Before the
                      Federal Communications Commission
                          Washington, D.C. 20554
In the Matter of              )         CS Docket No. 97-98
Amendment of                  )
Rules and Policies                 )
Governing Pole Attachments              )
                              )
In the Matter of                   )         CS Docket No. 97-151
Implementation of Section 703(e) of          )
The Telecommunications Act of 1996      )
         CONSOLIDATED PARTIAL ORDER ON RECONSIDERATION
         Adopted:  May 22, 2001         Released:  May 25, 2001
By the Commission:
                              Table of Contents
                                                                  Paragraph
          I.   INTRODUCTION                             1
          II.  BACKGROUND                          .    7
          III.                                              ORDER ON RECONSIDERATION                     10
       A. COMPLAINT PROCEDURES AND NEGOTIATED AGREEMENTS  ...    10
       B. BASIC CONCEPTS USED IN THE FORMULA                15
          1.   Use of Actual Costs                     .    15
          2.   When Net Pole Investment is Zero or Negative          ..    22
          3.   Case by Case Applications                  ..     39
       D. THE SPACE FACTOR                     .. 42
          1.   Average Pole Height                      .   46
          2.   Safety Space                            47
          3.   Minimum Ground Clearance                 ... 48
          4.   Telecom Formula Space Factor                      49
                 a.                                              Counting Attaching Entities             ..   49
                 b.                                              Average Number of Attaching Entities         ..    50
                    i.   Geographic Areas                   60
                         ii.  Presumptive Averages            .  65
       C. OVERLASHING                        ...  69
          1.   Space Occupied by Third Party Overlashing              69
          2.   What the Third Party Overlasher Pays              ..   72
          3.   Wind and Weight Load Factors   ..              .. 73
          4.   Shared One-Foot Usable Space                      75
          5.   Cable Operator Not a Utility Obligated to Provide for Overlashing   ..     77
          6.   Notice to Utility Pole Owner                      78
          7.   Dark Fiber                              82
       H. CONDUIT ISSUES                       .  83
          1.   Space Factor in Conduit                      86
                 a.                                              Total Duct or Conduit Capacity            ..   87
                 b.                                              Occupied Capacity, the Half-Duct Presumption      ..  91
          3.   Net Linear Cost of Conduit                   ..   95
                 a.                                              Net Conduit Investment (LEC-Owned Conduit)          97
                 b.                                              Net Conduit Investment (Electric Utility-Owned Conduit)  .   101
       C. FERC AND ARMIS ACCOUNTS USED IN THE FORMULAS      104
          1.   Electric Utility Accumulated Deferred Income Taxes Poles (Correction)      105
          2.   Carrying Charge Accounts (LECs)               ..  106
          3.   Carrying Charge Accounts (Electric)                    112
          4.   Investment Accounts (Electric)                    116
          V.   FINAL REGULATORY FLEXIBILITY CERTIFICATION        ...  125
          VI.  PAPERWORK REDUCTION ACT OF 1995 ANALYSIS         .     129
          VII. ORDERING CLAUSES                        130
APPENDIX A - Revised Rules
APPENDIX B - List of Parties Filing in Fee Order Reconsideration Proceeding
APPENDIX C - List of Parties Filing in Telecom Order Reconsideration Proceeding
APPENDIX D-1 - Section 224(d) Cable Formula (LECS)
APPENDIX D-2 - Section 224(d) Cable Formula (Electric)
APPENDIX E-1 - Section 224(e) Telecom Formula (LECS)
APPENDIX E-2 - Section 224(e) Telecom Formula (Electric)
APPENDIX F-1 - Conduit Formula (LECS)
APPENDIX F-2 - Conduit Formula (Electric)

          I.                                                     INTRODUCTION
1.     In this Consolidated Partial Order on Reconsideration ("Reconsideration Order"), we
consolidate two reconsideration proceedings raising similar and interrelated issues concerning the
rates, terms and conditions of access for attachments by cable operators and telecommunications
carriers to utility poles, ducts, conduits and rights-of way pursuant to Section 224 of the Communications
Act of 1934, as amended ("Pole Attachment Act") and Subpart J of the Commission's Rules.  On February 6,
1998, we released a Report and Order, Implementation of Section 703(e) of the Telecommunications
Act of 1996, Amendment of the Commission's Rules and Policies Governing Pole Attachments, CS
Docket No. 97-151, FCC 98-20 ("Telecom Order"), adopting rules implementing section 703(e) of
the Telecommunications Act of 1996 ("1996 Act") relating to pole attachments.  On April 3, 2000,
we released a Report and Order, Amendment of Rules and Policies Governing Pole Attachments, CS
Docket No. 97-98, FCC 00-116 ("Fee Order") addressing concerns about the application of our
formula for determining reasonable rates for pole attachments. We have determined that it is in the
interest of administrative efficiency and regulatory effectiveness to consolidate these two
reconsideration proceedings.
2.     In the Telecom Order, we implemented Section 703(e) of the 1996 Act by prescribing
regulations, effective February 8, 2001, to ensure that a utility complies with the Pole Attachment
Act's requirements for just and reasonable rates, terms and conditions and nondiscriminatory access
for pole attachments used to provide telecommunications services. Among other things, the Telecom
Order considered the 1996 Act, Telecom Order comments and Telecom Order reply comments filed
in response to the Telecom Order Notice. Increases in prescribed rates for telecommunications
services attachers pursuant to section 224(e) of the Pole Attachment Act are to be phased in over five
years beginning February 8, 2001.
3.     Appeals of the Telecom Order were consolidated in the United States Court of Appeals for
the 11th Circuit and resulted in a decision, Gulf Power, et al. v. FCC and USA ("Gulf Power II").
That decision was stayed by the 11th Circuit Court of Appeals and the Commission filed a petition for
certiorari with the United States Supreme Court which was granted. Because two issues, the
application of the Pole Attachment Act to wireless telecommunications service providers and the
effect of Internet service on pole attachments are the subject of the appeal of Gulf Power II, we decline
to address those issues at this time, pending the issuance of a final mandate from the courts.  In
addition, the regulatory status of cable Internet access is the subject of an ongoing Notice of Inquiry
("NOI"), the resolution of which may affect our determination of this issue.  Therefore, we reserve
review of our position that wireless telecommunications service providers are covered by the Pole
Attachment Act and that Internet service is neutral for purposes of determining the character of the
attachment as cable or telecommunications.  However, these two issues remain open and will be the
subject of a later order once we have received guidance from the courts and have had an opportunity
to review the additional comments received in the NOI proceeding.
4.      In the Fee Order, we adopted rules based on the comments filed in response to the Fee
Order Notice. We also considered the Telecom Order comments and reply comments when relevant
to the issues addressed.  Among other things, the Fee Order addressed the use of certain presumptions
in our rate calculation methodology, the carrying charge rate elements used in our formulas, the use of
gross versus net data in our formulas used to determine a maximum just and reasonable rate for pole
attachments, the regulatory accounts to be used in our formulas, and the formula used to determine a
maximum rate for attachments to conduit.
5.     In this Reconsideration Order, we grant in part and deny in part petitions for
reconsideration and/or clarification of our Telecom Order ("Telecom Order petitions"). Nine Telecom
Order petitions were filed, and in response 15 parties filed Telecom Order reconsideration comments
and nine parties filed Telecom Order replies.  In this Reconsideration Order, we also  grant in part
and deny in part petitions for reconsideration and/or clarification of our Fee Order ("Fee Order
petitions").  Five Fee Order petitions were filed and in response two parties filed Fee Order
reconsideration comments and four parties filed Fee Order replies.
6.     In this Reconsideration Order, we
               (a)  affirm our decision not to impose additional regulation on the negotiation process or on
          the rules for resolution of pole attachment complaints;
          (b)  affirm the continued use, in the pole attachment rate calculation formulas, of specific
          regulatory accounts maintained by utilities that identify the actual costs incurred by the
          utilities for the poles, ducts, conduits and rights-of-way that are the subject of the
          attachment;
          (c)  reconsider and clarify the way in which entities are counted for the purpose of allocating
          and apportioning costs of unusable space for telecommunications attachers after
          February 8, 2001;
               (e)  reconsider and clarify the geographic areas used to determine average numbers of
          attaching entities for use in calculations of the formulas for telecommunications pole
          attachment rates, and establish two presumptive averages that may be used in our
          formulas after February 8, 2001;
               (f)  affirm and clarify our decisions regarding third party overlashing;
          (g)  affirm the presumption that a pole attachment occupies one foot of usable space
          occupied and that this presumption is rebuttable by either party;
               (h)  affirm that the formula adopted in the Fee Order, for calculating the rate for use of
          capacity in a conduit, is applicable to telecommunications systems; affirm the use in the
          formula of the actual percentage of the conduit capacity occupied, with a rebuttable
          presumption that an attacher occupies one-half duct; affirm our decision that there is no
          unusable capacity in a conduit; and affirm our decision that a utility may not exclude
          reserved capacity within a conduit system when calculating total capacity upon which
          the pole attachment rate in a conduit is based;
               (i)  affirm our position that complaints regarding nondiscriminatory access, rates, terms and
          conditions for non-traditional pole attachments, such as attachments to rights-of-way,
          wireless attachments and transmission facilities attachments, will be considered under
          our rules on a case-by-case basis;
          (j)  reconsider and clarify our methodology for calculating maximum pole attachment rates
          when the net pole investment becomes zero or negative.
          (k)  decline to reconsider at this time and reserve for later review, our decision that Internet
          service has a neutral affect on an attacher's classification as a cable system or
          telecommunications system;
          (l)  decline to reconsider at this time and reserve for later review, our decision that providers
          of wireless telecommunications services are entitled to the benefits and protection of
          the Pole Attachment Act; and
          (m)  amend our rules to reflect our decisions in this Reconsideration Order.
          XIV.                                                   BACKGROUND
15.    In 1978, Congress enacted section 224 of the Communications Act granting the
Commission authority to regulate the rates, terms, and conditions governing pole attachments,
requiring that such rates, terms and conditions be just and reasonable.  The Commission is
authorized to adopt procedures necessary to hear and to resolve complaints concerning such rates,
terms, and conditions. Congress sought to constrain the ability of utilities to extract monopoly profits
from cable television system operators in need of pole, duct, conduit or right-of-way space for pole
attachments.
16.    Section 224(d)(1) of the Pole Attachment Act defines a just and reasonable rate as ranging
from the statutory minimum based on the additional costs of providing pole attachments, to the
statutory maximum based on fully allocated costs.  The additional, or incremental, costs are the costs
that would not be incurred by the utility but for the pole attachments.  The maximum rate, identified
as a percentage of fully allocated costs, refers to the portion of operating expenses and capital costs
that a utility incurs in owning and maintaining pole attachment infrastructure that is equal to the
portion of space on a pole, or capacity of a duct, conduit, or right-of-way, that is occupied by an
attacher.  The Commission developed a methodology to determine the maximum allowable pole
attachment rate under section 224(d)(1) of the Pole Attachment Act which is referred to as the Cable
Formula.
17.    Subsequently, Congress enacted the 1996 Act "to accelerate rapidly private sector
deployment of advanced telecommunication and information technologies and services."  The 1996
Act amended section 224 in several important respects.  Section 703(6) of the 1996 Act added a new
subsection 224(d)(3), that expanded the scope of section 224 by applying the Cable Formula to rates
for pole attachments made by telecommunications carriers in addition to cable systems, until a
separate methodology becomes effective for telecommunications carriers in 2001.  Section 703(7) of
the 1996 Act added new subsections 224(e)(1-4), which set forth a separate methodology to govern
charges for pole attachments used to provide telecommunications services beginning February 8, 2001
("Telecom Formula").  Further, the 1996 Act gave cable operators and telecommunications carriers
a right of nondiscriminatory access to utility poles, ducts, conduit and rights-of-way.  In the Local
Competition Order, we adopted a number of rules implementing the new access provisions of section
224.
          XVIII.                                                 ORDER ON RECONSIDERATION
       A. COMPLAINT PROCEDURES AND NEGOTIATED AGREEMENTS
2.     Our pole attachment rules were established in 1978, and have been refined through
rulemakings and enforcement actions.  These rules apply when parties are unable to arrive at a
negotiated agreement and an aggrieved party files a complaint.  Section 224 (e) (1) of the Pole
Attachment Act indicates that application of the Commission's rules will apply only when the parties
fail to resolve a dispute.  Our rules require that a complaint include a brief summary of the steps
taken to resolve the problem prior to filing a complaint.
3.     Utilities must provide a cable television system or telecommunications carrier with
nondiscriminatory access to any pole, duct, conduit or right-of-way owned or controlled by it, at just
and reasonable rates, terms and conditions.  In the Telecom Order, we concluded that the current
complaint procedures are adequate to establish just and reasonable rates, terms, and conditions for
pole attachments, and determined that the existing methodology for determining a presumptive
maximum pole attachment rate for telecommunications carriers, as modified, facilitates negotiation
because the parties can identify an anticipated range for the pole attachment rate. We rejected
proposals to require uniformity of terms in pole attachment agreements stating that "[w]hile we do not
agree that all pole attachment agreements have to be identical, differing provisions must not violate
the statutory requirement that terms be just, reasonable, and nondiscriminatory."
4.     Electric utilities urge us to declare negotiated agreements for pole attachments inviolate,
asserting negotiated market-based rates assure just compensation for pole attachments. Electric
utilities assert there is a robust and competitive free market for pole attachments and that utilities lack
any incentive to discriminate against attaching entities.  UTC/EEI argues that a negotiated rate
reflects an entire package of benefits that attaching entities reap from access to utility infrastructure:
time-to-market, dispute avoidance, and maintenance, construction and partnership, as well as non-
infrastructure opportunities such as service resale. UTC/EEI continues to urge that we impose
additional regulation on the negotiation process or, in the alternative, that we impose additional
regulation on the complaint process that is favorable to a utility.
5.     Contrary to UTC/EEI's argument, the record as a whole does not demonstrate that the
market for pole attachments is fully competitive or that the utilities now lack any incentive to
discriminate against attaching entities.  As the Court stated in Gulf Power II,  contrary to American
Electric's assertions, the original purpose of the Pole Attachment Act, to prevent utilities from
charging monopoly rents to attach to their bottleneck facilities, did not change with the 1996 Act.
