**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

In the Matter of )

)

)

The Petition of the State of Minnesota )

for a Declaratory Ruling Regarding the )

Effect of Section 253 on an Agreement ) CC Docket No. 98-1

to Install Fiber Optic Wholesale )

Transport Capacity in State Freeway )

Rights-of-Way )

)

)

**MEMORANDUM OPINION AND ORDER**

**Adopted: December 20, 1999 Released: December 23, 1999**

By the Commission:

**TABLE OF CONTENTS**

**Paragraph**

**Error! No table of contents entries found.**

Our conclusion here is fully consistent with the *New England Preemption
Order*. In that order the Commission found that the provision of
payphones was a telecommunications service, and that the city\'s
restrictions prohibited a class of carriers from providing this
telecommunications service contrary to section 253(a). Whether the state
or local requirement affected the provision of telecommunications
services was the important issue, not the purported subject matter of
the restriction.[^1] We use the same analysis here \-- whether the
requirement has the effect of prohibiting the provision of any
telecommunications service.

**2.The Agreement Creates a Legal Requirement**

Similarly, we cannot agree with ITS America\'s argument that the
Agreement does not create a legal requirement to which section 253(a)
could apply. As we understand ITS America\'s filing, ITS America asserts
that section 253(a) would not be violated if Minnesota acquired fiber
optic capacity for its own purposes. Because Minnesota could contract
for fiber capacity for itself, ITS America argues that Minnesota also
has the authority to contract out the management of its rights-of-way to
a single entity on an exclusive basis.[^2] Therefore, ITS America argues
that section 253 limits the Commission to reviewing Minnesota\'s
procurement laws. ITS America contends that the Commission does not have
the authority to \"review contractual arrangements entered into between
the State and private parties pursuant to the lawful exercise of its
unchallenged procurement laws and procedures under section 253.\"[^3]
Thus, according to ITS America the \"only \'statute, regulation or other
legal requirement\' that could be subject to section 253 scrutiny, would
be the state\'s procurement laws or a state law that permits the state
or municipality to offer telecommunications services in competition with
commercial telecommunications service providers.\"[^4] In other words,
ITS America appears to be arguing that the Agreement itself does not
create a legal requirement subject to section 253(a).

We are not persuaded by ITS America\'s arguments. We conclude that the
Agreement does rise to the level of a \"statute, regulation, or legal
requirement,\" and that section 253(a) applies to the Agreement itself,
not just the State\'s procurement laws.[^5] Although the Agreement is
not a statute or regulation, it grants Developer exclusive physical
access to certain freeway rights-of-way. Awarding Developer exclusive
physical access to these rights-of-way as part of a contract legally
binds the State to deny other entities permits for access to these
freeway rights-of-way. Therefore, the Agreement between the Developer
and the State creates a \"legal requirement\" that prevents the State
from granting potential competitors access to these freeway
rights-of-way. In light of this, we see no reason why application of
section 253(a) would be limited to Minnesota\'s procurement statutes as
opposed to the Agreement.[^6]

We conclude that Congress intended that the phrase, \"State or local
statute or regulation, or other State or local legal requirement\" in
section 253(a) be interpreted broadly. The fact that Congress included
the term \"other legal requirements\" within the scope of section 253(a)
recognizes that State and local barriers to entry could come from
sources other than statutes and regulations.[^7] The use of this
language also indicates that section 253(a) was meant to capture a broad
range of state and local actions that prohibit or have the effect of
prohibiting entities from providing telecommunications services. We
believe that interpreting the term \"legal requirement\" broadly, best
fulfills Congress\' desire to ensure that states and localities do not
thwart the development of competition. Our conclusion, that Congress
intended this language to be interpreted broadly, is reinforced by the
scope of section 253(d). Section 253(d) directs the Commission to
preempt any statute, regulation, or legal requirement *permitted* or
imposed by a state or local government if it contravenes sections 253(a)
or (b).[^8] A more restrictive interpretation of the term \"other legal
requirements\" easily could permit state and local restrictions on
competition to escape preemption based solely on the way in which action
was structured. We do not believe that Congress intended this result.

As discussed above, we will look at the effect of the state or local
government\'s action to determine whether section 253 is applicable. In
this case, Minnesota is not merely acquiring fiber optic capacity for
its own use; it is providing a private party with exclusive physical
access to the freeway rights-of-way. The fact that Developer can use its
facilities along these rights-of-way to provide wholesale
telecommunications capacity to others and retail telecommunications
service through an affiliate,[^9] has the potential to adversely affect
competitors that do not have similar access. This situation is very
different from a traditional government procurement of
telecommunications facilities or services.

**C. Section 253(a) Analysis**

Minnesota fails to show that the Agreement does not have the potential
to violate section 253(a). In particular, we are concerned that the
Agreement has the potential to deprive competitors of the ability to
compete on a facilities basis. As the Commission concluded in the *Texas
Preemption Order*, such a restriction would violate section 253(a).

**1. Precedent from the *Texas Preemption Order***

In the *Texas Preemption Order*, the Commission preempted state-imposed
build-out requirements on two separate grounds.[^10] First, the
Commission concluded that section 253(a) bars state or local
requirements that restrict the means or facilities through which a party
is able to provide service. In particular, the Commission found that new
entrants must be able to choose whether to resell incumbent local
exchange carrier (LEC) services, obtain incumbent LEC unbundled network
elements, utilize their own facilities, or employ any combination of
these three options. The Commission reached this conclusion by reading
section 253(a) and the statutory definition of \"telecommunications
service\" together. When considered together, these sections provide
that no state or local requirement may prohibit or have the effect of
prohibiting any entity from providing any offering of telecommunications
directly to the public for a fee *regardless of the facilities used*. By
requiring competing carriers to provide service by building their own
facilities, the Texas law precluded the other forms of entry
contemplated by the Act.[^11] The Commission found that other provisions
of the Act supported this interpretation of section 253(a).[^12] As a
second, independent basis for the decision, the Commission found that
enforcement of the build-out requirements would have the effect of
prohibiting certain carriers from providing any telecommunications
service contrary to section 253(a) because \"the substantial financial
investment\" required to meet the build-out requirement effectively
precluded any entry at all.[^13]

As discussed below, our concern that the Agreement may have the effect
of prohibiting facilities-based entry is premised on evidence in the
record that utilizing rights‑of-way other than the freeway rights-of-way
to install telecommunications infrastructure is substantially more
expensive than using the freeway rights-of-way. The evidence in the
present record precludes us from concluding that the Agreement will not
have the effect of prohibiting facilities-based competition because of
the availability of alternative rights-of-way, the existence of excess
fiber optic capacity, or access to Developer\'s capacity. We are very
concerned that giving Developer exclusive physical access to
rights-of-way that are inherently less costly to use has the potential
to prevent facilities-based entry by certain other carriers that cannot
use these rights-of-way. This would be inconsistent with section 253(a)
and the Commission\'s decision in the *Texas Preemption Order*. On the
other hand, the Agreement could be implemented in a manner that does not
contravene section 253(a), as indicated elsewhere.[^14]

**2.Alternative Rights-of-Way**

Minnesota fails to convince us that the existence of alternative
rights-of-way means that the Agreement does not have the potential to
prevent certain carriers from providing facilities-based services.
Minnesota argues that, although the Agreement precludes competitors from
having physical access to freeway rights-of-way, carriers wishing to
provide telecommunications services can construct their own fiber optic
facilities using alternative rights-of-way. Parties opposing grant of
the Petition claim that \"there are distinct cost advantages of
constructing a telecommunications network over freeway rights-of-way in
Minnesota, as opposed to using other rights-of-way that are purportedly
available to competitors.\"[^15] These commenters claim that this cost
differential is substantial enough to make it infeasible for a
competitor to use alternative rights-of-way to provide facilities-based
services in competition with the Developer or entities using
Developer\'s services. Evidence on the record indicates that the cost of
using the alternative rights-of-way is not competitive with using of the
freeway rights-of-way, to serve communities along the freeway\'s route.

**a. Gas, Electric, and Oil Pipeline Utility Rights-of-Way**

The record does not support Minnesota\'s contention that utility
rights-of-way offer suitable alternatives to use of the freeway
rights-of-way. Minnesota claims that there are many sources of
alternative rights-of-way within the state,[^16] including utilities,
such as gas pipelines, oil pipelines, and electric power lines.[^17]
Opponents claim that these utility rights-of-way do not provide a
practical alternative to freeway rights-of-way, because: (1) other than
electric utilities, they are under no legal requirement to allow
telecommunications providers access to their rights-of-way; [^18] (2)
utilities are potential competitors who may not want to share their
rights-of-way with other telecommunications providers;[^19] (3) many
pipeline companies and electric utilities lack perfected easements that
would allow telecommunications uses of the property;[^20] (4) pipeline
companies and electric utilities seek to minimize the risk of accidents
by locating their facilities away from population centers, and, as a
result, are not always the most direct route between population
centers;[^21] and, (5) pipeline companies and electric utilities may
also deny access to their rights-of-way for safety reasons or lack of
space.[^22] Minnesota has not refuted these claims by its opponents.
Therefore, we cannot find that Minnesota has demonstrated that this set
of rights-of-way provides a viable, competitive alternative to the
freeway rights-of-way.

