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                                Before the
                     Federal Communications Commission
                          Washington, D.C. 20554
In the Matter of                                            )
                                                    )
Multimedia Cablevision, Inc.,                )
                                                    )
               Complainant,                         )
                                                    )              CS Docket No. 96-181
       v.                                           )              PA 95-008
                                                    )
Southwestern Bell Telephone                  )
Company,                                            )
                                                    )
               Respondent.                          )
MEMORANDUM OPINION
                   AND
            HEARING DESIGNATION ORDER
   Adopted:  August 26, 1996                                     Released:  September 3, 1996
By the Commission:
                              I. INTRODUCTION
     1.  In this Order, we designate for hearing a conduit attachment complaint filed by
Multimedia Cablevision, Inc. (Multimedia) against Southwestern Bell Telephone Company
(SWB).  The complaint concerns the conduit attachment rates SWB has charged Multimedia since
July 1, 1991.  To expedite the resolution of this complaint, we direct the presiding administrative
law judge (ALJ) to require the parties to meet prior to the hearing to determine whether the case
can be settled.  In the event a settlement is not reached, the presiding judge will, if possible,
resolve the case on a paper record, but, if unable to do so, shall conduct such further proceedings
as may be necessary.
                              II. BACKGROUND
A.  Statutory and Rule Requirements
     2.  Pole attachments refer to, inter alia, the placement of cable operator equipment on
utility poles or in conduit or ducts owned or controlled by a utility company, including a local
exchange carrier.  The utility can charge the cable operator for the attachment of its facilities
to the utility's poles or conduits.  Section 224 of the Communications Act of 1934, as amended,
empowers the Commission to adjudicate disputes between cable system operators and utilities
concerning allegedly unjust and unreasonable pole or conduit attachment rates that no state
regulates.  In enacting Section 224, Congress specified that each conduit attachment rate would
be deemed 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 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 ... duct, conduit, or right-of-way.
This statutory language defines a zone of reasonableness for conduit attachment rates that extends
from the utility's incremental costs to the cable operator's share of the utility's fully allocated
costs.  Incremental costs consist of those costs that the utility would not have incurred "but for"
cable attachments.  Fully allocated costs refer to the total operating expenses and capital costs
of owning and maintaining conduits.  Fully allocated costs are either incurred directly with
respect to conduits or allocated to conduit activities and include depreciation, administrative, and
maintenance expenses, taxes, and a return on investment.
    3.  The case before us presents us with our first opportunity to address conduit attachment
rates.  As previously noted, Section 224 provides the basic methodology for computing the
maximum just and reasonable pole and conduit attachment rates.  In the paragraphs that follow,
we describe how the methodology of Section 224 is applied to conduit attachment cases and how
our present pole attachment formulas can be adjusted and employed to determine the maximum
just and reasonable conduit attachment rates.
    4.  Based on the statutory language contained in Section 224 and the legislative history,
the Commission adopted Section 1.1409(c) of its rules.  This section, as applied to conduit,
translates the upper bound of the zone of reasonableness defined by Congress into the following
formula:
Maximum = Space Occupied by CATV x (Operating Expenses + Capital Cost of Conduit)
           Rate           Total Usable Space
    5.  The rule provides that in the context of conduit the percentage of the total usable space
is the percentage of conduit capacity which is occupied by the attachment.  We generally
calculate the sum of operating expenses and capital cost of poles by multiplying the net cost of
a bare pole times the carrying charges.  Carrying charges refer to costs incurred by the utility
in owning and maintaining conduit regardless of the presence of cable attachments.  They
include the utility's income tax, conduit maintenance, administrative, and depreciation expenses,
as well as a return on conduit-related investment at the authorized intrastate rate of return.  We
express the carrying charges as a percentage that we calculate using formulas.