Nothing in the record demonstrates that the utilities' monopoly over poles has since changed.  Upon
consideration of the record, we affirm our decision not to impose additional regulation on either the
negotiation process or the rules for resolution of complaints arising out of failed negotiations.  We
reject assertions by utilities that our rules frustrate negotiations. To the contrary, our experience has
taught us, and the record gained through these proceedings demonstrates, that without our rules and
the use of presumptions in a formula methodology, attaching entities would not be able to challenge
any rate offered by a utility.  There would be no reasonable negotiation without a benchmark rate
against which to compare the utility's proposed rate. We continue to reject arguments by utilities that
attaching parties should be required to take exception to terms or conditions when the pole attachment
agreement is negotiated or be estopped from filing a complaint about those issues.
6.     We do not suggest that good faith negotiations require use of identical rates, terms or
conditions in pole attachment agreements.  We encourage, support and fully expect that mutually
beneficial exchanges will take place between the utility and the attaching entity.  When utilities and
attaching entities are innovative and provide mutually beneficial negotiated alternatives to the
maximum rates, competition and the deployment of services to all communities will be fostered,
resulting in the successful implementation of the 1996 Act.  However, we do require that differences
in rates, terms and conditions for pole attachments among attaching entities, be based on legitimate
exchanges of consideration and not on discriminatory factors such as favoring an affiliated services
provider over an unaffiliated entity.  We will carefully scrutinize any differences in rates, terms and
conditions in any complaint action, and the burden will be on the utility to demonstrate that any
differences are nondiscriminatory.
       G. BASIC CONCEPTS USED IN THE FORMULA
          1.   Use of Actual Costs
2.     In response to the Telecom Order Notice and the Fee Order Notice, several electric utilities
submitted comments supporting a rate calculation methodology which would substitute replacement
costs in the rate formula in lieu of the actual costs reflected in the utility's regulatory accounts. There
was also comment by attaching entities opposing the use of anything but historical costs to both the
Telecom Order Notice and the Fee Order Notice.  In the Telecom Order, we stated that we had not
sought comment on this issue and we declined to address the utilities' proposals to do so.  In
response to the Fee Order Notice, we adopted the Fee Order in which we rejected utilities' arguments
that pole attachment rates should be based on replacement costs and we affirmed the use of historical
costs in our pole attachment rate methodology.  We stated that the continued use of historical costs
accomplishes key objectives of assuring, to both the utility and the attaching parties, just and
reasonable rates; establishes accountability for prior cost recoveries; and accords with generally
accepted accounting principles.
3.     Electric utilities continue to urge that we abandon our use of regulatory accounts based on
historical costs.  Petitioners assert that pricing methodologies for use in pole attachment formulas
should reflect replacement costs or the rates calculated are not constitutional because they cannot
provide just compensation. American Electric asserts that we should review the constitutionality of
the rate methodology in light of the Gulf Power I decision, which held that the mandatory access
provisions of the 1996 Act amendments to the Pole Attachment Act constitute a taking of property.
UTC/EEI asserts the proper measure of just compensation is the "fair market value" of the property at
the time of the taking.  Southern Co. argues that in instances where there is no clear market value,
several different proxies for market value have been used to determine just compensation, including
replacement costs. American Electric attempts to demonstrate that replacement costs are necessary
to provide just compensation for pole attachments.
4.     We affirm our decision that the Cable Formula, which includes regulatory accounts
maintained using historical costs, encompasses the statutory directive to provide just and reasonable
rates for pole attachments, adding certainty and clarity to negotiations.  We have been presented
with no persuasive evidence that utility owners do not recover a just and reasonable compensation
for pole attachments from use of the Cable Formula.  The application of the well-established Cable
Formula, with technical adjustments adopted from time to time, is consistent with establishing a just,
reasonable, and nondiscriminatory maximum pole attachment rate as envisioned by Congress. The
statute requires the Commission to develop a methodology to compensate the pole owner for its actual
costs associated with the amount of space used by an attacher. Congressional intent to rely on
existing regulatory accounts and avoid a prolonged rate making process is realized in the
Commission's regulations.
5.     Both the decision in Gulf Power I  and Gulf Power II  support our analysis on the issue
of just compensation.  While the decisions recognize that the Pole Attachment Act and the
Commission's rules invoke constitutional standards because of the mandatory access requirements,
neither the statute nor the Commission's rules were found to be facially unconstitutional.  In both
cases, the 11th Circuit Court of Appeals held that the issue of just compensation was not ripe for
review because the utilities had not shown that the 1996 Act nor the Commission's rules would
operate to deny them just compensation in every case.  As the Court stated in Gulf Power II, " . . . we
are not confident, given the record at hand, that the formula will deny just compensation in all cases."
Indeed, as the Supreme Court stated in Duquesne Light Company v. Barasch, ("Duquesne Light"),
"[f]orty-five years ago in the landmark case of [Hope Natural Gas], this Court . . . held that the 'fair
value rule'  is not the only constitutionally acceptable method of fixing utility rates.  In [Hope Natural
Gas] we ruled that historical cost was a valid basis on which to calculate utility compensation."
6.     Several parties observe that the Commission applies a different methodology in the context
of universal service requirements and interconnection agreements as opposed to pole attachments.
They argue that consistency demands that the same pricing methodology be applied throughout the
1996 Act. We disagree that the Commission's continued use of a historical cost methodology in the
pole attachment context is arbitrary and capricious. As explained in detail below, the Commission had
a rational basis, amply supported by record evidence, for choosing different pricing methodologies in
these different contexts.
7.     In the Universal Service Order and Local Competition Order, the Commission
reasonably and in detail explained that, in connection with universal service requirements and
interconnection agreements, ratemaking on the basis of forward-looking economic cost would best
effectuate the new competitive objectives of the 1996 Act.  These objectives were to stimulate direct
competition in local telecommunications markets, to ensure the efficient use of existing
telecommunications network facilities, and to encourage new entrants to make economically rational
decisions about whether or how to enter a local telecommunications market. The Commission found
the use of a forward-looking cost methodology particularly important in this context because we
determined that a firm compares forward-looking costs with existing market prices, in making
decisions about entry, expansion, and price.
8.     By contrast, the predominant legislative goal for Congress in enacting the Pole Attachment
Act was "to establish a mechanism whereby unfair pole attachment practices may come under review
and sanction, and to minimize the effect of unjust or unreasonable pole attachment practices on the
wider development of cable television service to the public."  Due to the local monopoly in
ownership or control of poles, the legislative record indicated that some utilities had abused their
superior bargaining position by demanding exorbitant rental fees and other unfair terms in return for
access by cable companies to their pole space.  This actual and potential anti-competitive behavior
prompted Congress to pass the Pole Attachment Act.  It was in this context that the Commission,
guided by Congressional direction to use existing accounting measures to determine costs, decided to
employ a historical cost based pole attachment formula in implementing the Pole Attachment Act.
There is nothing novel about the Commission's use of a historical cost methodology in the context of
regulating monopoly rates.  For example, to carry out the statutory goal of section 623(b) of the
Communications Act   i.e., to ensure that individual retail subscribers of monopoly cable providers
were not exploited -- the Commission, in addition to using a benchmark approach, also adopted a
historical, cost-of-service alternative methodology for the cable television industry.
9.     Since 1978, the Commission has applied an embedded cost methodology, which has been
upheld by the United States Supreme Court. The Commission's continued use of a historical cost
methodology in the pole attachment context is consistent with Congressional expectations.
Specifically, while the Commission's pole attachment formula has been in place since 1978, Congress
did not directly or by implication instruct the Commission to deviate from the use of historical costs
when it amended the Pole Attachment Act in 1996.  By comparison, the local competition
provisions of the Telecommunications Act of 1996 contemplated some degree of departure by the
Commission from its past practice of setting rates on the basis of rate based/rate-of-return regulation.
 Specifically, section 252(d)(1)(A)(i) requires that rates be based on the "cost" of providing the
interconnection or network element "determined without reference to a rate-of-return or rate-based
proceeding."
10.    In addition, the benefits of using a forward-looking cost methodology are less pronounced
in the pole attachment context than in the universal service/interconnection context.  The Pole
Attachment Act protects cable and telecommunications attachers from monopoly prices set by utilities
that are not necessarily in direct competition with the attachers, although there may be potential for
direct competition.  The Pole Attachment Act does not set out a scheme for attachers to access the
network elements of a utility's core business.  The majority of poles nationwide are owned or
controlled by electric utilities, with the remaining poles owned or controlled by telephone
companies.  Thus, while in some cases pole owner and attacher may both provide
telecommunications services, most typically a cable attacher or telecommunications attacher is seeking
relief under the Pole Attachment Act from the rates, terms and conditions imposed by an electric
utility pole owner.  In the telecommunications interconnection context, on the other hand, the statute
sets out a scheme for determining rates solely between competing telecommunications carriers. Thus,
rate regulation in the context of pole attachments is not focused primarily on the same concerns that
predominate with interconnection.
11.    In addition, the assets being regulated in the two contexts are very different. The Pole
Attachment Act addresses access to poles, ducts, conduits and rights-of-way, in contrast to the
unbundled elements of an incumbent's telecommunications network that are addressed in the
interconnection context.  These telecommunications network elements, in contrast to poles, ducts and
conduits, are subject to a rapidly changing technology.   A forward looking cost pricing methodology
reflects the cost of replacing the functions of an asset using the most efficient technology available so
as to appropriately capture the technological changes that are occurring.  As a result, new entrants are
given the proper cost signals to decide whether to construct their own networks or to use the
incumbent's.  In the context of pole attachments, there has been significantly less change in the nature
of the asset since their deployment decades ago, so it is not as critical to employ a formula that
accounts for such factors.  Indeed, given the nature of the pole attachment asset, the two
methodologies   i.e., historical and forward looking  -- may likely produce similar cost results in the
pole attachment context.  In addition, cable attachers frequently do not have a realistic option of
installing their own poles or conduits both because, in many cases, attachers are foreclosed by local
zoning or other right of way restrictions from constructing a second set of poles of their own and
because it would be prohibitively expensive for each attacher to install duplicative poles. Thus,
because attachers frequently do not face a realistic "make or buy" decision, the benefits of giving
proper cost signals to new entrants are less pronounced in the pole attachment context.  Moreover, the
pole attachment formula does account for the costs incurred when poles are replaced by utilities in the
normal course of their business because the formula uses actual year end asset and expense data from
records maintained and publicly reported as part of the utilities' regulated core electric or telephone
business services.  In fact, if a utility is required to replace a pole in order to provide space for an
attacher, the attacher pays the full cost of the replacement pole.
12.    We have recognized that the continued use of the historical cost based pole attachment
formula brings certainty to the regulatory process. For more than two decades, the pole attachment
formula has provided a stable and certain regulatory framework, which may be applied "simply and
expeditiously" requiring "a minimum of staff, paperwork and procedures consistent with fair and
efficient regulation."  We have found that switching to a methodology based on forward-looking
economic costs would significantly change and burden the Commission's processes, requiring the
Commission to develop a new formula, which would necessitate a protracted rulemaking proceeding
involving complicated pricing investigations.  We have acknowledged that, in certain contexts,
setting prices on the basis of forward-looking economic costs has advantages, such as giving the
appropriate signal for new entrants to invest in network facilities; but, as explained above, these
advantages are less pronounced in the pole attachment context because pole attachers are less likely to
build, or may be prohibited from building, their own poles and conduit.  We have concluded and
continue to find that, in the context of pole attachments, the continued use of historical costs
accomplishes the key objectives of assuring just and reasonable rates to both the utility and the
attaching parties, establishing accountability for prior cost recoveries, and encouraging negotiation
among the parties by providing regulatory certainty. For the reasons stated above, we will continue
to calculate maximum pole attachment rates under the Pole Attachment Act using regulatory accounts
based on historical costs.
          13.  When Net Pole Investment is Zero or Negative
14.    In enacting the Pole Attachment Act, Congress directed the Commission to institute an
expeditious program for determining just and reasonable pole attachment rates that would necessitate
a minimum of staff, paperwork and procedures consistent with fair and efficient regulation.
Congress determined that the rates should permit the utility to recover its fully allocated costs, as
defined by Section 224(d)(1).  Congress stated that although there may be some difficulty in
determining certain components of a utility's operating expenses and actual capital costs, special
accounting measures or studies should not be necessary because the majority of cost and expense
items attributable to utility pole plant were already established and reported to various regulatory
bodies and therefore the information was already a matter of public record.  Congress did not expect
the Commission to re-examine the reasonableness of the cost methodologies that various regulatory
agencies had sanctioned; it recognized that the Commission would have to "make its best estimate" of
some of the less readily identifiable costs.
15.    Under Section 224(d)(1), fully allocated costs refer to the portion of operating expenses
and capital costs that a utility incurs in owning and maintaining poles that are associated with the
space occupied by pole attachments. The Commission originally derived the formulas for
determining maximum allowable pole attachment rates under the Pole Attachment Act by applying the
legislative direction in individual complaint cases.  These cases led to a generally applicable formula
for calculating the maximum just and reasonable rate:
The second component of the overall formula is the net cost of a bare pole.  This net cost equals a factor,
0.85 for electric utilities or 0.95 for telephone companies, multiplied by the net investment per pole,
as shown in the following formula:
          Net Cost of a      =     Factor  x  Net Pole Investment
        Bare Pole                        Number of Poles
16.    The final component of the pole attachment formula is the carrying charge rate. Carrying
charges are the costs incurred by the utility in owning and maintaining poles regardless of the presence
of pole attachments.  The carrying charges include the utility's administrative, maintenance, and
depreciation expenses, a return on investment, and associated income taxes.  To help calculate the
carrying charge rate, we developed formulas that relate each of these components to the utility's net
pole investment.
17.    The pole attachment formulas rely on the investment and expense data utilities maintain
in, or derive from, their accounting records.  The investment data take two forms:  "gross" data, which
provide the original cost of the plant being considered; and "net" data, which adjust the gross data to
reflect accumulated depreciation and deferred income taxes associated with that plant. The pole
attachment formulas generally allocate the costs of owning and maintaining poles on the basis of net
pole or net plant investment.   In the Fee Order, we affirmed our long practice of calculating pole
attachment rates using net book costs, continuing to allow the use of gross book costs if all parties
agreed to that usage.  We concluded that the important goal is to ensure that like figures are used,
whether net or gross.  We affirm our continued use of net figures in the formulas unless the parties
agree otherwise, with the following limited exception.