**b. Railroad Rights-of-Way**

There is also conflicting evidence concerning Minnesota\'s claim that
railroad rights-of-way provide a practical alternative for
facilities-based competitors. The MTA asserts that the railroads charge
high fees for access to their rights-of-way.[^23] The MTA also states
that railroad crews must be assigned to insure the safety of workers
installing fiber optic cable. In addition, it asserts that installation
of fiber optic facilities takes longer because work must be stopped when
trains pass through construction areas.[^24] The MTA estimates that the
cost of using railroad rights-of-ways is twice that of using the freeway
rights-of-way.[^25] Minnesota counters these arguments by stating that
MCI and Sprint have installed fiber in railroad rights-of-way in
Minnesota and that Qwest plans to install fiber throughout the nation on
railroad rights-of-way.[^26] Prior commercial use of railroad
rights-of-way does not demonstrate that granting exclusive physical
access to freeway rights-of-way will not have the effect of making
future fiber optic construction on railroad rights-of-way economically
unattractive in Minnesota. Indeed, it appears that some entities used
the railroad rights-of-ways because the freeway rights-of-way were not
available and it was easier to negotiate the necessary access.[^27] We
conclude that Minnesota has not refuted opponents\' claims that using
railroad rights-of-way would be substantially more expensive than using
the freeway rights-of-way to install fiber.

**c. State Trunk Highway Rights-of-Way**

Based on the current record, we cannot agree with Minnesota that
rights-of-way on state trunk highways provide a reasonable, competitive,
alternative to the use of freeway rights-of-way for the installation of
fiber optic facilities. To the contrary, the record demonstrates that
freeway rights-of-way have inherent advantages over state trunk highway
rights-of-way. Parties challenging the Agreement point to three factors
that make it more efficient and less expensive to use the freeway
rights-of-way: (1) it is less expensive and less time consuming to
negotiate and obtain permission to use freeway rights-of-way; (2)
freeways connect major population centers more directly than alternative
rights-of-way; and, (3) it is less expensive to install fiber on freeway
rights-of-way because there are fewer obstacles such as cross streets,
and no other utilities in the right-of-way, for example. Each of these
differences is discussed below.

It appears that it would be more costly and time-consuming to obtain
permission to use state trunk highway rights-of-way than to obtain
permission to use the freeway rights-of-way. A carrier wishing to use
the state trunk highway system would need to negotiate and obtain
permits from MnDOT and all of the municipalities through which the state
trunk highway passes in order to install fiber in these
rights-of-way.[^28] An entity using the freeway rights-of-way would only
need to obtain MnDOT\'s approval. In this regard, we note that at least
two requests for preemption filed with the Commission have involved
refusals by local officials to grant franchises or rights-of-way permits
required for local exchange competition.[^29]

It also appears, based on the present record, that it is more expensive
to use the state trunk highway rights-of-way rather than the freeway
rights-of-way because the distance between major population centers
measured along state trunk highways is greater than the distance between
the same points measured along the freeways.[^30] According to the MTA,
the distance over the trunk highway routes is approximately 10 percent
greater than the distance over the freeway routes.[^31] As a result,
even if the price of installing fiber on both types of rights-of-way is
the same per mile \-- which, as discussed below, does not appear to be
the case \-- the cost of using state trunk highway rights-of-way would
be greater because the routing of the state trunk highway is less direct
than the routing of the freeways.

It also appears to be more expensive to install fiber optic transmission
facilities along the state trunk highway system than it is to use
freeway rights-of-way.[^32] Opponents of the Agreement note that
freeways are controlled-access roadways with relatively little
interference from cross-streets and other obstacles,[^33] such as sewer
lines, electric lines, gas pipes, or other objects buried in the
rights-of-way.[^34] Because there are fewer obstacles, using the freeway
rights-of-way will require less engineering and planning than use of the
state trunk highway rights-of-way.[^35]

**d. Cost Studies**

Both Minnesota and the MTA submit cost studies to support their
respective positions on the cost differential between using freeway
rather than state trunk highway rights-of-way. Based on the evidence in
the record, we are unable to determine whether the cost difference would
prevent the provision of telecommunications services by certain
entities.

At the outset, we cannot accept Minnesota\'s assertion that cost
comparisons must reflect Developer\'s state-wide transmission network,
including installation costs for both rural and urban areas. In
determining whether the Agreement could have the effect of prohibiting
\"any entity\" from providing telecommunications service, we conclude
that it is appropriate to consider point-to-point cost comparisons since
a competitor may wish to use the freeway rights-of-way for particular
point-to-point connections. For example, a local exchange carrier may
wish to use the freeway rights-of-way to connect its existing switch to
facilities in another exchange in order to provide competitive local
exchange service. Other carriers may only be interested in providing
facilities-based services to specific areas. For such carriers, the
relevant consideration in determining whether they can compete
effectively in providing such service is a point-to-point comparison.
Therefore, in conducting this analysis, we will compare the cost of
installing capacity between specific points utilizing freeway
rights-of-way versus using state trunk highway rights-of-way between the
same points, and not Developer\'s cost of installing a fiber network in
Minnesota.[^36]

Minnesota fails to convince us that the cost differential between using
the state trunk highway rights-of-way and the freeway rights-of-way for
the installation of fiber optic facilities will be insubstantial when
considered in the context of the competitive telecommunications
industry, and thus unlikely to adversely affect entry decisions. MTA and
MFS assert that the cost of installing fiber along the freeway is
approximately 30 percent less than the cost of installing fiber along
the state trunk highway.[^37] Minnesota appears to concede that the cost
differential for fiber installation is between 11 and 21 percent.[^38]

Moreover, these cost studies do not attempt to quantify all of the
advantages of using the freeway rights-of-way. For example, they do not
reflect the effect of the administrative costs and delays of having to
obtain multiple permits from multiple localities when using the trunk
highway system.[^39] We also note that using the freeway rights-of-way
may improve reliability and lessen maintenance costs since fiber
installed on the freeway rights-of-way is less likely to be
unintentionally cut because the right-of-way is not shared with other
users. For a carrier wishing to provide competitive local exchange
service from a remote switch, the reliability of the connection to the
remote switch could be critical. A cut in this cable could result in
widespread service disruptions for its customers.

Minnesota also argues that the cost differential claimed by MTA shrinks
to a negligible amount once the Developer\'s full costs are taken into
account. Pursuant to the Agreement, Developer will provide the state
with a variety of benefits, including at least 20 percent of the
network\'s lit capacity as well as some dark fiber without charge. The
Developer must also bear maintenance costs, provide up to \$5 million
worth of facilities and services for Minnesota\'s ITS applications and
lay fiber in \"less profitable\" rural areas. The Developer must also
pay prevailing wage rates, which competing companies do not. According
to the state, when all of these costs are included, the Developer will
not have a cost advantage over carriers utilizing other rights-of-way.

We cannot agree with this analysis. We believe the appropriate
comparison must be between what it would cost an efficient carrier to
provide facilities-based services using freeway rights-of-way versus
state trunk highways. We do not believe that it is appropriate to
include in this comparison the additional cost of the benefits that the
state is able to extract from Developer only in exchange for granting
exclusive physical access to these valuable freeway rights-of-way.
Indeed, the state\'s argument that the Developer\'s costs should reflect
these benefits is premised on the state\'s position that it would not
permit anyone to use the freeway rights-of-way unless they agreed to
provide the requested benefits. We believe such an extraction of
benefits in exchange for exclusive physical access to rights-of-way is
fundamentally inconsistent with the 1996 Act, which endeavors to replace
exclusive monopoly rights with open competition.

Moreover, it would be an ironic result if a state could seek to avoid a
finding of a potential section 253(a) violation through the expedient of
claiming it may impose excessive requirements on users of public
rights-of-way. Section 253(c) was specifically designed to avoid such a
result. That section permits states and local governments to avoid
preemption for section 253(a) violations when the state or local
government\'s management of public rights-of-way are implicated, and the
state requires \"fair and reasonable compensation from telecommunication
providers . . . for use of public rights-of-way on a nondiscriminatory
basis.\"[^40] We do not believe that the benefits extracted in exchange
for access to the freeway rights-of-way in this instance meet the \"fair
and reasonable compensation\" standard laid out in section 253(c).[^41]

**3.Existing Fiber Capacity and the Ability to Expand It**

We also disagree with Minnesota\'s contention that the Agreement is
consistent with section 253(a) of the Act because competitors can
readily obtain fiber optic capacity on existing networks and resell it.
In support of this assertion, Minnesota argues that there is excess
fiber optic capacity in Minnesota, and that current capacity can be
expanded.[^42] Minnesota asserts that only 15 percent of the fiber optic
capacity in Minnesota is lit. Furthermore, the State argues that the
most cost-effective means of increasing capacity is to upgrade the
electronics on existing systems, rather than install new fiber.[^43] As
a result, Minnesota argues that current competitors will not face
capacity constraints and that new entrants will be able to obtain
transport capacity for resale from Developer and other providers at
competitive market-based prices.[^44]

This argument, however, only addresses the potential for entry through
resale. As discussed above, we believe that section 253(a) bars state or
local action that makes any of the three entry methods unavailable to
competitors.[^45] Minnesota\'s argument that current providers can
expand capacity at less cost than installing new fiber does not address
the potential adverse effect of the Agreement on new entrants that wish
to provide telecommunications service by constructing their own
facilities.[^46] Nor would Minnesota\'s argument address the effect of
the Agreement on an existing telecommunications service provider that
wishes to expand the geographic scope of its facilities. The existence
of spare fiber optic capacity merely indicates that new entrants will be
able to lease fiber optic capacity from other providers for the purpose
of resale, and that current facilities-based providers will be able to
expand the capacity on existing routes.

