average numbers of attaching
     entities;[^429] and we allow parties to a pole attachment
     proceeding to substitute presumptive numbers of attaching entities
     in the formula in order to avoid the expense of establishing
     numbers based on a survey or compilation of actual data.[^430] We
     also provide a simpler methodology for calculating rates when the
     net pole investment is negative or zero.[^431] These changes do not
     impose additional compliance burdens on small entities nor do they
     alter the number or type of small entities possibly affected by the
     rules published in the *Fee Order* and *Telecom Order.* The changes
     may, in fact, reduce the burden on small entities. Therefore, we
     certify, pursuant to Section 605(b) of the RFA, that the rules
     adopted herein will not have a significant economic impact on a
     substantial number of small entities.

132. *Report to Congress*: The Commission will send a copy of this
     *Reconsideration Order*, including this final certification, in a
     report to Congress pursuant to the Congressional Review Act, 5
     U.S.C. § 801(a)(1)(A). A copy of this *Reconsideration Order* (or
     summary thereof) and this certification will be sent to the Chief
     Counsel for Advocacy of the Small Business Administration, and will
     be published in the Federal Register pursuant to 5 U.S.C. § 605.

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V.  PAPERWORK REDUCTION ACT OF 1995 ANALYSIS

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133. The requirements adopted in this Reconsideration Order have been
     analyzed with respect to the Paperwork Reduction Act of 1995 (the
     \"1995 Act\") and found to impose no new or modified information
     collection requirements on the public.

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```
VI. ORDERING CLAUSES

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```
134. Accordingly, IT IS ORDERED, pursuant to section 405 of the
     Communications Act of 1934, *as amended*, 47 U.S.C. §§ 405 and
     section 1.106 of the Commission\'s rules, 47 C.F.R. § 1.106, the
     petitions for reconsideration and/or clarification are DENIED IN
     PART and GRANTED IN PART to the extent indicated above.

135. IT IS FURTHER ORDERED that, pursuant to Sections 1, 4(i), 224 and
     303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§
     151, 154(i), 224 and 303(r), this Reconsideration Order is hereby
     ADOPTED and the Commission\'s rules are HEREBY AMENDED as set forth
     in Appendix A.

136. IT IS FURTHER ORDERED that the Commission\'s rules, as amended in
     Appendix A hereto, will become effective 30 days after the date of
     publication of this *Reconsideration Order* (or summary thereof) in
     the Federal Register.

137. Number range level0Number range level1Number range level2Number
     range level3Number range level4Number range level5Number range
     level6Number range level7IT IS FURTHER ORDERED that the
     Commission\'s Consumer Information Bureau, Reference Information
     Center, SHALL SEND a copy of this *Reconsideration Order*,
     including the Final Regulatory Flexibility Certification, to the
     Chief Counsel for Advocacy of the Small Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**APPENDIX A**

**Revised Rules**

Part 1 of Title 47 of the Code of Federal Regulations is amended as
follows:

PART 1 --- PRACTICE AND PROCEDURE

1\. The authority citation for Part 1 continues to read as follows:

AUTHORITY: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309 and
325(e).

2\. Amend § 1.1402 to revise paragraph (m) to read as follows:

**§ 1.1402 Definitions.**

\* \* \* \* \*

\(m\) The term *attaching entity* includes cable system operators,
telecommunications carriers, incumbent and other local exchange
carriers, utilities, governmental entities and other entities with a
physical attachment to the pole, duct, conduit or right of way. It does
not include governmental entities with only seasonal attachments to the
pole.

\* \* \* \* \*

3\. Amend § 1.1409 to remove paragraph (e)(4) and revise paragraphs
(e)(1), (e)(2), (e)(3) and the first sentence of paragraph (f) to read
as follows:

**§ 1.1409 Commission consideration of the complaint.**

\* \* \* \* \*

\(e\) \* \* \*

\(1\) The following formula shall apply to attachments to poles by cable
operators providing cable services. This formula shall also apply to
attachments to poles by any telecommunications carrier (to the extent
such carrier is not a party to a pole attachment agreement) or cable
operator providing telecommunications services until February 8, 2001:

![](media/image16.wmf){width="3.6666666666666665in"
height="0.3888888888888889in"}

![](media/image17.wmf){width="2.8333333333333335in"
height="0.5694444444444444in"}

\(2\) Subject to paragraph (f) the following formula shall apply to
attachments to poles by any telecommunications carrier (to the extent
such carrier is not a party to a pole attachment agreement) or cable
operator providing telecommunications services beginning February 8,
2001:

![](media/image18.wmf){width="4.555555555555555in"
height="0.5833333333333334in"}
![](media/image19.wmf){width="4.199305555555555in"
height="0.9972222222222222in"}

\(3\) The following formula shall apply to attachments to conduit by
cable operators and telecommunications carriers:

![](media/image20.wmf){width="6.055555555555555in"
height="1.0416666666666667in"}

simplified as:

![](media/image21.wmf){width="4.5in" height="0.4861111111111111in"}

If no inner‑duct is installed the fraction, \"1 Duct divided by the No.
of Inner‑Ducts\" is presumed to be ½.

\(f\) Paragraph (e)(2) of this section shall become effective February
8, 2001 (i.e., five years after the effective date of the
Telecommunications Act of 1996). \* \* \*

\* \* \* \* \*

4\. Amend §1.1417 to revise paragraphs (a), (b), (c), and the first
sentence of paragraph (d) to read as follows:

**§ 1.1417 Allocation of Unusable Space Costs.**

\(a\) With respect to the formula referenced in Section 1.1409(e)(2), a
utility shall apportion the cost of providing unusable space on a pole
so that such apportionment equals two‑thirds of the costs of providing
unusable space that would be allocated to such entity under an equal
apportionment of such costs among all attaching entities.

\(b\) All attaching entities attached to the pole shall be counted for
purposes of apportioning the costs of unusable space.

\(c\) Utilities may use the following rebuttable presumptive averages
when calculating the number of attaching entities with respect to the
formula referenced in Section 1.1409(e)(2). For non-urbanized service
areas (under 50,000 population), a presumptive average number of
attaching entities of three (3). For urbanized service areas (50,000 or
higher population), a presumptive average number of attaching entities
of five (5). If any part of the utility\'s service area within the state
has a designation of urbanized (50,000 or higher population) by the
Bureau of Census, United States Department of Commerce, then all of that
service area shall be designated as urbanized for purposes of
determining the presumptive average number of attaching entities.

\(d\) A utility may establish its own presumptive average number of
attaching entities for its urbanized and non-urbanized service areas as
follows: \* \* \*

\* \* \* \* \*

5\. Amend §1.1418 to read as follows:

**§ 1.1418 Use of presumptions in calculating the space factor.**

With respect to the formulas referenced in Sections 1.1409(e)(1) and
(e)(2), the space occupied by an attachment is presumed to be one (1)
foot. The amount of usable space is presumed to be 13.5 feet. The amount
of unusable space is presumed to be 24 feet. The pole height is presumed
to be 37.5 feet. These presumptions may be rebutted by either party.

**APPENDIX B**

**List of Parties Filing in *Fee Order* Reconsideration Proceeding**

Petitions for Reconsideration and/or Clarification of the Fee Order were
filed by:

American Electric Power Corporation, Commonwealth Edison Company and
Duke Energy Corporation (filed errata to correct the name of American
Electric Power Corporation to American Electric Power Services
Corporation) (American Electric)

Southern Company Services, Inc., on behalf of Alabama Power Company,
Georgia Power Company, Gulf Power Company, Mississippi Power Company,
and Savannah Electric and Power Company (Southern Co.)

Texas Cable & Telecommunications Association (TxCTA)

United States Telecom Association (USTA)

United Telecom Council and the Edison Electric Institute (UTC/EEI)

# *Comments in Support of and/or Opposition to Fee Order Petitions were filed by:* 

Verizon, local telephone companies of Bell Atlantic Corporation (d/b/a
Verizon Communications), including telephone companies formerly
affiliated with GTE Corporation, specifically: Bell Atlantic- Delaware,
Inc., Bell Atlantic- Maryland, Inc., Bell Atlantic- New Jersey, Inc.,
Bell Atlantic- Pennsylvania, Inc., Bell Atlantic- Virginia, Inc., Bell
Atlantic- Washington, D.C., Inc., Bell Atlantic- West Virginia, Inc.,
Contel of Minnesota, Inc., Contel of the South, Inc., GTE Alaska
Incorporated, GTE Arkansas Incorporated, GTE California Incorporated,
GTE Midwest Incorporated, GTE Southwest Incorporated, The Micronesian
Telecommunications Corporation, New England Telephone and Telegraph
Company, New York Telephone Company, Verizon Florida Inc., Verizon
Hawaii Inc., Verizon North Inc., Verizon Northwest Inc., Verizon South
Inc., Verizon West Coast (Verizon).

WorldCom, Inc. (WorldCom)

# 

# *Replies to Comments in Support of and/or Opposition to Fee Order Petitions were filed by:* 

American Electric Power Corporation, Commonwealth Edison Company and
Duke Energy Corporation (American Electric)

National Cable Television Association (NCTA)

Southern Company Services, Inc., on behalf of Alabama Power Company,
Georgia Power Company, Gulf Power Company, Mississippi Power Company,
and Savannah Electric and Power Company (Southern Co.)

The United States Telecom Association (USTA) filed a *Fee Order*
Reconsideration Reply after the deadline for timely filing. No new
arguments or issues were raised in that *Fee Order* Reconsideration
Reply and we have considered the comments contained therein in the
interest of having a full record reflected in the *Reconsideration
Order*.

**APPENDIX C**

**List of Parties Filing in *Telecom Order* Reconsideration Proceeding**

Petitions for Reconsideration and/or Clarification of the Telecom Order
were filed by:

Bell Atlantic (Bell Atlantic)

ICG Communications (ICG)

MCI Telecommunications Corporation (MCI)

National Cable Television Association, Cable Telecommunications
Association,

Texas Cable & Telecommunications Association, Cable Television
Association of Georgia, South Carolina Cable Television Association,
Cable Television Association of Maryland, Delaware and the District of
Columbia, Mississippi Cable Telecommunications Association, Mid-America
Cable Telecommunications Association, Kansas Cable Telecommunications
Association, Jones Intercable, Inc., Charter Communications, Greater
Media, Inc., Prime Cable, Rifkin & Associates, TCA Cable TV, Inc., and
The Helicon Corporation (NCTA)

SBC Communications Inc. (SBC)

Teligent

United States Telephone Association (USTA)

United Telecom Council and the Edison Electric Institute ("UTC/EEI")

U S West, Inc. (U S West)

*Comments in Support of or in Opposition to Telecom Order Petitions were
filed by:*

Adelphia and Lenfest Communications (Adelphia and Lenfest)

Ameritech

AT&T Corp. (AT&T)

Bell Atlantic (Bell Atlantic)

BellSouth Corporation (BellSouth)

Edison Electric Institute and UTC, the Telecommunications Association
(UTC/EEI)

GTE Service Corporation (GTE)

Joint Cable Parties: Texas Cable & Telecommunications Association; Cable
Telecommunications Association of Maryland, Delaware & District of
Columbia; Mid-American Cable Telecommunications Association, Jones
Intercable, Inc.; Helicon, Inc.; and Rifkin & Associates (Joint Cable
Parties)

MCI Telecommunications Corporation (MCI)

National Cable Television Association, Cable Telecommunications
Association,

Texas Cable & Telecommunications Association, Cable Television
Association of Georgia, South Carolina Cable Television Association,
Cable Television Association of Maryland, Delaware and the District of
Columbia, Mississippi Cable Telecommunications Association, Mid-America
Cable Telecommunications Association, Kansas Cable Telecommunications
Association, Jones Intercable, Inc., Charter Communications, Greater
Media, Inc., Prime Cable, Rifkin & Associates, TCA Cable TV, Inc., and
The Helicon Corporation (NCTA)

SBC Communications Inc. (SBC)

Sprint Local Telephone Companies (Sprint)

Texas Electric Utilities Company (TUEC)

Time Warner Cable (Time Warner)

WinStar Communications (WinStar)

*Reply Comments to Comments in Support of or Opposition to Telecom Order
Petitions were filed by:*

Association for Local Telecommunications Services (ALTS)

Bell Atlantic (Bell Atlantic)

Edison Electric Institute and UTC, the Telecommunications Association
(UTC/EEI)

GTE Service Corporation (GTE)

Joint Cable Parties: Texas Cable & Telecommunications Association; Cable
Telecommunications Association of Maryland, Delaware & District of
Columbia; Mid-American Cable Telecommunications Association, Jones
Intercable, Inc.; Helicon, Inc.; and Rifkin & Associates (Joint Cable
Parties)

MCI Telecommunications Corporation (MCI)

National Cable Television Association, Cable Telecommunications
Association,

Texas Cable & Telecommunications Association, Cable Television
Association of Georgia, South Carolina Cable Television Association,
Cable Television Association of Maryland, Delaware and the District of
Columbia, Mississippi Cable Telecommunications Association, Mid-America
Cable Telecommunications Association, Kansas Cable Telecommunications
Association, Jones Intercable, Inc., Charter Communications, Greater
Media, Inc., Prime Cable, Rifkin & Associates, TCA Cable TV, Inc., and
The Helicon Corporation (NCTA)

Teligent

WinStar Communications (WinStar)

Note: If no abbreviation appears in parentheses following the full name
of the party, the full name is used in this *Reconsideration Order*.