18.    In certain cases, negative net asset values for poles may occur as a result of the way the
Commission calculates depreciation rates.  We generally prescribe depreciation rates at levels
sufficient to give a telecommunications utility an opportunity to recover its plant investment, including
poles, on a straight-line basis over the life of the associated plant.  In order to accomplish this, we
calculate depreciation rates by using the following formula:
Depreciation Rate = 100% - Accumulated Depreciation % - Future Net Salvage %
                         Average Remaining Life
The depreciation rate determined by this formula is then applied to the gross pole value.  In the above
formula, accumulated depreciation is the portion of the pole investment that has been charged to
depreciation expense in previous periods.  Future net salvage is the estimated difference between the
amount the utility would receive as salvage for sale of retired poles and the utility's estimated cost of
removal.  Average remaining life is the estimated future life expectancy of the investment.
19.    As accumulated depreciation rises, for plant with high removal costs such as poles, the
application of the depreciation rate formula can lead to a net asset value becoming negative.  This is
because, in computing the net pole investment, the formula subtracts from gross pole investment an
accumulated depreciation that includes both a recovery of original investment and a recovery of costs
of removal (less salvage).  Because gross pole investment only includes the original cost of the poles,
subtracting both components from the gross pole investment may lead to a zero or negative net pole
investment.   The carrying charge formulas compute percentages for each element (administrative,
maintenance, and depreciation expenses, taxes, and rate of return) which are added and then
multiplied against the net pole investment.  For example, if the carrying charge formulas yield 10% for
each element, the carrying charge rate would be 50%.  This rate would then be multiplied by net pole
investment (expressed on a per pole basis as net cost of a bare pole) and the percentage of usable pole
space occupied by the attachment, to determine the maximum just and reasonable rate per pole. When
the net pole investment is zero or negative, the formula cannot be calculated properly.  In those
instances, our pole attachment formula, using net figures, cannot be used to calculate a maximum rate
based on fully allocated costs.
20.    In the Fee Order, we affirmed the calculation of net cost of a bare pole as total investment
in poles less accumulated depreciation for poles and less accumulated deferred income taxes.  We
also affirmed our adjustment to a utility's net pole investment of 15% for electric utilities and 5% for
LECs to eliminate the investment in crossarms and other non-pole related items. In the Fee Order,
we attempted to adjust the formula for application in situations that involve negative net pole
investment by eliminating the cause of the negative results.  We concluded that the accumulated
depreciation attributable to removal costs should be removed from the total accumulated depreciation
when calculating net pole investment.   We redefined net pole investment in those cases involving
negative net pole investment as follows:
where Accumulated Depreciation (Poles) includes only that portion of Account 3100 which arises
from the depreciation of Account 2411.
21.    Fee Order petitioners urge us to modify or clarify our methodology for avoiding negative
pole cost. TxCTA and USTA urge us to review paragraphs 62-70 of the Fee Order in which we
sought to adjust the formula for application to a negative rate base.  USTA asserts that our
correction for the alleged negative rate situation assumed a level of accounting detail that may not
exist.  USTA asserts that LECs do not keep that level of detail in the accounting records. USTA
further explains that if we eliminate the removal costs from accumulated depreciation in Account
3100 we must also do the same in the application of accumulated deferred income taxes in Accounts
4100 and 4340.  USTA adds that they have been working with the Commission to reduce the
accounting burdens on LECs and that in the foreseeable future, the reporting requirements may be
even less comprehensive than they are today.  In the alternative, TxCTA again calls on us to set the
maximum rate at the last point a positive valuation existed under the current formula.  Verizon
supports USTA's alternative method for estimating the amount of removal costs when calculating net
pole investment.
22.    NCTA asserts USTA's solution would not effectuate the Commission's intention to
"unbundle accumulated depreciation so that the amounts already recovered through advance
expensing of anticipated net salvage would be removed." According to NCTA, the negative net
salvage associated with additions to the depreciation reserve varies substantially over time and
necessary records do not appear to be publicly available.
23.    On reconsideration of this matter, we modify and clarify our guidance to utilities and
attaching entities on how to apply the formula in those cases where the net pole investment is zero or
negative. Our proposal in the Fee Order was predicated on a belief that the depreciation attributable
to removal costs was identifiable.  Fee Order petitioners and other parties request clarification or
reconsideration of our adopted solution on this issue.  We also have received inquiries outside of the
reconsideration proceedings concerning implementation of our solution. Many parties representing
LECs as well as attaching entities have observed that the records of LECs are not sufficiently detailed
for identifying the portion of accumulated depreciation that represents pole removal costs.
Furthermore, they observe that adjustments to the accumulated deferred taxes reported in Accounts
4100 and 4340 would also need to be modified to the extent that they arose from the depreciation of
removal costs.
24.    As an alternative, USTA proposes a method of estimating the amount of pole removal
costs that should be excluded from the rate formula. Specifically,
     The FCC should allow LECs to identify the portion of accumulated depreciation that is
     'attributable to poles' by subtracting the 'future net salvage' component from the pole
     depreciation rate.  For example, if the depreciation rate for poles is 7 percent, and 3 percent
     represents future net salvage, the portion 'attributable to poles' would be 4 percent.  The LEC
     would then calculate net pole investment by subtracting 4/7ths of the balance in the
     Accumulated Depreciation Account 3100 (Poles) from Gross Pole Investment in Account
     2411.
25.    This approach raises concern because it suggests that only the current relative relationship
between gross pole investment and future net salvage value should be considered as a basis for the
proration necessary to calculate the required data.  This overlooks the dramatic change in the relative
relationship between gross pole investment and future net salvage value over the period for which
depreciation adjustments are needed; because future net salvage value now comprises a far greater
percentage of gross pole investment than in the past, an adjustment on this basis would be overstated.
The same would be true of any corresponding adjustment to deferred income taxes.  Therefore, on this
basis, we disagree with USTA's claim that this approach provides a reasonable estimate of the amount
of removal costs that should be removed from the formula.
26.    Some commenters continue to advocate relying upon the last rate calculated using a
positive net pole investment.  This calculation is readily achievable based on publicly available data.
However, this calculation would not reflect subsequent changes in the carrying charges. While we
encourage parties to negotiate rates using this method if they choose, we do not at this time believe
that it is the most reasonable method for addressing the problem.
27.    On reconsideration, we find that our approach in the Fee Order failed to acknowledge that
the utilities' recovery through depreciation of the future costs of removing poles should be reflected
in the rate.  Moreover, because utilities install poles over time at various original costs and because net
salvage estimates vary over time, the extraction of depreciation due to net salvage costs from
accumulated depreciation would be exceedingly difficult.  Current ARMIS and FERC accounting
reports do not provide information with respect to the net salvage effect.  Due to the limitations of
available data and the complex relationships between rate calculation factors, we believe that the
solution we prescribe must be simple yet equitable and produce consistent results. We have
determined that the most reasonable and efficient method is to apply the formula using gross figures
rather than net figures, with the exception of the rate of return element of the carrying charges which
is always a net calculation. For example, we currently allocate administrative expenses by dividing
total administrative and general expenses by net plant investment.  This yields a percentage that is
applied against the net cost of a bare pole.  In contrast, a gross approach to allocation would, for
example, divide total administrative and general expenses by gross plant investment.
28.    With the exception of the maintenance component, the expense accounts upon which the
pole attachment rates rely are not kept by type of plant.  Because utilities cannot directly measure the
amount of administrative expenses or taxes that are incurred because of poles, we must allocate
administrative expenses and taxes to poles on some rational basis.  In the Pole Attachment Order, we
determined that allocation of expenses based on net pole investment was reasonable. We continue to
agree with the Pole Attachment Order that the appropriate figures to use in the normal situation are the
net figures. However, in the unusual situations where net pole investment is zero or negative, we find
application of the formula using gross figures, with the noted net adjustment to the return element, to
be appropriate.
29.    In proposing this methodology, we acknowledge that only the administrative and tax
elements of the carrying charges are affected by the change.  The maintenance, depreciation and return
elements yield the same maximum rate whether net or gross figures are used.  The administrative and
tax elements may be higher or lower due to the different ratios of accumulated depreciation and
accumulated deferred taxes to gross total plant as opposed to gross pole plant.  The rate of return
element will be negative and is subtracted from the positive elements of the carrying charge. We
believe this result is reasonable because the utility has, in effect, already recovered more than the original
cost of its pole plant through depreciation charges.  While this "over-recovery" is necessary to defray the
costs of disposing of the poles when they are retired from service, the utility has the use of any "over-
recovered" amounts throughout the poles' useful lives.  Our conclusion that the utility's pole attachment
rates should reflect the over-recovery in the form of a negative rate of return carrying charge properly
recognizes this fact.
30.    The formula using the gross approach yields the following calculation:
(A). Gross Plant (Poles)               (G).  Administrative Expenses (Total)
(B).  Net Plant (Poles)                     (H).  Taxes (Total)
(C).  Depreciation Rate (Poles)          (I).     Gross Plant (Total)
(D).  Maintenance Expense (Poles)     (J).   Net Plant (Total)
(E).  Quantity of Poles                     (K).  Usable Space Factor (.074)
(F).  Authorized Rate of Return         (L). Bare Pole Factor (.85 or .95)
Maintenance    = Maintenance Expense (Poles)  Gross Plant (Poles)
Element                     = (D)  (A)
Depreciation        = Depreciation Rate (Poles)
Element                         = (C)
Return Element = Rate of Return x Net Plant (Poles)  Gross Plant (Poles)
                         = [(F) x (B)]  (A)
Administrative = Administrative Expenses (Total)  Gross Plant (Total)
Element                      = (G)  (I)
Tax Element    = Taxes (Total)  Gross Plant (Total)
          = (H)  (I)
Total Carrying Charge    = Sum of Maint., Depr., Ret. (-), Admin. and Tax Elements
Max Rate  = Space Factor x Bare Pole Factor x Gross Plant (Poles) x Total Carrying Charges  Quantity
of Poles
          = [(K) x (L) x (A) x Total Carrying Charges ]  (E)
We reiterate that in all other cases, where the net pole investment is positive, the appropriate figures
to use in the formula continue to be the net figures, unless the parties agree otherwise.
          31.  Case by Case Applications
32.    Teligent urges us to adopt more specific rules regarding pole attachments in rights-of-way
and wireless pole attachments, rather than consider those complaints on a case by case basis. MCI
petitions us to adopt specific rules for addressing complaints concerning rates for access to electric
utility transmission facilities rather than considering such complaints on a case by case basis.
33.    In the Telecom Order, we stated that the record was not sufficient to enable us to adopt
detailed standards that would govern all of these situations. We believe our basic rate methodology
is adaptable to attachments that fit these categories.   A complaint involving a dispute about these
attachments would be treated as any other pole attachment complaint.  In the Telecom Order and
the Local Competition Order, we recognized guiding principles based on the Pole Attachment Act
to be used in determining rates for pole attachments, including attachments to rights-of-way, wireless
attachments and transmission facilities attachments. Guiding principles include the congressionally
mandated methodology, preference for publicly available records when available, and an
acceptable range of just and reasonable rates.  We stated that we believed it prudent to gain
experience through case-by-case adjudication of disputes to determine whether additional "guiding
principles" or presumptions were necessary or appropriate for non-traditional situations.  We
concluded that complaints will be considered on a case by case basis.
34.    On reconsideration, we will not adopt separate or detailed regulations at this time for
considering complaints about rates, terms and conditions for nondiscriminatory access for non-
traditional attachments.  We have not been persuaded that our current rules are not satisfactory to
provide all parties a process by which they may seek appropriate remedies when negotiations for
attachments fail.  We continue to believe it prudent to gain experience through case by case
adjudication to determine whether additional guiding principles or presumptions are necessary or
appropriate, and this will be accomplished through our existing complaint procedures. We will
continue to address complaints about just and reasonable rates, terms and conditions, and
nondiscriminatory access for non-traditional attachments on a case-by-case basis.
       II.     THE SPACE FACTOR
36.    In the Fee Order, we affirmed the use of the Cable Formula to set rates in disputed pole
attachment cases. As indicated above, the basic Cable Formula can be stated as follows:
In order to facilitate the negotiation of just and reasonable rates and the resolution of pole
attachment complaints, we make use of rebuttable presumptions in the Cable Formula. In the Fee
Order, we reviewed the continued applicability of various factors and elements within the Cable
Formula, including certain presumptions used to determine the total usable space or capacity
occupied by a pole attachment.
37.    We first discuss the rebuttable presumption of the amount of space occupied by the
attachment as a percentage of the total usable space on the pole.  The 1977 Senate Report indicated a
Congressional intent that cable system pole attachments be responsible for no more than 12 inches of
the usable space on a pole, including actual space occupied plus clearance space. The Commission
established a rebuttable presumption of one foot as the amount of space a cable television attachment
occupies when calculating a maximum rate under an interim formula.  We subsequently refined our
methodology for determining the amount of usable space and retained the one foot presumption in the
Cable Formula.  The same presumption also applies to telecommunications service providers.
38.    The presumptions used in the Cable Formula have been repeatedly affirmed since the
enactment of the Pole Attachment Act.  We define total usable space as the space on the utility pole
above the minimum grade level that is usable for the attachment of wires, cables, and related
equipment.  In the Fee Order, we affirmed the use of various presumptions that lead to 13.5 feet as
the presumptive average usable space on a pole.  The Cable Formula uses a 37.5 foot presumptive
pole height, an 18 foot average minimum ground clearance, allocation of the 40-inch safety space to
usable space, and the inclusion of poles of 30 feet or less when calculating the costs of a bare pole.
No persuasive evidence or arguments have been presented which challenge our long-standing
presumptions resulting in 13.5 feet as the presumptive usable space. Application of these
presumptions results in 7.4% as the percentage of usable space occupied by a pole attachment.
39.     In the Telecom Order, we found that the one foot presumption of space occupied should
continue to apply where an attaching entity has overlashed its own pole attachments.  We also
determined that facilities overlashed by third parties onto existing pole attachments are presumed to
share the presumptive one foot of usable space of the host attachment.  We declined to adopt
procedures to allocate the cost of usable space between a third party overlasher and the host attaching
entity, in part, because the benefit of third party overlashing as an expeditious means for entry into the
market would be undermined by such procedures.  In their filings, the parties raise the following
specific issues relating to the rebuttable presumptions concerning the percentage of space occupied.