**4.Making the Agreement \"Functionally Non-Exclusive\"**

We conclude that Minnesota has not demonstrated that the Agreement
imposes requirements on the Developer that will have the effect of
making the Agreement \"functionally non-exclusive,\"[^47] *i.e.*, that
it would not \"have the effect of prohibiting the ability of any entity
to provide any . . . telecommunications services,\" and therefore would
not contravene section 253(a).[^48] Minnesota argues that the Agreement
is \"functionally non-exclusive\" because it requires the Developer to
install collocated fiber for third parties[^49] and lease or sell
network capacity[^50] to telecommunications providers on a
nondiscriminatory basis. In light of these safeguards, Minnesota
contends that the restriction on physical access to freeway
rights-of-way does not prevent any entity from offering
telecommunications services, and instead enhances the competitiveness of
the market by making available a new source of fiber optic
transport.[^51]

The safeguards contained in the Agreement represent a laudable effort to
reduce the potential anti-competitive effects of the Agreement. As
discussed above, however, section 253(a):

> bars state and local requirements that restrict the means or
> facilities through which a party is permitted to provide service,
> *i.e.*, new entrants should be able to choose whether to resell
> incumbent LEC services, obtain incumbent LEC unbundled network
> elements, utilize their own facilities, or employ any combination of
> these three options.[^52]

Nonetheless, there is some ambiguity in the safeguards contained in the
Agreement. Accordingly, we are unable to determine at this time if the
Agreement prevents other facilities-based providers from providing
telecommunications services.

**a.Installation of Third Party Fiber**

Requiring the Developer to install fiber for other carriers when it
installs its own fiber, does not fully overcome the Agreement\'s
shortcomings.[^53] The primary problem with this solution is that the
opportunity to collocate fiber is very limited.[^54] In order to
collocate fiber a competitor must enter into a \"User Agreement\" with
Developer before Developer begins installing fiber.[^55] If a competitor
is unable to do this before the trench is closed, that competitor will
be excluded from collocating fiber in the freeway right-of-way for a
period of at least ten years.[^56] During this ten year period we expect
new carriers to be formed, and existing carriers to expand. Keeping the
freeway rights-of-way closed for at least ten years will have a
particularly adverse impact on the ability of to-be-formed, start-up,
and expanding carriers to offer telecommunications services in Minnesota
because they will be unable to place facilities in the most efficient
rights-of-way. The ten year restriction forces new entrants to use more
expensive rights-of-way, provide service through resale, or \"purchase\"
fiber from Developer. In comments, but not the Agreement, Minnesota
claims that new entrants can purchase capacity on an indefeasible right
of user (IRU) basis.[^57] The Agreement, however, does not sufficiently
spell out the obligations of Developer in providing capacity to
interested parties.

**b.Availability of Network Capacity for Purchase or Resale**

Based on the present record, we cannot conclude that the Agreement
requires that Developer to sell network capacity in a manner that makes
the Agreement functionally non-exclusive. Minnesota argues that sections
7.7 and 7.8 of the Agreement require the Developer to sell both lit and
unlit network capacity, stating that the \"unlit network capacity is
similar to the bulk capacity made available on an IRU basis.\"[^58] It
is possible that under certain circumstances, the ability of interested
parties to purchase facilities on an IRU basis might be an adequate
substitute for the ability to construct facilities along a particular
route. The present record, however, does not demonstrate that this is
the case. The language of the Agreement does not clearly state whether
the Developer must sell lit or unlit capacity on an IRU basis.[^59] Even
if interested parties are able to purchase capacity in Developer\'s
network, the present record does not establish that this would be an
adequate substitute for the ability to construct facilities along the
freeway rights-of-way.[^60] For example, we do not know whether the
Developer will charge rates, terms, and conditions that are just and
reasonable. Although it is possible that the presence of collocated
fiber owned by third parties or other fiber capacity in the state would
serve as a competitive restraint on the prices Developer could charge
for capacity, we cannot determine beforehand if this will be the case.

Furthermore, the record does not adequately address whether the ability
to obtain fiber on an IRU-like basis is an adequate substitute for
physical access to the freeway rights-of-way. Regardless of whether a
competitor collocates or \"purchases\" fiber from Developer, it will not
be able to access the facility to maintain and repair it.[^61] Several
commenters argue that the ability to maintain and repair their own fiber
is important to ensure quality of service and limit costs.[^62]
Nevertheless, it is possible that this drawback is not significant
because fiber optic cable generally requires little maintenance and the
likelihood of a cable cut along this right-of-way is relatively low.
Moreover, Minnesota suggests that carriers currently swap capacity on
fiber optic transport networks.[^63] The present record, however, is not
adequate to allow us to conclude that the ability of interested parties
to collocate fiber or purchase facilities on an IRU basis is an adequate
substitute for the ability to construct facilities.

**c.Availability of Conduit**

The availability of conduit space, through which competitors could pull
their own fiber, may also ameliorate the anticompetitive effects of
limiting physical access to the freeway rights-of-way to one provider
for a period of ten years. Minnesota claims that \"\[a\]ny carrier has
the opportunity to purchase access \[to\] either the fiber-optic in the
conduit owned by \[Developer\] or to AT&T\'s conduit if they wish to
pull through their own fiber cable.\"[^64] While we are encouraged to
hear that the Developer is installing conduit in the trenches,[^65] we
do not have enough information about the availability of conduit to
conclude that it makes the Agreement functionally non-exclusive. If
conduit space were available to competitors in a manner consistent with
section 253, it would further ameliorate our concerns because it would
enable competitors to pull their own fiber through the conduit at a
later time.[^66] The current record however neither indicates that the
Developer is required to provide conduit nor that it will have the
ability to provide such conduit space.[^67]

The record also indicates that the Developer is installing conduit on
behalf of AT&T.[^68] This suggests that empty conduit space may be
available from AT&T. While this might further ameliorate our concerns,
the record does not provide the rates, terms and conditions AT&T would
offer for access to the conduit nor whether AT&T would even offer access
to such conduit.[^69] As a result, we cannot determine, at this time,
whether the availability of conduit would ameliorate the anticompetitive
concerns that may have been created by the Agreement.

**d. Nondiscrimination**

Minnesota fails to demonstrate that the Agreement\'s nondiscrimination
provisions are sufficient to protect collocators and entities reselling
or purchasing Developer\'s capacity.[^70] As commenters note, the
Agreement specifically states that it does not create third party
rights.[^71] As a result, parties wishing to obtain facilities or
service from Developer or collocate along the freeway rights-of-way have
no right to enforce the Agreement\'s nondiscrimination
requirements.[^72]

In addition, it is not clear from the record whether the
nondiscrimination language of the Agreement provides Minnesota with
sufficient oversight powers to ensure that the rates will be fair and
reasonable.[^73] The Agreement allows the Developer to raise prices so
long as they are not discriminatory.[^74] Aside from claiming that the
charges were discriminatory, neither Minnesota nor Developer\'s
customers would have a basis to object to the level of charges. Thus,
Developer could use its exclusive physical access to the freeway
rights-of-way to extract monopoly profits from the fiber capacity it
leases or \"sells\" on an IRU-like basis, as well as from installation
and maintenance of collocated fiber.[^75]

Moreover, if Developer creates an affiliated retail service provider, it
could effectively preclude third parties from benefitting from the less
expensive rights-of-way by charging all retail customers, including its
affiliate, unduly high rates.[^76] These charges would not be
discriminatory since they would apply to all retail customers, however.
While this would reduce the profits of its retail affiliate, Developer
could offset this by the increased profits on its wholesale offering. In
contrast to this, competitors would simply have lower retail profits if
they used Developer\'s services and facilities. In this way, Developer
could retain the benefits of the less expensive rights-of-way for itself
and prevent competitors from benefitting from use of the least expensive
rights-of-way. Again, the uncertainty over how the Developer will
implement the Agreement requires us to exercise caution at this point
and not approve the Agreement as consistent with section 253.

We conclude that Minnesota fails to demonstrate that the Agreement\'s
nondiscrimination provisions are sufficient to protect resellers and
collocators. Neither third parties nor the State would be able to ensure
that the Developer does not capitalize on the monopoly powers granted it
by the state. It is possible that the Developer\'s charges and/or other
terms for the purchase of capacity will be reasonable, but, based on the
present record, we cannot determine whether this will be the case.

**D.Section 253(b) Analysis**

We conclude that the Agreement is not protected by section 253(b), which
preserves from preemption certain state or local requirements that are
\"competitively neutral,\" and \"necessary\" to achieve the public
interest objectives enumerated in section 253(b), even if the
requirements contravene section 253(a).[^77] In particular, Minnesota
has not convinced us that the Agreement is competitively neutral. We
also note that Minnesota has not shown that the restrictions on physical
access to the freeway rights-of-way are necessary to protect the public
safety and welfare.

**1. Competitive Neutrality of the Agreement**

We cannot agree with the State\'s contention that the Agreement is
competitively neutral as required by section 253(b) because the State
followed a public procurement process in selecting the Developer.[^78]
In support of its position, Minnesota argues that the requirement for
competitive neutrality in section 253(b) only relates to how the
requirement is *imposed*, not to the substantive effect of the measure.
We do not believe that Congress intended to protect the imposition of
requirements that are not competitively neutral in their effect on the
theory that the non-neutral requirement was somehow imposed in a neutral
manner. Moreover, we do not believe that this narrow interpretation is
appropriate because it would undermine the primary purpose of section
253 \-- ensuring that no state or locality can erect legal barriers to
entry that would frustrate the 1996 Act\'s explicit goal of opening all
telecommunications markets to competition.[^79] Therefore, we conclude
that the proper inquiry is whether the effect of the Agreement will be
competitively neutral.[^80]

We conclude that the Agreement is not competitively neutral because it
grants a single entity, the Developer, exclusive physical access to the
valuable freeway rights-of-way for a period of ten years with an option
to renew for another ten years.[^81] This restriction on physical access
is likely, as we explained above, to disadvantage future
facilities-based entrants. In reaching this conclusion, we recognize
that it is not necessary for a state to treat all entities in the same
way for a requirement to be competitively neutral. In fact, treating
differently situated entities the same can contravene the requirement
for competitive neutrality. In this case, however, Minnesota has not
demonstrated that there are differences in circumstances that warrant
granting exclusive physical access to the freeway rights-of-way to only
one party.

Our conclusion in this regard is supported by the decision in the *Texas
Preemption Order*. In that Order we found that certain facilities
\"build out\" requirements were not competitively neutral under section
253(b) because they \"single\[d\] out \[a specific class of carriers\]
and require\[d\] them to construct their own facilities or purchase
access to non-incumbent network elements.\"[^82] We also noted that \"by
imposing the costs of providing facilities based service only on
\[certain carriers\], the build-out provisions significantly
affect\[ed\] the ability of \[these carriers\] to compete against other
certificated carriers for customers in the local exchange market.\"[^83]
Here the Agreement forces a specific class of carriers to use
alternative rights-of-way that appear to be more costly than the freeway
rights-of-way. The only significant difference is that the lack of
competitive neutrality in this case is imposed by granting the Developer
an advantage \-- exclusive physical access to the freeway rights-of-way
\-- rather than imposing a disadvantage on a certain class of carriers,
as was the case in the *Texas Preemption Order*. Furthermore, as
discussed above, Minnesota has not demonstrated that the
nondiscrimination provisions of the Agreement are sufficient to overcome
the effect of granting one entity exclusive physical access to the
freeway rights-of-way and render the Agreement competitively
neutral.[^84]

**2. Necessity of the Agreement**

Our conclusion that the Agreement is not competitively neutral is
dispositive on the question of whether the section 253(b) exemption
applies. We nonetheless take this opportunity to raise concerns about
Minnesota\'s claims that the Agreement is necessary to protect public
safety and advance universal service objectives.

**a. Public Safety**

We agree with the State\'s assertion that requirements protecting the
traveling public and transportation workers fall within the general
class of requirements potentially protected by section 253(b). Minnesota
is concerned that allowing construction on the freeway rights-of-way
will increase the number of accidents and fatalities on the freeway,
and, as discussed above, that allowing construction more than once every
ten years will increase the risk to an unacceptable level.[^85] In this
instance, however, opponents of the Agreement dispute certain aspects of
Minnesota\'s claims.[^86]

The record indicates that in many rural areas, the freeway right-of-way
extends a considerable distance beyond the paved shoulder, permitting
work to take place beyond the paved shoulder.[^87] A major highway study
in the record also shows \"that construction on either the
\'Shoulder/Roadside\' (*i.e.*, on the shoulder or beyond the shoulder)
*did not* increase accident rates in on (sic) any road type.\"[^88]
According to this study, \"\[t\]he impact of construction on shoulders
or roadsides was a 4.3% *decrease* \[in accident rates\] with rural
freeways, \[and\] a 2.2% *decrease* \[in accident rates\] with urban
freeways,\" when compared with \"normal\" road conditions.[^89] As such,
in areas with wide rights-of-way, the record does not show a correlation
between construction work off the highway shoulder and an increase in
accidents. Because the Agreement requires construction away from the
paved surfaces when rights-of-way are wide enough, Minnesota\'s safety
concerns appear to be overstated, except in areas with very narrow
rights-of-way.[^90]

Moreover, it appears that installing fiber optic facilities has no
greater safety impact than typical roadside maintenance, such as removal
of refuse, mowing of grass, sign maintenance and replacement, fence
repair, and/or culvert construction that occurs routinely. In fact,
installing fiber is less intrusive than typical repairs which take place
on the roadways such as joint repair and patching, or snow removal,
which are common in cold climates like Minnesota.[^91] Therefore, based
on the record before us, we are unable to determine whether it is
necessary to limit installation of fiber to once every ten years on all
parts of Minnesota\'s interstate freeway system.

**b. Universal Service**

While we applaud Minnesota\'s efforts to bring advanced services to
rural areas, we are concerned that the Agreement is not \"necessary to
preserve and advance universal service.\"[^92] Minnesota claims that one
of the benefits of the Agreement is that it extends fiber optic capacity
into rural areas by requiring Developer to install fiber over the entire
planned network.[^93] As discussed above, however, extracting benefits
from the Developer in exchange for exclusive physical access to
rights-of-way is, we believe, fundamentally inconsistent with the 1996
Act.[^94] At the very least, Minnesota has not demonstrated that this
method is necessary to deploy advanced services.

**E. Section 253(c)**

We cannot agree with Minnesota that the Agreement is protected from
preemption by section 253(c). Section 253(c) provides that \"\[n\]othing
in this section affects the authority of a State or local government to
manage the public rights-of-way or to require fair and reasonable
compensation from telecommunications providers, on a competitively
neutral and nondiscriminatory basis, for use of public rights-of-way on
a nondiscriminatory basis, if the compensation required is publicly
disclosed by such government.\"[^95] Minnesota contends that the
decision to grant exclusive physical access to Developer constitutes
rights-of-way management that Congress exempted from section 253
preemption. Further, Minnesota claims that it is managing the
rights-of-way in a nondiscriminatory manner because Developer is a not a
telecommunications service provider.[^96] Minnesota also asserts that
the compensation required is reasonable, competitively neutral and
nondiscriminatory as required by section 253(c). In particular, it
asserts that the open procurement process ensures that the state has not
unfairly favored one provider over another. The state also argues that
the nondiscrimination requirements in the Agreement and the provisions
for collocation of third party fiber mitigate any anti-competitive
effects of the Agreement.[^97]

We have serious reservations about whether the Agreement constitutes
rights-of-way management for purposes of section 253(c). In particular,
the legislative history of section 253(c) indicates that Congress
intended to protect the states\' traditional regulation of
rights-of-way.[^98] The House Report states that section 253 \"makes
explicit a local government\'s continuing authority to issue
*construction permits* regulating how and when construction is conducted
on roads and other public rights-of-way.\"[^99] In contrast to this,
Minnesota has decided not to use a permit process similar to that in
effect for other state rights-of-way and instead has granted exclusive
physical access to this right-of-way to a single entity in return for
valuable consideration.

Even assuming that the Agreement constitutes rights-of-way management,
Minnesota has not demonstrated that the Agreement is protected by
section 253(c). Section 253 requires that both management of public
rights-of-way and the requirement for compensation be competitively
neutral and nondiscriminatory in order for a state or local legal
requirement to be protected under section 253(c).[^100] As discussed
previously in relation to section 253(b), Minnesota has not shown that
the Agreement is \"competitively neutral and nondiscriminatory.\"[^101]
Therefore, even assuming that the Agreement constitutes protected
rights-of-way management \-- which we are not convinced, based on this
record, that it does \-- Minnesota has not shown that such management is
competitively neutral and/or nondiscriminatory.

Moreover, Minnesota has not shown that the compensation required for
access to the right-of-way is \"fair and reasonable.\"[^102] The
compensation appears to reflect the value of the exclusivity inherent in
the Agreement, rather than fair and reasonable charges for access to the
right-of-way. Nor has Minnesota shown that the Agreement provides for
\"use of public rights-of-way on a nondiscriminatory basis.\"[^103]

In addressing the status of the Agreement under section 253, we are
responding to Minnesota\'s request for a declaratory ruling on the
Agreement. Since we conclude that Minnesota fails to demonstrate that
the Agreement will not violate section 253(a) or that it is protected by
section 253(b), we must consider whether the Agreement is protected from
preemption by section 253(c) in order to fully respond to Minnesota\'s
petition. Our discussion of these issues should not be interpreted as
addressing potential issues involving the Commission\'s jurisdiction
under section 253(c).

**III. PETITIONS FOR PREEMPTION**

Many of the parties opposing Minnesota\'s request for declaratory ruling
also ask the Commission to preempt the Agreement in their filings in
this proceeding. We do not resolve these requests for preemption at the
present time. As our prior discussion makes clear, there are aspects of
the Agreement that have the potential to contravene section 253(a), and
we invite interested parties to comment on whether the Commission should
preempt the Agreement pursuant to its authority under section 253(d). We
believe that our consideration of any requests for preemption would be
aided by supplemental information concerning the practical effect of
this Agreement, and we urge parties to provide us with such information
in their comments.

**IV. ORDERING CLAUSE**

Accordingly, IT IS ORDERED that the Petition for Declaratory Ruling
filed by the State of Minnesota IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

APPENDIX A

Minnesota Petition for Declaratory Ruling

CC Docket No. 98-1

List of Commenters

Comments

Ameritech Corporation (Ameritech)

Association for Local Telecommunications Services (ALTS)

GTE Service Corporation (GTE)

GVNW, Inc. (GVNW)

KMC Telecom Inc. and KMC Telecom II, Inc. (KMC)

MCI Telecommunications Corporation (MCI)

MFS Network Technologies, Inc. (MFS)

Midwest Wireless Communications, L.L.C. (Midwest Wireless)

Minnesota Telephone Association (MTA)

National Cable Television Association (NCTA)

National Telephone Cooperative Association (NTCA)

New York State Telecommunications Association, Inc. (NYSTA)

Nextlink Communications Inc. (Nextlink)

RCN Telecom Services, Inc. (RCN)

SBC Communications Inc. (SBC)

Teleport Communications Group Inc. (TCG)

United States Telephone Association, The Organization for the Promotion
and Advancement of Small Telecommunications Companies, The Western Rural
Telephone Association and The Competition Policy Institute (USTA Joint
Comments)

US West, Inc. (US West)

Reply Comments

Crown Castle International Corp. (Crown Castle Reply Comments)

ICS/UNC, L.L.C. (Developer Reply Comments)

Intelligent Transportation Society of America (ITS America Reply
Comments)

MCI Telecommunications Corporation (MCI Reply Comments)

MFS Network Technologies, Inc. (MFS Reply Comments)

Minnesota Telephone Association (MTA Reply Comments)

Teleport Communications Group Inc. (TCG Reply Comments)

Time Warner Cable (Time Warner Reply Comments)

United States Telephone Association, The Organization for the Promotion
and Advancement of Small Telecommunications Companies, The Western Rural
Telephone Association and the Competition Policy Institute (USTA Joint
Reply Comments)