**Appendix D-1**

**Section 224(d) *Cable Formula* for Determining Maximum Rate For Use of
LEC Utility Poles**

**Using FCC ARMIS Accounts**

![](media/image22.wmf){width="4.596527777777778in"
height="0.4861111111111111in"}

Where:

![](media/image23.wmf){width="3.5in" height="0.2361111111111111in"}

![](media/image24.wmf){width="3.4722222222222223in"
height="0.2361111111111111in"}

And:

![](media/image25.wmf){width="6.083333333333333in"
height="0.5694444444444444in"}

![](media/image26.wmf){width="4.833333333333333in"
height="0.34652777777777777in"}

![](media/image27.wmf){width="6.263888888888889in"
height="0.5416666666666666in"}

![](media/image28.wmf){width="3.1805555555555554in"
height="0.3888888888888889in"}

![](media/image29.wmf){width="4.888888888888889in"
height="0.3888888888888889in"}

![](media/image30.wmf){width="6.0in" height="0.5416666666666666in"}

![](media/image31.wmf){width="3.1527777777777777in"
height="0.34652777777777777in"}

**Appendix D-2**

**Section 224(d) *Cable Formula* for Determining Maximum Rate for Use of
Electric Utility Poles**

**Using FERC Form 1 Accounts**

![](media/image32.wmf){width="4.596527777777778in"
height="0.4861111111111111in"}

Where:

![](media/image23.wmf){width="3.5in" height="0.2361111111111111in"}

![](media/image24.wmf){width="3.4722222222222223in"
height="0.2361111111111111in"}

And:

![](media/image33.wmf){width="7.083333333333333in"
height="0.4722222222222222in"}

![](media/image26.wmf){width="4.833333333333333in"
height="0.34652777777777777in"}

![](media/image34.wmf){width="5.513888888888889in"
height="0.7777777777777778in"}

![](media/image35.wmf){width="5.846527777777778in"
height="0.6805555555555556in"}

![](media/image36.wmf){width="4.861111111111111in"
height="0.3888888888888889in"}

![](media/image37.wmf){width="5.805555555555555in"
height="0.6111111111111112in"}

![](media/image38.wmf){width="3.1527777777777777in"
height="0.34652777777777777in"}

**Appendix E-1**

**Section 224(e) *Telecom Formula* for Determining Maximum Rate For Use
of LEC Utility Poles**

**Using FCC ARMIS Accounts**

![](media/image39.wmf){width="6.497222222222222in"
height="0.8888888888888888in"}

Where:

![](media/image23.wmf){width="3.5in" height="0.2361111111111111in"}

![](media/image40.wmf){width="3.6527777777777777in"
height="0.2361111111111111in"}

![](media/image41.wmf){width="6.596527777777778in"
height="0.2361111111111111in"}![](media/image42.wmf){width="3.9722222222222223in"
height="0.2361111111111111in"}

And:

![](media/image43.wmf){width="5.125in" height="0.4861111111111111in"}

![](media/image26.wmf){width="4.833333333333333in"
height="0.34652777777777777in"}

![](media/image27.wmf){width="6.263888888888889in"
height="0.5416666666666666in"}

![](media/image28.wmf){width="3.1805555555555554in"
height="0.3888888888888889in"}

![](media/image29.wmf){width="4.888888888888889in"
height="0.3888888888888889in"}

![](media/image30.wmf){width="6.0in" height="0.5416666666666666in"}

![](media/image31.wmf){width="3.1527777777777777in"
height="0.34652777777777777in"}

**Appendix E-2**

**Section 224(e) *Telecom Formula* for Determining Maximum Rate For Use
of Electric Utility Poles**

**Using FERC Form 1 Accounts**

![](media/image39.wmf){width="6.497222222222222in"
height="0.8888888888888888in"}

Where:

![](media/image23.wmf){width="3.5in" height="0.2361111111111111in"}

![](media/image44.wmf){width="3.0694444444444446in"
height="0.2361111111111111in"}

![](media/image45.wmf){width="6.596527777777778in"
height="0.2361111111111111in"}![](media/image42.wmf){width="3.9722222222222223in"
height="0.2361111111111111in"}

![](media/image46.wmf){width="7.166666666666667in"
height="0.4722222222222222in"}

![](media/image26.wmf){width="4.833333333333333in"
height="0.34652777777777777in"}

![](media/image47.wmf){width="6.236111111111111in"
height="0.7777777777777778in"}

![](media/image35.wmf){width="5.846527777777778in"
height="0.6805555555555556in"}

![](media/image36.wmf){width="4.861111111111111in"
height="0.3888888888888889in"}

![](media/image48.wmf){width="5.805555555555555in"
height="0.6111111111111112in"}

![](media/image38.wmf){width="3.1527777777777777in"
height="0.34652777777777777in"}

**Appendix F-1**

**Formula for Determining Maximum Rate for Use of LEC Utility Conduit**

**Using FCC ARMIS Accounts**

![](media/image49.wmf){width="6.345138888888889in" height="1.15in"}

simplified as:

![](media/image50.wmf){width="4.291666666666667in"
height="0.4861111111111111in"}

Where:

![](media/image51.wmf){width="6.0472222222222225in" height="0.34375in"}

and

![](media/image52.wmf){width="4.375in" height="0.4722222222222222in"}

The Carrying Charge Rate reflects the costs incurred by the utility in
owning and maintaining conduit and other pole attachment infrastructure
regardless of the presence of pole attachments. To help calculate the
Carrying Charge Rate, we developed formulas that relate each of these
components to the utility\'s conduit investment. The Carrying Charge
Rate used in the conduit formula is the same as used in the pole
formula.

![](media/image53.wmf){width="3.9027777777777777in"
height="0.4861111111111111in"}

Where:

![](media/image54.wmf){width="3.3333333333333335in"
height="0.5694444444444444in"}

![](media/image55.wmf){width="5.25in" height="0.6527777777777778in"}

![](media/image56.wmf){width="6.722222222222222in"
height="0.4861111111111111in"}

![](media/image57.wmf){width="4.833333333333333in"
height="0.34652777777777777in"}

![](media/image58.wmf){width="6.208333333333333in"
height="0.5277777777777778in"}

![](media/image59.wmf){width="3.5416666666666665in"
height="0.3888888888888889in"}

![](media/image60.wmf){width="4.486111111111111in"
height="0.3888888888888889in"}

![](media/image61.wmf){width="5.083333333333333in"
height="0.6805555555555556in"}

![](media/image62.wmf){width="3.1527777777777777in"
height="0.34652777777777777in"}

**Appendix F-2**

**Formula for Determining Maximum Rate for Use of Electric Utility
Conduit**

**Using FERC Form 1 Accounts**

![](media/image63.wmf){width="6.302083333333333in"
height="0.9798611111111111in"}

Simplified as:

![](media/image50.wmf){width="4.291666666666667in"
height="0.4861111111111111in"}

Where:

![](media/image51.wmf){width="6.0472222222222225in" height="0.34375in"}

And

![](media/image64.wmf){width="4.19375in" height="0.34652777777777777in"}

The Carrying Charge Rate reflects the costs incurred by the utility in
owning and maintaining conduit and other pole attachment infrastructure
regardless of the presence of pole attachments. To help calculate the
Carrying Charge Rate, we developed formulas that relate each of these
components to the utility\'s conduit investment. The Carrying Charge
Rate used in the conduit formula is the same as used in the pole
formula.

![](media/image65.wmf){width="3.9027777777777777in"
height="0.4861111111111111in"}

Where:

![](media/image66.wmf){width="3.3333333333333335in"
height="0.5694444444444444in"}

![](media/image67.wmf){width="5.25in" height="0.6527777777777778in"}

![](media/image68.wmf){width="6.013888888888889in"
height="0.3888888888888889in"}

![](media/image69.wmf){width="4.833333333333333in"
height="0.34652777777777777in"}

![](media/image70.wmf){width="5.402777777777778in"
height="0.6111111111111112in"}

![](media/image71.wmf){width="5.458333333333333in"
height="0.7777777777777778in"}

![](media/image72.wmf){width="4.69375in" height="0.4166666666666667in"}

![](media/image73.wmf){width="5.888888888888889in"
height="0.6111111111111112in"}

![](media/image74.wmf){width="3.1527777777777777in"
height="0.34652777777777777in"}

[^1]: 47 U.S.C. §224.

[^2]: 47 C.F.R. §§1.1401--1.1418.

[^3]: 13 FCC Rcd 6777 (1998); *affirmed in part, reversed in part, Gulf
    Power v. FCC,* 208 F.3d 1263 (11th Cir. 2000) (\"Gulf Power II\"),
    *motion for stay granted*; *petition for cert. granted January 22,
    2001.*

[^4]: Pub. L. No. 104-104, 110 Stat. 61, 149-151.

[^5]: Section 703 of the 1996 Act amended § 224 of the Communications
    Act of 1934, *codified* at various subsections of 47 U.S.C. § 224.
    Section 703 codified at 47 U.S.C. ¶ 224(f) was challenged in court.
    *See Gulf Power, et al., v. FCC and USA*, 998 F. Supp. 1398 (N.D.
    Fla. 1998), *affirmed*, 187 F.3d 1324 (11th Cir. 1999) (\"Gulf Power
    I\").

[^6]: 15 FCC Rcd 6453 (2000).

[^7]: In deciding this matter, all of the petitions, comments in support
    or opposition to the petitions, and replies of all parties filed in
    both rulemaking reconsideration proceedings have been reviewed. We
    have determined that the two proceedings raise many of the same
    issues, cover the same statutory authority, 47 U.S.C. § 224, and
    involve the same industries (cable television systems,
    telecommunications systems and utilities). Many of the same industry
    representatives and parties submitted filings in both proceedings.
    *See* Appendix B and Appendix C for lists of all parties submitting
    filings. UTC/EEI suggest that the Commission should \" . . . adopt
    all pole attachment-related regulations together so that the parties
    are given the ability to assess their rights and obligations.\"
    UTC/EEI *Telecom Order* Reconsideration Petition at 23.

[^8]: 47 U.S.C. § 224(e)(1-4); *see also,* 47 U.S.C. § 224(d)(3).

[^9]: *See Telecom Order* at Appendix A; 47 C.F.R. § 1.1401-1.1418.

[^10]: *See* 47 U.S.C. § 224(e)(4).

[^11]: A \"utility\" is defined as any person who is a local exchange
    carrier or an electric, gas, water, steam, or other public utility,
    and who owns or controls poles, ducts, conduit or rights-of-way
    used, in whole or in part, for any wire communications. Such term
    does not include any railroad, any person who is cooperatively
    organized, or any person owned by the Federal Government or any
    State. 47 U.S.C. § 224(a)(1).

[^12]: 47 U.S.C. § 224(e)(1). *See also* 47 U.S.C. § 224(a)(5) exempting
    pole attachments of telecommunications carriers who are also
    incumbent local exchange carriers (\"ILECs\").

[^13]: *Notice of Proposed Rulemaking, Implementation of Section 703(e)
    of the Telecommunications Act of 1996, Amendment of the
    Commission\'s Rules and Policies Governing Pole Attachments*, 12 FCC
    Rcd 11725 (1997).

[^14]: 47 U.S.C. § 224(e)(4); 47 C.F.R. § 1.1409(f).

[^15]: 208 F.3d 1263 (11 Cir. 2000).

[^16]: *Inquiry Concerning High-Speed Access to the Internet over Cable
    and other Facilities*, FCC 00-355 (released September 28, 2000).

[^17]: *Notice of Proposed Rulemaking, Amendment of Rules and Policies
    Governing Pole Attachments*, 12 FCC Rcd 7449 (1997).

[^18]: *See* Appendix C.

[^19]: *Fee Order* petitions were filed by: American Electric Power
    Services Corporation, and others (American Electric), Southern
    Company Services, Inc., et al., (Southern Co.), Texas Cable &
    Telecommunications Association (TxCTA), United States Telecom
    Association (formerly the United States Telephone
    Association)(USTA), United Telecom Council and the Edison Electric
    Institute (UTC/EEI). A full listing of all parties filing *Fee
    Order* petitions, *Fee Order* comments and *Fee Order* replies to
    *Fee Order* petitions and comments, as well as abbreviations used to
    identify these parties in this *Reconsideration Order*, is contained
    in Appendix B, hereto.

[^20]: *See* Appendix B.

[^21]: *See* *Telecom Order* at ¶¶ 10-21.

[^22]: *See Telecom Order* at ¶¶ 122-124; *see also, Fee Order* at ¶¶
    8-11.

[^23]: *Cf. Telecom Order* at ¶¶ 45-58.

[^24]: *Cf. Telecom Order* at ¶¶ 74-79.

[^25]: *See and cf. Telecom Order* at ¶¶ 65-73 regarding treatment of
    unusable space, ¶¶ 92-95 regarding treatment of usable space.

[^26]: *Cf. Telecom Order* at ¶¶ 83-91.

[^27]: *Cf. Telecom Order* at ¶ 115.

[^28]: *Cf. Telecom Order* at ¶¶ 107-111. *Fee Order* at ¶¶ 90-91 and n.
    290.

[^29]: *See Telecom Order* at ¶ 110. *Fee Order* at ¶ 91.

[^30]: *See Telecom Order* at ¶¶ 117-121 and n. 390.

[^31]: *Fee Order* at ¶¶ 31, 33-34.

[^32]: Pub. L. No. 95-234, 92 Stat. 33 (\"Pole Attachment Act\")
    codified at Communications Act of 1934, as amended (\"Communications
    Act\"), § 224, 47 U.S.C. § 224.

[^33]: The Commission\'s authority does not extend to pole attachment
    rates, terms, and conditions that a state regulates. 47 U.S.C. §
    224(c)(1). Jurisdiction for pole attachments reverts to the
    Commission generally if the state has not issued and made effective
    rules implementing the state\'s regulatory authority over pole
    attachments. Reversion to the Commission, with respect to individual
    matters, also occurs if the state does not take final action on a
    complaint within 180 days after its filing with the state, or within
    the applicable period prescribed for such final action in the
    state\'s rules, as long as that prescribed period does not extend
    more than 360 days beyond the complaint\'s filing. 47 U.S.C. §
    224(c)(3). *See* Public Notice, *States That Have Certified That
    They Regulate Pole Attachments*, 7 FCC Rcd 1498 (1992).

[^34]: 47 U.S.C. § 224(b)(1).

[^35]: *See* S. Rep. No. 580, 95th Congress., 1st Sess. at 19-20 (1977)
    (\"*1997 Senate Report*\"), *reprinted in* 1978 U.S.C.C.A.N. 109*;*
    *FCC v. Florida Power Corp.,* 480 U.S. 245, 247-48 (1987) (Congress
    enacted this legislation as a solution to a perceived danger of
    anticompetitive practices by utilities in connection with cable
    television service).

[^36]: 47 U.S.C. § 224(d)(1).

[^37]: *See* *1997 Senate Report*. Congress expected pole attachment
    rates based on incremental costs to be low because utilities
    generally recover the make-ready or change-out charges directly from
    cable systems. *Report and Order, Amendment of Rules and Policies
    Governing the Attachment of Cable Television Hardware to Utility
    Poles*, CC Dkt. 86-212, 2 FCC Rcd 4387, 4388 n.3 (1987) (\"*Pole
    Attachment Order*\"), *recon. denied*, 4 FCC Rcd 468 (1989).

[^38]: 47 U.S.C. § 224(d)(1-2).

[^39]: 47 U.S.C. § 224(d)(1).

[^40]: *1977 Senate Report* at 19-20.

[^41]: 47 C.F.R. § 1.1404*. See: First Report and Order, Adoption of
    Rules for the Regulation of Cable Television Pole Attachments,* CC
    Dkt. 78-144, 68 FCC 2d 1585 (1978) *(\"First Report and Order\");
    Second Report and Order*, 72 FCC 2d 59 (1979) (\"*Second Report and
    Order\"); Third Report and Order*, 77 FCC 2d 187 (1980) *(\"Third
    Report and Order\"), aff\'d, Monongahela Power Co. v. FCC*, 655 F.2d
    1254 (D.C. Cir. 1985*) (per curiam); see also, Pole Attachment
    Order*, 2 FCC Rcd 4387 (1987).

[^42]: *Pole Attachment Order*, 2 FCC Rcd 4384 (1987). The *Cable
    Formula* was codified in the *Telecom Order*, 13 FCC Rcd 6777
    (1998), at 47 C.F.R. § 1.1409(e)(1)(1998). *See also Fee Order,* in
    *passim*.

[^43]: *House Conference Report* No. 104-458 to 1996 Act, *reprinted at*
    1996 U.S.C.C.A.N. 124 (1996) (\"*Conf. Rpt.\")*, Joint Explanatory
    Statement of Conference Committee.

[^44]: 47 U.S.C. § 224(d)(3).

[^45]: 47 U.S.C. § 153(44).

[^46]: 47 U.S.C. § 153(8); 47 U.S.C. § 602(5).

[^47]: *See* 47 U.S.C. § 224(d)(3) (only to the extent that such carrier
    is not a party to a pole attachment agreement) and 47 U.S.C. §
    224(e)(4).

[^48]: 47 U.S.C. § 224(e)(1-4).

[^49]: 47 U.S.C. § 224(a),(f).

[^50]: *Local Competition Order,* 11 FCC Rcd 15499, 16058-107 (1996) at
    ¶¶ 1119-1240, *aff'd* *Local Competition Access Reconsideration
    Order*, FCC 99-266, 14 FCC Rcd 18049 (1999). In August 1996, the
    Commission also issued a *Report and Order* in CS Dkt. 96-166
    (Implementation of Section 703 of the Telecommunications Act of
    1996), 11 FCC Rcd 9541 (1996), amending its rules to reflect the
    self-effectuating additions and revisions to Section 224
    (\"*Self-Effectuating Order*\").

[^51]: *See, e.g., First Report and Order*, 68 FCC 2d 1585 (1978); *see
    also Second Report and Order*, 72 FCC 2d 59 (1979); *Third Report
    and Order*, 77 FCC 2d 187 (1980), *aff\'d, Monongahela Power Co. v.
    FCC*, 655 F.2d 1254 (D.C. Cir. 1985) *(per curiam); Alabama Power
    Co. v. FCC*, 773 F.2d 362 (D.C. Cir. 1985) (upholding challenge to
    the Commission\'s pole attachment formula relating to net pole
    investment and carrying charges); *Pole Attachment Order*, 2 FCC Rcd
    4384 (1987).

[^52]: *See* 47 U.S.C. § 224(b)(1); 47 C.F.R. § 1.1401-1.1418.

[^53]: 47 U.S.C. § 224 (e) (1). In passing the 1996 Act, the Congress
    adopted a Conference Agreement which \" . . . amend\[ed\] section
    224 of the Communications Act by adding a new subsection (e)(1) to
    *allow parties to negotiate* the rates, terms, and conditions for
    attaching to poles, ducts, conduits, and rights-of-way.\" *Conf.
    Rpt.* at 221 (emphasis added).

[^54]: 47 C.F.R. § 1.1404 (l) (1998).

[^55]: 47 U.S.C. § 224; *see also* 47 U.S.C. §§ 522 (5-7).

[^56]: 47 U.S.C. § 224; *see also* 47 U.S.C. §§ 153 (43-46).

[^57]: 47 U.S.C. § 224(f)(1).

[^58]: 47 U.S.C. §§ 224(b),(d),(e).

[^59]: *See Telecom Order* at ¶¶ 16-21.

[^60]: *Telecom Order* at ¶¶ 20-21.

[^61]: UTC/EEI *Fee Order* petition at 3-6.

[^62]: UTC/EEI *Fee Order* petition at 5.

[^63]: UTC/EEI *Fee Order* petition at 5-6.

[^64]: UTC/EEI *Telecom Order* petition at 2-9, *Fee Order* petition at
    3-8.

[^65]: 208 F.3d 1263 (11^th^ Cir. 2000).

[^66]: *See* American Electric's February 15, 2001 *ex parte*
    presentation memorandum at n. 3 (utility poles and conduit are not
    bottleneck facilities).

[^67]: *Gulf Power II* at 1274-1275. *See also*, NCTA's *Fee Order*
    reply comments at 3-6 (direct-buried cable and wireless facilities
    do not provide the cable industry with realistic alternatives to
    pole attachments).

[^68]: *See Telecom Order* at ¶¶ 16-21.

[^69]: UTC/EEI *Telecom Order* petition at 2.

[^70]: *See, e.g.,* Association of Local Telecommunications Services
    (\"ALTS\") *Telecom Order* comments at 2; Joint Cable Parties
    *Telecom Order* comments at 20-21; MCI *Telecom Order* comments at
    7-8l; NCTA *Telecom Order* comments 2-8 and *Fee Order* comments at
    2-8, 44-48; Time Warner *Fee Order* comments at 2-4.

[^71]: *See Telecom Order* at ¶¶ 12-21.

[^72]: *See, e.g.,* UTC/EEI *Telecom Order* petition at 8-9; *see also*,
    GTE *Telecom Order* comments at 4-5. *Cf.* NCTA *Telecom Order*
    reply at 3-6; Southern New England Telephone *Telecom Order*
    comments at 2.

[^73]: *See, e.g.,* UTC/EEI *Telecom Order* petition at 8.

[^74]: *See, e.g.,* Joint Cable Parties *Telecom Order* comments at
    20-21; MCI *Telecom Order* comments at 7-8; NCTA *Telecom Order*
    comments at 14-18.

[^75]: *See, e.g*., American Electric *Fee Order* comments at 14-95,
    American Electric *Telecom Order* comments at v, 13, 17-20, 39;
    Duquesne Light *Fee Order* comments at 12-13, *Telecom Order*
    comments at 13-17; UTC/EEI *Fee Order* comments at 14-15, *Telecom
    Order* comments at 8.

[^76]: 12 FCC Rcd 11725 (1997). *See, e.g.,* Comcast, et al., *Telecom
    Order* comments at 5; NCTA *Telecom Order* reply at 12-17; USTA
    *Telecom Order* reply at 1-6.

[^77]: ***^[?]{.underline}^**See, e.g.*, NCTA *Fee Order* comments at
    24-25; Time Warner *Fee Order* reply at 1-9.

[^78]: *Telecom Order* at ¶ 124.

[^79]: *Fee Order* at ¶ 10.

[^80]: *Fee Order* at ¶ 10.

[^81]: *See, e.g.,* AEPSC *Telecom Order* petition at, UTC/EEI *Telecom
    Order* petition at 9-11, *Fee Order* petition at 8; Southern Co.
    *Telecom Order* petition at 8-11. *But see*, Joint Cable Parties
    *Telecom Order* comments at 10-15, *Telecom Order* reply at 8, NCTA
    *Fee Order* reply at 1; WorldCom *Fee Order* comments at 2-6.

[^82]: American Electric *Fee Order* petition at 2-7; UTC/EEI *Fee
    Order* petition at 7.

[^83]: American Electric *Fee Order* petition at 2-7.

[^84]: UTC/EEI *Fee Order* petition at 7.

[^85]: *See, e.g.,* Southern Co. *Fee Order* recon. reply at 3.

[^86]: American Electric claims a report demonstrating that the *Cable
    and Telecom Formulas* deny the electric utilities just compensation
    in all cases, and that the report is "imminent." American Electric
    *Fee Order* recon. reply at 2-3. No report was received.

[^87]: *1977 Senate Report* at 19-21; 47 U.S.C. § 224(d)(1) and §
    224(e)(1).

[^88]: *See, e.g.,* Joint Cable Parties *Telecom Order* comments at
    10-15; *see also*, Association of Local Telecommunications Services
    *Fee Order* comments at 14; AT&T *Fee Order* reply at 13-14; NCTA
    *Fee Order* comments at 24-25; TCI *Fee Order* reply at 3; Time
    Warner *Fee Order* reply at 1-9.

[^89]: *See, e.g.,* Joint Cable Parties *Telecom Order* comments at
    10-15; NCTA *Fee Order* recon. reply at 3-6; WorldCom *Fee Order*
    recon. opposition at 2-6. *See, e.g.,* UTC/EEI *Telecom Order*
    petition at 9-11; *see also, e.g.,* American Electric *Telecom
    Order* comments at 11-18, *Fee Order* comments at 14-95; UTC/EEI
    *Telecom Order* comments at 8.

[^90]: The U. S. Supreme Court held all that is required is that a
    \"reasonable, certain and adequate provision for obtaining
    compensation\" exist at the time of the taking, stating: \"\[i\]f
    the government has provided an adequate process for obtaining
    compensation, and if the resort to that process \`yield\[s\] just
    compensation,\' then the property owner \`has no claim against the
    Government\' for a taking.\" *Williamson County Regional Planning
    Comm\'n v. Hamilton Bank of Johnson City*, 473 U.S. 172, 194 (1985),
    quoting *Ruckelshaus v. Monsanto Co.*, 467 U.S. 986, 1013, 1018 n.21
    (1984).

[^91]: *Cf.* § 224(d)(1) and § 224(e)(1).

[^92]: *See, e.g.,* *1977 Senate Report*; *FCC v. Florida Power
    Corporation, et al.,* 107 S.Ct. 1107, 1113 (1987) (rate imposed
    \[when\] calculated according to the statutory formula for the
    determination of a rate providing for the recovery of fully
    allocated cost, including the actual cost of capital, is \[not\]
    confiscatory); *see also, Gulf Power v. U.S.A.,* 998 F. Supp. 1398
    (N.D. Fla. Mar. 1998)(just compensation provided by 47 U.S.C. §
    224), *aff\'d,* 187 F.3d 1324 (11th Cir. 1999).

[^93]: 47 U.S.C. § 224 (d) (1) (\". . . a rate is just and reasonable if
    it assures a utility the recovery of not less than the additional
    costs of providing pole attachments, nor more than an amount
    determined by multiplying the percentage of the total usable space,
    or the percentage of total duct or conduit capacity, which is
    occupied by the pole attachment by the sum of the operating expenses
    and actual capital costs of the utility attributable to the entire
    pole, duct, conduit or right-of-way.\").

[^94]: *1977 Senate Report* at 20.

[^95]: 187 F.3d 1324 (11th Cir. 1999).

[^96]: 208 F.3d 1263 (11^th^ Cir. 2000).

[^97]: *See Gulf Power I*, 187 F.3d 1324, 1338 (11th Cir. 1999).

[^98]: *Gulf Power II*, 208 F.3d 1263, 1272 (11^th^ Cir. 2000).

[^99]: 488 U.S. 299 (1989).

[^100]: *FPC v. Hope Natural Gas Co*., 320 U.S. 591 (1944).

[^101]: *Duquesne Light* at 310*.*

[^102]: *See Federal Communications Commission, et al. v. National
    Citizens Committee for Broadcasting, et al.*, 436 U.S. 775, 803
    (1978). *See also, Chevron, U.S.A., Inc. v. Natural Resources
    Defense Council, Inc*., 467 U.S. 837, 842-843 (1984) (the standard
    of review of an agency action for arbitrariness or capriciousness is
    a deferential standard by which a reviewing court will uphold an
    agency action if its has a rational basis).

[^103]: *Federal-State Joint Board on Universal Service*, FCC 96J-3, 12
    FCC Rcd 87 (1997).

[^104]: *Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996*, FCC 96-325, 11 FCC Rcd 15499
    (1996).

[^105]: *Local Competition Order*, 11 FCC Rcd at 15813, 15817, 15846 (¶¶
    620, 630, 679).

[^106]: *Local Competition Order,* 11 FCC Rcd at 15813, 15846 (¶¶ 620,
    679).

[^107]: S. Rep. No. 95-580, 95th Cong., 1st Sess. (1977), *reprinted in*
    1978 U.S.C.C.A.N. 109.

[^108]: *Id.*

[^109]: *See* *In the Matter of Adoption of Rules for the Regulation of
    Cable Television Pole Attachments*, First Report and Order, 68 FCC
    2d 1585 (1978); *In the Matter of Adoption of Rules for the
    Regulation of Cable Television Pole Attachments*, Memorandum Opinion
    and Second Report and Order, 72 FCC 2d 59 (1979).

[^110]: 47 U.S.C. § 543(b); *Implementation of Sections of the Cable
    Television Consumer Protection and Competition Act of 1992: Rate
    Regulations*, 9 FCC Rcd 4527 (1994). *See also Time Warner
    Entertainment Co. v. FCC*, 56 F.3d 151, 178-87 (D.C.Cir. 1995),
    *cert. denied*, 116 S.Ct. 911 (1996).

[^111]: *See First Report and Order*, 68 FCC Rcd 1585, ¶ 25*; aff'd,
    Second Report and Order*, 72 FCC 2d 59, ¶ 15*; see also FCC v.
    Florida Power Corporation*, 480 U.S. 245 (1987).

[^112]: *See* S. Conf. Rep. No. 104-230, 104^th^ Cong., 2^nd^ Sess.
    (1996).

[^113]: *See* *Local Competition Order*, 11 FCC Rcd at 15857 (¶ 704).

[^114]: 47 U.S.C. § 252(d)(1)(A)(i).

[^115]: We recognize that increasing convergence of services and
    electric utilities' entry into telecommunications may change this
    situation in the future.

[^116]: *See* *1977 Senate Report*. In the *1977 Senate Report*,
    Congress also noted that poles owned by cable companies were less
    than 0.1 percent of the total number of poles nationwide. There is
    nothing in the record to suggest that this percentage has markedly
    changed.

[^117]: *See* 47 C.F.R. § 51.505(b)(1) (forward-looking cost \"should be
    measured based on the use of the most efficient telecommunications
    technology currently available and the lowest cost network
    configuration\").

[^118]: *See* *Local Competition Order*, 11 FCC Rcd at 1585 (¶ 705)
    (stating that it cannot be determined in the abstract whether a
    forward-looking cost approach or a historical approach will produce
    higher cost figures in a particular setting).

[^119]: In addition, it is not clear that a policy which would encourage
    the erection of multiple duplicative poles in the public right of
    way is consistent with the Pole Attachment Act.

[^120]: If there is not adequate space on an existing pole for an
    attacher, the attacher is usually required to pay up front to
    replace the pole with a larger pole. The Commission has never held
    that the Pole Attachment Act, which anticipates a range of
    reasonable rates, prohibits a utility from being directly
    compensated by an attacher for such incremental, non-recurring
    costs. Alternatively, a utility could include an allocated portion
    of these costs in its annual rental rate, but most utilities prefer
    to recover up front, the full amount of make-ready or pole change
    out costs. Such costs are required to be excluded from the annual
    rate calculation to avoid a double recovery by the utility. *See
    Amendment of Rules and Policies Governing Pole Attachments*, FCC
    00-116, 15 FCC Rcd 6453 at ¶ 28 (2000).

[^121]: *See Amendment of Rules and Policies Governing Pole
    Attachments*, FCC 00-116, 15 FCC Rcd 6453 at ¶ 9 (2000).

[^122]: *See* 1977 *Senate Report* at 21 (stating that it was the desire
    of the drafters "that the Commission institute a simple and
    expeditious CATV pole attachment program which will necessitate a
    minimum of staff, paperwork and procedures consistent with fair and
    efficient regulation").

[^123]: *See Amendment of Rules and Policies Governing Pole
    Attachments*, FCC 00-116, 15 FCC Rcd 6453 at ¶ 9 (2000).

[^124]: *Id.*

[^125]: *See Amendment of Rules and Policies Governing Pole
    Attachments*, FCC 00-116, 15 FCC Rcd 6453 at ¶ 10 (2000).

[^126]: *1977 Senate Report* at 21.

[^127]: *Id.* at 19-20. Incumbent local exchange carriers (\"ILECs\")
    and competitive local exchange carriers (\"CLECs\") are regulated by
    the Commission Rules at 47 U.S.C. Title II. Electric, gas, water,
    steam and oil utilities are regulated by FERC, an independent
    regulatory agency within the Department of Energy under authority
    from the Federal Power Act of 1935, 49 Stat. 847; the Natural Gas
    Act of 1938, 52 Stat. 821; the Natural Gas Policy Act of 1978, 92
    Stat. 3350, Pub. L. No. 95-621; the Public Utility Regulatory
    Policies Act of 1978, 92 Stat. 3117, Pub. L. No. 95-617; and the
    Energy Policy Act of 1992, 106 Stat. 2776, Pub. L. No. 102-486.

[^128]: *Id.* at 20.

[^129]: *Id.* at 19-20. 47 U.S.C. § 224 (d)(1) states that a rate is
    just and reasonable if it assures a utility the recovery of not more
    than \"an amount determined by multiplying the percentage of the
    total duct or conduit capacity, which is occupied by the pole
    attachment by the sum of the operating expenses and actual capital
    costs of the utility attributable to the entire pole, duct, conduit,
    or right-of-way.\"

[^130]: *See*, *e.g., Teleprompter of Fairmont, Inc. v. Chesapeake and
    Potomac Telephone Co. of West Virginia*, PA 79-0029, 79 FCC 2d 232
    (1980); *Continental Cablevision of New Hampshire, Inc. v. Concord
    Electric Co.*, Mimeo No. 5536 (Com. Car. Bur., July 3, 1985).

[^131]: *Pole Attachment Order,* 2 FCC Rcd 4387 (1987) at ¶ 6; 47 U.S.C.
    §§ 224(b)(1), (d).

[^132]: The two factors reflect the differences between telephone
    companies\' and electric utilities\' investment in crossarms and
    other non-pole investment that is recorded in the pole accounts.
    Electric utilities typically have more investment in crossarms than
    telephone companies have. The 0.85 factor for electric utilities
    recognizes this fact. *See* *Pole Attachment Order*, 2 FCC Rcd at
    4390.

[^133]: *See Pole Attachment Order,* 2 FCC Rcd at 4402, Appendix A. This
    formula rearranges the *Pole Attachment Order\'s* net cost of a bare
    pole formula for presentation purposes. Net pole investment is
    defined as the gross investment in poles less accumulated
    depreciation and accumulated deferred income taxes with respect to
    pole investment.

[^134]: Net pole investment is defined as the gross investment in poles
    less accumulated depreciation and accumulated deferred income taxes
    with respect to pole investment. Net plant investment is defined as
    the gross plant in service less accumulated depreciation and
    accumulated deferred income taxes with respect to plant in service.

[^135]: *See, e.g., Capital Cities Cable, Inc. v. Southwestern Public
    Service Co*., Mimeo No. 5431 (June 28, 1985*); Booth American Co. v.
    Duke Power Co.*, Mimeo 3064 (Com. Car. Bur., Mar. 22, 1984*);
    Teleprompter of Greenwood, Inc. v. Duke Power Co*., Mimeo 001866
    (Com. Car. Bur., July 6, 1981).

[^136]: The *Pole Attachment Order*, used the term \"depreciation
    reserve\" in this formula. We updated our terminology to reflect
    Generally Acceptable Accounting Principles (GAAP) and now use the
    term \"accumulated depreciation.\" *See Pole Attachment Order*, 2
    FCC Rcd 4387 (1987) at ¶¶ 10-19 & Appendix B; *see also* Fee Order
    at ¶ 31, n. 127.

[^137]: *Fee Order* at ¶¶ 34-35 (LECs), ¶¶ 41-42 (electric utilities);
    *see also* *Pole Attachment Order*, 2 FCC Rcd 4287, at ¶¶ 10-19 &
    Appendix B.

[^138]: *See Fee Order at ¶¶ 31, 33-34;* see also *Pole Attachment
    Order*, 2 FCC Rcd at 4387, 4390, (1987) at ¶ 19. The two factors
    reflect the differences between LECs\' and electric utilities\'
    investment in crossarms and other non-pole investment that is
    recorded in the pole accounts. Electric utilities typically have
    more investment in crossarms than LECs. The 0.85 factor for electric
    utilities recognizes this difference. These adjustment factors are
    rebuttable.

[^139]: TxCTA *Fee Order* petition at 1; USTA *Fee Order* petition at
    6-9.

[^140]: USTA *Fee Order* petition at 7.

[^141]: *Id.*; *see also* Verizon *Fee Order* recon. comments at 3.

[^142]: USTA *Fee Order* petition at 6-9.

[^143]: TxCTA *Fee Order* petition at 1.

[^144]: Verizon *Fee Order* recon. comments at 3.

[^145]: NCTA *Fee Order* recon. reply at 2-3.

[^146]: *Id.*

[^147]: TxCTA *Fee Order* petition at 1-2; USTA *Fee Order* petition at
    6-9; see *also,* Cole, Raywid, et al. *Ex parte* on *Fee Order*
    reconsideration, November 2000; Verizon *Fee Order* recon. comments
    at 3.

[^148]: *See, e.g.,* USTA CS *Fee Order* petition at 6-9; TxCTA *Fee
    Order* petition at 1-2; Cole, Raywid, et al. *Ex parte* on *Fee
    Order* recon., November 2000.

[^149]: USTA *Fee Order* petition at 6-9.

[^150]: *Id.*

[^151]: *See* USTA *Fee Order* petition at 6-9.

[^152]: *See, e.g.,* TxCTA *Fee Order* petition at 1; *see also* NCTA
    *Fee Order* comments at 24.

[^153]: Gross pole plant should not include costs for pole change-outs
    or other make-ready costs that were paid by the attacher.

[^154]: Teligent *Telecom Order* petition at 7-9.

[^155]: MCI *Telecom Order* petition at 24-25.

[^156]: *Telecom Order* at ¶¶ 120-121. *See also, Local Competition
    Access Reconsideration Order,* FCC 99-266 (1999) at n. 5.

[^157]: *See, e.g.,* GTE *Telecom Order* comments at 1-3 (case-by-case
    only way to go for wireless attachments). *But see*, Teligent
    *Telecom Order* petition at 7-12 (without clear specific guidelines,
    providers of wireless telecommunications services will be
    disadvantaged).

[^158]: 47 C.F.R. § 1.1401-1.1418.

[^159]: *See generally*, the *Telecom Order.*

[^160]: *See Local Competition Order*, 11 FCC Rcd 15499 (1996) at ¶¶
    1143-1186; *see also, Local Competition Access* *Reconsideration
    Order*, FCC 99-266 at ¶¶ 23-46.

[^161]: 47 U.S.C. §224(d),(e).

[^162]: *1977 Senate Report* at 19-21.

[^163]: *Pole Attachment Order,* 2 FCC Rcd 4387 (1978).

[^164]: *Telecom Order* at ¶ 121 n.390

[^165]: *Telecom Order* at ¶ 121. *See also* *Promotion of Competitive
    Networks in Local Telecommunications Markets, First Report and Order
    and Further Notice of Proposed Rulemaking*, WT Docket No. 99-217,
    *Fifth Report and Order and Memorandum Opinion and Order,* CC Docket
    No. 96-98, *and Fourth Report and Order and Memorandum Opinion and
    Order,* CC Docket No. 88-57, 15 FCC Rcd 22983, 23024, ¶ 91(2000)
    (adopting case by case approach to determine rates for access to
    in-building ducts and conduit).

[^166]: *See, e.g.,* Teligent *Telecom Order* petition at 7-9; *see
    also* WinStar *Telecom Order* comments at 13-16.

[^167]: 47 C.F.R. §§ 1.1401-1.1418.

[^168]: *Fee Order* at ¶ 14; *see also, Pole Attachment Order,* 2 FCC
    Rcd 4387 (1987) at ¶ 6; 47 U.S.C. §§ 224(b)(1), (d).

[^169]: To avoid a pole by pole rate calculation, the Commission adopted
    rebuttable presumptions such as an average pole height of 37.5 feet,
    and an average of 13.5 feet of usable space on a pole. *See Second
    Report and Order,* 72 FCC 2d at 69-72; *see also, Telecom Order*, 13
    FCC Rcd 6777 (1998).

[^170]: *Fee Order* at ¶ 19; *see Fee Order Notice,* 12 FCC Rcd at 7449,
    ¶¶ 17-37.

[^171]: *1997 Senate Report* at 20.

[^172]: *Second Report and Order*, 72 FCC 2d at 69-70.

[^173]: *Second Report and Order*, 72 FCC 2d at 69-70; *see also
    Petition to Adopt Rules Concerning Usable Space on Utility Poles,*
    FCC 84-325 (*rel.* July 25, 1984) *(\"Usable Space Order\")* at ¶
    10. This one-foot presumption is affirmed in the *Fee Order* at ¶¶
    18-19.

[^174]: *First Report and Order*, 72 FCC 2d 59; *Second Report and
    Order*, 77 FCC 2d 187, 191-193*; Cable Information Services, Inc. v.
    Appalachian Power Co*., 81 FCC 2d 383 (1980*); Television Cable
    Service, Inc. v. Monongahela Power Co*., 88 FCC 2d 56 (D.C. Cir.
    1981).

[^175]: *See* 72 FCC 2d at 69; 47 C.F.R. § 1.1402(c).

[^176]: *Fee Order* at ¶ 22 (safety space), ¶ 24 (minimum ground
    clearance), and ¶ 26 (30-foot poles); *see* *Fee Order Notice* at ¶¶
    18-20.

[^177]: The ratio of space occupied (presumptive 1 foot) over usable
    space (presumptive 13.5 feet) results in a factor of 0.074 for use
    in calculations of the *Cable Formula*.

[^178]: Overlashing occurs when an attacher physically ties additional
    cables to cables already attached to a pole.

[^179]: *Telecom Order* at ¶ 92.

[^180]: *Telecom Order* at ¶ 92. We noted that we deferred decision to
    the *Fee Order* Notice proceeding on the issue of the effect any
    increased burden, such as wind and weight loading, may have on the
    rate the utility pole owner may charge the host attacher. In the
    *Fee Order*, we declared that weight and wind loading may be a
    consideration in the make-ready plans and expenses, for safety,
    reliability and engineering purposes, but not a consideration in
    calculating the recurring rate. *Fee Order* at ¶¶ 29-30.

[^181]: *See Telecom Order* at ¶ 94.

[^182]: *See, e.g.,* Southern Co. *Fee Order* petition at 14. *But see*,
    WorldCom *Fee Order* recon. opposition at 9.

[^183]: *See, e.g.,* GTE *Fee Order* reply at 13; NCTA *Fee Order*
    comments at 12-16, *Fee Order* reply at 21-22; Ohio Edison *Fee
    Order* comments at 26; SBC *Fee Order* comments at 38-39; TCI *Fee
    Order* comments at 13; Time Warner *Fee Order* comments at 11-13,
    18-19; U S West *Fee Order* comments at 4.

[^184]: *Fee Order* at ¶ 26.

[^185]: UTC/EEI *Fee Order* petition at 9-10*. See, Second Report and
    Order*, 72 FCC 2d 59, 69-70 (*citing* National Electrical Safety
    Code® at Appendix C, at 163, Table 235-5 (1977 ed.) at n. 25.

[^186]: *Fee Order* at ¶ 21-22.

[^187]: *See, e.g.,* American Electric *Fee Order* petition at 11-12;
    UTC/EEI *Fee Order* petition at 9-10.

[^188]: The National Electrical Safety Code® (\"*NESC*\"), published by
    the Institute of Electrical and Electronics Engineers, Inc.
    (\"IEEI\") adopts certain standards that cover basic provisions for
    safeguarding persons from hazards arising from the installation,
    operation, or maintenance of (1) conductors and equipment in
    electric supply stations, and (2) overhead and underground electric
    supply and communication lines. *NESC*, 1997 Edition (published
    August 1, 1996) Abstract and § 1, p. 1. The *NESC* is a voluntary
    standard; however, some editions and some parts have been adopted,
    with or without changes, by some state and local jurisdictional
    authorities. *NESC*, p. vi.

[^189]: WorldCom *Fee Order* recon. opposition at 7-8.

[^190]: *Fee Order* at ¶ 24.

[^191]: *See Telecom Order* at ¶ 43-44.

[^192]: *Telecom Order* at ¶¶ 50-51.

[^193]: *Telecom Order* at ¶ 43 (Unusable Space Factor) & ¶¶ 80-82
    (Usable Space Factor); see *also* *Telecom Order* ¶ 102.

[^194]: Because we are now using a combined formula for calculating the
    *Telecom Formula* rate, we will no longer refer to the separate rate
    calculations for usable and unusable space as space factors.
    Instead, the term space factor refers to the percentage of space
    occupied in either formula that is multiplied by the net cost of a
    bare pole and the carrying charges to determine the maximum rate.

[^195]: *Telecom Order* at ¶¶ 43-54.

[^196]: *See Telecom Order* at ¶ 46.

[^197]: *Telecom Order* at ¶ 54.

[^198]: The statute uses the term \"entities\" not \"telecommunications
    carriers\" when indicating how the costs of unusable space should be
    allocated. 47 U.S.C. § 224(e)(2).

[^199]: *Telecom Order* at ¶ 69.

[^200]: UTC/EEI *Telecom Order* petition at 16-21. *Cf.* ICG *Telecom
    Order* petition at 7-8.

[^201]: ICG *Telecom Order* petition at 8.

[^202]: *See Telecom Order* at ¶¶ 46-47, 50-51, and 54.

[^203]: *See, e.g.,* ICG *Telecom Order* petition at 7-8; NCTA *Telecom
    Order* petition at 5-8; *see also*, AT&T *Telecom Order* comments at
    2-4; Ameritech *Telecom Order* comments at 2-3; MCI *Telecom Order*
    comments at 4-5; Joint Cable Parties *Telecom Order* reply at 3-5;
    Sprint *Telecom Order* comments at 2.

[^204]: *See Conf. Rpt.* at 220 (the Commission shall . . . recognize
    that the entire pole, duct, conduit, or right-of-way other than the
    usable space is of equal benefit to all entities attaching to the
    pole and therefore apportion the cost of the space other than the
    usable space equally among all such attachments).

[^205]: 47 U.S.C. § 224(e)(2).

[^206]: An attaching entity with its own separate attachment, that is an
    affiliate, subsidiary or associate of another attaching entity with
    its own separate attachment, is counted as a separate attaching
    entity unless it is a wholly-owned subsidiary of the other attaching
    entity.

[^207]: *Telecom Order* at ¶¶ 77-79.

[^208]: *Id.* at ¶ 77.

[^209]: *Id.*

[^210]: *A Guide to State and Local Census Geography*, U.S. Census
    Bureau, (*issued* June, 1993), U.S. Department of Commerce,
    Economics and Statistics Administration, at 4-5. We note that an
    urbanized area may contain one or more urban areas. *See also,* SBC
    *Telecom Order* petition at 10-16, *SBC Telecom Order Ex Parte
    Presentations* dated September 24, 1998 and December 16, 1998.

[^211]: We also stated that a utility shall, upon request, provide all
    attaching entities and all entities seeking access the methodology
    and information by which a utility\'s presumption was determined. We
    expect a good faith effort by a utility in establishing its
    presumption and updating it when a change is necessitated. For
    example, when a new attaching entity has a substantial impact on the
    number of attaching entities, the utility\'s presumptive average
    should be modified. This method should be consistent with present
    practice, as we understand most pole attachment agreements \"provide
    for periodic field surveys, generally once every three to seven
    years, to determine which entities have attached what facilities to
    whose poles.\" *Telecom Order* at ¶ 78 (citing ICG *Telecom Order*
    Comments at 37).

[^212]: *See, e.g., Pole Attachment Order*, 2 FCC Rcd 4387 (1987).

[^213]: *Telecom Order* at ¶ 79. *See, e.g.,* *Capital Cities Cable,
    Inc. v. Mountain States Telephone & Telegraph Co.,* 56 RR 2d 393 at
    ¶ 22 (1984) (establishing methodology for developing a statistically
    sound survey).

[^214]: *Telecom Order* at ¶ 79.

[^215]: SBC *Telecom Order* petition at 10-16; USTA *Telecom Order*
    petition at 10-11; UTC/EEI *Telecom Order* petition at 22-23.

[^216]: *See, e.g.,* UTC/EEI *Telecom Order* petition at 22, *Telecom
    Order* comments at 18-19, *Telecom Order* reply at 11-12*; see
    also,* SBC *Telecom Order* petition at 10-16. In its *ex parte*
    presentations, SBC suggested in the alternative to statewide
    presumptions, utilities could develop presumptions by service area
    or by rural and urban, of which the urban would include urban and
    urbanized. *SBC Telecom Order* *Ex Parte Presentations* dated
    September 24, 1998 and December 16, 1998.

[^217]: *See, e.g.,* UTC/EEI *Telecom Order* petition at 22; SBC
    *Telecom Order* petition at 14-15, *SBC Telecom Order* *Ex Parte
    Presentations* dated September 24, 1998 and December 16, 1998; USTA
    *Telecom Order* petition at 10-11; *see also, e.g.,* NCTA *Telecom
    Order* comments at 11-12;

[^218]: *See* UTC/EEI *Telecom Order* comments at 18-19; *SBC Telecom
    Order* *Ex Parte Presentations* dated September 24, 1998 and
    December 16, 1998; *see also* USTA *Telecom Order* *Written Ex
    Parte,* dated November 5, 1998.

[^219]: *See, e. g .,* SBC *Telecom Order* *Ex Parte Presentations*
    dated September 24, 1998 and December 16, 1998 (company\'s service
    areas rarely correspond to geographic designations of Bureau of
    Census).

[^220]: *See, e.g.,* *SBC Telecom Order* *Ex Parte Presentations* dated
    September 24, 1998 and December 16, 1998; *USTA Telecom Order*
    *Written Ex Parte,* dated November 5, 1998.

[^221]: *Telecom Order* at ¶¶ 43-44 (Unusable Space Factor includes the
    use of an average number of attaching entities).

[^222]: *See, e.g.,* NCTA *Telecom Order* comments at 20-22; Comcast
    *Telecom Order* comments at 8-10.

[^223]: SBC *Telecom Order* petition at 10-15, SBC *Telecom Order* *Ex
    Parte Presentations* dated September 24, 1998 and December 16, 1998.

[^224]: USTA *Telecom Order* *Written Ex Parte Presentation* dated
    November 5, 1998.

[^225]: *See Telecom Order Notice* at ¶ 26; *Telecom Order* at ¶¶ 77-78.

[^226]: *See, e.g.,* NCTA *Telecom Order* comments at 20-22; SBC
    *Telecom Order* petition at 10-15, SBC *Telecom Order* *Ex Parte
    Presentations* dated September 24, 1998 and December 16, 1998; USTA
    *Telecom Order* *Written Ex Parte Presentation* dated November 5,
    1998; *see also* UTC/EEI *Telecom Order* reply at 9-10.

[^227]: The service area must be representative of the area for which
    pole attachment rates are being set.

[^228]: *See, e.g.,* SBC *Telecom Order* *Ex Parte Presentations* dated
    September 24, 1998 and December 16, 1998; USTA *Telecom Order*
    *Written Ex Parte Presentation* dated November 5, 1998. *Cf.* NCTA
    *Telecom Order* comments at 20-22.

[^229]: *See, e.g.,* SBC *Telecom Order* *Ex Parte Presentations* dated
    September 24, 1998 and December 16, 1998.

[^230]: *1977 Senate Report* at 19-21.

[^231]: *Telecom Order* at ¶¶ 78-79.

[^232]: *See, e.g.,* SBC *Telecom Order* *Ex Parte Presentations* dated
    September 24, 1998 and December 16, 1998; USTA *Telecom Order*
    *Written Ex Parte Presentation* dated November 5, 1998. *Cf.* NCTA
    *Telecom Order* comments at 20-22.

[^233]: *Accord, e.g.,* Comcast *Telecom Order* comments at 7-11; NCTA
    *Telecom Order* comments at 20-21.

[^234]: *See, e.g.,* Joint Cable Parties *Telecom Order* reply at 9;
    NCTA *Telecom Order* comments at 11-12, *Telecom Order* reply at 6.

[^235]: *Telecom Order* at ¶¶ 78-79.

[^236]: *See, e.g.,* Joint Cable Parties *Telecom Order* reply at 9;
    NCTA *Telecom Order* comments at 11-12, *Telecom Order* reply at 6.
    *But see, e.g.,* MCI *Telecom Order* comments at 6-7; UTC/EEI
    *Telecom Order* petition at 22, *Telecom Order* comments at 18-19,
    *Telecom Order* reply at 11-12.

[^237]: *See* 47 U.S.C. § 224(b), (d-e).

[^238]: *See* USTA *Telecom Order* petition at 6-7; *see also,* MCI
    *Telecom Order* comments at 6-7.

[^239]: *See* ¶ 41 of this *Reconsideration Order*, above.

[^240]: *Telecom Order* at ¶¶ 76-78.

[^241]: AT&T *Telecom Order* comments at 14; Comcast, *et al*., *Telecom
    Order* comments at 8-10.

[^242]: Jonathan Kraushaar, Fiber Deployment Update - End of Year 1996
    released by the Common Carrier Bureau of the Federal Communications
    Commission on August 29, 1997 (\"*Fiber Deployment Update*\"); *see
    also* Comcast, *et. al*., *Telecom Order* comments at 8-10.

[^243]: U S West *Telecom Order* comments at 9 n.25.

[^244]: *Telecom Order* at ¶ 77.

[^245]: *See, e.g.,* USTA *Telecom Order* petition at 6-7; MCI *Telecom
    Order* comments at 6-7.

[^246]: *See Pole Attachment Order*, 2 FCC Rcd 4387 (1987) at ¶ 19 &
    *see also* n. 27.

[^247]: *See, e.g.,* Comcast *Telecom Order* comments at 8-10; NCTA
    *Telecom Order* comments at 20; *see also*, SBC *Telecom Order* *Ex
    Parte Presentations* dated September 24, 1998 and December 16, 1998.

[^248]: American Electric *Fee Order* comments at 8 (*citing* *Annual
    Assessment of Status of Competition in the Market for Delivery of
    Video Programming*, CS Dkt. 96-133 (*rel'd* Jan. 2, 1997) at ¶ 14.

[^249]: *See, e.g.,* AT&T *Telecom Order* comments at 13; NCTA *Telecom
    Order* comments at ; Comcast *Telecom* *Order c*omments at 7-11;
    Joint C able Parties *Telecom Order* recon. comments in opposition
    at 3. *See also*, Seventh Annual Report on Competition in Video
    Markets, CS Docket No. 00-132), (*rel'd* January 8, 2001);

[^250]: *See Deployment of Advanced Telecommunications Capability:
    Second Report,* CC Docket No. 98-146, FCC 00-290 (*rel'd* August
    2000) ("*2000 Advanced Services Report*").

[^251]: Jonathan Kraushaar, Fiber Deployment Update - End of Year 1996
    released by the Common Carrier Bureau of the Federal Communications
    Commission on August 29, 1997 (\"*Fiber Deployment Update*\"); *see
    also* Comcast, et al., comments at 8-10.

[^252]: *Telecom Order* at ¶ 59-62. *See also,* Comcast, et al.,
    *Telecom Order* reply at 8 (cable operators have routinely
    overlashed for 30 years); NCTA *Telecom Order* comments at 5
    (overlashing has been a critical component of cable industry\'s
    construction strategy for decades).

[^253]: *See Conf. Rpt.* at 124, Joint Explanatory Statement of the
    Committee of Conference.

[^254]: The Commission has recognized overlashing as a legitimate and
    desirable practice, especially because utility poles are often
    regarded as essential facilities. *See Overlashing Public Notice*
    (1995); *see also, TCI Cablevision of Oakland County, Inc.*, 12 FCC
    Rcd 21396, 21429 (1997), *aff\'d*, FCC 98-216 (Sept. 4, 1998).

[^255]: *Telecom Order* at ¶ 68; *see also* discussion at ¶¶ 59-64 of
    the *Telecom Order*.

[^256]: *Telecom Order* at ¶ 92.

[^257]: *Telecom Order* at ¶ 69.

[^258]: *Telecom Order* at ¶ 68.

[^259]: *See, e.g.,* MCI *Telecom Order* petition at 8-13; SBC *Telecom
    Order* petition at 7-8; USTA *Telecom Order* petition at 11-12; U
    S West *Telecom Order* petition at 2.

[^260]: *Telecom Order* at ¶ 68, referencing the Preamble to 1996 Act.

[^261]: *See, e.g.,* BellSouth *Telecom Order* comments at 1-2; NCTA
    *Telecom Order* comments at 5-10.

[^262]: *Telecom Order* at ¶ 68.

[^263]: *See Local Competition Order*, 11 FCC Rcd 15499 (1996) at ¶¶
    1161-64; *Telecom Order* at ¶ 68.

[^264]: *See, e.g.,* U S West *Telecom Order* petition at 3-4; *see
    also,* Ameritech *Telecom Order* comments at 4-5; Bell Atlantic
    *Telecom Order* comments at 8; BellSouth *Telecom Order* comments at
    1-2. *Cf. Local Competition Order,* 11 FCC Rcd 15499 at ¶¶ 1161-64;
    *Telecom Order* at ¶68.

[^265]: MCI *Telecom Order* petition at 13; SBC *Telecom Order* petition
    at 7-8; USTA *Telecom Order* petition at 11-12; U S West *Telecom
    Order* petition at 3.

[^266]: *See, e.g.,* U S West *Telecom Order* petition at 3-4. *But
    see*, MCI *Telecom Order* petition at 9; USTA *Telecom Order*
    petition at 11; *cf.* NCTA *Telecom Order* comments at 14.

[^267]: *See Telecom Order* at ¶ 69 (third party overlashing by a
    telecommunications carrier); ¶ 73 & ¶ 94 (discussion of dark fiber),
    ¶ 73.

[^268]: 47 U.S.C. § 224(e).

[^269]: *Telecom Order* at ¶ 94. *Cf.* 47 U.S.C. § 224(d)(1) and 47
    U.S.C. § 224(e)(3).

[^270]: American Electric, *Fee Order* petition at 9-11; UTC/EEI *Fee
    Order* petition at 9-10. *But see* WorldCom *Fee Order* recon.
    comments at 7.

[^271]: National Electric Safety Code.

[^272]: *NESC* at 142-168, Sections 24-26.

[^273]: *See Second Report and Order,* 72 FCC 2d 59, at ¶ 27.

[^274]: 47 U.S.C. § 224(d); *see also, e.g.,* USTA *Fee Order* recon.
    reply at 13-14.

[^275]: *See, e.g.,* *Fee Order* at ¶ 30; *see also* NCTA *Fee Order*
    comments at 15-16.

[^276]: *Telecom Order* at ¶ 92.

[^277]: *Telecom Order* at ¶ 92. We noted that we deferred decision to
    the *Fee Order Notice* proceeding on the issue of the effect any
    increased burden, such as wind and weight loading, may have on the
    rate the utility pole owner may charge the host attacher. In the
    *Fee Order*, we declared that weight and wind loading may be a
    consideration in the make-ready plans and expenses, for safety,
    reliability and engineering purposes, but not a consideration in
    calculating the recurring rate. *Fee Order* at ¶¶ 29-30.

[^278]: ICG *Telecom Order* petition at 11-14; MCI *Telecom Order*
    petition at 8-9.

[^279]: *See Telecom Order* at ¶ 84.

[^280]: *See, e.g.,* ICG *Telecom Order* petition at 11-14, ICG *Ex
    Parte Presentation*, December 9, 1998; *see also*, MCI *Telecom
    Order* petition at 8-9.

[^281]: *See Telecom Order* at ¶ 87, referencing ICG *Telecom Order*
    comments at 39; see *also* discussion, *Telecom Order* at ¶ 85-91.

[^282]: *See, e.g.,* Bell South *Telecom Order* comments at 2; UTC/EEI
    *Telecom Order* comments at 11; NCTA *Telecom Order* comments at
    14-17; SBC *Telecom Order* comments at 9.

[^283]: MCI *Telecom Order* petition at 10 (cable \[attachers\] may deny
    a third party from overlashing, but if they do so, they may not
    subsequently offer telecommunications services because once they
    offer telecommunications services they may not reserve space); *see
    also, e.g.,* SBC *Telecom Order* comments at 19-20 *But see,* NCTA
    *Telecom Order* comments at 15-16, *Telecom Order* reply at 7-8.

[^284]: *See* 47 U.S.C. § 224(a)(1) (\" \'utility\' means any person who
    is a local exchange carrier or an electric, gas, water, steam or
    other public utility, and who owns or controls poles, ducts,
    conduits, or rights-of-way used, in whole or in part, for any wire
    communication\"). *See, e.g.,* MCI *Telecom Order* petition at 8-13;
    *see also*, SBC *Telecom Order* comments at 19-20; TUEC *Telecom
    Order* comments at 5. *But see, e.g.*, Joint Cable Parties *Telecom
    Order* reply at 9-10; NCTA *Telecom Order* comments at 15-16,
    *Telecom Order* reply at 7-8.

[^285]: 47 U.S.C. § 224(f)(1).

[^286]: *See, e.g.,* Joint Cable Parties *Telecom Order* comments at
    9-10; NCTA *Telecom Order* comments at 14-17. However, a
    telecommunications carrier may have certain obligations under 47
    U.S.C. § 251.

[^287]: U S West *Telecom Order* petition at 3-4.

[^288]: U S West *Telecom Order* petition at 4; *see also, e.g.,* AT&T
    *Telecom Order* comments at 4-5; Bell Atlantic *Telecom Order*
    comments at 7; GTE *Telecom Order* reply at 4.

[^289]: 47 U.S.C. § 224(e)(1).

[^290]: *See, e.g., Telecom Order* at ¶ 35.

[^291]: *Telecom Order* at ¶ 68; *see* 47 U.S.C. § 224(e)(2).

[^292]: See ¶¶ 54-57 and ¶¶ 69-74 of this *Reconsideration Order*.

[^293]: *See, e.g.,* UTC/EEI *Telecom Order* petition at 11-12; *see
    also,* Bell Atlantic *Telecom Order* comments at 5.

[^294]: *See, e.g., Closed Captioning Order*, 13 FCC Rcd 19973 (1998) at
    ¶ 41.

[^295]: *Telecom Order* at ¶ 35.

[^296]: *See, e.g.,* Adelphia and Lenfest *Telecom Order* comments at
    11-12; NCTA *Telecom Order* comments at 3-9. Joint Cable Parties
    urge the Commission to reject utility efforts to secure
    competitively sensitive data from cable operators that Joint Cable
    Parties believe would result from certification. Joint Cable Parties
    advise that the New York Public Service Commission similarly
    rejected a proposal to adopt this utility proposal in a 1997 pole
    attachment rulemaking order, *In the Matter of the Proceeding on
    Motion of the Commission to Consider Certain Pole Attachment
    Issues*, New York Pub. Serv. Comm\'n. Case No. 95-C-0341, 1997 N.Y.
    PUC LEXIS 364 (issued and effective June 17, 1997), *recon. denied*,
    1997 N.Y. PUC LEXIS 639 (October 7, 1997). *See* Joint Cable Parties
    *Telecom Order* comments at 19 (referencing prior Commission actions
    denying utility access to such information in *Telecom Order* at ¶
    35; *Marcus Cable Associates, L.P. v. Texas Utilities Electric Co.*,
    12 FCC Rcd 10362, 8 Comm. Reg. (P&F) 1293 (July 21, 1997).

[^297]: *See, e.g.,* Joint Cable Parties *Telecom Order* comments at 19.
    *Cf.* Letter from Meredith J. Jones, Chief, Cable Services Bureau to
    Danny E. Adams, Esq., Kelley Drye & Warren LLP, DA No. 97-131
    (January 17, 1997) regarding unreasonable terms and conditions in
    pole attachment agreements.

[^298]: *See, e.g.,* Bell Atlantic *Telecom Order* petition at 6-7,
    *Telecom Order* reply at 6-7; USTA *Telecom Order* petition at 7-8.

[^299]: SBC *Telecom Order* petition at 7-8.

[^300]: *Telecom Order* at ¶ 73.

[^301]: *See, e.g*., U S West *Telecom Order* petition at 2-3; *Telecom
    Order* at ¶¶ 72-73, 95; *In the Matter of the Public Utility
    Commission of* Texas, 13 FCC Rcd 3460, 3541 n.409 (1997); *see also,
    e.g.,* NCTA *Telecom Order* petition at 7-8; Joint Cable Parties
    *Telecom Order* reply at 1-3.

[^302]: *Telecom Order* at ¶ 73. A telecommunications carrier is, by
    definition, \" . . . any provider of telecommunications services.\"
    47 U.S.C. § 153(44).

[^303]: *NESC* § 2.

[^304]: *See Fee Order at ¶ 77; see also, e.g.,* AT&T *Telecom Order*
    comments at 22; ICG *Telecom Order* comments at 55; UTC/EEI *Fee
    Order* comments at 22, n. 7.

[^305]: *See NESC* § 2; *see also* American Electric *Fee Order*
    comments at 84.

[^306]: *See, e.g.,* Carolina Power *Fee Order* comments at 62, 65-75;
    Duquesne Light *Fee Order* comments at 7; NCTA *Fee Order* comments
    at 40; Ohio Edison *Fee Order* comments at 43; Time Warner *Fee
    Order* comments at 27.

[^307]: *See, e.g.,* MCI *Telecom Order* petition at 14-23; MCI *Telecom
    Order* comments at 2-4 (conduit formula is unworkable); NCTA
    *Telecom Order* petition at 2-5 (assignment of costs raises
    intractable and unnecessary complications into the conduit-rate
    formula. . . no publicly available data on which one can
    disaggregate total conduit investment . . . Commission should
    question whether its initial approach . . . is the best
    interpretation of the \[1996\] Act); *see also*, SBC *Telecom Order*
    petition at 16-17 (clarify method for determining total capacity);
    U S West *Telecom Order* petition at 4-5 (clarify what makes up
    total capacity). *But see, e.g.,* USTA *Telecom Order* petition at
    8-9 (use proposal in original proceeding of Bell Atlantic (Bell
    Atlantic *Telecom Order* comments at 8) that unusable space is all
    spare or excess capacity not actually being used by the conduit
    owner or any attaching entity)

[^308]: *Fee Order* at ¶ 90 *and see Fee Order* at n. 290.

[^309]: *Fee Order* at ¶¶ 82-114.

[^310]: *See* 47 U.S.C. § 224(e)(3).

[^311]: *Fee Order* at ¶¶ 82-88.

[^312]: *See Fee Order* at ¶¶ 82-114 & Appendix C.

[^313]: For detailed formula methodologies and regulatory accounts to be
    used for calculating a maximum rate allowable, *see* Appendix C of
    *Fee Order*.

[^314]: *See, e.g.,* FCC Part 32 Account 2441 (47 C.F.R. Part 32, §
    32.2441); FERC Account 366 (18 C.F.R. Part 101, Account 366); *see
    also*, discussion at ¶ 70, above.

[^315]: 47 C.F.R. § 32.2441(a)(1999).

[^316]: 18 C.F.R. Part 101, Description of Accounts.

[^317]: *Fee Order* at ¶ 89.

[^318]: *Fee Order* at ¶ 89.

[^319]: SBC *Fee Order* comments at 72--73.

[^320]: USTA *Fee Order* petition at 5-6.

[^321]: USTA *Fee Order* petition at 5.

[^322]: Verizon *Fee Order* recon. comments at 2-3.

[^323]: Verizon *Fee Order* recon. comments at 2-3.

[^324]: 47 U.S.C. § 224(d)(1). *See, e.g.,* NCTA *Telecom Order*
    petition at 4-5; *see also*, Joint Cable Parties *Telecom Order*
    comments at 6-9.

[^325]: *See, e.g.,* MCI *Telecom Order* comments at 3-4; *see also*:
    AT&T *Fee Order* *Telecom Order* comments at 23; Carolina Power *Fee
    Order* *Telecom Order* comments at 63; Duquesne Light *Fee Order*
    *Telecom Order* comments at 7--8; Ohio Edison *Fee Order* *Telecom
    Order* comments at 35; SBC *Fee Order* *Telecom Order* comments at
    30--31; *see also*, *Local Competition Access Reconsideration
    Order*, FCC99-266 (1999) at ¶ 69.

[^326]: *See, e.g.,* SBC *Fee Order* *Telecom Order* comments at 32
    (imposed as condition of granting right-of-way).

[^327]: *See Local Competition Order* at ¶¶ 1168-69; *see also,* ConEd
    *Fee Order* comments at 9--11; Duquesne Light *Fee Order* comments
    at 8; Ohio Edison *Fee Order* comments at 35.

[^328]: *Local Competition Order,* 11 FCC Rcd 15499, 16077-79 (1996) at
    ¶¶ 1165-1170; *see also Local Competition Access Reconsideration
    Order,* 14 FCC Rcd 18049 (1999) at ¶¶ 65-70.

[^329]: *Fee Order* at ¶ 92.

[^330]: *Second Report and Order,* 72 FCC 2d 59 (1979); *see also,* NCTA
    *Fee Order* Reply at 46-47.

[^331]: *Telecom Order* at ¶ 115 (NESC rule relied on by the electric
    utilities does not prohibit the coexistence of electric and
    communications facilities in a conduit, . . . the rule conditions
    the coexistence on the maintenance and operation being performed by
    the utility, citing NESC Rule 341(A)(6) that supply, control, and
    communication cables shall not be installed in the same duct unless
    the cables are maintained or operated by the same utility). *Id.*
    n.374.

[^332]: *Telecom Order* at ¶ 115.

[^333]: *See Greater Media, Inc. v. New England Telephone and
    Telegraph,* Massachusetts D.P.U. 91-218 (1992).

[^334]: 11 FCC Rcd 11202 (1996).

[^335]: *Telecom Order* at ¶ 115. In the alternative, the utility can
    install inner duct as part of its make‑ready, charging the attaching
    entity the percentage of the make‑ready costs for the inner ducting
    that corresponds to the percentage of inner duct the attachment
    occupies in relation to the number of inner ducts installed (*i.e.*,
    utility installs 6 inner ducts in a previously open duct, the pole
    attachment will occupy only one of those inner ducts, the attaching
    entity pays one sixth of the costs of the inner duct installation as
    part of its make‑ready expenses).

[^336]: *See, e.g.,* American Electric *Fee Order* comments at 85--87;
    ConEd *Fee Order* comments at 5--6; Duquesne Light *Fee Order*
    comments at 8; Edison Electric/UTC *Fee Order* comments at 20--21.

[^337]: *See, e.g.,* MCI *Telecom Order* petition at 14-23; NCTA
    *Telecom Order* petition at 2-5; USTA *Telecom Order* petition at
    8-9; U S West *Telecom Order* petition at 4-5.

[^338]: *See, e.g.,* UTC/EEI *Telecom Order* comments at 13.

[^339]: Joint Cable Parties *Telecom Order* reply at 7-8; SBC *Telecom
    Order* comments at 9-12.

[^340]: *See, e.g.,* American Electric *Fee Order* petition at 11-12;
    Southern Co. *Fee Order* petition at ii.

[^341]: WorldCom *Fee Order* recon. opposition at 9-10.

[^342]: *Telecom Order* at ¶ 115; *see also Fee Order* at ¶¶ 88, 93,
    Appendices C-3 & C-4. *But see, e.g.,* SBC *Telecom Order* comments
    at 9-10.

[^343]: *See, e.g.,* MCI *Telecom Order* petition at 20-23
    (one-third-duct presumption); NCTA *Telecom Order* comments at 25,
    *Fee Order* comments at 42-43 (adopt a one-quarter duct
    presumption). *But see*, Joint Cable Parties *Telecom Order* reply
    at 7-8; SBC *Telecom Order* comments at 9-10.

[^344]: *Telecom Order* at ¶¶ 114-15; *See, e.g.,* American Electric
    *Telecom Order* comments at 54.

[^345]: *See Fee Order* at ¶ 94, discussion at ¶¶ 92-94.

[^346]: *See Fee Order* at ¶ 94; *see also* Verizon *Fee Order* recon.
    comments at 2-3 (it is the electric supply cables, not
    communications cables, that effectively exclude other party's cables
    from occupying the same duct.); WorldCom *Fee Order* recon. comments
    at 10.

[^347]: *See, e.g., NESC* Rule 341(A)(6).

[^348]: *See,* *Fee Order* at ¶¶ 92-95(conduit formula presumptions are
    adjusted for the presence of inner duct).

[^349]: *Fee Order* at ¶ 94-95.

[^350]: *Fee Order* at ¶ 95, *see also* Appendices C-3 & C-4.

[^351]: *Pole Attachment Order*, 2 FCC Rcd 4387 (1987) at ¶ 37.

[^352]: *Second Report and Order*, 72 FCC 2d 59 at ¶ 32.

[^353]: 47 U.S.C. § 32.2441.

[^354]: *Part 32 Guidance Letter,* 5 FCC Rcd 3898 (1990). *See* ARMIS
    Report 43-02, row 0470.

[^355]: *Part 32 Guidance Letter,* 5 FCC Rcd 3898 (1990). *See* ARMIS
    Report 43-02, row 0470.

[^356]: 12 FCC Rcd 7449 (1997) at Appendix C.

[^357]: *See* Appendices F-1 and F-2 for LEC and electric utility
    conduit formulas.

[^358]: *See, e.g.,* Bell South *Fee Order* comments at 8; GTE *Fee
    Order* comments at 14; SBC *Fee Order* comments at 20.

[^359]: Bell South *Fee Order* comments at 8.

[^360]: NCTA *Fee Order* reply at 33--34.

[^361]: *Fee Order* at ¶ 101 & n.324.

[^362]: Biennial Regulatory Review, Review of Accounting and Cost
    Allocation Requirements, FCC 99-106 at ¶ 15 (*rel*. June 30, 1999)
    and Biennial Regulatory Review, Review of ARMIS Reporting
    Requirements, FCC 99-107 at ¶ 13 (*rel*. June 30, 1999) (\"we are
    requiring \[LECs\] to continue to maintain subsidiary records to
    provide the information needed for the pole attachment formula. . .
    . The Commission is currently considering issues regarding the pole
    attachment formulas. *See Amendment of Rules and Policies Governing
    Pole Attachments*, CS Docket No. 97-98, Notice of Proposed
    Rulemaking, 12 FCC Rcd 7449 (1997). When a report and order is
    released, we will specify the subsidiary record categories carriers
    must maintain in order to provide data for the pole attachment
    formulas\")*.*

[^363]: *See* Biennial Regulatory Review, Review of ARMIS Reporting
    Requirements, FCC 99-107 at ¶ 13 (*rel*. June 30, 1999).

[^364]: *See* 18 C.F.R. Part 101 (stating the accounts associated with
    the conduit attachment formula for electric utilities); *see also*
    47 C.F.R. Part 32 (stating accounts associated with the conduit
    formula for LECs).

[^365]: 18 C.F.R. Part 101.

[^366]: *Id.*

[^367]: UTC/EEI *Fee Order* p*e*tition at 17-19.

[^368]: UTC/EEI *Fee Order* petition at 17, referencing *Fee Order* at ¶
    85 (citing *Fee Order c*omments of Carolina Power at 65, ConEd *Fee
    Order* comments at 3, UTC/EEI *Fee Order* comments at 18-19, Dayton
    P&L *Fee Order* comments at 3, Public Service Co. of NM *Fee Order*
    comments at 5).

[^369]: *See, e.g.,* UTC/EEI *Fee Order* comments at 24.

[^370]: UTC/EEI *Fee Order* comments at 16.

[^371]: UTC/EEI *Fee Order* petition at 12; Southern Co. *Fee Order*
    petition at 12; USTA *Fee Order* petition at 2, supported by Verizon
    *Fee Order* recon. comments at 2.

[^372]: *Fee Order* at ¶ 42.

[^373]: *Fee Order* at ¶ 44.

[^374]: *Pole Attachment Order*, 2 FCC Rcd at 4387, 4402-03, Attachment
    B (1987).

[^375]: *Fee Order* at ¶ 44.

[^376]: *New USOA - Part 32 Adoption,* 51 Fed. Reg. 24745 (1986) and 51
    Fed. Reg. 43493 (1986); *recon. in part,* 2 FCC Rcd 1086 (1987).

[^377]: Common Carrier Bureau, DA 89-503 (*rel*., May 22, 1989).

[^378]: *Part 32 Guidance Letter*, 5 FCC Rcd 3898 (1990).

[^379]: 2 FCC Rcd 4387, 4402-03 (1987).

[^380]: Prior to 1996, the Common Carrier Bureau exercised authority for
    pole attachment regulation. In 1996, we amended our rules regarding
    the functions of the Cable Services Bureau to provide the delegated
    authority for pole attachment regulation to the Cable Services
    Bureau. *See* Order *In The Matter Of Amendment of Part 0 of The
    Commission\'s Rules To Make Changes In The Functions of the Cable
    Services Bureau*, 11 FCC Rcd. 19697 (Dec. 5, 1996).

[^381]: *Part 32 Guidance Letter*, 5 FCC Rcd 3898 (1990).

[^382]: *Fee Order in passim* and at Appendix C.

[^383]: LECs maintain their Part 32 accounts and file their annual
    operating costs with the Commission\'s Automated Reporting and
    Management Information System (\"ARMIS\"). See Reporting
    *Requirements for Certain Class A and Tier 1 Telephone Companies
    (Parts 31, 43, 67 and 69 of the FCC\'s Rules)*, CC Docket No.
    86‑182, 2 FCC Rcd 5770 (1987), *modified on recon*., 3 FCC Rcd 6375
    (1988) *(released* Oct. 14, 1988) (*\"ARMIS Order*\").

[^384]: *Fee Order* at ¶ 52.

[^385]: USTA *Fee Order* petition at 2-4; Verizon *Fee Order* comments
    at 2.

[^386]: USTA *Fee Order* petition at 2-4.

[^387]: *Id.*

[^388]: *Alabama Power v. FCC*, 773 F.2d 362 (D.C. Cir. 1985).

[^389]: NCTA *Fee Order* reply comments, Declaration of Patricia D.
    Kravtin at 7.

[^390]: *See* 47 C.F.R. § 32.6721.

[^391]: *See* 47 C.F.R. § 32.6722.

[^392]: *See* 47 C.F.R. § 32.6723.

[^393]: *See* 47 C.F.R. § 32.6724.

[^394]: *See* 47 C.F.R. § 32.6725.

[^395]: *See* 47 C.F.R. § 32.6726.

[^396]: *See* 47 C.F.R. § 32.6727.

[^397]: *See* 47 C.F.R. § 32.6728.

[^398]: 773 F.2d 362 (D.C.Cir. 1985).

[^399]: The court in *Alabama Power Co. v. FCC* found it appropriate to
    divide total administrative expenses by total plant investment to
    arrive at a percentage of investment representing administrative
    expenses. *Alabama Power Co. v. FCC,* 773 F.2d at 369-370.

[^400]: *See, e.g.,* *1977 Senate Report* at 19-21.

[^401]: For example, Account 6712 includes \"costs incurred in
    developing and evaluating long-term courses of action for the future
    operations of the company. This includes performing corporate
    organization and integrated long-range planning, including
    management studies, options and contingency plans, and economic
    strategic analysis. *See* 47 C.F.R. § 32.6712.

[^402]: *Fee Order* at ¶¶ 57-61.

[^403]: *Id.*

[^404]: *See* 18 C.F.R. Part 101.

[^405]: *See, e.g.,* Southern Co. *Fee Order* petition at 11-13; UTC/EEI
    *Fee Order* petition at 16-17. *But see* NCTA *Fee Order* recon.
    reply at 2.

[^406]: *See, e.g.,* NCTA *Fee Order* comments at 37; Time Warner *Fee
    Order* comments at 26. Account 593 also includes some non-pole
    related expenses, such as expenses for the cleaning of insulators
    and bushings, various functions in support of crossarms, the capital
    costs of which are factored out of the net cost of a bare pole as
    discussed elsewhere in this *Order*; *see also* 18 C.F.R. Part 101,
    Account 590, 593 description of accounts.

[^407]: *See* Edison Electric/UTC *Fee Order* comments at 26; Carolina
    Power *Fee Order* comments at 68--75; Ohio Edison *Fee Order*
    comments at 42--45.

[^408]: 18 C.F.R. Part 101, Description of Accounts.

[^409]: 18 C.F.R. Part 101, Description of Accounts.

[^410]: 47 U.S.C. § 224(d)(1).

[^411]: The inclusion of Accounts 389-399 in Southern Co.'s petition may
    have been an error. Southern Co. provides absolutely no information
    or arguments in support of including general plant investment
    accounts as pole investment.

[^412]: 18 CFR § 101.364.

[^413]: Pole maintenance expenses are not included in the investment
    calculation. Our formula includes pole maintenance expenses in the
    carrying charges.

[^414]: *See, e.g.,* Southern Co. *Fee Order* comments at 46.

[^415]: *See, e.g.,* Southern Co. *Fee Order* comments at 48.

[^416]: 18 C.F.R. § 101.367.

[^417]: 18 C.F.R. § 101.366.

[^418]: 18 CFR § 101.369 (emphasis added).

[^419]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq.*,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (\"CWAAA\"). Title
    II of the CWAAA is the Small Business Regulatory Enforcement
    Fairness Act of 1996 (\"SBREFA\").

[^420]: *Notice of Proposed Rulemaking*, CS Docket No. 97-151, 12 FCC
    Rcd 11725, 11741-51, ¶¶ 45-74 (1997).

[^421]: *Fee Order*, 15 FCC Rcd 6453 (2000).

[^422]: *Telecom Order,* 13 FCC Rcd 6777 (1998).

[^423]: 5 U.S.C. § 605(b).

[^424]: 5 U.S.C. § 601(6).

[^425]: 5 U.S.C. § 601(3) (incorporating by reference the definitions of
    \"small business concern\" in 15 U.S.C. § 632). Pursuant to 5 U.S.C.
    § 601(3), the statutory definition of a small business applies
    \"unless an agency, after consultation with the Office of Advocacy
    of the Small Business Administration and after opportunity for
    public comment, establishes one or more \`definitions\' of such term
    which are appropriate to the activities of the agency and publishes
    such definitions in the Federal Register.\"

[^426]: Small Business Act, 15 U.S.C. § 632.

[^427]: 47 C.F.R. § 1.1401-1.1418.

[^428]: *Reconsideration Order* at ¶ 51.

[^429]: *Id.* at ¶ 63.

[^430]: *Id*. at ¶¶ 67-68.

[^431]: *Id*. at ¶ 22, *et seq*.