          1.   Average Pole Height
2.     Some Fee Order petitioners continue to urge that we exclude 30-foot poles from the
average pole height calculation as well as the bare pole calculation.  The record in this proceeding
confirms the prevalent use of 30-foot poles and reflects that exclusion of such poles from the Cable
Formula calculations could distort the resulting rate by excluding a significant portion of local
exchange carrier ("LEC") utility plant investment from the rate calculation.  We affirm our position
that a distorted inventory of poles would be reflected if utilities were allowed to "opt out" or exclude
their poles of 30 feet or less when calculating their pole attachment rates.
          3.   Safety Space
4.     UTC/EEI continues to urge that we consider as unusable the 40-inch safety space that
exists to minimize the likelihood of physical contact between employees working on cable television
or telephone lines and the potentially lethal voltage carried by the electric lines, as well as to prevent
electrical contact between such cables.  No new arguments or evidence was presented in the filings
and based on our previous reasoning, that the space is usable and used by the electric utility, we
reject arguments to reduce the presumptive usable space of 13.5 feet by 40 inches.
          5.   Minimum Ground Clearance
6.     Some Fee Order petitioners continue to urge that we depart from our well-established
presumption of an average minimum ground clearance of 18 feet.  Ground clearance requirements
in the National Electric Safety Code ("NESC"), include an average amount of sag for cable lines.
WorldCom disagrees with petitioners' claims that the average line sag should decrease the amount of
usable space on a pole.  No new evidence or arguments were provided that would persuade us to
abandon our long-standing reliance on the presumptive average minimum ground clearance based on
NESC standards.
          7.   Telecom Formula Space Factor
                 a.                                              Counting Attaching Entities
2.     Under the Cable Formula, the costs of unusable space are allocated based on the portion
of usable space an attachment occupies, the space factor.  Our formula is stated as follows:
3.     Using the presumptions in the Cable Formula, this results in a space factor of 1/13.5 or
.074, multiplied by the net cost of a bare pole and the carrying charge rate:
4.     In the Telecom Order, we adopted a formula for the purpose of allocating costs of
unusable space.  Under the Telecom Formula, pursuant to the specific requirements of the Pole
Attachment Act, the costs of unusable space are separated from the costs of usable space and are
allocated based on the number of attaching entities.  The costs of usable space are still calculated
based on the portion of usable space occupied. In the Telecom Order, we adopted separate formulas
for determining the unusable space factor maximum rate and the usable space factor maximum rate
which, when added together, calculate a maximum rate under section 224(e) of the Pole Attachment
Act.  We now simplify the two formulas into one combined formula as follows:
5.     Using our presumptions in the Telecom Formula, this calculation can be stated as:
which results in a combined (usable and unusable) space factor of between .24 for 2 attachers and .098
for 6 attachers for telecommunications attachers, as opposed to .074 for cable attachers.  The
difference between the two rate calculations is then phased in over five years, pursuant to the
provisions of the Pole Attachment Act.
6.     In the Telecom Order, we recognized that the number of attaching entities is a significant
factor in determining the maximum rate. We concluded that certain entities should be counted as
attaching entities pursuant to the Pole Attachment Act.  We now reconsider and clarify our
methodology for counting the number of attaching entities used in the Telecom Formula. In the
Telecom Order, we stated that for the purposes of allocating costs of unusable space, parties to a pole
attachment agreement should count as separate entities, in addition to telecommunications carriers and
cable operators, any incumbent or competitive LEC, all governmental agencies that provide cable
or telecommunications service and any electric or other utility providing telecommunications
services, with a physical attachment to the pole.  We also included third party overlashers as
separate entities.
7.     UTC/EEI's Telecom Order petition argues that we should consider only attaching
telecommunications carriers as entities in the Telecom Formula.  In contrast, ICG asks us to clarify
that not only electric utilities but all commercial users of a pole, duct, conduit or right-of-way are
attaching entities for purposes of the apportionment of unusable space in the Telecom Formula. We
clarify our position that all utilities should be counted as attaching entities.  In addition, we further
reconsider and clarify that any entity with a physical attachment to the pole should be counted as an
attaching entity. Thus, in the case of government attachments, we find that any physical attachment by
a government entity qualifies the government attacher as an attaching entity.  The statute does not
provide an exclusion for non-telecommunications attachments.  We will continue to exclude a
government's temporary or seasonal attachments from this category. Because of the temporary nature
of these attachments, the burden of identifying and counting such attachments outweighs any increase
in accuracy that might ensue from including them. We also reconsider our inclusion of third party
overlashers as separate entities and conclude that they are not to be counted as separate attaching
entities.  This is consistent with our conclusion that an overlashing entity does not occupy additional
space on a pole.  An overlashed cable is still only attached to the pole by the original single
attachment.
8.     The term "attaching entities" includes, without limitation, and consistent with the Pole
Attachment Act, any telecommunications carrier, incumbent or other local exchange carrier, cable
operator, government agency, and any electric or other utility, whether or not the utility provides a
telecommunications service to the public, as well as any other entity with a physical attachment to the
pole.  This is consistent with the language of the statute and with Congress' intent to count all
attaching entities when allocating the costs of unusable space.  We believe that if Congress intended
that only telecommunications carriers' with attachments on a pole, or in a conduit, duct or right-of-
way, should be counted as attaching entities for the purpose of apportioning costs of unusable space
pursuant to section 224(e)(2), Congress would have used the specific term "telecommunications
carrier" or "provider of telecommunications services" instead of the more general and more inclusive
term "entity" and "entities."
9.     We find arguments that the pole owner must absorb unfairly the costs of government
attachments to be unpersuasive.  As we stated in the Telecom Order, because the government attacher
and the pole owner have a relationship that benefits both parties, we are not persuaded that the pole
owner is unfairly absorbing the cost of government attachments to the extent the pole owner's
franchise so provides.  Moreover, many attachers pay a separate fee to governments for the ability to
attach to poles in public right of ways in addition to the pole rental fee. We also find unpersuasive
arguments that the non-telecommunications utility pole owner should not be included as an attaching
entity.  We find no reasonable distinction to be drawn when comparing telecommunications utility
pole owners and non-telecommunications utility pole owners that would warrant different treatment
in counting attaching entities.  We do not believe that Congress intended for a single attacher,
protected by the Pole Attachment Act, that uses one foot of space on a pole, to pay a higher (double)
portion of the unusable space cost than the pole owner that controls, and uses a good portion of, the
rest of the usable space.  Therefore, we include the utility pole owner in the count, resulting in a
minimum of two attaching entities being counted.
10.    Upon reconsideration, we find that third party overlashers should not be counted as
separate entities because they are not occupying separately segregated pole space.  This conclusion is
consistent with our finding that overlashing does not constitute a separate attachment and our
conclusion that all entities with a physical attachment should be counted.  Our review of the Pole
Attachment Act leads us to reconsider our previous decision and conclude that the term "attaching
entity" as it is used in the Pole Attachment Act is not limited to entities with attachments that meet the
definition of pole attachment as it is used in the Pole Attachment Act.  Rather, we conclude that any
entity with a physical attachment to the pole should be counted.  Our rule for counting attaching
entities will allow parties to pole attachment agreements to calculate an average number of attaching
entities for use in the Telecom Formula.
                 k.                                              Average Number of Attaching Entities
12.    In the Telecom Order, we determined that the most efficient and expeditious manner to
identify an average number of attaching entities, was for each utility to develop its own average
number of attaching entities.  We concluded that the alternative, the Commission undertaking a
survey, would be too cumbersome and would not necessarily enhance accuracy.  Our decision that
the utility would establish an average number of attaching entities was premised on the belief that
utilities not only possess information with which to develop an average number of attaching entities,
but also have both the expertise to structure the development of an average and the information
reflecting where services are being provided.  In an effort to have the averages reflect the different
characteristics of geographic areas' varying incidents of attachments, we required utilities to establish
averages based on rural, urban, or urbanized service areas as defined by the Bureau of Census, United
States Department of Commerce ("Bureau of Census").  The Bureau of Census, identifies all
territory, population and housing as rural (population under 2,500 and not in an urbanized area), urban
(population over 2,500), or urbanized (a central city plus the closely-settled urban fringe that together
have a minimum population of 50,000).  We adopted these categories because we believed they
would equitably reflect the different levels of attachment usage based on characteristics of the
locations.
13.    In the Telecom Order, we established the right of attaching entities to challenge the
average number of attaching entities set by the utilities, in the same manner as challenges presently are
made to other presumptions used in the Cable Formula.  For example, the challenging party will
identify and calculate the number of attaching entities on the poles and submit to the utility what it
believes to be an appropriate average.  Where the number of poles is too large, and/or complete
inspection impractical, we found that a statistically sound survey could be substituted.  The utility
will be afforded an opportunity to justify its averages and where the utility's average is successfully
challenged, the resulting figure will be deemed to be the number of attaching entities.
                         i.   Geographic Areas
2.     Telecom Order petitioners urge that we reconsider the geographic areas used by utilities to
determine an average number of attachers for use in calculations of the formulas for pole attachment
rates.  Upon presentation of additional information and consideration of the record in this
proceeding, we modify the geographic areas on which a utility will base its average numbers of
attaching entities.  Confusion has been demonstrated on the part of utilities attempting to implement
the Telecom Order, because the term "urban" comprises all territory, population and housing units in
places of 2,500 or more people.  An urbanized area may be contained within an urban area, and
vice-versa, and it has been demonstrated that utilities do not have the ability to determine what portion
of their service areas fall within a rural, urban or urbanized area without unreasonable costs and
effort.  Further confusion has been demonstrated about the three categories of areas for which
averages should be prepared because individual utilities may have distinct service areas, specific to a
state, their company or industry, that complicate the development of averages as outlined in the
Telecom Order.  These distinct service areas may not correspond to the Bureau of Census
categories.  Some utilities assert it will not be feasible to determine averages in any cost-efficient
manner, so we will provide default averages for urbanized and non-urbanized areas, for use in the
absence of utility developed averages.
3.     The purpose of having averages based on geographic areas was to have pole attachment
rates reflect an appropriate average number of pole attachments in a particular geographic area as of
February 2001, when utilities begin calculating rates for telecommunications carriers.  It was
expected that densely populated areas would have more attachments, in response to various
communities' diversity of communications and other services.  For instance, utility poles in a
densely built out urbanized area would be expected to have multiple attachments of governmental
entities that may not exist in a rural area without street or pedestrian directional lighting, and multiple
service providers.  It has been suggested by SBC and USTA that the development of an average
number of attaching entities by distinct service area within a state, designated as urbanized or non-
urbanized, reflecting the demographics of the particular service area, would be an efficient, cost-
effective exercise resulting in averages for areas that share similar characteristics relating to pole
attachments.  A population of 50,000 or greater (urbanized area) is a reasonable density in which to
expect greater penetration of service providers and attachments.  The record shows that using
urbanized and non-urbanized areas allows a reasonably effective classification of poles based upon the
actual characteristics of pole inventory of different utilities.
4.     We will require utility pole owners to calculate an average number of attaching entities by
service area.  Where a utility territory or service area in which an attaching entity seeks to install
pole attachments can be identified as either urbanized or non-urbanized, the default averages, or the
actual averages if developed by the utility, for that area should be used.  However, where a utility
territory or service area in which an attaching entity seeks to install pole attachments cannot be
identified as either urbanized or non-urbanized because it crosses into both an urbanized and
non-urbanized area, and the utility is unable to identify a separate service area as non-urbanized, the
default averages, or the actual averages if developed by the utility, for an urbanized area should be
used.  If any part of a specific service area, as identified by the utility, is urbanized, then all that service
area would be considered urbanized for pole attachment purposes.  This will facilitate an equitable
calculation of pole attachment rates for telecommunications carriers.  Utilities that have multiple
service areas in a state would classify each service area, as either urbanized or non-urbanized
depending on whether any part of the service area is within an area designated by the Bureau of
Census as urbanized.  Utilities advise this would be equitable because in a service area in which any
part is considered urbanized, the development potential for the entire area to become urbanized is
great.
5.     We emphasize our preference that each utility use the data it has available in its corporate
and regulatory records, and not go to extraordinary lengths to be precise when reasonable estimates
will generally provide an equitable process.  The utility shall make available its data, information
and methodology upon which the averages were developed, unless the default averages are used.
We clarify that when a distinct area defined by the Bureau of Census as urban falls within an
urbanized area, a separate average number of attaching entities for that urban area is not required.  The
record demonstrates that in some states, and for some utilities, there may be no significant difference
in the number of attaching entities for rural areas and for urban areas that are outside urbanized
areas.  Therefore, we provide utilities the option of using our presumptive averages presented below,
or developing averages for two areas: (1) urbanized (50,000 or higher population), and (2) non-
urbanized (less than 50,000 population).
6.     When a utility exercises good faith in determining average numbers of attaching entities
upon which to base the costs of providing unusable space, the burden of proof will be on an attaching
entity to demonstrate the costs are being unjustly apportioned.  In demonstrating its good faith, the
utility must make its methodology and data publicly available to the attaching entity, upon request for
information sufficient for an attaching entity to project its costs of attaching to that utility's
infrastructure.  The costs of conducting an exercise to determine average numbers of attaching
entities shall not be directly passed on to the attaching entities as make-ready costs.  Expenses
relating to the exercise necessary to develop these averages will be shared ultimately by all attachers
and the utility when, as a reasonable business expense incurred as part of doing business, the expense
is reported to the utility's appropriate regulatory accounts and factored into the carrying charge rate of
the Cable Formula.  We do not believe that such expenses would be within the methodology
prescribed by Congress for individual payment by each attaching entity for a pole attachment.