Universal Communication Networks, LLC

U.S. Department of Transportation (US DOT Reply Comments)

US West, Inc. (US West Reply Comments)

Wilbur Smith Associates

States, State Agencies, and other Commenters

Alabama Department of Transportation

American Association of State and Highway Transportation Officials
(AASHTO)

Arizona Department of Transportation

City of Boston

Commonwealth of Kentucky Transportation Cabinet

Commonwealth of Virginia, Department of Transportation

DPD Comprehensive Resources Planning

Indiana Department of Transportation

Iowa Department of Transportation

Kansas Department of Transportation

Kentucky Department of Transportation

Massachusetts Highway Department

Mississippi Department of Transportation

Missouri Department of Transportation

Montana Department of Transportation

New Mexico State Highway and Transportation Department

New York State Thruway Authority

North Dakota Department of Transportation

Rep. Phyllis Kahn, Rep. Jean Wagenius, and Rep. Irv Anderson, Minnesota
House of Representatives

State of Alaska Department of Transportation and Public Facilities

State of California Department of Transportation

State of Delaware Department of Transportation

State of Florida Department of Transportation

State of Idaho Transportation Department

State of Maine Department of Transportation

State of Minnesota Intergovernmental Information Systems Advisory
Council

State of Montana Department of Administration

State of Nebraska, Department of Roads

State of New Jersey Department of Transportation

State of North Carolina Department of Transportation

State of Oregon Department of Transportation

State of Rhode Island and Providence Plantations, Department of
Transportation

State of Tennessee Department of Transportation

State of Utah Department of Transportation

State of Vermont Agency of Transportation

State of Wisconsin Department of Transportation

Texas Department of Transportation

Washington State Department of Transportation

[^1]: ^?^ In the *New England Preemption Order*, the area affected by
    the state legal requirement at issue \-- the provision of payphone
    service \-- was also the direct subject matter of the state
    requirement. *New England Preemption Order*, 11 FCC Rcd at 19720, ¶¶
    17-18. The situation here is somewhat different. Minnesota argues
    that infrastructure development is the subject directly addressed by
    the Agreement, while the parties challenging the Agreement argue
    that it will affect the provision of telecommunications services.

[^2]: ^?^ ITS America Reply Comments at 13.

[^3]: ^?^ ITS America Reply Comments at 12; *see also* ICS/UNC, L.L.C.
    Reply Comments at 3.

[^4]: ^?^ ITS America Reply Comments at 11-13.

[^5]: ^?^ Petition at 12.

[^6]: ^?^ NTCA Comments at 2.

[^7]: ^?^ 47 U.S.C. § 253(a).

[^8]: ^?^ 47 U.S.C. § 253(d).

[^9]: ^?^ Agreement, Section 3.1(b)(vii, ix); *see also* Agreement,
    Section 7.8.

[^10]: ^?^ Texas law required that certain competitors provide
    telecommunications services using their own facilities or those of
    other new entrants. Before the end of the first year, ten percent of
    these competitors\' service territory had to be served through the
    use of facilities other than those of the incumbent LEC. Before the
    end of the third year, fifty percent of their service territory had
    to be served through the use of facilities other than those of the
    incumbent LEC. *Texas Preemption Order*, 13 FCC Rcd at 3488, ¶ 57.

[^11]: ^?^ *Texas Preemption Order*, 13 FCC Rcd at 3496, ¶ 74; *see
    also* Nextlink Comments at 6-7; NTCA Comments at 3; NCTA Comments at
    5-6, 10-11; MCI Comments at 6; ALTS Comments at 13 (citing *Texas
    Preemption Order*, 13 FCC Rcd at 3521, ¶ 128); MFS Comments at 15;
    Time Warner Reply Comments at 7-8.

[^12]: ^?^ More specifically, we noted that section 251 allows new
    competitors to enter the market using the three entry strategies
    noted above. *Id.* at 3496-97, ¶ 75. Section 271, while only
    applicable to the Bell Operating Companies, also requires those
    companies to make all three entry strategies available before being
    allowed to provide in-region, inter-LATA services. Our
    interpretation also was consistent with the Eighth Circuit\'s
    opinion in *Iowa Utilities Board*. In discussing section 251, the
    Eighth Circuit recognized that new competitors may choose resale,
    access to unbundled network elements or access to interconnection
    arrangements offered by incumbent LECs as an entry strategy and
    stated that \"\[a\] company seeking to enter the local telephone
    service market may request an incumbent LEC to provide it with any
    one or any combination of these three services.\" *Iowa Utils. Bd.
    v. FCC*, 120 F.3d 753, 791 (8th Cir. 1997), *rev\'d in part, aff\'d
    in part, AT&T Corp. v. Iowa Utils. Bd.*, 119 S.Ct. 721 (1999). *See*
    TCG Comments at 7 (citing *Implementation of the Local Competition
    Provisions in the Telecommunications Act of 1996*, First Report and
    Order, 11 FCC Rcd 15499, 15588, ¶ 172 (1996)(*Local Competition
    First Report and Order*).

[^13]: ^?^ *Texas Preemption Order*, 13 FCC Rcd at 3498, ¶ 78.

[^14]: ^?^ *See infra* section II, C, 4.

[^15]: ^?^ MFS Comments at 14, Declaration of Robert Eide at ¶ 7 (MFS,
    Eide Decl.); MTA Cosson July 22 *ex parte* at 2 (citing *MEANS
    v.Minnesota)*: *see* GTE at 8; GVNW at 6; MTA at 29-30, Ex. 4,
    Affidavit of Kenneth D. Knuth at 3-11 (MTA, Knuth Aff.); USTA Joint
    Reply Comments at 6-7; TCG Reply Comments at 2; US West Reply
    Comments at 5; Letter from David Cosson, Kraskin, Lesse & Cosson,
    LLP, to Magalie Roman Salas, Secretary, Federal Communications
    Commission, and Carol E. Mattey, Chief, Policy and Program Planning
    Division, Federal Communications Commission at 3 (Dec. 22, 1998),
    Kenneth D. Knuth Affidavit at ¶¶ 2-7 (MTA, Knuth *ex parte* Aff.);
    MFS at 14; Time Warner Reply Comments at 9-10; *but see* Minnesota
    Reply Comments at 14-16, Ex. 3, Fazil Bhimani Reply Affidavit at ¶¶
    4-10 (Minnesota, Bhimani Reply Aff.); ICS/UNC Reply Comments at 4
    (Arguing that requiring Developer to collocate third party fiber
    \"presents an opportunity for other entities to defray construction
    costs associated with the installation of their own fiber and an
    opportunity for smaller providers to purchase fiber capacity without
    incurring the associated facilities build out costs.\").

[^16]: ^?^ Since the freeway rights-of-way have not been available
    previously, current providers of fiber optic transport capacity use
    these alternative rights-of-way and several are in the process of
    constructing additional fiber optic transport capacity along them.
    Petition at 23; *see* Petition, Ex. 8, Affidavit of Fazil Bhimani at
    ¶¶ 5-7, 9, 13 (Minnesota, Bhimani Aff.).

[^17]: ^?^ Minnesota claims that alternatives include thousands of miles
    of rights-of-way in Minnesota, some of which parallel the State\'s
    freeway system. Petition at 23-24; Petition, Ex. 6, Affidavit of
    Adeel Lari at ¶¶ 12-13 (Lari Aff.). Minnesota also provides maps
    comparing the alternative rights-of-way with the freeway
    rights-of-way. Petition, Exs. 12-17.

[^18]: ^?^ MFS, Eide Decl. at ¶¶ 18-19; NCTA Comments at 9; ALTS
    Comments at 14; Time Warner Reply Comments at 9; *but see* 47 U.S.C.
    § 224(f).

[^19]: ^?^ MFS, Eide Decl. at ¶ 20.

[^20]: ^?^ MFS, Eide Decl. at ¶ 19; MTA Knuth Aff. at ¶ 13; GVNW at 6;
    Letter from David Cosson, Kraskin, Lesse & Cosson, LLP, to Magalie
    Roman Salas, Secretary, Federal Communications Commission, (Jan. 15,
    1999), Kenneth D. Knuth Supplemental Affidavit at ¶ 3 (MTA, Knuth
    Supp. *ex parte* Aff.). Lack of perfected easements would require a
    telecommunications provider to obtain an additional easement from
    the land-owner, a potentially expensive and time-consuming
    undertaking.

[^21]: ^?^ MFS, Eide Decl. at ¶ 19; MTA, Knuth Supp. *ex parte* Aff. at
    ¶ 3.

[^22]: ^?^ MFS, Eide Decl. at ¶ 20; MTA, Knuth Supp. *ex parte* Aff. at
    ¶ 4. Section 224(f)(1) of the Act states: \"A utility shall provide
    . . . any telecommunications carrier with nondiscriminatory access
    to any pole, duct, conduit, or right-of-way owned or controlled by
    it.\" 47 U.S.C. § 224(f)(1). The Commission concluded that use of
    any utility pole, duct, conduit or right-of-way for wire
    communications triggers access to all poles, ducts, conduits, and
    rights-of-way owned or controlled by the utility, including those
    not currently used for wire communications. *Local Competition First
    Report and Order*, 11 FCC Rcd at 16079-80, ¶ 1173. Neither Minnesota
    nor any of the comments cite to section 224 in response to
    opponents\' arguments.

[^23]: ^?^ *See, e.g.*, MTA, Knuth Aff. at ¶ 12; MTA, Knuth Supp. *ex
    parte* Aff. at ¶ 2.

[^24]: ^?^ MTA, Knuth Aff. at ¶¶ 12-13; MTA, Knuth Supp. *ex parte* Aff.
    at ¶ 2.

[^25]: ^?^ MTA, Knuth Supp. *ex parte* Aff. at ¶ 2.