    6.  In this case, we multiply the net linear cost of the conduit (instead of the net cost of
a bare pole) times the carrying charges so that the formula defining the upper bound of the zone
of reasonableness becomes:
Maximum = Space Occupied by CATV  x  Net Conduit Cost  x  Carrying
    Rate          Total Usable Space  per meter      Charges
   7.  When we compute net cost of a bare pole, we multiply a factor times the net asset
value of poles.  The factor reflects non-cable related investment, such as guys and crossarms,
that are included in the poles account.  This factor is .85 for electric utilities or .95 for
telephone companies.  For conduit, we believe that there is no such comparable non-cable
related investment; thus, the computation for net cost of conduit does not reflect the pole
attachment factors.  As a result, the net linear cost of conduit computation for utilities is
illustrated as follows:
Net Conduit Cost = Net Conduit Investment
per meter              Length (Meters)
    8.  In the Pole Attachment Order, we listed the regulatory accounts to be used, where
possible, in applying the formulas to determine the maximum allowable rate for pole
attachments.  For telephone companies, the accounts we listed were in our existing uniform
accounting system for telephone companies.  Effective January 1, 1988, we replaced that
accounting system with a new system that changed how telephone companies account for their
costs, including those used in applying the pole attachment formulas.  In a June 22, 1990 letter,
the Common Carrier Bureau's Accounting and Audits Division (Division) provided guidance on
how to apply the formulas using Part 32 accounts.  That letter indicates where expenses
recorded previously under Part 31 were required to be recorded under Part 32.  The conduit
attachment formulas under Part 32 are provided in Attachment A of this Order.
B.  The Pleadings
    9.  Multimedia filed its complaint on December 30, 1994.   In its complaint, Multimedia
states that it owns and operates a cable television system serving Wichita, Kansas.  Multimedia
also states that it has conduit attachment contracts with SWB, that it has occupied conduit space
controlled by SWB pursuant to those contracts, and that it pays SWB an annual rental fee of $.44
per foot for conduit space.  Using information provided by SWB and applying our pole
attachment formula, Multimedia calculates that the maximum just and reasonable rate for its
conduit attachments is $.06 per foot per year, based on accounting data related solely to the
Wichita, Kansas service area, or in the alternative $.38 per foot per year, based on accounting
data for the entire State of Kansas.  Multimedia urges the Commission to declare SWB's conduit
attachment rate unlawful, to declare that SWB's methodology for calculation of conduit
occupancy unlawful, to declare that SWB's practice of billing Multimedia for multiple parallel
facilities placed in ducts results in unjust and unreasonable rates, to declare any separate non-
video conduit occupancy rate unlawful, to substitute a lower rate for the $.44 per foot rate for
each conduit occupancy, to order refunds with interest of any payments in excess of the lawful
rate, and to grant Multimedia costs and reasonable attorneys' fees incurred in the prosecution of
the case.
    10.  In its response to Multimedia's complaint, SWB makes both procedural and
substantive arguments.  We address these arguments below.
                          III. PROCEDURAL ISSUES
A.  Sufficiency of Complaint
   1.  Failure to State a Claim
    11.  SWB asserts, as an affirmative defense, that Multimedia has failed to state a claim
under our pole attachment rules because Multimedia has failed to take into consideration the
significant differences between conduit systems and utility pole attachments.  This assertion is
completely without merit.  Our rules, while entitled "Pole Attachment Complaint Procedures,"
also apply to cable operators' attachments to or occupancies of ducts, conduits, or rights-of-way.
Multimedia has met all the requirements set forth in Section 1.1404 of our rules governing pole
attachment complaints and has included a statement of the specific unreasonable pole attachment
rate, term or condition and all arguments used to support its claim of unreasonableness.  As a
result, Multimedia has established in its pleadings a prima facie conduit attachment case pursuant
to our rules; thus, SWB's affirmative defense cannot stand.
   2.  Failure to Summarize Steps to Settle Case
    12.  SWB also asserts, as an affirmative defense, that Multimedia failed to provide a brief
summary of all steps taken to resolve the problems prior to filing the complaint, as required by
Section 1.1404(i).  Again, this assertion is without merit.  Multimedia detailed the negotiations
that Multimedia has had with SWB concerning the subject matter of this complaint and stated
that it had also attempted unsuccessfully on numerous occasions to resolve these matters
informally.  We believe that Multimedia has satisfied the requirements of Section 1.1404(i) of
our rules, and therefore we reject SWB's affirmative defense based on the failure of Multimedia
to summarize the steps it has taken to settle the complaint.
   3.  Failure to Include Appropriate Data
    13.  Section 1.1404(g) of our rules requires pole or conduit attachment rate complainants
to provide certain data and information in support of these complaints.  SWB maintains that
Multimedia has not specified all information necessary to establish that the conduit rate is unjust
and unreasonable; SWB asserts this failure as an affirmative defense to Multimedia's complaint.
    14.  The purpose of the information required by Section 1.1404(g) is to ensure that
accurate, up-to-date information is utilized in pole attachment proceedings.  We find that
Multimedia's complaint includes information specified in the rule.  Although SWB disputes some
of the numbers Multimedia uses in applying the formulas to calculate the maximum just and
reasonable rate, the existence of those disputes does not require dismissal of the complaint.
   4.  Vague and Unclear Complaint
    15.  SWB additionally asserts that Multimedia's complaint is vague and unclear in its
application of the Commission's pole attachment procedures with respect to the usable conduit
space occupied by Multimedia's facilities.  SWB asks that we dismiss the complaint with
prejudice.  We address the substantive issues with respect to conduit space below.  We believe
that Multimedia has made a good faith effort to describe its conduit occupancy and how that
occupancy should be factored into the conduit attachment formulas.  We will not penalize
Multimedia simply because we have not had occasion to rule on a conduit attachment case.  We
again reject SWB's affirmative defense.
B.  Costs and Attorneys' Fees
    16.  In its complaint, Multimedia requested that we grant them costs and attorneys' fees
resulting from the prosecution of this conduit attachment complaint.  SWB argues that we have
no authority to grant such costs and attorneys' fees in pole attachment proceedings.  We agree
with SWB that we do not have the authority to grant costs and attorneys' fees.  Thus, we
dismiss Multimedia's request.
                          IV. SUBSTANTIVE ISSUES
A.  Space Occupied by Cable
    17.  Our rules provide that in determining the maximum just and reasonable rate for a
conduit attachment one begins with the "percentage of the total duct or conduit capacity which
is occupied by the pole attachment."  We believe that the major issues in this case revolve
around a prescription for a methodology for determining total conduit space, conduit space
occupied by a cable operator, and usable space in a conduit.  We will first address the
determination of total conduit space and conduit space occupied by a cable operator.
    18.  There are  numerous methods of approximating total conduit space and conduit space
occupied by a cable operator.  SWB attempts this computation by using what SWB refers to as
a linear methodology.  SWB's approach results in a cable operator being charged a rate based
on the cost of one duct for each cable that the cable operator runs through SWB's conduit
system.  As an alternative, it might be possible to approximate conduit space by utilizing a pure
cubic footage methodology as articulated by Section 224.  Under this approach, total conduit
space would be the total cubic footage of the conduit system.  The amount occupied by the cable
operator would be the total cubic footage of its cables in the conduit system.  Another
methodology would utilize a reasonable surrogate for a pure cubic footage methodology.  Such
a surrogate method could involve analyzing total capacity of the conduit system in terms of
average number of ducts in conduit.  A cable operator's occupancy could be approximated by
dividing the number or portion of ducts it occupies by the average number of total ducts within
the conduit system.
    19.  The parties have not stipulated any methodology, and thus, we are left to determine
a methodology based on the tenets of Section 224.  Section 224 clearly provides that total conduit
space and conduit space occupied by cable operators are based on duct or conduit capacity.
Section 224 states that: "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 the total duct or conduit
capacity..."  We do not adopt SWB's methodology because it gives no consideration to the
actual space occupied by the cable operator.  We also decline to adopt a pure cubic footage
approach as being too difficult to apply.  We believe that there are other approaches that provide
reasonable estimates of capacity without using pure cubic footage.  We apply herein the
methodology posed by Multimedia.  We describe the methodology in the paragraphs that follow.
   20.  During settlement conferences attended by the parties to this complaint and
Commission staff, the Commission was presented data which indicated that SWB's Kansas
conduit system contained 1,165 trench kilometers and 9,001 duct kilometers.  Based on these
figures, SWB's Kansas conduit system contains an average of 7.73 ducts.  We realize that conduit
comes in different shapes and sizes and that the number of ducts per conduit also varies; the
figure of 7.73, however, represents the average of the system.  The average number of ducts
serves as the basis for the denominator of the occupied space component of the conduit
attachment formula.  This figure is used as a surrogate for total conduit space.
    21.  The space occupied by Multimedia can be estimated based on the number of ducts
or portion of a duct that its cable occupies.  With respect to a duct, the space occupied by
Multimedia is the portion of the duct capacity that the cable operator occupies.  However, in this
case, the actual portion of the space occupied is in dispute.  Multimedia claims that their conduit
attachment rate should only be one-half the rate of a full-duct because their cable attachment
occupies only one-half of the duct or less.  In support of this half-duct rate, Multimedia refers
to the methodology adopted by the Massachusetts Department of Public Utilities ("MDPU").
    22.  In the MDPU decision, the MDPU found that the half-duct methodology was a
reasonable solution for use in establishing a conduit attachment rate for the complainant, cable
operator.  The MDPU held that since the space occupied by the cable operator required the use
of a half-duct only, and that its use did not preclude the use of the other half of the conduit, the
cable operator should only be charged for a half-duct.  Moreover, the MDPU found that unless
a cable operators conduit precludes use by other conduit attachers of the other half of the duct,
the cable operator should pay only for a half-duct.  Based on the record, we believe that the
actual portion of the duct occupied by Multimedia is one-half or less.  Thus, consistent with
Multimedia's suggestion, we will follow the MDPU's decree and adopt a presumptive half-duct
methodology.  We consider this to be the simplest and most straight forward approach.  In
order to calculate this formula, a determination of the cost per foot of one duct must be made,
and then divided by one-half to produce a "half-duct convention."  This determines the maximum
just and reasonable rate per duct foot that can be charged for cable attachments.  Accordingly,
we require Multimedia to serve on the Commission information concerning the number of cables
and the length of each cable that Multimedia has laid in SWB's Wichita conduit system.
B.  Usable Space
    23.  Our pole attachment formula calculates a cable operator's share of pole expenses
based on only the usable space of the pole.  In the case of 30 and 40 foot poles, we estimate the
usable space to be 11 feet and 16 feet respectively.  The average of those two numbers, 13.5
feet, serves as the denominator of the usable space component.  In contrast, most of the ducts
in conduits are considered usable.  There may, however, be situations in which a utility might
reserve a duct for maintenance, and, in doing so, might create unusable space.
    24.  In the present case, we rule that if SWB reserves one duct for maintenance, and if
Multimedia has the right to utilize that reserved space in the event of a cable break or benefits
in any way from the reservation of that space, that reserved duct shall be considered unusable
space.  In that event, the denominator of the occupied space component, the average number of
ducts, should be reduced by the number of such reserved ducts.  If Multimedia has no right to
use that space or receives no benefit from that duct, we hold that the denominator should not be
reduced.
    25.  We require that SWB file with the Commission information concerning the existence
and use of a maintenance duct.  Based on that information and any other required to be filed by
the ALJ, the ALJ shall determine whether SWB has established that a duct(s) or a portion thereof
that is reserved for maintenance shall be excluded from the denominator of the conduit space
formula.  Such determination shall be based on the criteria of whether the cable operator receives
a benefit from the reservation of such duct.
C.  Statewide Data
    26.  Multimedia requests that we require SWB to submit cost data that details the costs
associated with SWB's conduit system in Wichita, Kansas rather than receive conduit data for
the State of Kansas as a whole.  Multimedia argues that the Wichita data should be used in the
conduit attachment formulas and would better represent the costs of the Wichita conduit system
rather than statewide information.  SWB objects to the use of Wichita conduit costs because its
cost information is maintained on a statewide basis and because the Commission has always
required statewide data to be used in the pole attachment formulas.
    27.  We agree with SWB that conduit attachment formulas should be based on statewide
figures.  Our rules contemplate that information filed with regulatory agencies serve as the basis
for pole and conduit attachment computations.  This data is prepared on a statewide, rather than
a system-specific basis.  We believe that statewide information provides readily obtainable data
to be used in pole or conduit attachment rate computations and should continue to serve as the
basis for these computations.
D.  Operating Expenses
   1.  Administrative Expenses
       a.  Parties' Positions
    28.  Multimedia and SWB disagree with respect to the computation of the administrative
component of the carrying charges.   Under our former Part 31 accounting system, telephone
companies used Accounts 661 through 665 and Accounts 668 through 677 to record general and
administrative expenses.  Under our Part 32 rules, telephone companies use various accounts
to record those expenses.   Multimedia includes Accounts 6710, Executive and planning, and
6720, General and administrative, in the numerator of the administrative component calculation.
In addition, Multimedia uses Total Telephone Plant as the denominator for the administrative
component computation.
    29.  SWB contends that amounts recorded in Account 6535, Engineering expense, should
also be included in the numerator of the administrative component computation.  SWB states
that the Commission's rules do not require any portion of Account 6535 to be removed from the
computation of the administrative component.  SWB also argues that the numerator of the
administrative factor should reflect any conduit-associated benefits or rents under Account 6441.
Finally, SWB contends that Account 2001, Total Telephone Plant in Service, should serve as the
denominator of the administrative component computation.
       b. Discussion
    30.  We first note that Multimedia, in its reply to SWB's response, indicates that it has
no objection to the inclusion of conduit-associated benefits and rents in the numerator of the
administrative component computation.  Thus, we direct SWB to file information with the
Commission concerning the amounts of conduit-associated benefits and rents to be included.
    31.  For the second issue concerning the administrative component calculation, we must
utilize a methodology that attempts to equate our calculations under Part 32 with those under Part
31.  Account 6535, Engineering expense, is intended to be used to record general engineering
expenses that are not directly chargeable to specific undertakings or projects.  According to the
June 22 Letter, a portion of Account 6535 would include expenses that under Part 31 would have
been recorded in Account 675 or cleared to Account 602:1.  Because the Commission
determined that administrative component calculations should reflect all amounts recorded in
Account 675, we hold that a portion of Account 6535 should be included in the numerator of
the calculation of the administrative component.  We conclude that any portion of Account 6535
that would have been previously recorded in Account 675 shall be included in the numerator of
the administrative component calculation.
    32.  The record does not make clear what portion of Account 6535 SWB would have
included in pole attachment rate calculations under Part 31.  To expedite resolution of the
complaints, we require SWB to file that information with the Commission.  We direct the ALJ
to resolve any issue that develops in this regard.
    33.  We also note that in Multimedia's reply to the response of SWB, that Multimedia
acknowledges that, due to a typographical error, it used Total Kansas Telephone Plant in the
denominator of the administrative component computation.  We accordingly direct that  Account
2001, Total Telephone Plant in Service, be utilized as the base for the denominator of the
administrative component computation.
   2.  Taxes
    34.  Multimedia also used the Total Kansas Telephone Plant in the denominator of the
taxes component computation.  As discussed above, Multimedia has acknowledged this error.
We accordingly direct that Account 2001, Total Telephone Plant in Service, be utilized as the
base for the denominator of the taxes component computation.
   3.  Cost of Capital
    35.  In applying the pole attachment formulas, Multimedia includes a rate of return of
11.25% which it indicates is the default rate of return used by the Commission for local exchange
and cable rates.  SWB instead utilizes a rate of return of 12.19%, which was derived by the
Kansas Corporation Commission sometime during the mid-1980s.
    36.  In the past, for the computation of the rate of return carrying charge, telephone
companies and electric utilities have utilized the rate of return for intrastate services as announced
by the applicable state public service commission.  Kansas presents us with the problem of a state
that has adopted price regulation and no longer announces such a rate of return.  In prior pole
attachment cases, we have required that parties employ the weighted average cost of debt and
equity as announced by the appropriate state regulatory authority as the cost of capital component
because that figure provides the best estimate of the costs incurred by a utility in attracting
capital, including that invested in poles and conduit.  We still believe that the weighted average
cost of debt and equity is the proper cost of capital figure.  Because Kansas no longer announces
this figure, we direct SWB to submit information to the Commission concerning its weighted
average cost of capital, both debt and equity, for the State of Kansas during the years in question.
This information shall be used to compute the cost of capital carrying charge to be included in
the conduit attachment rate formulas.
E.  Retroactive Billing
    37.  The record indicates that, on October 27, 1994, SWB retroactively billed Multimedia
for placing more than one cable in SWB's conduit from July 1, 1991.  Multimedia subsequently
filed a conduit attachment complaint on December 30, 1994.  According to Section 1.1410(c) of
our rules, refunds in pole or conduit attachment cases accrue from the date the complaint is filed.
As a result, we require that SWB's Kansas conduit attachment rates should be recomputed for
the period since December 30, 1994, using the methodology described in Part IV of this Order.
If the recomputed rates are in excess of that paid by Multimedia, we require Multimedia to pay
the difference, with interest, to SWB.  In the event that Multimedia paid amounts in excess of
the recomputed conduit attachment rates for this period, we require SWB to refund the difference
to Multimedia, with interest.
    38.  To assist the ALJ in efforts to decide the case based on a paper record, we direct
SWB to file with the Commission the data required by Section 1.1404(g) and any other data
needed to calculate the maximum just and reasonable rates pursuant to our conduit attachment
formulas.  We also require that Multimedia submit information with the Commission concerning
the amount of conduit rates paid to SWB and the amount of linear feet that its cables occupy in
SWB's Kansas conduit system in each of the years since December 30, 1994.
V. CONCLUSION
    39.  To expedite this proceeding, we designate this complaint for a hearing before an ALJ
pursuant to Section 1.1411 of the rules.  In taking this step, we direct the presiding ALJ to use
procedures designed to encourage the parties to settle the case or narrow their differences.  This
Order has directed that the parties submit various data to the Commission in order to expedite
the ALJ's decision making process.  In every instance, the parties should support the data
submitted by an accompanying affidavit.  The ALJ may also request one or both of the parties
to provide any additional information deemed necessary to clarify the issues or facilitate their
resolution.  If the parties are unable to settle the case, the ALJ will attempt to decide this case
based on the paper record.  If unable to do so, the ALJ shall have discretion to conduct such
further proceedings as deemed necessary and to add any issues during the hearing that will aid
in resolving the complaint.
    40.  If the parties fail to reach a settlement, the ALJ will determine whether SWB charged
Multimedia conduit attachment rates in excess of the maximum allowable in accordance with
Section 1.1409(c) and the guidelines of paragraphs 36 and 37 above.  If the rates are unlawful,
the ALJ shall determine the refund amount that is to be paid pursuant to Section 1.1410 of the
rules and the guidelines of paragraphs 36 and 37 above.
    41.  The ALJ shall also determine whether, based on its double-occupancy of SWB's
Kansas conduit system, the recomputed rates are in excess of that paid by Multimedia or whether
Multimedia paid amounts in excess of the recomputed conduit attachment rates for the period
beginning on December 30, 1994.
                            VI. ORDERING CLAUSE
    42.  Accordingly, IT IS ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), and 224, that the
complaint Multimedia Cablevision, Inc. filed December 30, 1994, against Southwestern Bell
Telephone Company IS GRANTED to the extent indicated in Parts III and IV of this Order, IS
DISMISSED to the extent indicated in Parts III and IV, and to the extent neither granted, nor
dismissed, IS REFERRED to an Administrative Law Judge.
    43.  IT IS FURTHER ORDERED, pursuant to Sections 4(i), 4(j), and 224 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), and 224, that the above-
captioned complaint proceeding IS DESIGNATED FOR HEARING before an Administrative
Law Judge either on a paper record or as required at a time and place to be specified in a
subsequent order upon the following issues:
           1.  To determine whether SWB charged Multimedia conduit attachment
           rates that exceeded the maximum amounts allowable under Commission
           rules during the period covered by the complaint.
           2.  If SWB has charged Multimedia excessive conduit attachment rates
           during the period covered by the complaint, to determine the amounts of
           the refunds, plus interest on refunds accruing after December 30, 1994,
           SWB must pay Multimedia.
    3.  To determine whether Multimedia has underpaid conduit attachment
    rates during the period covered by the complaint.
    4.  If Multimedia has underpaid conduit attachment rates, to determine the
    amounts Multimedia must pay to SWB.
    44.  IT IS FURTHER ORDERED, that the burden of proof and the burden of proceeding
with the introduction of evidence SHALL BE UPON complainant, except that respondent shall
bear the burden of proof with respect to the issues of whether complainant has underpaid conduit
attachment rates since December 30, 1994 and whether complainant has received a benefit from
any reserved duct.
    45.  IT IS FURTHER ORDERED, that the designated parties may avail themselves of an
opportunity to be heard by filing with the Commission a Notice of Appearance in accordance
with Section 1.221 of the Rules, 47 C.F.R. 1.221, within twenty (20) days of the mailing of this
Order.
    46.  IT IS FURTHER ORDERED, that SWB and Multimedia SHALL FILE the
information set forth above, within thirty (30) days of the mailing of this Order.
    47.  IT IS FURTHER ORDERED, that the parties SHALL ADDRESS any exceptions to
the ALJ's decision in this proceeding to the Commission.
    FEDERAL COMMUNICATIONS COMMISSION
    William F. Caton
    Acting Secretary ATTACHMENT A
COND                     UIT ATTACHMENT FORMULAS
Maximum Rate      =      A x 1  x C x D
    B    2
Net Linear Cost   =      E-F-G*
of Conduit                   I
Net Conduit              =     E-F-G*
Investment
Accumulated
Deferred                 E xM*
Income Taxes      =      K
(Conduit)
Depreciation                   O x  E
Carrying          =             H
Charge
Administrative    =      Q  X
Taxes                    =     S  J
Maintenance       =      U  W
KEY
A = Space Occupied by CATV (1 duct)
B = Average # of Ducts (Duct km/Trench km)
C = Net Linear Cost of Conduit
D = (N+P+R+T+V)
E = Gross Conduit Investment in Part 32, Account 2441
F = Depreciation Reserve (Conduit)
G = Accumulated Deferred Income Taxes (Conduit)
H = Net Conduit Investment
I = Total Conduit Feet
J = Net Plant Investment
K = Total Gross Plant Investment
L = Total Depreciation Reserve
M = total Accumulated Deferred Income Taxes*
N = Depreciation Carrying Charge
O = Depreciation Rate for Conduit
P = Administrative Carrying Charge
Q = Total General and Administrative Expenses
R = Tax Carrying Charge
S = Total Current and Deferred Tax Expense
T = Maintenance of Carrying Charge
U = Conduit Maintenance Expense
V = Cost of Capital (Return) = Return Authorized by State Regulatory Commission (or as
    described in this Order)
W = Net Investment in  Conduit*
X = Net Plant Investment*
*   We are treating deferred taxes as most state commissions do - as a rate base
deduction.  If the state utility commission includes the reserve for deferred income taxes in
the utility's capital structure at zero cost, we would not need to make any further adjustment.