                         ii.  Presumptive Averages
3.     In order to expedite the process of developing average numbers of attaching entities, and
allow utilities to avert the expense of developing location specific averages, we provide two
rebuttable presumptive averages for use in our Telecom Formula.  This gives both small and large
utilities the option of not conducting a potentially costly and burdensome exercise necessary to
develop averages based on their company specific records. The adoption of presumptive averages
should reduce cost and effort by all parties. In the Telecom Order, we declined to set default
presumptions, even though various commenters suggested the development of a rebuttable
presumption of at least three attachers was appropriate.  Comcast encouraged a presumptive average
of six attaching entities based on our Common Carrier Bureau's Fiber Deployment Update - End of
Year 1996 ("Fiber Deployment Update").  U S West indicated that having the Commission develop
the presumptive average would serve efficiency, minimize complaints, and place the burden of
rebuttal on the pole owner.
4.     In the Telecom Order, we did not establish presumptions, but said we believed the most
efficient and expeditious manner to calculate a presumptive number of attaching entities would be for
each utility to develop its own presumptive average number of attaching entities. We now
reconsider that decision and set rebuttable presumptive average numbers of attaching entities for our
two categories, urbanized and non-urbanized. We are now persuaded that utilities and attaching
entities would benefit from our providing presumptive averages for their use. Our establishment of
presumptive averages will expedite the process and allow utilities to avert the expense of developing
location specific averages. As with all our presumptions, either party may rebut this presumption
with a statistically valid survey or actual data.
5.     Based on the expanded record, we establish presumptive average numbers of attaching
entities in a non-urbanized (less than 50,000 population) area to be three (3) attaching entities, based
on information presented in the record and the expectation that on a pole or in a conduit, for instance,
there would be electric, telephone and cable attachers. It is estimated that cable systems now provide
access to cable television services to over 97% of all households with a television.  Electric power
and telephone service is even more universal.  The record supports a presumptive average of three
attaching entities in non-urbanized areas.
6.     In an urbanized area that is more densely populated (50,000 or higher population), more
developed commercially than a non-urbanized area, and in which we expect both residential and
business commercial competition to flourish, we set a presumptive average number of attaching
entities at five (5) to reflect the inclusion of, but not limited to, the following possible attaching
entities: electric, telephone, cable, competitive telecommunications service providers and
governmental agencies.  Advanced telecommunications capability is being deployed throughout the
country.  As noted above, competitive services are increasing.  The record supports a presumptive
average number of five attachers in urbanized areas.
       G. OVERLASHING
          1.   Space Occupied by Third Party Overlashing
2.     Cable companies have, through overlashing, been able for decades to replace deteriorated
cables or expand the capacity of existing communications facilities, by tying communication
conductors to existing, supportive strands of cable on poles.  The 1996 Act was designed to
accelerate rapid deployment of telecommunications and other services, and to increase competition
among providers of these services.  Overlashing existing cable reduces construction disruption and
associated expense.  Accordingly, in the Telecom Order, we declared our continued approval of, and
support for, third party overlashing, subject to the same safety, reliability, and engineering constraints
that apply to overlashing one's own pole attachment.
3.     We determined that facilities overlashed by third parties are presumed to share the
presumptive one foot of usable space occupied by the host attachment.  We did not dictate how the
utility, host attaching and third party attaching entities would relate to each other for compensation
purposes. We did not require the host attaching entity or the third party overlasher to obtain the
consent of the utility beyond the consent already acquired for the host attachment although the utility
is entitled to notice of the overlashing.  We stated that third party overlashing did not disadvantage the
utility's ability to ensure the integrity of its poles.
4.     Some Telecom Order petitioners continue to urge that we impose additional regulation on
third party overlashing.  We decline to impose additional regulation and clarify several aspects of
our position regarding third party overlashing.  Allowing third party overlashing reduces
construction disruption and associated expenses which would otherwise be incurred by third parties
installing new poles and separate attachments.  We clarify that third party overlashing is subject to
the same safety, reliability, and engineering constraints that apply to overlashing the host pole
attachment.  We affirm our policy that neither the host attaching entity nor the third party
overlasher must obtain additional approval from or consent of the utility for overlashing other than the
approval obtained for the host attachment.
          5.   What the Third Party Overlasher Pays
6.     Some petitioners urge us to specify, or at least clarify, what the third party
telecommunications carrier overlasher pays to the host attacher or the utility pole owner.  We
decline to attempt to regulate this relationship.  However, if the third party overlashing a cable
operator's pole attachment is a telecommunications carrier, then the pole attachment will be considered
to be used to provide telecommunications services for purposes of calculating the pole attachment
rate.  The  maximum rate for that overlashed pole attachment would then be calculated using the
Telecom Formula after February 8, 2001.  In some instances, the host attaching entity will pay the
utility for a telecommunications carrier pole attachment. We have stated that the third party
overlasher is not separately liable to the utility for the usable space which the overlashing shares with
the host attachment because there would be no additional usable space occupied.  We expect and
encourage the overlashing and host attaching entities to negotiate a just and reasonable rate of
compensation between them for the overlashing, which will represent some sharing of the usable and
unusable space costs.  Until our intervention is necessary to facilitate pole attachments for these
parties, we will rely on all parties to act in good faith to develop their own just and reasonable
compensation.
          7.   Wind and Weight Load Factors
8.     Fee Order petitioners continue to urge that we allow some factor for increased weight and
wind load in cases of overlashing.  We have reviewed Sections 24 through 26 of the NESC that
address loading and structural requirements in detail.  Based on our analysis and the record, we
continue to believe that an attachment's "burden on the pole" relates to an assessment of need for
make-ready changes to the pole structure, including pole change-out, to meet the strength
requirements of the NESC.  For example, if the addition of overlashed wires to an existing attachment
causes an excessive weight to be added to the pole requiring additional support or causes the cable sag
to increase to a point below safety standards, then the attacher must pay the make-ready charges to
increase the height or strength of the pole.  Make-ready costs are non-recurring costs for which the
utility is directly compensated and as such are excluded from expenses used in the rate calculation.
The statutory language prescribes that we allocate costs based on space occupied, not load capacity.
9.     Fee Order petitioners present no new or persuasive evidence that the "burden on the pole"
due to weight and wind load is an additional factor for consideration in the determination of the
amount of space occupied through which some rate increase would be calculated. We affirm our
position that the costs of the physical attachments of an attaching entity are normally paid to the pole
owner as a condition of attachment, addressing such factors as weight, wind load and safety space.
Overlashing does not increase the amount of space actually occupied by the attachment.
          10.  Shared One-Foot Usable Space
11.    In the Telecom Order, we found that the one foot presumption should continue to apply
where an attaching entity has overlashed its own pole attachments.  We also determined that
facilities overlashed by third parties onto existing pole attachments are presumed to share the
presumptive one foot of usable space of the host attachment.
12.    Telecom Order petitioners urge us to clarify that the presumption of one foot of usable
space occupied by a pole attachment is rebuttable.  The one foot presumption is rebuttable by any
party.  We decline to abandon or redefine our presumption for usable space occupied by a pole
attachment, even in instances of overlashing.  We have previously considered and rejected ICG's
argument that the one foot presumption is outdated. The record on reconsideration affirms that the
sharing and use of the one foot presumption, for usable space occupied by a pole attachment, does not
lead to a distortion of the allocation of the costs of the pole in determining a just and reasonable
compensation for the utility.
          13.  Cable Operator Not a Utility Obligated to Provide for Overlashing
14.    MCI urges us to classify cable operators and telecommunications carriers with pole
attachments as utilities and therefore require them to act as a utility for a third party overlashing.
The Pole Attachment Act does not define utility to include attachers.  Section 224(f) of the Pole
Attachment Act obligates a utility to provide a cable television system or any telecommunications
carrier with nondiscriminatory access for purposes of a pole attachment.  Neither a cable system
attacher nor a telecommunications attacher has an obligation to act as a host and share its pole
attachment with a third party overlasher.
          15.  Notice to Utility Pole Owner
16.    U S West urges us to clarify that the utility pole owner shall receive explicit notice of a
third party overlasher.  U S West asserts that notice to the pole owner of a third party overlasher is
necessary for the pole owner to determine whether the overlashing will endanger the integrity of a pole
line or create a hazardous condition, as well as to calculate Telecom Formula rates after February 8,
2001 if the overlasher is a telecommunications service provider.  We agree that the utility pole
owner has a right to know the character of, and the parties responsible for, attachments on its poles,
including third party overlashers. The pole owner is entitled to charge a Telecom Formula rate when
a pole attachment previously used to provide only cable services is used to provide
telecommunications services, as a result of a third party telecommunications carrier overlashing.
When the cable operator's pole attachment provides transmission of telecommunications services,
whether for itself or via third party overlashing, it will notify the pole owner.  We clarify that it
would be reasonable for a pole attachment agreement to require notice of third party overlashing.
17.    In the Telecom Order, we concluded that the third party overlashing entity should be
classified as a separate attaching entity for purposes of counting entities using the Telecom Formula.
We now reconsider that decision, and based on our review of the statute, the record herein and our
decision that an overlasher shares space with the host attachment, we believe that the third party
overlasher should not be counted as a separate attaching entity.
18.    Telecom Order petitioners request that we require cable operators to certify that they are
not providing telecommunications service. We decline to adopt such a regulatory reporting
requirement as it would impose unnecessary administrative burdens on cable operators, utilities, and
the Commission.  We affirm the requirement that a cable operator notify the utility when the cable
operator begins providing telecommunications services itself or via third party overlashing. Cable
attachers stress that this notification should not provide utilities with an opportunity to acquire
sensitive proprietary and business development, planning, or scheduling information that could result
in a competitive disadvantage to the attaching entity. We agree.  The record fails to demonstrate any
legitimate purpose for a utility to require commercially-sensitive data or information to be provided as
a part of this notification of a change of service status by a cable operator.
19.    Finally, utilities contend that they are entitled to bill for and/or receive interest on any
difference in rates between the Cable Formula rates and the Telecom Formula rates, if a cable
operator fails to notify the utility that the cable operator is offering telecommunications services over
its pole attachment. Pole attachment agreements after February 8, 2001 could be expected to include
a reasonable mechanism for notification by a cable operator of its change of status to a
telecommunications carrier.  Pole attachment agreements could also be expected to include a
reasonable remedy for a cable operator's failure to so notify.  Because we have not explored the issue
of a penalty for failure to notify and have no record on the question, we will not make a determination
on that issue at this time.
          20.  Dark Fiber
21.    Telecom Order petitioners continue to urge that we impose additional regulation on the
leasing of "dark fiber" when a pole attachment that has been used to provide only cable services
would, as a result of activation of dark fiber, be used to also provide telecommunications services.
We affirm our holding in the Telecom Order that if an attachment previously used for providing solely
cable services would, as a result of the leasing of dark fiber, also be used for providing
telecommunications services, the rate for the attachment would be determined using the Telecom
Formula. However, attaching entities may lease their dark fiber to third parties without such leases
being considered separate attachments and without making an additional payment beyond the host's
existing attachment rate.  The cable system operator may lease excess fiber capacity within its
existing attachment to any party for a negotiated rate without the knowledge or consent of the pole
owner because the physical attachment will not be altered. The dark fibers contained within the
attaching host have already been taken into account in determining the rent for the attachment.  The
character and content of the services provided do not affect the amount of space occupied by the
attachment.  The type of services provided over the attachment only affect the pole attachment rate if
the services are telecommunications services.  If the third party leasing the fiber is, or becomes, a
telecommunications carrier, then the utility is entitled to compensation for the pole attachment based
on the Telecom Formula and must be notified.
       V. CONDUIT ISSUES
23.    Conduits are structures that provide physical protection for cables and allow new cables to
be added inexpensively along a pathway or route. A conduit consists of one or more ducts, which are
the enclosures that carry the cables. Often, when a cable operator's or telecommunications carrier's
cables are placed in a duct, three or more inner duct are inserted into the duct allowing "one duct to be
treated more like conduit." A collection of conduits, together with their supporting infrastructure,
constitutes a conduit system. A conduit system may vary widely among geographic areas, and
between LEC and electric utilities.
24.    In the Fee Order, we reviewed the Fee Order Notice filings as well as the Telecom Order
petition filings and concluded that other than collapsed ducts which are not counted in determining
total capacity, there is no unusable capacity in a conduit.  This was a departure from our conclusion
in the Telecom Order and we now affirm our conclusion in the Fee Order. The total capacity of a duct
or conduit is the entire volume of available capacity in the conduit system.  All costs associated with
the construction of the conduit system are considered in determining the cost of this total capacity.
Essentially, the lack of any unusable capacity in a conduit makes the practical application of the Pole
Attachment Act formulas the same for both cable attachers and telecommunications attachers both
before and after February 8, 2001.
25.     In the Fee Order, we adopted a conduit methodology and clarified what should be
considered the total capacity of a conduit for purposes of determining a per unit rate for use of a
utility's conduit.  Cable operators and telecommunications carriers alike will calculate a maximum
just and reasonable rate for a pole attachment in a conduit by apportioning the cost of providing
capacity among all entities according to the percentage of capacity used by each entity. Calculation
of the maximum rate may be simplified by using the presumptions in the formula. The carrying
charge rate is calculated for pole attachments in conduit, in the same manner as the carrying charge
rate in our pole attachment formula.  The conduit formula adopted in the Fee Order and affirmed
here is the following:
          1.   Space Factor in Conduit
2.     In the Fee Order, we concluded that all costs attributable to utilities' underground conduit
systems are costs of providing capacity.  The regulatory accounts to which LEC and electric utilities
report their gross conduit investment include the costs of installed conduit, original permit, excavation,
sewer connections and other costs.  For instance, in ARMIS Account 2441 LECs report the ". . .
original cost of conduit. . . which is reusable in place. . . includ[ing] the costs of opening trenches and
of any repaving necessary in the construction of conduit plant.  For electric utilities, FERC Account
366 reports the capital costs for "installed underground conduit and tunnels used for housing
distribution cables or wires." All costs associated with the construction of the conduit system are
considered in determining the cost of this total capacity.
                 a.                                              Total Duct or Conduit Capacity
2.     In the Fee Order, we clarified that a utility may designate capacity in a duct for
maintenance or emergency use, but that a duct so designated is usable in the event it is needed, and
therefore is part of the conduit capacity.  Where duct capacity is set aside for future municipal use (in
the nature of consideration as a condition for a license, franchise, or permit), the utility is compensated
for those costs as part of its net conduit investment and/or in the carrying charge rate. Collapsed or
otherwise damaged ducts are no longer available for pole attachments, and should not be included in
the calculation of total capacity of a conduit or duct in the Cable Formula.