[^26]: ^?^ Minnesota Reply Comments at 18.

[^27]: ^?^ A carrier using railroad rights-of-way would only have to
    negotiate with one entity, the railroad, rather than every state and
    local government through which it wishes to install fiber. *See
    infra* para. .

[^28]: ^?^ MFS, Eide Decl. at ¶ 11; Ameritech Comments at 2; KMC
    Comments at 6: MTA Comments at 27-28; Time Warner Reply Comments at
    9-10. According to the MFS expert, \"the Developer will not become
    entangled in the elaborate permitting processes that delay carriers
    using other rights-of-way. . . . With other rights-of-way, carriers
    often find themselves mired in a variety of different negotiations
    involving multiple land owners, utilities, and/or municipalities.
    These negotiations can be expensive and time-consuming.\" MFS, Eide
    Decl. at ¶ 11; *but see* Minnesota Reply Comments at 14 (\"Some
    opponents argue that the costs and delays in obtaining multiple
    permits from municipalities represents a significant cost advantage.
    Yet no quantification of this advantage has been noted.\").

[^29]: ^?^ *Classic Telephone, Petition for Preemption, Declaratory
    Ruling and Injunctive Relief,* Memorandum Opinion and Order, 11 FCC
    Rcd 13082 (1996)(*Classic Preemption Order*); *Chibardun Telephone
    Cooperative, Inc., Petition for Preemption Pursuant to Section 253
    of the Communications Act*, Order, 13 FCC Rcd 9504 (1998). We also
    note that we have recently begun an inquiry into state and local
    governments\' policies regarding telecommunications service
    providers\' access to public rights-of-way and how those policies
    may be affecting competition. *Promotion of Competitive Networks in
    Local Telecommunications Markets*, Notice of Proposed Rulemaking and
    Notice of Inquiry in WT Docket No.99-217 and Third Further Notice of
    Proposed Rulemaking in CC Docket No. 96-98, FCC 99-141, paras. 70-80
    (rel. July 7, 1999).

[^30]: ^?^ Ameritech Comments at 2; MTA, Knuth Aff. at ¶ 11; *see* US
    West Comments at 13; TCG Comments at 19; Nextlink at 3; KMC Comments
    at 6.

[^31]: ^?^ For example, the state trunk highway route between
    Minneapolis and Fargo-Moorhead is 7.6 percent longer than the
    freeway route between these cities. The state trunk highway route
    between Minneapolis and Duluth is 14.8 percent longer than the
    freeway route. MTA, Knuth Aff. at ¶ 11.

[^32]: ^?^ According to the MTA expert, in rural areas it would cost
    \$1.08 per foot to install fiber on the freeway right-of-way and
    \$1.23 per foot to install fiber on the state trunk highway
    right-of-way. MTA, Knuth Aff. at ¶¶ 5-6; *but see* Letter from
    Dennis D. Ahlers, Assistant Attorney General, State of Minnesota, to
    Magalie Roman Salas, Secretary, Federal Communications Commission,
    and Carol E. Mattey, Chief, Policy and Program Planning Division,
    Federal Communications Commission (Feb. 22, 1999), Fazil Bhimani
    Affidavit at ¶ 4 (Minnesota, Bhimani *ex parte* Aff.)(Challenging
    some of the MTA expert\'s underlying assumptions.) As a result, in
    rural areas, the cost of using the freeway right-of-way would be
    \$5,853.00 per mile and the cost of using state trunk highway
    rights-of-way would be \$6,763.00 per mile. Although the MTA expert
    asserts that it is much more difficult to estimate the cost of
    installing fiber in town and city areas, he estimates that the cost
    of installing fiber in \"town\" areas using the state trunk highway
    system is \$3.03 per foot or \$16,344 per mile, and the estimate for
    installing fiber in cities of over 2,000 people is \$4.22 per foot
    and \$22,788 per mile. MTA, Knuth Aff. at ¶¶ 5-8. The MTA expert
    estimates that a route along a state highway system would require 15
    percent \"town type construction\" and 85 percent rural
    construction. The freeway route does not pass directly though such
    towns, and would be less costly to use in this regard.

[^33]: ^?^ Ameritech Comments at 2; MTA, Knuth Aff. at ¶ 3.

[^34]: ^?^ Ameritech Comments at 2; USTA Joint Comments at 10; KMC
    Comments at 6; MTA Comments at 26; MTA Knuth Aff. at ¶ 3; MTA, Knuth
    *ex parte* Aff. at ¶ 4; MFS, Eide Decl. at ¶ 12 (Freeways have
    \"controlled\" or limited access which minimizes intersections, so
    the Developer can lay cable for miles without interruption.
    Furthermore, the Developer would not have to use extraordinary
    measures to work around natural or man-made obstacles because
    freeway builders generally have already resolved such problems.)

[^35]: ^?^ MTA, Knuth *ex parte* Aff. at ¶ 4.

[^36]: ^?^ This analysis comports with the MTA expert who states that:
    \"Many potential customers will also need capacity on only a portion
    of the Network. The recent collocation arrangement between the
    \[Developer\] and McLeod demonstrates that customers are often
    interested in specific routes, for which the \[Developer\] will have
    a significant cost advantage, and are not interested in using the
    \[Developer\'s\] full Network. As a result, the cost advantages for
    different segments . . . are the proper focus for installation cost
    analysis.\" MTA, Knuth *ex parte* Aff. at ¶ 5. Strategic Policy
    Research (SPR) concludes that \"the relevant market is the set of
    points served by the interstate freeway system in Minnesota. SPR
    also argues that we used a point-to-point comparison in two orders.
    MTA *ex parte,* Strategic Policy Research at 1-2 (citing *Regulatory
    Treatment of LEC Provision of Interexchange Services Originating in
    the LEC\'s Local Exchange Area and Policy and Rules Concerning the
    Interexchange Marketplace*, Second Report and Order; CC Docket
    96-149; Third Report and Order, CC Docket 960-61 at ¶¶ 64-69 (1997);
    International Competitive Carrier Policies, *Report and Order*, 102
    FCC 2d 812 (1985)).

[^37]: ^?^ MFS, Eide Decl. at ¶ 14; MTA, Knuth *ex parte* Aff. at ¶ 6.
    The MTA expert estimates a cost differential of approximately 30.57
    percent based on a comparison of the cost of installing fiber
    between Minneapolis and Fargo. The MTA expert estimates a cost
    differential of approximately 39.41 percent for installing fiber
    between Minneapolis and Duluth. MTA, Knuth *ex parte* Aff. Table 2.
    MFS estimates that the Developer\'s costs \"can be at least 30
    percent less than the costs competitors will experience in
    attempting to access alternative rights-of-way.\" MFS, Eide Decl. at
    ¶ 14. MFS does not provide underlying documentation to support this
    assertion.

[^38]: ^?^ Minnesota, Bhimani *ex parte* Aff. ¶ 7.

[^39]: ^?^ *See supra* para. 27.

[^40]: ^?^ 47 U.S.C. § 253(c).

[^41]: ^?^ Bell Atlantic - Maryland, Inc. v. Prince George\'s County,
    Maryland, 49 F. Supp. 2d 805, 817-19 (D. Md. May 24, 1999), *appeal
    pending*; AT&T Communications of the Southwest, Inc. v. City of
    Dallas, 8 F. Supp.2d 582, 593 (N.D. Tex. 1998)(granting preliminary
    injunction); AT&T Communications of the Southwest, Inc. v. City of
    Dallas, 52 F. Supp.2d 763, 769-770 (N.D. Tex. 1999)(granting final
    declaratory and permanent injunctive relief); MTA, Cosson July 22
    *ex parte* at 4; *but see* Minnesota, Ahlers Sept. 14 *ex parte* at
    3-4 (arguing that the above-mentioned cases are distinguishable from
    these facts because the cases involve (1) cities regulating
    rights-of-way rather than states; (2) certificated carriers not a
    carrier\'s carrier; (3) the payment of fees while none is demanded
    here; and (4) already used rights-of-way, unlike the rights-of-way
    in this case.)

[^42]: ^?^ Petition at 21; *but see* RCN Comments at 6 (outside of urban
    areas only ILECs and AT&T have facilities available for resale). The
    State currently purchases fiber backbone services from MCI which
    uses its own facilities and those of MEANS. AT&T operates a fiber
    optic network in Minnesota. US West has deployed fiber in Minnesota
    as have interexchange carriers such as MCI, U.S. Link, and Wiltel.
    In 1994 there were an estimated 7,265 sheath kilometers of fiber in
    Minnesota. Petition at 21.

[^43]: ^?^ Minnesota, Bhimani Aff. at ¶¶ 10-12; Minnesota Reply Comments
    at 11-12.

[^44]: ^?^ Petition at 22-23.

[^45]: ^?^ *See* 47 U.S.C. § 253(a); *Texas Preemption Order*, 13 FCC
    Rcd at 3496, ¶ 74.

[^46]: ^?^ ALTS Comments at 13 (\"\[T\]he existence of other sources
    from which a carrier could obtain \[resold\] capacity does nothing
    for the carrier with a facilities-based business plan\").

[^47]: ^?^ Petition at 24; *see* Universal Communication Networks Reply
    Comments at 4; ICS/UNC, L.L.C. Reply Comments at 4.

[^48]: ^?^ 47 U.S.C. § 253(a).

[^49]: ^?^ Petition at 24, 26; Agreement, Section 7.7, 5.12; *see*
    Universal Communication Networks, LLC Reply Comments at 2.

[^50]: ^?^ Petition at 24-26; Agreement, Section 7.7; *see* Universal
    Communication Networks, LLC Reply Comments at 2; ITS America Reply
    Comments at 20. Network capacity, as opposed to collocated fiber,
    refers to the fiber the Developer installs on its own behalf. The
    Developer can sell or lease unlit network capacity, *i.e.*, dark
    fiber, or lit network capacity. Petition at 26.

[^51]: ^?^ Petition at 26; Minnesota, Ahlers June 16 *ex parte* at 2;
    *but see* MFS Comments at 12 (Arguing that Developer has acquired
    the ability to veto new entrants\'s applications to get access to
    these rights-of-way.).

[^52]: ^?^ *Texas Preemption Order*, 12 FCC Rcd at 3496, ¶ 74.

[^53]: ^?^ Section 5.12 requires the Developer to install fiber optic
    capacity on behalf of those entities who contract with the Developer
    to install such capacity before Developer lays its own facilities.
    Developer will install third party (collocated) fiber at the same
    time it installs its own fiber. Agreement, Section 5.12; *see*
    Universal Communication Networks Reply Comments at 2, 3.

[^54]: ^?^ SBC Comments at 4; *see* USTA Joint Comments at 9, 15; TCG
    Comments at 17; RCN Comments at 5; Nextlink at 4, 8-9 (late-comers
    will be relegated to resale only with its lack of control); NCTA
    Comments at 10, 11 (new entrants must rely upon the network of
    incumbents); MCI Comments at 6; GTE Comments at 6; NYSTA Comments at
    3; ALTS Comments at 12; MFS Comments at 29; Time Warner Reply
    Comments at 7.

[^55]: ^?^ Agreement, Section 5.12(c). *See* ALTS Comments at 12; MFS
    Comments at 29; GTE Comments at 6; TCG Comments 3, n.2, 11-12; RCN
    Comments at 3; MCI Comments at 6; KMC Comments at 4.

[^56]: ^?^ ALTS Comments at 12; *see* USTA Joint Comments at 9, 15; SBC
    at 4; RCN Comments at 3; MFS Comments at 29.

[^57]: ^?^ Minnesota, Ahlers June 16 *ex parte* at 1; *see supra*
    Section II, C, 3; SBC Comments at 4. As defined by the Commission,
    \"\[a\]n IRU interest in a communications facility is a form of
    acquired capital in which the holder possesses an exclusive and
    irrevocable right to use the facility and to include its capital
    contribution in its rate base, but not the right to control the
    facility or, depending on the particular IRU contract, any right to
    salvage . . . . The IRU is conveyed by a facility co‑owner to a
    carrier that did not elect to become a facility co‑owner or that as
    a facility co‑owner did not purchase sufficient capacity to meet its
    projected demand over the life of the facility.\" *See* Reevaluation
    of the Depreciated‑Original‑Cost Standard in Setting Prices for
    Conveyances of Capital Interests in Overseas Communications
    Facilities Between or Among U.S. Carriers, CC Docket No. 87‑45,
    Report and Order, 7 FCC Rcd 4561, 4561 n.1 (1992), *recon*. 8 FCC
    Rcd 4173 (1993).

[^58]: ^?^ Petition at 26; Universal Communication Networks Reply
    Comments at 2; Minnesota, Ahlers June 16 *ex parte* at 1; Minnesota,
    Ahlers Sept. 14 *ex parte* at 4; *but see* MTA, Cosson July 22 *ex
    parte* at 8 (arguing that the Agreement does not contain a
    contractual obligation to provide fiber on an IRU basis). Minnesota
    Claims that, pursuant to Section 2.74 of the Agreement, the
    Developer will \"enter into \'User Agreements\' under which \[a\]
    third party can acquire \'rights of use or access to
    \[Developer\'s\] Network.\" As a result Minnesota argues that \"the
    Developer is obligated to offer use of and access to
    \[Developer\'s\] Network\" on an IRU basis, and will give all
    telecommunications providers an opportunity to purchase capacity on
    a nondiscriminatory basis.\" Minnesota, Ahlers June 16 *ex parte* at
    1; Minnesota, Ahlers Sept. 14 *ex parte* at 4.

[^59]: ^?^ Letter from David Cosson, Kraskin, Lesse & Cosson, LLP, to
    Carol E. Mattey, Chief, Policy and Program Planning Division,
    Federal Communications Commission (April. 21, 1999) at 1; *see also*
    Time Warner Reply Comments at 8.

[^60]: ^?^ *See* Nextlink Comments at 4, 8-9 (late-comers will be
    relegated to reselling and its lack of control); NCTA Comments at 10
    (new entrants will be forced to rely upon the facilities of
    incumbents); MFS Comments at 11 (Developer controls cost and quality
    of construction); *see also* KMC Comments at 4 (\"Congress clearly
    recognized \[that\] a competitor\'s ability to buy transport
    capacity from a wholesaler . . . is not the same as that competitor
    having proprietary development of control over its own facilities.\"
    *Id.* at 5.); Time Warner Reply Comments at 8.

[^61]: ^?^ TCG Comments at 12 (TCG is concerned that access to TCG
    equipment by non-TCG personnel could void equipment warranties and
    threaten the \"proprietary and confidential nature of TCG\'s
    network.\" TCG argues that it is more efficient for it to manage and
    maintain its own facilities. *Id.* at 14); Nextlink Comments at 9.

[^62]: ^?^ Ameritech Comments at 3; KMC Comments at 4; *see* MFS
    Comments at 11.

[^63]: ^?^ Minnesota Reply Comments at 26-27; Minnesota, Bhimani Reply
    Aff. at ¶ 19.

[^64]: ^?^ Letter from Laura Bishop, Director of Legislative Affairs,
    Department of Administration, to Magalie Roman Salas, Secretary,
    Federal Communications Commission, at 1 (Dec. 13, 1999)(Minnesota,
    Bishop Dec. 13 *ex parte*); Letter from Gregory P. Huwe, Assistant
    Attorney General, State of Minnesota, to David Kirschner, Common
    Carrier Bureau, Federal Communications Commission, at 1 (Dec. 16,
    1999)(Minnesota, Huwe Dec. 16 *ex parte*).

[^65]: ^?^ Minnesota, Huwe Dec. 16 *ex parte* at 1.

[^66]: ^?^ This is similar to a rights-of-way policy devised by the City
    of Boston that maximizes the availability of conduit and minimizes
    the need for multiple street openings. Letter from Merita A.
    Hopkins, Corporation Counsel, City of Boston Law Department, to
    Magalie Roman Salas, Secretary, Federal Communications Commission,
    Attachment (Mar. 25, 1999).

[^67]: ^?^ Minnesota indicates \"that once fiber has been pulled through
    a conduit, it is unlikely that additional fiber will be installed in
    that conduit, due to the potential for damage to existing fiber and
    the availability of other upgrade methods.\" Minnesota, Huwe Dec. 16
    *ex parte* at 2 (citing Petition, Bhimani Aff., Ex. 8).

[^68]: ^?^ Minnesota, Huwe Dec. 16 *ex parte* at 1.

[^69]: ^?^ If AT&T is a local exchange carrier, it has the \"duty to
    afford access to \[its\] poles, ducts, conduits, and rights-of-way
    of such carrier to competing providers of telecommunications
    services on rates, terms, and condition that are consistent with
    section 224.\" 47 U.S.C. § 251(b)(4).

[^70]: ^?^ Section 7.7 of the Agreement states in part: \"\[a\]t all
    times the \[Developer\] shall maintain, offer, accept, implement and
    adhere to written, uniform and non-discriminatory rates and charges
    for all similarly situated customers and potential customers for
    such customer\'s rights to use or access the Network or to become
    Collocating Customers. . . . The term \'similarly situated customers
    and potential customers\' is intended to permit \[Developer\] to
    maintain, offer, accept, implement and adhere to different rates and
    charges for different classifications os customers (including but
    not limited to Collocating Customers) based on commercially
    reasonable considerations and distinctions, such as but not limited
    to volume of capacity in the Network utilized or the volume of data
    transported by a particular customer or the length of time for which
    any particular customer commits to the utilization of a specified
    volume of capacity in the Network or a specified volume of data
    transported.\" Agreement, Section 7.7.

[^71]: ^?^ US West Comments at 14; Nextlink Comments at 8; KMC Comments
    at 9; *see* MTA Reply Comments at 6.

[^72]: ^?^ Section 20.5 of the Agreement states: \"\[n\]othing contained
    in this Agreement is intended or shall be construed as creating or
    conferring any rights, benefits or remedies upon, or creating any
    obligations of the parties hereto toward, any person or entity not a
    party to this Agreement, except rights expressly contained herein
    for the benefit of Lenders.\" Agreement, Section 20.5.

[^73]: ^?^ USTA Joint Comments at 12, 16-17; MFS Comments at 27-28;
    *see* TCG Comments at 16; RCN Comments at 7, 10; GVNW Comments at
    8-9.

[^74]: ^?^ Section 7.7 allows Developer to \"modify, supplement or
    revise its rates and charges for use of or access to the Network, so
    long as such rates and charges, as modified, supplemented or
    revised, continue to provide uniform and nondiscriminatory rates and
    charges for use of or access to the Network or for collocating fiber
    optic cable for similarly situated customers and potential
    customers.\" Agreement, Section 7.7.

[^75]: ^?^ We note that New York has addressed this issue. In parts of
    New York, Empire City Subway Company, Limited, a wholly-owned
    subsidiary of Bell Atlantic, has been granted a non-exclusive right
    to construct, operate and maintain a system of underground conduits.
    Empire then leases space in its conduits, the pricing of which is
    subject to the \"control, modification and revision\" of New York
    City. Empire\'s \"rates are determined by rate case proceedings held
    before the City of New York Department of General Services.\" Letter
    from Dee May, Director, Federal Regulatory Affairs, Bell Atlantic,
    to Magalie Roman Salas, Secretary, Federal Communications
    Commission, (March 22, 1999), Att. 1, Yildirim S. Guner Affidavit at
    ¶¶ 3-8; *see* GVNW Comments at 9.