3.     USTA continues to urge that we declare that costs of ducts reserved for maintenance and
municipal uses should be treated as "unusable space," thus reducing the total capacity used in the
denominator of the rate methodology formula.  USTA argues because this duct space is available for
the benefit of all users it cannot be used exclusively by the conduit owner or by any party from whom
the owner can recover attachment charges. Verizon supports USTA's Fee Order petition that we
should reconsider our treatment that ducts reserved for maintenance activities, or that are set-aside for
municipal use should not be excluded from usable capacity.  Verizon asserts that these ducts are not
available for pole attachments and conduit owners are "short-changed" when these set-asides are not
excluded from usable capacity (i.e. not treated as unusable space).
4.     We will not allow capacity designated for maintenance, future business plans, or municipal
set-asides to be subtracted from the total duct or conduit capacity for rate determination purposes.  The
record supports our analysis that capacity in a duct or conduit that is usable for any of these purposes
is part of the "total duct or conduit capacity."  For example, a utility may set-aside capacity for
maintenance or emergencies so that unoccupied capacity is available into which a temporary cable
may be placed and spliced into a damaged cable.  Capacity so designated is usable in the event it is
needed, and available for use by the utility at any time for any purpose, and is therefore part of the total
available conduit capacity.  Such reservation of capacity is not necessarily identified by a specific duct
or location, can be created, used, withdrawn or discarded at the sole discretion of the utility, and must
be considered part of the total capacity of the conduit.  Municipal set-asides are also capacity that may
be made available for the use of the local government as a condition in a franchise, license, right-of-
way or other agreement.
5.     Capacity may be reserved, or kept unused to be available to an electric utility for expansion
of its core business services, but that capacity is still part of the total capacity of the duct or conduit
system and must be made available for pole attachments until such time as it is needed by the electric
utility under a bona fide business plan. Under the policy articulated in the Local Competition Order,
an electric utility is allowed to reserve capacity for future business purposes under a bona fide business
plan, but must allow that capacity to be used for attachments until an actual business need arises.
For whatever reason capacity may be reserved or designated for special uses, by or on behalf of the
utility, and regardless of who may benefit directly or indirectly from those uses, the capacity is
available for use and therefore remains part of the total capacity of the conduit for rate determination
purposes.
                 f.                                              Occupied Capacity, the Half-Duct Presumption
7.     Presumptions are used in the Cable and Telecom Formulas to expedite the calculations of
a just and reasonable rate so that complicated surveys, accounting and calculations may be avoided.
In the Fee Order and Telecom Order, in order to identify a rebuttable presumption of the percentage
of capacity occupied by an attachment in a conduit, we adopted a rebuttable presumption that a cable
or telecommunications attacher occupies one half of a duct.  We stated that we believed that the one
half duct methodology is a simple and reasonable presumptive approximation of the conduit capacity
used by a cable operator or telecommunications carrier.  This method, patterned after the one used
by the Massachusetts Department of Public Utilities ("MDPU"), and relied on in Multimedia
Cablevision, allows for determining the cost, per foot or meter, of one duct and then dividing by
two, instead of actually measuring the actual capacity occupied.  In situations where the formula, or
the presumption, is inappropriate, for instance because it has been demonstrated that there are more
than two users in the duct, or that one particular attachment precludes sharing the duct with another
attachment, the one half duct presumption can be rebutted.  If a new entity is installing an attachment
in a previously unoccupied duct, we stated such an entity should be encouraged to place inner duct
prior to placing its wires in the duct.
8.     Telecom Order petitioners continue to argue that our half-duct presumption of capacity
occupied by an attachment in a conduit system is not an accurate reflection of capacity occupied. Fee
Order petitioners continue to assert that an electric supply cable cannot share a duct with a
communications cable, and therefore, from the electric utility point of view, the communications cable
occupies the entire duct. Attachers argue that the presumption is too large; utilities argue that the
presumption is too small.  Joint Cable Parties and SBC support retention of the half-duct
presumption. American Electric argues that electric conduit cannot be and is not shared and
therefore the one half duct presumption leads to under recovery for the electric utility. WorldCom
supports our conclusion that electric supply cables, not communications cables, effectively exclude
other cables from occupying the same duct and therefore the one half duct presumption for a
communications cable is appropriate. WorldCom challenges petitioners' claims that we misinterpreted
NESC guidelines permitting a communications and electric cable to share a duct when both are
controlled by the same party.
9.     Petitioners have presented no new evidence to persuade us that utilities are not justly
compensated for use of their conduit by the one half duct presumption.  We affirm our rebuttable
presumption that a cable or telecommunications attacher occupies a maximum capacity of one half of
a duct, when determining a reasonable conduit attachment rate.  We have previously considered and
rejected petitioners' arguments for a smaller presumption and electric utilities' arguments that a pole
attachment occupies a whole duct. The presumption that a communications cable in a conduit
system occupies one half of a duct is based on clear evidence that all types of cable   including
electric supply cables when controlled by the same party as the communications cable    may share a
duct. We affirm our position that, because the NESC rule relied on by the electric utilities does not
prohibit the sharing of a duct by electric and communications cables when controlled by the same
party or two communications cables, it is reasonable to expect there to be more than one attacher in a
duct.
10.    The one half duct presumption is rebuttable and the presence of inner duct is adequate
rebuttal.  Where inner duct is installed, either by the attacher or in a previous installation, the
maximum rate will be reduced in proportion to the fraction of the duct occupied.  That fraction will be
one divided by the actual number of inner ducts in the duct. We continue to believe that the use of the
one half duct rebuttable presumption is a simple, expedient and reasonable approximation of the
actual capacity occupied by a cable operator or telecommunications carrier attaching in a conduit
system.  When the actual percentage of  capacity occupied is known, it can and should be used
instead of the one half duct presumption.
          11.  Net Linear Cost of Conduit
12.    As stated in the Fee Order, in the conduit context, we use the net linear cost of the conduit,
as compared to the net cost of a bare pole, as one factor within the formula for determining a
maximum permissible rate for attachment within conduit. As the net cost of a bare pole reflects the
total system investment for the above ground pole attachment infrastructure, to arrive at a system
investment for use in the conduit formula we identify the net linear cost of the conduit system.  To
accomplish this, the utility must first establish the Net Conduit Investment.
13.    Our goal has always been to adopt a formula which allows the parties to calculate the
maximum rate using public data when available, in a fair and expeditious manner.  We also have a
policy against requiring additional accounting procedures so long as the information is available from
the utilities upon reasonable request.
                 a.                                              Net Conduit Investment (LEC-Owned Conduit)
2.     Net Conduit Investment for LEC-owned conduit is calculated as follows:
3.     Gross Conduit Investment for the LEC consists of Part 32 Account 2441. For LECs,
Accumulated Depreciation (Conduit) represents the share of ARMIS Account 3100 that corresponds
to Account 2441. Accumulated Depreciation related to conduit is publicly available at the LECs
ARMIS Report 43-02.  In the Fee Notice we proposed the following formula for the calculation
of accumulated deferred income taxes for conduit:
4.     LEC conduit owners objected to this formula on the basis that the actual amount of
accumulated deferred taxes for conduit is available directly from the LEC's books.  BellSouth
maintains that because it is required to keep separate and accurate records of accumulated deferred
income taxes for poles and conduit, our formula will improperly introduce non-conduit related
deferred taxes into rate calculations.  NCTA argued that LECs should not use accumulated deferred
income tax figures taken from the LEC's books because the information is not publicly available.
5.     In the Fee Order, we concluded that if the LEC conduit owner is required to keep this data
precisely as required for the formula, we will allow them to use it in the rate calculation, as long as it
was reported to and available through our public ARMIS.  There is confusion among utilities and
attaching entities whether this data is available.  Pursuant to our Biennial Regulatory Review, Review
of Accounting and Cost Allocation Requirements, FCC 99-106 and Biennial Regulatory Review,
Review of ARMIS Reporting Requirements, FCC 99-107 we require the LEC conduit owner to
keep this data as required for the formula because we require LECs to use it in the rate calculation.
This data will be available at ARMIS Report 43-02 and we will use this data in our formulas.  Until
ARMIS reports for LECs include this required data after 2001, we will continue to use the proration
method to calculate the conduit portion of accumulated deferred taxes for use in the formula to
calculate the net linear cost of conduit.
                 f.                                              Net Conduit Investment (Electric Utility-Owned Conduit)
7.     Net Conduit Investment for electric utility-owned conduit is calculated as follows:
8.     For electric utilities, Gross Conduit Investment is reflected in FERC Part 101 Account
366. Accumulated Depreciation (Conduit) represents the share of FERC Account 108 (Accumulated
provision for depreciation of electric utility plant (Major only) - a composite account that is required to be
maintained on a subsidiary basis) that corresponds to Account 366.  Accumulated Deferred Income
Taxes for electric utilities represents the share of FERC Accounts 190, 281, 282, and 283 that
correspond to Account 366.
9.     UTC/EEI argues that our conduit formula methodology should reflect differences between
urban and suburban conduit. UTC/EEI objects to the use of system-wide data because UTC/EEI
believes system-wide data fails to account for significant differences between the cost of deploying
conduit in urban and suburban areas. However, in comments to the Fee Notice, UTC/EEI admitted
that costs related to both urban and non urban facilities are recorded in the same utility accounts, such
as FERC account 366 (Gross Conduit Investment).  In fact, UTC/EEI further asserts that in the
absence of their preferred "market-based" approach to establishing rates, more regulatory certainly and
greater market stability results from the application of a uniform methodology, avoiding different
regional or urban/rural formulas.   Upon review, we found no new information presented that would
persuade us to abandon the use of system-wide data in the conduit context, as it is used in the pole
context.  No viable alternate suggestion has been offered and we continue to find that the use of
system-wide data is the most efficient and reasonable methodology.
       J. FERC AND ARMIS ACCOUNTS USED IN THE FORMULAS
11.    Both telecommunications and electric utilities continue to argue, as they have since the
implementation of the pole attachment formula, that the various permutations of the formulas for
poles and conduit, for LECs and electric utilities, do not include enough FERC or ARMIS regulatory
accounts to fully compensate the utilities for their costs.  Before discussing the issues raised by the
parties concerning the accounts used in the formulas, we first correct a typographical error appearing
in the Fee Order.
          1.   Electric Utility Accumulated Deferred Income Taxes Poles (Correction)
2.     In the Fee Order, we stated the following formula to determine the net cost of a bare pole
for electric utilities:
We stated that the Accumulated Deferred Income Taxes represents the share of composite FERC
Account 190 (Accumulated deferred income taxes) that corresponds to Account 364.  In error, we
neglected to include  FERC Accounts 281, 282, and 283 along with Account 190. We now correct this
typographical error so that Accumulated Deferred Income Taxes represents the share of composite
FERC Accounts 190, 281, 282 and 283 that corresponds to Account 364.
          3.   Carrying Charge Accounts (LECs)
4.     The carrying charge rate reflects those costs incurred by the utility in owning and
maintaining pole attachment infrastructure regardless of the presence of attachments.  The elements
of the carrying charge rate are: administrative, maintenance, depreciation, taxes and cost of capital
(rate of return).  To calculate the carrying charge rate, we developed formulas that relate each element
to a utility owner's net investment. The carrying charge rate factor of the Cable Formula is
calculated as follows:
5.     In May 1986, the Commission adopted a new uniform system of accounts for all FCC
regulated telephone companies.  The Commission's Annual Report Form M was revised on April
27, 1989 to reflect the new accounting system in Part 32 that replaced the accounting system in Part
31, effective January 1, 1988.  The Pole Attachment Order provided formulas for determining a
maximum just and reasonable pole attachment rate with regulatory accounts identified.  The
formula for LECs used Part 31 accounts until after adoption of the New USOA-Part 32 Adoption,
when the Common Carrier Bureau responded to a request for clarification of what Part 32 accounts
would be used in place of the Part 31 accounts specified in the Pole Attachment Order.  That guidance
was given with the understanding that an exact tracking of expenses from Part 31 accounts to Part 32
accounts was not possible.  In the Fee Order, we clarified the Part 32 accounts to be used in the
Cable Formula for LECs utilities.
6.     In the Fee Order, we adopted the following formula to determine the administrative
element of the carrying charge rate of the Cable Formula for LEC pole owners:
USTA and Verizon ask us to reconsider our decision to exclude certain accounts as administrative
expenses.  USTA asserts we should reconsider our decision to exclude expenses in ARMIS
Accounts 6110 (network support expenses) which includes costs of repairing and maintaining the
motor vehicle fleet; 6120 (general support expenses) which includes costs of land and buildings, office
equipment and computers; 6534 (plant operations and administrative expenses) which includes costs
related to the general administration of plant operations; and 6535 (engineering expenses) that support
all plant operations.  USTA argues that we should include all accounts that USTA claims indirectly
support the administration of poles.  USTA argues that our conclusions in the Fee Order
contradicted the Pole Attachment Order and the court's advice in Alabama Power v. FCC.
7.     NCTA counters that a one to one mapping of accounts from Part 31 to part 32 is not
feasible and the accounts included in the formula overstate the administrative expenses attributable to
poles because administrative expenses such as research and development for highly complex
technological and business planning projects would far exceed the administrative oversight for
poles.  NCTA points out that the conversion to Part 32 actually increased the administrative
expenses because Account 6720 includes costs that were formerly excluded under Part 31 accounting.
NCTA notes that Account 6720 is a composite account including expenses for accounting and
finance, external relations, human resources, information management, legal,
procurement, research and development, and a general account labeled "general and
administrative."  NCTA continues that Account 6535 (engineering expenses) is particularly
inappropriate because the attacher pays any engineering expenses related to the attachment upfront in
makeready charges.  Referring to Account 6110 (network support expenses), NCTA argues that
vehicle expenses associated with attachments are already included in makeready charges.
8.     The Fee Order did not attempt to establish different accounts to be used in the
administrative element of the carrying charges.  The Fee Order merely reconciled the accounts
formerly listed in Part 31 to their counterpart accounts in Part 32.  This resulted in the identification
of Accounts 6710 and 6720 to be included in the administrative element of the carrying charges. We
agree with NCTA that these accounts provide a broad spectrum of administrative expenses.  Contrary
to USTA's argument, we did not exclude general plant administrative expense accounts from the
calculation. USTA's citation to Alabama Power Co. v. FCC is not apropos.  We are using plant-
wide accounts representing administrative expenses, not pole-only administrative accounts. The
court's reasoning in Alabama Power Co. v. FCC  would apply if we used an administrative account
that isolated pole administrative expenses and then divided that by the net plant investment. The
accounts listed by USTA do not fall into the category of plant-wide administrative expenses that are
attributable in any way to poles, and were not previously included in the calculation under Part 31.
Maintenance expenses are already isolated into a pole-related account and are not to be included in the
administrative element. Capital accounts which are not pole investment also should not be included in
the administrative element.
9.     We reviewed and considered the record before us regarding the accounts to be used for the
administrative element expenses for LECs. We do not believe Congress intended us to discover and
aggregate all de minimis expenses which might have some intangible nexus to pole attachments.  On
the contrary, we believe Congress gave us a clear mandate not to engage in full-scale ratemaking
exercises every time we had a pole attachment complaint before us.  We have chosen not to
disaggregate the major accounts selected for inclusion in our calculations in order to eliminate
expenses not directly attributable to administrative costs with a nexus to pole attachments, such as
corporate strategic planning.  On reconsideration, we decline to draw in more expenses to the
administrative element because we already apply a comprehensive set of expenses in conformance
with the statutory directive to allocate a percentage of operating expenses attributable to pole
attachments.
          10.  Carrying Charge Accounts (Electric)
11.    In the Fee Order, we rejected our tentative conclusion to include a portion of FERC
Account 590 in the maintenance element of the carrying charge rate.  We concluded that any indefinite
and uncertain attempt to identify a possibly minute percentage of pole related expenses that may be
included in Account 590, is outweighed by the complexity of arriving at an appropriate and equitable
percentage of the account.  We also concluded that pole related maintenance expenses would be
posted to Account 593, which is included in our calculation. Account 590 (maintenance supervision
and engineering (Major only)) includes the cost of labor and expenses incurred in the general
supervision and direction of maintenance of the distribution system. However, direct field supervision
of specific jobs are charged to the appropriate maintenance account. Operating expense instruction 1
(supervision and engineering (Major utilities)) states that the supervision and engineering includible
in the operating expense accounts shall consist of the pay and expenses of superintendents, engineers,
clerks, other employees and consultants engaged in supervising and directing the operation and
maintenance of each utility function.
12.    Account 593 (maintenance of overhead lines (Major only)) includes all the cost of labor,
materials used and expenses incurred in the maintenance of overhead distribution line facilities, the
book cost of which is includible in Account 364 (poles, towers and fixtures), Account 365 (overhead
conductors and devices), and Account 369 (services). In our calculation we include the net investment
for all three accounts to determine the portion of Account 593 attributable to Account 364.  UTC/EEI
and Southern Co. continue to argue that Account 590, or a portion thereof, should be included in the
carrying charge because the expenses relating to the maintenance of a distribution system may include
poles. We disagreed in the Fee Order, and we have been provided no additional evidence to rebut
the description of Account 590 or that "direct field supervision of specific jobs shall be charged to the
appropriate maintenance account," in this case Account 593. Fee Order petitioners do not persuade
us that there is any significant expense related to poles included in Account 590.
13.    This same reasoning applies to Account 594 in the conduit context.  Account 594
(maintenance of underground lines (Major only)) includes the cost of labor, materials used and
expenses incurred in the maintenance of underground distribution line facilities, the book cost of
which is includible in Account 366 (underground conduit), Account 367 (underground conductors and
devices), and Account 369 (Services). All expenses associated with Account 366, the account used to
determine conduit investment, are reported in Account 594 and no additional accounts should be
included as maintenance expenses.
14.    Petitioners also include a list of FERC accounts that they would like included as
maintenance expenses in the pole and conduit calculations. These include Accounts 580 (operation
and supervision), 583 (overhead line expenses (Major only)), 584 (underground line expenses (Major
only)), 584 (operation of underground lines), 588 (miscellaneous distribution operation expenses), 590
(maintenance supervision and engineering-Major only), and 598 (maintenance of miscellaneous
distribution plant).  Accounts 580, 583, 584, and 588 are operational accounts to which electric
utilities report expenses relating to the utility's core regulated business services, and not pole or
conduit expenses. Account 598 is the miscellaneous account related generally to maintenance of
equipment on customer premises and is not associated with pole or conduit expenses.  We will not
include any portion of Accounts 580, 583, 584, 588 or 598 in the calculation of the maintenance
element of the carrying charge rate for pole or conduit because the costs or expenses reported to these
accounts do not reflect a sufficient nexus to the operating expenses and actual capital costs of the
utility attributable to the pole or conduit attachment.  The pertinent maintenance expenses are
reported in Accounts 593 (poles) and 594 (conduit) and we include those in the calculation.
          15.  Investment Accounts (Electric)
16.    In addition to its arguments for including additional accounts in the carrying charge
component of the pole and conduit attachment formulas, Southern Co. argues that additional capital
accounts should be included in the investment calculation for poles and conduit, including FERC
Accounts 360 (land and land rights); 365 (overhead conductors and devices); 368 (line transformers)
and Accounts 389-399 (General Plant).  UTC/EEI joins in arguing for inclusion of Accounts 360,
365, 367 (underground conductors and devices), 369 (services), and 397 (communications
equipment).  We calculate net pole or conduit investment for two purposes in the formula.  First, we
calculate net investment to identify the portion of net investment that is allocable to the physical
attachment.  We then apply the rate of return against that portion so that the utility is fully
compensated for the capital investment that is being used by the attacher.  The only account pertinent
to that calculation is the pole or conduit investment account.
17.    We measure the capital investment that is used by determining the percentage of physical
space occupied by the attachment.  For electric utility poles, we use Account 364 (poles, towers and
fixtures). Account 364 includes the cost of installed poles, towers, and appurtenant fixtures used for
supporting overhead distribution conductors and service wires.  Specific items include: 1. Anchors,
head arm, and other guys, including guy guards, guy clamps, strain insulators, pole plates, etc.;
Brackets; Crossarms and braces; Excavation and backfill, including disposal of excess excavated
material; Extension arms; Foundations; Guards; Insulator pins and suspension bolts; Paving; Permits
for construction; Pole steps and ladders; Poles, wood, steel, concrete, or other material; Racks
complete with insulators; Railings; Reinforcing and stubbing; Settings; Shaving, painting, gaining,
roofing, stenciling, and tagging; Towers; Transformer racks and platforms.  Even with the 15%
reduction for non-pole appurtenances such as crossarms, this is still a very generous account, including
the cost of towers, transformer racks and platforms.
18.    The attacher is paying to attach a cable to the pole.  The Pole Attachment Act requires the
attacher to pay a portion of the capital costs attributable to the pole.  Those costs are fully captured in
Account 364.  The accounts suggested by petitioners include capital expenditures which support the
utility's core business function and are not related to the pole costs.  For instance, petitioners would
like to include tree trimming from Account 365 (overhead conductors and devices) in the pole
investment calculation.  However, tree trimming in that account is related to the overhead conductors
which relate to the core business function of the utility.  Any excavation relating to the installation of
the pole itself, including disposal of excess material, is already included in Account 364. If tree
trimming is required as part of make-ready activity to provide for installation of an attaching entity's
pole attachment, the attacher pays or reimburses that amount as part of make-ready charges.
19.    Petitioners also ask to include Account 360 (land and land rights). This account includes
the cost of land and land rights used in connection with distribution operations. It does not include the
cost of permits to erect poles, towers, etc. which are included in Account 364.  Electric Plant
Instruction 7 states that  "[t]he accounts for land and land rights shall include the cost of land owned
in fee by the utility and rights. Interests, and privileges held by the utility in land owned by others,
such as leaseholds, easements, water and water power rights, diversion rights, submersion rights,
rights-of-way, and other like interests in land. Do not include in the accounts for land and land rights
and rights-of-way costs incurred in connection with first clearing and grading of land and rights-of-
way and the damage costs associated with the construction and installation of plant. Such costs shall
be included in the appropriate plant accounts directly benefited." (emphasis added).  Petitioners
propose that they should earn a return on the entire amount of Account 360 which includes the entire
cost of all its land and land rights acquisitions which support its distribution system.  Even if some
costs associated with the land or right of way on which the poles are placed are included in this
account rather than Account 364, the utility is enjoying the full use of those rights and the attacher's
physical occupation of a portion of space on a pole does not restrict the utility's use of the land for its
distribution network.  The ratio of space occupied used to determine the capital pole investment
allocable to the attachment bears no relationship to the portion of land on which the pole sits in
relation to the entire inventory of square footage included in Account 360.  In addition, an attacher
usually pays a separate franchise, permit or license fee to the local government or franchising authority
for the right to operate in the public right of ways.  To the extent that an attacher wished to place a
separate structure (pole, box, etc.) on utility property, we would examine any rate issue on a case by
case basis.
20.    Petitioners also suggest that a portion of Account 368 (line transformers) benefits other
pole users because the lightning arresters attached to the transformers to protect the transformers may
also benefit other pole attachments.  Once again, Southern Co. proposes using an undisclosed formula
for calculating what portion of these costs should be attributed to the pole investment.  We do not
believe that the Pole Attachment Act envisions a drawn out ratemaking process to determine whether
a lightning arrester, whose only function is to protect a piece of equipment which supports the utility's
core business function of power distribution, indirectly benefits other attachers on the pole.  Neither
do we propose a complex ratemaking process to remove every possible cost included in Account 364
that does not benefit the pole attacher.
21.    Another account proposed by UTC/EEI is Account 367 (underground conductors and
devices) which UTC/EEI proposes to add to conduit investment.  This account includes the cost
installed of underground conductors and devices used for distribution purposes.  Items included are:
Armored conductors, buried, including insulators, insulating materials, splices, potheads, trenching,
etc.; Armored conductors, submarine, including insulators, insulating materials, splices in terminal
chamber, potheads, etc.; Cables in standpipe, including pothead and connection from terminal
chamber or manhole to insulators on pole; Circuit breakers; Fireproofing, in connection with any
items listed herein; Hollow-core oil-filled cable, including straight or stop joints, pressure tanks,
auxiliary air tanks, feeding tanks, terminals, potheads and connections, etc.; Lead and fabric covered
conductors, including insulators, compound-filled; oil-filled or vacuum splices, potheads, etc.;
Lightning arresters; Municipal inspection; Permits; Protection of street openings; Racking of cables;
Switches; and Other line devices. All of these items are related to the utility's distribution of power.
22.    Account 366 (underground conduit), which we include in the investment calculation,
includes the cost installed of underground conduit and tunnels used for housing distribution cables or
wires.  Items included are: 1. Conduit, concrete, brick and tile, including iron pipe, fiber pipe, Murray
duct, and standpipe on pole or tower; Excavation, including shoring, bracing, bridging, backfill, and
disposal of excess excavated material; Foundations and settings specially constructed for and not
expected to outlast the apparatus for which constructed; Lighting systems; Manholes, concrete or
brick, including iron or steel frames and covers, hatchways, gratings, ladders, cable racks and hangers,
etc., permanently attached to manholes; Municipal inspection; Pavement disturbed, including cutting
and replacing pavement, pavement base, and sidewalks; Permits; Protection of street openings;
Removal and relocation of subsurface obstructions; Sewer connections, including drains, traps, tide
valves, check valves, etc.; Sumps, including pumps; and Ventilating equipment.  All items
associated with the construction of the conduit are included in this account.
23.    Finally, UTC/EEI would like to include the costs of providing electric service to its
customers homes and the costs of its own communications facilities in the pole investment
calculation.  They seek to include Account 369 (services) which covers "the cost installed of overhead
and underground conductors leading from a point where wires leave the last pole of the overhead
system or the distribution box or manhole, or the top of the pole of the distribution line, to the point
of connection with the customer's outlet or wiring." Conduit used for this purpose is also included
in this account.  Account 397 includes the cost installed of telephone, telegraph, and wireless
equipment for general use in connection with utility operations.  Neither of these accounts can be
considered as pole investment.
24.    Based on our extensive review of the record and the description of the accounts, we affirm
that only FERC accounts to be included in the investment calculation are Accounts 364 for pole
investment and Account 366 for conduit investment.  Petitioners failed to provide any new
information and their reiteration of the same arguments fail to persuade us to include additional
accounts in our calculation of the pole or conduit investment.  As we have stated above, any unusual
requests involving access to land or rights of way other than for a pole attachment or conduit
attachment will be considered on a case by case basis. Our inclusion of unrelated expenses in certain
accounts and our exclusion of possible minor expenses in other accounts provides a balanced overall
allocation of costs while avoiding a prolonged and contentious ratemaking process.
          XXV.                                                   FINAL REGULATORY FLEXIBILITY CERTIFICATION
26.    As required by the Regulatory Flexibility Act ("RFA"), an Initial Regulatory Flexibility
Analysis ("IRFA") was incorporated in both the Fee Order Notice and Telecom Order Notice and
a Final Regulatory Flexibility Analysis ("FRFA") was incorporated in both the Fee Order and
Telecom Order. The Commission sought written public comment on the proposals in the Fee Order
Notice and Telecom Order Notice, including comment on the IRFAs. No comments were received in
response to the IRFA in either the Fee Order Notice or Telecom Order Notice, nor did we receive any
petitions for  reconsideration of the Fee Order FRFA or Telecom Order FRFA. The RFA requires that
an RFA analysis be prepared for notice and comment rulemaking proceedings, unless the agency
certifies that "the rule will not, if promulgated, have a significant economic impact on a substantial
number of small entities."
27.    The RFA generally defines a "small entity" as having the same meaning as the terms
"small business," "small organization," and "small governmental jurisdiction."  In addition, the term
"small business" has the same meaning as the term small business concern under the Small Business
Act.  A "small business concern" is one that:  (1) is independently owned and operated; (2) is not
dominant in its field of operation; and (3) satisfies any additional criteria established by the Small
Business Administration ("SBA"). As we described in the FRFA analyses in the Fee Order and
Telecom Order, we estimate that there are small business entities that might be affected by those
orders.