[^76]: ^?^ Agreement, Section 7.8. Section 7.8 of the Agreement allows
    Developer to have an \"affiliated\" company but requires the
    Developer to charge such entity \"the same rates and charges as it
    does for similarly situated, unaffiliated, non-interested customers
    and users of the Network or similarly situated, unaffiliated
    non-interested Collocating Customers.\" Agreement, Section 7.8(c).
    *See* SBC Comments at 6; Nextlink Comments at 8; *see also* MFS
    Comments at 26. Developer claims that it does not have any
    affiliated or subsidiary companies. Universal Communication Networks
    Reply Comments at 2.

[^77]: ^?^ *Texas Preemption Order*, 13 FCC Rcd at 3480, ¶¶ 41-42; *see*
    Silver Star Telephone Company Petition for Preemption and
    Declaratory Ruling, Memorandum Opinion and Order at ¶ 37 (1997)
    (*Silver Star Preemption Order*). Since Minnesota asserts that the
    Agreement falls within the exception to preemption created by
    section 253(b), it bears the burden of demonstrating that the
    Agreement falls within the parameters of section 253(b).

[^78]: ^?^ Petition at 28-30; ICS/UNC, L.L.C. Reply Comments at 7; USDOT
    Reply Comments at 7-8; *but see* GTE Comments at 10; Time Warner
    Reply Comments at 10-11. The State issued a Request for Proposals
    (RFP). The RFP listing criteria for proposals was published in the
    State Register and, the State awarded the right to negotiate the
    contract to the party filing the most advantageous proposal. The RFP
    was open to all qualified parties. Petition at 31; *see also* ICS
    Reply Comments at 7-8. Minnesota notes that several of the
    commenters who oppose Minnesota\'s Petition submitted proposals in
    response to the RFP. Minnesota Reply Comments at 43.

[^79]: ^?^ *Texas Preemption Order*, 13 FCC Rcd at 3480, ¶ 41.

[^80]: ^?^ In the *Huntington Park Preemption Order*, we were not
    concerned with how Huntington Park chose Pacific Bell as the
    provider, we were concerned with the effect of the contract on
    competition. *California Payphone Association Petition for
    Preemption of Ordinance No. 576 NS of the City of Huntington Park,
    California Pursuant to Section 253(d) of the Communications Act of
    1934*, Memorandum Opinion and Order, 12 FCC Rcd 14191, 14206-07, ¶¶
    32-34 (1997) (*Huntington Park Preemption Order*).

[^81]: ^?^ *See* US West Comments at 18-19; Nextlink Comments at 10
    (noting that Developer and collocators will have an advantage over
    other telecommunications providers); NTCA Comments at 5 (noting that
    Developer benefits by providing Minnesota with service, precluding
    other carriers from providing service to the State); MFS Comments at
    23.

[^82]: ^?^ *Texas Preemption Order*, 13 FCC Rcd at 3500, ¶ 82.

[^83]: ^?^ *Id.*

[^84]: ^?^ *See supra* Section II, C, 4, d.

[^85]: ^?^ Petition at 27; Minnesota, Lari Aff. at ¶ 8; Minnesota Reply
    Comments at 36, 40; Durgin Reply Aff. at ¶ 20; USDOT May 21 *ex
    parte* at 4-5 (Noting that the ongoing debate about whether to allow
    access to these rights-of-way was \"not because of doubts about the
    ability of modern communications technology to serve the public
    interest, but because of the millions of accidents that occur on the
    nation\'s highway each year, and the established fact that the
    presence of construction vehicles and personnel on the rights-of-way
    of these roads unfortunately results in additional accidents,
    injuries, and deaths.\"); *see also* Crown Castle Reply Comments at
    3. It is USDOT\'s view that requiring relatively frequent reopening
    of telecommunications trenches \"would be unpalatable to most
    states, which could retain or revert to prior policies forbidding
    access altogether to affected rights-of-way.\" USDOT May 21 *ex
    parte* at 5; *but see* MTA, Cosson July 22 *ex parte* at 7 (arguing
    that USDOT has safety reviewed state policies allowing multiple
    installations of fiber facilities).

[^86]: ^?^ Although we accord substantial deference to a state\'s expert
    agency when considering issues of highway safety, certain aspects of
    the state\'s claims are in dispute.

[^87]: ^?^ Letter from David Cosson, Kraskin, Lesse & Cosson, LLP, to
    Magalie Roman Salas, Secretary, Federal Communications Commission,
    and Carol E. Mattey, Chief, Policy and Program Planning Division,
    Federal Communications Commission (Dec. 22, 1998), Arnold R. Kraft
    Affidavit at ¶ 9 (MTA, Kraft *ex parte* Aff.); RCN Comments at
    11-12; ALTS Comments at 17; MTA, Cosson July 22 *ex parte* at 6, 8;
    *but see* USDOT May 21 *ex parte* at 3 (Less than fifty percent of
    the 2,000 miles covered by the Agreement has a right-of-way so wide
    that construction equipment and crews can avoid working in the
    shoulder area, *i.e.*, \"on more than 1,000 miles of Minnesota\'s
    roadways over the next one to two years, telecommunications-related
    work in the ROW will introduce a non-trivial safety risk to
    motorists and work crews); Minnesota, Ahlers June 16 *ex parte* at 4
    (Claiming that the width of the rights-of-way varies); Minnesota,
    Ahlers Sept. 14 *ex parte* at 4.

[^88]: ^?^ MTA, Kraft *ex parte* Aff. at ¶ 10 (emphasis added), Att. 1,
    National Cooperative Highway Research Program, *Procedures for
    Determining Work Zone Speed Limits,* Research Results Digest, Sept.
    1996, at Table 10 (NCHRP safety study). Minnesota references the
    same study cited by the MTA, but cites the data for construction on
    the paved roadway and the paved shoulder. The MTA points to the data
    for work off of the paved roadway and beyond the paved shoulder.

[^89]: ^?^ MTA, Kraft *ex parte* Aff. at ¶ 9 (emphasis added); *see*
    NCHRP safety study, Table 10.

[^90]: ^?^ ALTS Comments at 17; MFS, Eide Decl. at ¶ 8 (According to MFS
    declarant: \"\[t\]he customary practice of placing fiber optic cable
    away from the surface of the roadway, and the extremely low level of
    maintenance for fiber, minimizes safety considerations.\");
    Ameritech Comments at 3-4 (\"The sole justification Minnesota offers
    for limiting the use of the freeways to a single entity is the
    historic prohibition on use for these purposes coupled with a naked
    assertion that access must be limited to a single party in order to
    address concerns regarding the safety of the traveling public and
    the adverse consequences of congestion.\")

[^91]: ^?^ MTA, Kraft *ex parte* Aff. at ¶ 13, Att. 2, National
    Cooperative Highway Research Program, Longitudinal Occupancy of a
    Controlled Access Right-of-Way by Utilities, National Research
    Council (1996).

[^92]: ^?^ 47 U.S.C. 253(b).

[^93]: ^?^ Universal Communication Networks Reply Comments at 2, 5;
    Minnesota, Ahlers June 16 *ex parte* at 5.

[^94]: ^?^ *See supra* paras. -.

[^95]: ^?^ 47 U.S.C. § 253(c).

[^96]: ^?^ Minnesota, Ahlers June 16 *ex parte* at 4.

[^97]: ^?^ Petition at 29-32.

[^98]: ^?^ *TCI Cablevision of Oakland County, Inc. Petition for
    Declaratory Ruling, Preemption and Other Relief Pursuant to 47
    U.S.C. §§ 541, 544(e), and 253*, Memorandum Opinion and Order, 12
    FCC Rcd 21396, 21441; *Classic Preemption Order*, 11 FCC Rcd at
    13103, ¶¶ 39-40; *see also* USTA Joint Comments at 12; RCN Comments
    at 4-5; Midwest Wireless Comments at 6; GTE Comments at 11; MFS
    Comments at 35. In the Classic Preemption Orders, the Commission
    found that the types of activities that fall within the sphere of
    appropriate rights-of-way management include coordination of
    construction schedules, determination of insurance, bonding, and
    indemnity requirements, establishment and enforcement of building
    codes and keeping track of the various systems using the
    rights-of-way to prevent interference between them. *Classic
    Telephone, Inc., Petition for Emergency Relief, Sanctions and
    Investigation*, Memorandum Opinion and Order, 12 FCC Rcd 15619, at
    15637, n.102 (citing *Classic Preemption Order*, 11 FCC Rcd at
    13103, ¶ 39); *see* GVNW at 5; *see also* ALTS Comments at 13, n.15,
    18; MFS Comments at 36; Time Warner Reply Comments at 12; *but see*
    USDOT Reply Comments at 6-7 (Arguing that the Agreement is a
    \"reasonable exercise of its management authority over public
    rights-of-way\").

[^99]: ^?^ House Report No. 104-204, U.S. Congressional & Administrative
    News, March 1996, vol.1, Legislative History section at 41(emphasis
    added).

[^100]: ^?^ *Classic Preemption Order*, 11 FCC Rcd 13082, 13103, ¶ 39;
    *Cablevision of Boston, Inc., v. Public Improvement Commission of
    the City of Boston*, No. 99-1222, 1999 WL 632203, at \*11-13 (1st
    Cir. Aug 25, 1999)(finding that the \"larger context suggests that
    \[Congress\] would have wanted to impose \[the competitively neutral
    and nondiscriminatory\] requirement on both management of rights of
    way and compensation schemes\" despite the fact that syntactically
    and semantically \"competitively neutral\" only applies to
    compensation schemes and not management of rights of way.)

[^101]: ^?^ 47 U.S.C. § 253(c); *see supra* Section II, D, 1.

[^102]: ^?^ 47 U.S.C. § 253(c).

[^103]: ^?^ *Id.*