28.    In this Reconsideration Order, we affirm most of our prior conclusions in the Fee Order
and Telecom Order.  We have, among other things, amended certain requirements of Sections 1.1401-
1.1418 of our rules. These amendments serve to simplify our formulas for calculating pole
attachment rates.  Specifically, we provide a simplified equation of our formula for
telecommunications attachers; we simplify the geographic categories for determining average
numbers of attaching entities; and we allow parties to a pole attachment proceeding to substitute
presumptive numbers of attaching entities in the formula in order to avoid the expense of establishing
numbers based on a survey or compilation of actual data.  We also provide a simpler methodology
for calculating rates when the net pole investment is negative or zero. These changes do not impose
additional compliance burdens on small entities nor do they alter the number or type of small entities
possibly affected by the rules published in the Fee Order and Telecom Order.  The changes may, in
fact, reduce the burden on small entities. Therefore, we certify, pursuant to Section 605(b) of the RFA,
that the rules adopted herein will not have a significant economic impact on a substantial number of
small entities.
29.    Report to Congress: The Commission will send a copy of this Reconsideration Order,
including this final certification, in a report to Congress pursuant to the Congressional Review Act, 5
U.S.C.  801(a)(1)(A). A copy of this Reconsideration Order (or summary thereof) and this
certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and
will be published in the Federal Register pursuant to 5 U.S.C.  605.
          XXX.                                                   PAPERWORK REDUCTION ACT OF 1995 ANALYSIS
31.    The requirements adopted in this Reconsideration Order have been analyzed with respect
to the Paperwork Reduction Act of 1995 (the "1995 Act") and found to impose no new or modified
information collection requirements on the public.
          XXXII.                                                 ORDERING CLAUSES
33.    Accordingly, IT IS ORDERED, pursuant to section 405 of the Communications Act of
1934, as amended, 47 U.S.C.  405 and section 1.106 of the Commission's rules, 47 C.F.R.  1.106,
the petitions for reconsideration and/or clarification are DENIED IN PART and GRANTED IN PART
to the extent indicated above.
34.     IT IS FURTHER ORDERED that, pursuant to Sections 1, 4(i), 224 and 303(r) of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 224 and 303(r), this
Reconsideration Order is hereby ADOPTED and the Commission's rules are HEREBY AMENDED
as set forth in Appendix A.
35.    IT IS FURTHER ORDERED that the Commission's rules, as amended in Appendix A
hereto, will become effective 30 days after the date of publication of this Reconsideration Order (or
summary thereof) in the Federal Register.
36.    IT IS FURTHER ORDERED that the Commission's Consumer Information Bureau,
Reference Information Center, SHALL SEND a copy of this Reconsideration Order, including the
Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
                         FEDERAL COMMUNICATIONS COMMISSION
                         Magalie Roman Salas
                         Secretary
                           APPENDIX A
                                Revised Rules
Part 1 of Title 47 of the Code of Federal Regulations is amended as follows:
PART 1   PRACTICE AND PROCEDURE
1.   The authority citation for Part 1 continues to read as follows:
AUTHORITY:  47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309 and 325(e).
2.   Amend  1.1402 to revise paragraph (m) to read as follows:
 1.1402  Definitions.
* * * * *
     (m)  The term attaching entity includes cable system operators, telecommunications carriers,
incumbent and other local exchange carriers, utilities, governmental entities and other entities with a
physical attachment to the pole, duct, conduit or right of way.  It does not include governmental entities
with only seasonal attachments to the pole.
* * * * *
3.   Amend  1.1409 to remove paragraph (e)(4) and revise paragraphs (e)(1), (e)(2), (e)(3) and
the first sentence of paragraph (f) to read as follows:
 1.1409  Commission consideration of the complaint.
* * * * *
     (e) * * *
          (1) The following formula shall apply to attachments to poles by cable operators providing
cable services.  This formula shall also apply to attachments to poles by any telecommunications carrier (to the
extent such carrier is not a party to a pole attachment agreement) or cable operator providing
telecommunications services until February 8, 2001:
          (2) Subject to paragraph (f) the following formula shall apply to attachments to poles by
any telecommunications carrier (to the extent such carrier is not a party to a pole attachment agreement) or
cable operator providing telecommunications services beginning February 8, 2001:
          (3)  The following formula shall apply to attachments to conduit by cable operators and
telecommunications carriers:
simplified as:
1
If no inner-duct is installed the fraction, "1 Duct divided by the No. of Inner-Ducts" is presumed to be .
     (f) Paragraph (e)(2) of this section shall become effective February 8, 2001 (i.e., five years after
the effective date of the Telecommunications Act of 1996). * * *
* * * * *
4.   Amend 1.1417 to revise paragraphs (a), (b), (c), and the first sentence of paragraph (d) to
read as follows:
 1.1417 Allocation of Unusable Space Costs.
     (a)  With respect to the formula referenced in Section 1.1409(e)(2), a utility shall apportion
the cost of providing unusable space on a pole so that such apportionment equals two-thirds of the costs
of providing unusable space that would be allocated to such entity under an equal apportionment of such
costs among all attaching entities.
     (b)  All attaching entities attached to the pole shall be counted for purposes of apportioning
the costs of unusable space.
     (c)  Utilities may use the following rebuttable presumptive averages when calculating the
number of attaching entities with respect to the formula referenced in Section 1.1409(e)(2).  For non-
urbanized service areas (under 50,000 population), a presumptive average number of attaching entities
of three (3). For urbanized service areas (50,000 or higher population), a presumptive average number
of attaching entities of five (5).  If any part of the utility's service area within the state has a designation
of urbanized (50,000 or higher population) by the Bureau of Census, United States Department of
Commerce, then all of that service area shall be designated as urbanized for purposes of determining the
presumptive average number of attaching entities.
     (d)  A utility may establish its own presumptive average number of attaching entities for its
urbanized and non-urbanized service areas as follows: * * *
* * * * *
5.   Amend 1.1418 to read as follows:
 1.1418  Use of presumptions in calculating the space factor.
     With respect to the formulas referenced in Sections 1.1409(e)(1) and (e)(2), the space occupied
by an attachment is presumed to be one (1) foot.  The amount of usable space is presumed to be 13.5
feet.  The amount of unusable space is presumed to be 24 feet.  The pole height is presumed to be 37.5
feet.  These presumptions may be rebutted by either party.
                           APPENDIX B
 List of Parties Filing in Fee Order Reconsideration Proceeding
Petitions for Reconsideration and/or Clarification of the Fee Order were filed by:
     American Electric Power Corporation, Commonwealth Edison Company and Duke Energy
     Corporation (filed errata to correct the name of American Electric Power Corporation to
     American Electric Power Services Corporation) (American Electric)
     Southern Company Services, Inc., on behalf of Alabama Power Company, Georgia Power
     Company, Gulf Power Company, Mississippi Power Company, and Savannah Electric and
     Power Company (Southern Co.)
     Texas Cable & Telecommunications Association (TxCTA)
     United States Telecom Association (USTA)
     United Telecom Council and the Edison Electric Institute (UTC/EEI)
Comments in Support of and/or Opposition to Fee Order Petitions  were filed by:
     Verizon, local telephone companies of Bell Atlantic Corporation (d/b/a Verizon Communications),
     including telephone companies formerly affiliated with GTE Corporation, specifically: Bell
     Atlantic- Delaware, Inc., Bell Atlantic- Maryland, Inc., Bell Atlantic- New Jersey, Inc., Bell
     Atlantic- Pennsylvania, Inc., Bell Atlantic- Virginia, Inc., Bell Atlantic- Washington, D.C.,
     Inc., Bell Atlantic- West Virginia, Inc., Contel of Minnesota, Inc., Contel of the South, Inc.,
     GTE Alaska Incorporated, GTE Arkansas Incorporated, GTE California Incorporated, GTE
     Midwest Incorporated, GTE Southwest Incorporated, The Micronesian Telecommunications
     Corporation, New England Telephone and Telegraph Company, New York Telephone
     Company, Verizon Florida Inc., Verizon Hawaii Inc., Verizon North Inc., Verizon
     Northwest Inc., Verizon South Inc., Verizon West Coast (Verizon).
     WorldCom, Inc. (WorldCom)
Replies to Comments in Support of and/or Opposition to Fee Order Petitions were filed by:
     American Electric Power Corporation, Commonwealth Edison Company and Duke Energy
     Corporation (American Electric)
     National Cable Television Association (NCTA)
     Southern Company Services, Inc., on behalf of Alabama Power Company, Georgia Power
     Company, Gulf Power Company, Mississippi Power Company, and Savannah Electric and
     Power Company (Southern Co.)
     The United States Telecom Association (USTA) filed a Fee Order Reconsideration Reply after the
     deadline for timely filing.  No new arguments or issues were raised in that Fee Order
     Reconsideration Reply and we have considered the comments contained therein in the
     interest of having a full record reflected in the Reconsideration Order.
                                APPENDIX C
List of Parties Filing in Telecom Order Reconsideration Proceeding
Petitions for Reconsideration and/or Clarification of the Telecom Order were filed by:
Bell Atlantic (Bell Atlantic)
ICG Communications (ICG)
MCI Telecommunications Corporation (MCI)
National Cable Television Association, Cable Telecommunications Association,
          Texas Cable & Telecommunications Association, Cable Television Association of Georgia,
     South Carolina Cable Television Association, Cable Television Association of Maryland,
     Delaware and the District of Columbia, Mississippi Cable Telecommunications Association,
     Mid-America Cable Telecommunications Association, Kansas Cable Telecommunications
     Association, Jones Intercable, Inc., Charter Communications, Greater Media, Inc., Prime Cable,
     Rifkin & Associates, TCA Cable TV, Inc., and The Helicon Corporation (NCTA)
SBC Communications Inc. (SBC)
Teligent
United States Telephone Association (USTA)
     United Telecom Council and the Edison Electric Institute ("UTC/EEI")
U S West, Inc. (U S West)
Comments in Support of or in Opposition to Telecom Order Petitions  were filed by:
Adelphia and Lenfest Communications (Adelphia and Lenfest)
Ameritech
AT&T Corp. (AT&T)
Bell Atlantic (Bell Atlantic)
BellSouth Corporation (BellSouth)
Edison Electric Institute and UTC, the Telecommunications Association (UTC/EEI)
GTE Service Corporation (GTE)
     Joint Cable Parties: Texas Cable & Telecommunications Association; Cable Telecommunications
     Association of Maryland, Delaware & District of Columbia; Mid-American Cable
     Telecommunications Association, Jones Intercable, Inc.; Helicon, Inc.; and Rifkin &
     Associates (Joint Cable Parties)
MCI Telecommunications Corporation (MCI)
National Cable Television Association, Cable Telecommunications Association,
          Texas Cable & Telecommunications Association, Cable Television Association of Georgia,
     South Carolina Cable Television Association, Cable Television Association of Maryland,
     Delaware and the District of Columbia, Mississippi Cable Telecommunications Association,
     Mid-America Cable Telecommunications Association, Kansas Cable Telecommunications
     Association, Jones Intercable, Inc., Charter Communications, Greater Media, Inc., Prime Cable,
     Rifkin & Associates, TCA Cable TV, Inc., and The Helicon Corporation (NCTA)
SBC Communications Inc. (SBC)
Sprint Local Telephone Companies (Sprint)
Texas Electric Utilities Company (TUEC)
Time Warner Cable (Time Warner)
WinStar Communications (WinStar)
Reply Comments to Comments in Support of or Opposition to Telecom Order Petitions were filed by:
Association for Local Telecommunications Services (ALTS)
Bell Atlantic (Bell Atlantic)
Edison Electric Institute and UTC, the Telecommunications Association (UTC/EEI)
GTE Service Corporation (GTE)
     Joint Cable Parties: Texas Cable & Telecommunications Association; Cable Telecommunications
     Association of Maryland, Delaware & District of Columbia; Mid-American Cable
     Telecommunications Association, Jones Intercable, Inc.; Helicon, Inc.; and Rifkin &
     Associates (Joint Cable Parties)
MCI Telecommunications Corporation (MCI)
National Cable Television Association, Cable Telecommunications Association,
          Texas Cable & Telecommunications Association, Cable Television Association of Georgia,
     South Carolina Cable Television Association, Cable Television Association of Maryland,
     Delaware and the District of Columbia, Mississippi Cable Telecommunications Association,
     Mid-America Cable Telecommunications Association, Kansas Cable Telecommunications
     Association, Jones Intercable, Inc., Charter Communications, Greater Media, Inc., Prime Cable,
     Rifkin & Associates, TCA Cable TV, Inc., and The Helicon Corporation (NCTA)
Teligent
WinStar Communications (WinStar)
          Note:     If no abbreviation appears in parentheses following the full name of the party, the full name is
          used in this Reconsideration Order.
                          Appendix D-1
Section 224(d) Cable Formula for Determining Maximum Rate For Use of LEC Utility Poles
                    Using FCC ARMIS Accounts
Where:
And:
                          Appendix D-2
Section 224(d) Cable Formula for Determining Maximum Rate for Use of Electric Utility Poles
                   Using FERC Form 1 Accounts
Where:
And:
                          Appendix E-1
Section 224(e) Telecom Formula for Determining Maximum Rate For Use of LEC Utility Poles
                    Using FCC ARMIS Accounts
Where:
And:

                          Appendix E-2
Section 224(e) Telecom Formula for Determining Maximum Rate For Use of Electric Utility
                             Poles
                   Using FERC Form 1 Accounts
Where:

                          Appendix F-1
Formula for Determining Maximum Rate for Use of LEC Utility Conduit
                    Using FCC ARMIS Accounts
simplified as:
2
Where:
and
The Carrying Charge Rate reflects the costs incurred by the utility in owning and maintaining conduit
and other pole attachment infrastructure regardless of the presence of pole attachments.  To help
calculate the Carrying Charge Rate, we developed formulas that relate each of these components to the
utility's conduit investment.  The Carrying Charge Rate used in the conduit formula is the same as used
in the pole formula.
Where:
                          Appendix F-2
Formula for Determining Maximum Rate for Use of Electric Utility Conduit
                   Using FERC Form 1 Accounts
Simplified as:
3
Where:
And
The Carrying Charge Rate reflects the costs incurred by the utility in owning and maintaining conduit
and other pole attachment infrastructure regardless of the presence of pole attachments.  To help
calculate the Carrying Charge Rate, we developed formulas that relate each of these components to the
utility's conduit investment.  The Carrying Charge Rate used in the conduit formula is the same as used
in the pole formula.
Where: