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 Federal  Communications  Commission  FCC  01-  170
 Before  the
 Federal  Communications  Commission
 Washington,  D.  C.  20554
 In  the  Matter  of  )  CS  Docket  No.  97-  98
 Amendment  of  Commissions  )
 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
 C.  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
 D.  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
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 5.  Cable  Operator  Not  a  Utility  Obligated  to  Provide  for  Overlashing..  77
 6.  Notice  to  Utility  Pole  Owner    78
 7.  Dark  Fiber    82
 E.  CONDUIT  ISSUES.  83
 1.  Space  Factor  in  Conduit  86
 a.  Total  Duct  or  Conduit  Capacity..  87
 b.  Occupied  Capacity,  the  Half-  Duct  Presumption..  91
 2.  Net  Linear  Cost  of  Conduit  ..  95
 a.  Net  Conduit  Investment  (LEC-  Owned  Conduit)    97
 b.  Net  Conduit  Investment  (Electric  Utility-  Owned  Conduit).  101
 F.  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
 IV.  FINAL  REGULATORY  FLEXIBILITY  CERTIFICATION...  125
 V.  PAPERWORK  REDUCTION  ACT  OF  1995  ANALYSIS.  129
 VI.  ORDERING  CLAUSES  130
 APPENDIX  A  -  Revised  Rules
 APPENDIX  B  -  List  of  Parties  Filing  in  Fee  Order  Reconsideration  Proceeding
 APPENDIX  C  -  List  of  Parties  Filing  in  Telecom  Order  Reconsideration  Proceeding
 APPENDIX  D-  1  -  Section  224(  d)  Cable  Formula  (LECS)
 APPENDIX  D-  2  -  Section  224(  d)  Cable  Formula  (Electric)
 APPENDIX  E-  1  -  Section  224(  e)  Telecom  Formula  (LECS)
 APPENDIX  E-  2  -  Section  224(  e)  Telecom  Formula  (Electric)
 APPENDIX  F-  1  -  Conduit  Formula  (LECS)
 APPENDIX  F-  2  -  Conduit  Formula  (Electric)
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 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")  1  and  Subpart  J  of  the
 Commission's  Rules.  2  On  February  6,  1998,  we  released  a  Report  and  Order,  Implementation  of
 Section  703(  e)  of  the  Telecommunications  Act  of  1996,  Amendment  of  the  Commission's  Rules
 and  Policies  Governing  Pole  Attachments,  CS  Docket  No.  97-  151,  FCC  98-  20  ("  Telecom
 Order"),  3  adopting  rules  implementing  section  703(  e)  of  the  Telecommunications  Act  of  1996
 ("  1996  Act")  4  relating  to  pole  attachments.  5  On  April  3,  2000,  we  released  a  Report  and  Order,
 Amendment  of  Rules  and  Policies  Governing  Pole  Attachments,  CS  Docket  No.  97-  98,  FCC  00-
 116  ("  Fee  Order")  6  addressing  concerns  about  the  application  of  our  formula  for  determining
 reasonable  rates  for  pole  attachments.  We  have  determined  that  it  is  in  the  interest  of
 administrative  efficiency  and  regulatory  effectiveness  to  consolidate  these  two  reconsideration
 proceedings.  7
 2.  In  the  Telecom  Order,  we  implemented  Section  703(  e)  of  the  1996  Act  8  by  prescribing
 regulations,  9  effective  February  8,  2001,  10  to  ensure  that  a  utility  11  complies  with  the  Pole
 1  47  U.  S.  C.  224.
 2  47  C.  F.  R.    1.1401  1.1418.
 3  13  FCC  Rcd  6777  (1998);  affirmed  in  part,  reversed  in  part,  Gulf  Power  v.  FCC,  208  F.  3d  1263  (11th  Cir.  2000)
 ("  Gulf  Power  II"),  motion  for  stay  granted;  petition  for  cert.  granted  January  22,  2001.
 4  Pub.  L.  No.  104-  104,  110  Stat.  61,  149-  151.
 5  Section  703  of  the  1996  Act  amended    224  of  the  Communications  Act  of  1934,  codified  at  various  subsections
 of  47  U.  S.  C.    224.  Section  703  codified  at  47  U.  S.  C.    224(  f)  was  challenged  in  court.  See  Gulf  Power,  et  al.,  v.
 FCC  and  USA,  998  F.  Supp.  1398  (N.  D.  Fla.  1998),  affirmed,  187  F.  3d  1324  (11th  Cir.  1999)  ("  Gulf  Power  I").
 6  15  FCC  Rcd  6453  (2000).
 7  In  deciding  this  matter,  all  of  the  petitions,  comments  in  support  or  opposition  to  the  petitions,  and  replies  of  all
 parties  filed  in  both  rulemaking  reconsideration  proceedings  have  been  reviewed.  We  have  determined  that  the
 two  proceedings  raise  many  of  the  same  issues,  cover  the  same  statutory  authority,  47  U.  S.  C.    224,  and  involve
 the  same  industries  (cable  television  systems,  telecommunications  systems  and  utilities).  Many  of  the  same
 industry  representatives  and  parties  submitted  filings  in  both  proceedings.  See  Appendix  B  and  Appendix  C  for
 lists  of  all  parties  submitting  filings.  UTC/  EEI  suggest  that  the  Commission  should  "  .  .  .  adopt  all  pole
 attachment-  related  regulations  together  so  that  the  parties  are  given  the  ability  to  assess  their  rights  and
 obligations."  UTC/  EEI  Telecom  Order  Reconsideration  Petition  at  23.
 8  47  U.  S.  C.    224(  e)(  1-  4);  see  also,  47  U.  S.  C.    224(  d)(  3).
 9  See  Telecom  Order  at  Appendix  A;  47  C.  F.  R.    1.1401-  1.1418.
 10  See  47  U.  S.  C.    224(  e)(  4).
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 Attachment  Acts  requirements  for  just  and  reasonable  rates,  terms  and  conditions  and
 nondiscriminatory  access  for  pole  attachments  used  to  provide  telecommunications  services.  12
 Among  other  things,  the  Telecom  Order  considered  the  1996  Act,  Telecom  Order  comments  and
 Telecom  Order  reply  comments  filed  in  response  to  the  Telecom  Order  Notice.  13  Increases  in
 prescribed  rates  for  telecommunications  services  attachers  pursuant  to  section  224(  e)  of  the  Pole
 Attachment  Act  are  to  be  phased  in  over  five  years  beginning  February  8,  2001.  14
 3.  Appeals  of  the  Telecom  Order  were  consolidated  in  the  United  States  Court  of
 Appeals  for  the  11  th  Circuit  and  resulted  in  a  decision,  Gulf  Power,  et  al.  v.  FCC  and  USA  ("  Gulf
 Power  II").  15  That  decision  was  stayed  by  the  11  th  Circuit  Court  of  Appeals  and  the  Commission
 filed  a  petition  for  certiorari  with  the  United  States  Supreme  Court  which  was  granted.  Because
 two  issues,  the  application  of  the  Pole  Attachment  Act  to  wireless  telecommunications  service
 providers  and  the  effect  of  Internet  service  on  pole  attachments  are  the  subject  of  the  appeal  of
 Gulf  Power  II,  we  decline  to  address  those  issues  at  this  time,  pending  the  issuance  of  a  final
 mandate  from  the  courts.  In  addition,  the  regulatory  status  of  cable  Internet  access  is  the  subject
 of  an  ongoing  Notice  of  Inquiry  ("  NOI"),  16  the  resolution  of  which  may  affect  our  determination
 of  this  issue.  Therefore,  we  reserve  review  of  our  position  that  wireless  telecommunications
 service  providers  are  covered  by  the  Pole  Attachment  Act  and  that  Internet  service  is  neutral  for
 purposes  of  determining  the  character  of  the  attachment  as  cable  or  telecommunications.
 However,  these  two  issues  remain  open  and  will  be  the  subject  of  a  later  order  once  we  have
 received  guidance  from  the  courts  and  have  had  an  opportunity  to  review  the  additional  comments
 received  in  the  NOI  proceeding.
 4.  In  the  Fee  Order,  we  adopted  rules  based  on  the  comments  filed  in  response  to  the
 Fee  Order  Notice.  17  We  also  considered  the  Telecom  Order  comments  and  reply  comments  when
 relevant  to  the  issues  addressed.  Among  other  things,  the  Fee  Order  addressed  the  use  of  certain
 (  continued  from  previous  page)  11
 A  "utility"  is  defined  as  any  person  who  is  a  local  exchange  carrier  or  an  electric,  gas,  water,  steam,  or  other
 public  utility,  and  who  owns  or  controls  poles,  ducts,  conduit  or  rights-  of-  way  used,  in  whole  or  in  part,  for  any
 wire  communications.  Such  term  does  not  include  any  railroad,  any  person  who  is  cooperatively  organized,  or  any
 person  owned  by  the  Federal  Government  or  any  State.  47  U.  S.  C.    224(  a)(  1).
 12  47  U.  S.  C.    224(  e)(  1).  See  also  47  U.  S.  C.    224(  a)(  5)  exempting  pole  attachments  of  telecommunications
 carriers  who  are  also  incumbent  local  exchange  carriers  ("  ILECs").
 13  Notice  of  Proposed  Rulemaking,  Implementation  of  Section  703(  e)  of  the  Telecommunications  Act  of  1996,
 Amendment  of  the  Commission's  Rules  and  Policies  Governing  Pole  Attachments,  12  FCC  Rcd  11725  (1997).
 14  47  U.  S.  C.    224(  e)(  4);  47  C.  F.  R.    1.1409(  f).
 15  208  F.  3d  1263  (11  Cir.  2000).
 16  Inquiry  Concerning  High-  Speed  Access  to  the  Internet  over  Cable  and  other  Facilities,  FCC  00-  355  (released
 September  28,  2000).
 17  Notice  of  Proposed  Rulemaking,  Amendment  of  Rules  and  Policies  Governing  Pole  Attachments,  12  FCC  Rcd
 7449  (1997).
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 presumptions  in  our  rate  calculation  methodology,  the  carrying  charge  rate  elements  used  in  our
 formulas,  the  use  of  gross  versus  net  data  in  our  formulas  used  to  determine  a  maximum  just  and
 reasonable  rate  for  pole  attachments,  the  regulatory  accounts  to  be  used  in  our  formulas,  and  the
 formula  used  to  determine  a  maximum  rate  for  attachments  to  conduit.
 5.  In  this  Reconsideration  Order,  we  grant  in  part  and  deny  in  part  petitions  for
 reconsideration  and/  or  clarification  of  our  Telecom  Order  ("  Telecom  Order  petitions").  Nine
 Telecom  Order  petitions  were  filed,  and  in  response  15  parties  filed  Telecom  Order
 reconsideration  comments  and  nine  parties  filed  Telecom  Order  replies.  18  In  this  Reconsideration
 Order,  we  also  grant  in  part  and  deny  in  part  petitions  for  reconsideration  and/  or  clarification  of
 our  Fee  Order  ("  Fee  Order  petitions").  19  Five  Fee  Order  petitions  were  filed  and  in  response  two
 parties  filed  Fee  Order  reconsideration  comments  and  four  parties  filed  Fee  Order  replies.  20
 6.  In  this  Reconsideration  Order,  we
 (a)  affirm  our  decision  not  to  impose  additional  regulation  on  the  negotiation  process  or  on
 the  rules  for  resolution  of  pole  attachment  complaints;  21
 (b)  affirm  the  continued  use,  in  the  pole  attachment  rate  calculation  formulas,  of  specific
 regulatory  accounts  maintained  by  utilit  ies  that  ident  ify  the  act  ual  cost  s  incurred  by  the
 utilities  for  the  poles,  ducts,  conduits  and  rights-  of-  way  that  are  the  subject  of  the
 attachment;  22
 (c)  reconsider  and  clarify  the  way  in  which  entities  are  counted  for  the  purpose  of
 allocating  and  apportioning  costs  of  unusable  space  for  telecommunications  attachers
 after  February  8,  2001;  23
 (e)  reconsider  and  clarify  the  geographic  areas  used  to  determine  average  numbers  of
 attaching  entities  for  use  in  calculations  of  the  formulas  for  telecommunications  pole
 attachment  rates,  and  establish  two  presumptive  averages  that  may  be  used  in  our
 18  See  Appendix  C.
 19  Fee  Order  petitions  were  filed  by:  American  Electric  Power  Services  Corporation,  and  others  (American
 Electric),  Southern  Company  Services,  Inc.,  et  al.,  (Southern  Co.),  Texas  Cable  &  Telecommunications
 Association  (TxCTA),  United  States  Telecom  Association  (formerly  the  United  States  Telephone
 Association)(  USTA),  United  Telecom  Council  and  the  Edison  Electric  Institute  (UTC/  EEI).  A  full  listing  of  all
 parties  filing  Fee  Order  petitions,  Fee  Order  comments  and  Fee  Order  replies  to  Fee  Order  petitions  and
 comments,  as  well  as  abbreviations  used  to  identify  these  parties  in  this  Reconsideration  Order,  is  contained  in
 Appendix  B,  hereto.
 20  See  Appendix  B.
 21  See  Telecom  Order  at    10-  21.
 22  See  Telecom  Order  at    122-  124;  see  also,  Fee  Order  at    8-  11.
 23  Cf.  Telecom  Order  at    45-  58.
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 formulas  after  February  8,  2001;  24
 (f)  affirm  and  clarify  our  decisions  regarding  third  party  overlashing;  25
 (g)  affirm  the  presumption  that  a  pole  attachment  occupies  one  foot  of  usable  space
 occupied  and  that  this  presumption  is  rebuttable  by  either  party;  26
 (h)  affirm  that  the  formula  adopted  in  the  Fee  Order,  for  calculating  the  rate  for  use  of
 capacity  in  a  conduit,  is  applicable  to  telecommunications  systems;  affirm  the  use  in  the
 formula  of  the  actual  percentage  of  the  conduit  capacity  occupied,  with  a  rebuttable
 presumption  that  an  attacher  occupies  one-  half  duct;  27  affirm  our  decision  that  there  is
 no  unusable  capacity  in  a  conduit;  28  and  affirm  our  decision  that  a  ut  ilit  y  may  not
 exclude  reserved  capacity  within  a  conduit  system  when  calculating  total  capacity  upon
 which  the  pole  attachment  rate  in  a  conduit  is  based;  29
 (i)  affirm  our  posit  ion  that  complaint  s  regarding  nondiscriminat  ory  access,  rates,  terms
 and  conditions  for  non-  traditional  pole  attachments,  such  as  at  t  achment  s  t  o  right  s-  of-way,
 wireless  attachments  and  transmission  facilities  attachments,  will  be  considered
 under  our  rules  on  a  case-  by-  case  basis;  30
 (j)  reconsider  and  clarify  our  methodology  for  calculating  maximum  pole  attachment  rates
 when  the  net  pole  investment  becomes  zero  or  negative.  31
 (k)  decline  to  reconsider  at  this  time  and  reserve  for  later  review,  our  decision  that  Internet
 service  has  a  neutral  affect  on  an  attachers  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
 24  Cf.  Telecom  Order  at    74-  79.
 25  See  and  cf.  Telecom  Order  at    65-  73  regarding  treatment  of  unusable  space,    92-  95  regarding  treatment  of
 usable  space.
 26  Cf.  Telecom  Order  at    83-  91.
 27  Cf.  Telecom  Order  at    115.
 28  Cf.  Telecom  Order  at    107-  111.  Fee  Order  at    90-  91  and  n.  290.
 29  See  Telecom  Order  at    110.  Fee  Order  at    91.
 30  See  Telecom  Order  at    117-  121  and  n.  390.
 31  Fee  Order  at    31,  33-  34.
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 (m)  amend  our  rules  to  reflect  our  decisions  in  this  Reconsideration  Order.
 II.  BACKGROUND
 7.  In  1978,  Congress  enacted  section  224  of  the  Communications  Act  32  granting  the
 Commission  authority  to  regulate  the  rates,  terms,  and  conditions  governing  pole  attachments,
 requiring  that  such  rates,  terms  and  conditions  be  just  and  reasonable.  33  The  Commission  is
 authorized  to  adopt  procedures  necessary  to  hear  and  to  resolve  complaints  concerning  such
 rates,  terms,  and  conditions.  34  Congress  sought  to  constrain  the  ability  of  utilities  to  extract
 monopoly  profits  from  cable  television  system  operators  in  need  of  pole,  duct,  conduit  or  right-  of-way
 space  for  pole  attachments.  35
 8.  Section  224(  d)(  1)  of  the  Pole  Attachment  Act  defines  a  just  and  reasonable  rate  as
 ranging  from  the  statutory  minimum  based  on  the  additional  costs  of  providing  pole  attachments,
 to  the  statutory  maximum  based  on  fully  allocated  costs.  36  The  additional,  or  incremental,  costs
 are  the  costs  that  would  not  be  incurred  by  the  utility  but  for  the  pole  attachments.  37  The
 maximum  rate,  identified  as  a  percentage  of  fully  allocated  costs,  refers  to  the  portion  of  operating
 expenses  and  capital  costs  that  a  utility  incurs  in  owning  and  maintaining  pole  attachment
 infrastructure  that  is  equal  to  the  portion  of  space  on  a  pole,  38  or  capacity  of  a  duct,  conduit,  or
 right-  of-  way,  39  that  is  occupied  by  an  attacher.  40  The  Commission  developed  a  methodology  41  to
 32  Pub.  L.  No.  95-  234,  92  Stat.  33  ("  Pole  Attachment  Act")  codified  at  Communications  Act  of  1934,  as  amended
 ("  Communications  Act"),    224,  47  U.  S.  C.    224.
 33  The  Commission's  authority  does  not  extend  to  pole  attachment  rates,  terms,  and  conditions  that  a  state  regulates.
 47  U.  S.  C.    224(  c)(  1).  Jurisdiction  for  pole  attachments  reverts  to  the  Commission  generally  if  the  state  has  not
 issued  and  made  effective  rules  implementing  the  state's  regulatory  authority  over  pole  attachments.  Reversion  to
 the  Commission,  with  respect  to  individual  matters,  also  occurs  if  the  state  does  not  take  final  action  on  a
 complaint  within  180  days  after  its  filing  with  the  state,  or  within  the  applicable  period  prescribed  for  such  final
 action  in  the  state's  rules,  as  long  as  that  prescribed  period  does  not  extend  more  than  360  days  beyond  the
 complaint's  filing.  47  U.  S.  C.    224(  c)(  3).  See  Public  Notice,  States  That  Have  Certified  That  They  Regulate  Pole
 Attachments,  7  FCC  Rcd  1498  (1992).
 34  47  U.  S.  C.    224(  b)(  1).
 35  See  S.  Rep.  No.  580,  95th  Congress.,  1st  Sess.  at  19-  20  (1977)  ("  1997  Senate  Report"),  reprinted  in  1978
 U.  S.  C.  C.  A.  N.  109;  FCC  v.  Florida  Power  Corp.,  480  U.  S.  245,  247-  48  (1987)  (Congress  enacted  this  legislation
 as  a  solution  to  a  perceived  danger  of  anticompetitive  practices  by  utilities  in  connection  with  cable  television
 service).
 36  47  U.  S.  C.    224(  d)(  1).
 37  See  1997  Senate  Report.  Congress  expected  pole  attachment  rates  based  on  incremental  costs  to  be  low  because
 utilities  generally  recover  the  make-  ready  or  change-  out  charges  directly  from  cable  systems.  Report  and  Order,
 Amendment  of  Rules  and  Policies  Governing  the  Attachment  of  Cable  Television  Hardware  to  Utility  Poles,  CC
 Dkt.  86-  212,  2  FCC  Rcd  4387,  4388  n.  3  (1987)  ("  Pole  Attachment  Order"),  recon.  denied,  4  FCC  Rcd  468  (1989).
 38  47  U.  S.  C.    224(  d)(  1-  2).
 39  47  U.  S.  C.    224(  d)(  1).
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 determine  the  maximum  allowable  pole  attachment  rate  under  section  224(  d)(  1)  of  the  Pole
 Attachment  Act  which  is  referred  to  as  the  Cable  Formula.  42
 9.  Subsequently,  Congress  enacted  the  1996  Act  "to  accelerate  rapidly  private  sector
 deployment  of  advanced  telecommunication  and  information  technologies  and  services."  43  The
 1996  Act  amended  section  224  in  several  important  respects.  Section  703(  6)  of  the  1996  Act
 added  a  new  subsection  224(  d)(  3),  44  that  expanded  the  scope  of  section  224  by  applying  the
 Cable  Formula  to  rates  for  pole  attachments  made  by  telecommunications  carriers  45  in  addition  to
 cable  systems,  46  until  a  separate  methodology  becomes  effective  for  telecommunications  carriers
 in  2001.  47  Section  703(  7)  of  the  1996  Act  added  new  subsections  224(  e)(  1-  4),  which  set  forth  a
 separate  methodology  to  govern  charges  for  pole  attachments  used  to  provide
 telecommunications  services  beginning  February  8,  2001  ("  Telecom  Formula").  48  Further,  the
 1996  Act  gave  cable  operators  and  telecommunications  carriers  a  right  of  nondiscriminatory
 access  to  utility  poles,  ducts,  conduit  and  rights-  of-  way.  49  In  the  Local  Competition  Order,  we
 adopted  a  number  of  rules  implementing  the  new  access  provisions  of  section  224.  50
 (  continued  from  previous  page)  40
 1977  Senate  Report  at  19-  20.
 41  47  C.  F.  R.    1.1404.  See:  First  Report  and  Order,  Adoption  of  Rules  for  the  Regulation  of  Cable  Television  Pole
 Attachments,  CC  Dkt.  78-  144,  68  FCC  2d  1585  (1978)  ("  First  Report  and  Order");  Second  Report  and  Order,  72
 FCC  2d  59  (1979)  ("  Second  Report  and  Order");  Third  Report  and  Order,  77  FCC  2d  187  (1980)  ("  Third  Report
 and  Order"),  aff'd,  Monongahela  Power  Co.  v.  FCC,  655  F.  2d  1254  (D.  C.  Cir.  1985)  (per  curiam);  see  also,  Pole
 Attachment  Order,  2  FCC  Rcd  4387  (1987).
 42  Pole  Attachment  Order,  2  FCC  Rcd  4384  (1987).  The  Cable  Formula  was  codified  in  the  Telecom  Order,  13
 FCC  Rcd  6777  (1998),  at  47  C.  F.  R.    1.1409(  e)(  1)(  1998).  See  also  Fee  Order,  in  passim.
 43  House  Conference  Report  No.  104-  458  to  1996  Act,  reprinted  at  1996  U.  S.  C.  C.  A.  N.  124  (1996)  ("  Conf.  Rpt."),
 Joint  Explanatory  Statement  of  Conference  Committee.
 44  47  U.  S.  C.    224(  d)(  3).
 45  47  U.  S.  C.    153(  44).
 46  47  U.  S.  C.    153(  8);  47  U.  S.  C.    602(  5).
 47  See  47  U.  S.  C.    224(  d)(  3)  (only  to  the  extent  that  such  carrier  is  not  a  party  to  a  pole  attachment  agreement)  and
 47  U.  S.  C.    224(  e)(  4).
 48  47  U.  S.  C.    224(  e)(  1-  4).
 49  47  U.  S.  C.    224(  a),(  f).
 50  Local  Competition  Order,  11  FCC  Rcd  15499,  16058-  107  (1996)  at    1119-  1240,  affd  Local  Competition
 Access  Reconsideration  Order,  FCC  99-  266,  14  FCC  Rcd  18049  (1999).  In  August  1996,  the  Commission  also
 issued  a  Report  and  Order  in  CS  Dkt.  96-  166  (Implementation  of  Section  703  of  the  Telecommunications  Act  of
 1996),  11  FCC  Rcd  9541  (1996),  amending  its  rules  to  reflect  the  self-  effectuating  additions  and  revisions  to
 Section  224  ("  Self-  Effectuating  Order").
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 III.  ORDER  ON  RECONSIDERATION
 A.  COMPLAINT  PROCEDURES  AND  NEGOTIATED  AGREEMENTS
 10.  Our  pole  attachment  rules  were  established  in  1978,  and  have  been  refined  through
 rulemakings  and  enforcement  actions.  51  These  rules  apply  when  parties  are  unable  to  arrive  at  a
 negotiated  agreement  and  an  aggrieved  party  files  a  complaint.  52  Section  224  (e)  (1)  of  the  Pole
 Attachment  Act  indicates  that  application  of  the  Commissions  rules  will  apply  only  when  the
 parties  fail  to  resolve  a  dispute.  53  Our  rules  require  that  a  complaint  include  a  brief  summary  of
 the  steps  taken  to  resolve  the  problem  prior  to  filing  a  complaint.  54
 11.  Utilities  must  provide  a  cable  television  system  55  or  telecommunications  carrier  56  with
 nondiscriminatory  access  57  to  any  pole,  duct,  conduit  or  right-  of-  way  owned  or  controlled  by  it,  at
 just  and  reasonable  rates,  terms  and  conditions.  58  In  the  Telecom  Order,  we  concluded  that  the
 current  complaint  procedures  are  adequate  to  establish  just  and  reasonable  rates,  terms,  and
 conditions  for  pole  attachments,  and  determined  that  the  existing  methodology  for  determining  a
 presumptive  maximum  pole  attachment  rate  for  telecommunications  carriers,  as  modified,
 facilitates  negotiation  because  the  parties  can  identify  an  anticipated  range  for  the  pole  attachment
 rate.  59  We  rejected  proposals  to  require  uniformity  of  terms  in  pole  attachment  agreements  stating
 that  "[  w]  hile  we  do  not  agree  that  all  pole  attachment  agreements  have  to  be  identical,  differing
 provisions  must  not  violate  the  statutory  requirement  that  terms  be  just,  reasonable,  and
 nondiscriminatory."  60
 51  See,  e.  g.,  First  Report  and  Order,  68  FCC  2d  1585  (1978);  see  also  Second  Report  and  Order,  72  FCC  2d  59
 (1979);  Third  Report  and  Order,  77  FCC  2d  187  (1980),  aff'd,  Monongahela  Power  Co.  v.  FCC,  655  F.  2d  1254
 (D.  C.  Cir.  1985)  (per  curiam);  Alabama  Power  Co.  v.  FCC,  773  F.  2d  362  (D.  C.  Cir.  1985)  (upholding  challenge
 to  the  Commission's  pole  attachment  formula  relating  to  net  pole  investment  and  carrying  charges);  Pole
 Attachment  Order,  2  FCC  Rcd  4384  (1987).
 52  See  47  U.  S.  C.    224(  b)(  1);  47  C.  F.  R.    1.1401-  1.1418.
 53  47  U.  S.  C.    224  (e)  (1).  In  passing  the  1996  Act,  the  Congress  adopted  a  Conference  Agreement  which
 "  .  .  .  amend[  ed]  section  224  of  the  Communications  Act  by  adding  a  new  subsection  (e)(  1)  to  allow  parties  to
 negotiate  the  rates,  terms,  and  conditions  for  attaching  to  poles,  ducts,  conduits,  and  rights-  of-  way."  Conf.  Rpt.  at
 221  (emphasis  added).
 54  47  C.  F.  R.    1.1404  (l)  (1998).
 55  47  U.  S.  C.    224;  see  also  47  U.  S.  C.    522  (5-  7).
 56  47  U.  S.  C.    224;  see  also  47  U.  S.  C.    153  (43-  46).
 57  47  U.  S.  C.    224(  f)(  1).
 58  47  U.  S.  C.    224(  b),(  d),(  e).
 59  See  Telecom  Order  at    16-  21.
 60  Telecom  Order  at    20-  21.
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 12.  Electric  utilities  urge  us  to  declare  negotiated  agreements  for  pole  attachments
 inviolate,  asserting  negotiated  market-  based  rates  assure  just  compensation  for  pole  attachments.  61  Electric  utilities  assert  there  is  a  robust  and  competitive  free  market  for  pole
 attachments  and  that  utilities  lack  any  incentive  to  discriminate  against  attaching  entities.  62
 UTC/  EEI  argues  that  a  negotiated  rate  reflects  an  entire  package  of  benefits  that  attaching  entities
 reap  from  access  to  utility  infrastructure:  time-  to-  market,  dispute  avoidance,  and  maintenance,
 construction  and  partnership,  as  well  as  non-  infrastructure  opportunities  such  as  service  resale.  63
 UTC/  EEI  continues  to  urge  that  we  impose  additional  regulation  on  the  negotiation  process  or,  in
 the  alternative,  that  we  impose  additional  regulation  on  the  complaint  process  that  is  favorable  to
 a  utility.  64
 13.  Contrary  to  UTC/  EEI's  argument,  the  record  as  a  whole  does  not  demonstrate  that  the
 market  for  pole  attachments  is  fully  competitive  or  that  the  utilities  now  lack  any  incentive  to
 discriminate  against  attaching  entities.  As  the  Court  stated  in  Gulf  Power  II,  65  contrary  to
 American  Electrics  assertions,  66  the  original  purpose  of  the  Pole  Attachment  Act,  to  prevent
 utilities  from  charging  monopoly  rents  to  attach  to  their  bottleneck  facilities,  did  not  change  with
 the  1996  Act.  67  Nothing  in  the  record  demonstrates  that  the  utilities  monopoly  over  poles  has
 since  changed.  Upon  consideration  of  the  record,  we  affirm  our  decision  not  to  impose  additional
 regulation  on  either  the  negotiation  process  or  the  rules  for  resolution  of  complaints  arising  out  of
 failed  negotiations.  68  We  reject  assertions  by  utilities  that  our  rules  frustrate  negotiations.  69  To
 the  contrary,  our  experience  has  taught  us,  and  the  record  gained  through  these  proceedings
 demonstrates,  that  without  our  rules  and  the  use  of  presumptions  in  a  formula  methodology,
 attaching  entities  would  not  be  able  to  challenge  any  rate  offered  by  a  utility.  70  There  would  be  no
 reasonable  negotiation  without  a  benchmark  rate  against  which  to  compare  the  utility's  proposed
 rate.  We  continue  to  reject  arguments  71  by  utilities  that  attaching  parties  should  be  required  to
 61  UTC/  EEI  Fee  Order  petition  at  3-  6.
 62  UTC/  EEI  Fee  Order  petition  at  5.
 63  UTC/  EEI  Fee  Order  petition  at  5-  6.
 64  UTC/  EEI  Telecom  Order  petition  at  2-  9,  Fee  Order  petition  at  3-  8.
 65  208  F.  3d  1263  (11  th  Cir.  2000).
 66  See  American  Electrics  February  15,  2001  ex  parte  presentation  memorandum  at  n.  3  (utility  poles  and  conduit
 are  not  bottleneck  facilities).
 67  Gulf  Power  II  at  1274-  1275.  See  also,  NCTAs  Fee  Order  reply  comments  at  3-  6  (direct-  buried  cable  and
 wireless  facilities  do  not  provide  the  cable  industry  with  realistic  alternatives  to  pole  attachments).
 68  See  Telecom  Order  at    16-  21.
 69  UTC/  EEI  Telecom  Order  petition  at  2.
 70  See,  e.  g.,  Association  of  Local  Telecommunications  Services  ("  ALTS")  Telecom  Order  comments  at  2;  Joint
 Cable  Parties  Telecom  Order  comments  at  20-  21;  MCI  Telecom  Order  comments  at  7-  8l;  NCTA  Telecom  Order
 comments  2-  8  and  Fee  Order  comments  at  2-  8,  44-  48;  Time  Warner  Fee  Order  comments  at  2-  4.
 71  See  Telecom  Order  at    12-  21.
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 take  exception  to  terms  or  conditions  when  the  pole  attachment  agreement  is  negotiated  or  be
 estopped  from  filing  a  complaint  about  those  issues.  72
 14.  We  do  not  suggest  that  good  faith  negotiations  require  use  of  identical  rates,  terms  or
 conditions  in  pole  attachment  agreements.  73  We  encourage,  support  and  fully  expect  that
 mutually  beneficial  exchanges  will  take  place  between  the  utility  and  the  attaching  entity.  74  When
 utilities  and  attaching  entities  are  innovative  and  provide  mutually  beneficial  negotiated
 alternatives  to  the  maximum  rates,  competition  and  the  deployment  of  services  to  all  communities
 will  be  fostered,  resulting  in  the  successful  implementation  of  the  1996  Act.  However,  we  do
 require  that  differences  in  rates,  terms  and  conditions  for  pole  attachments  among  attaching
 entities,  be  based  on  legitimate  exchanges  of  consideration  and  not  on  discriminatory  factors  such
 as  favoring  an  affiliated  services  provider  over  an  unaffiliated  entity.  We  will  carefully  scrutinize
 any  differences  in  rates,  terms  and  conditions  in  any  complaint  action,  and  the  burden  will  be  on
 the  utility  to  demonstrate  that  any  differences  are  nondiscriminatory.
 B.  BASIC  CONCEPTS  USED  IN  THE  FORMULA
 1.  Use  of  Actual  Costs
 15.  In  response  to  the  Telecom  Order  Notice  and  the  Fee  Order  Notice,  several  electric
 utilities  submitted  comments  supporting  a  rate  calculation  methodology  which  would  substitute
 replacement  costs  in  the  rate  formula  in  lieu  of  the  actual  costs  reflected  in  the  utilitys  regulatory
 accounts.  75  There  was  also  comment  by  attaching  entities  opposing  the  use  of  anything  but
 historical  costs  to  both  the  Telecom  Order  Notice  76  and  the  Fee  Order  Notice.  77  In  the  Telecom
 Order,  we  stated  that  we  had  not  sought  comment  on  this  issue  and  we  declined  to  address  the
 utilities'  proposals  to  do  so.  78  In  response  to  the  Fee  Order  Notice,  we  adopted  the  Fee  Order  in
 which  we  rejected  utilities  arguments  that  pole  attachment  rates  should  be  based  on  replacement
 costs  and  we  affirmed  the  use  of  historical  costs  in  our  pole  attachment  rate  methodology.  79  We
 72  See,  e.  g.,  UTC/  EEI  Telecom  Order  petition  at  8-  9;  see  also,  GTE  Telecom  Order  comments  at  4-  5.  Cf.  NCTA
 Telecom  Order  reply  at  3-  6;  Southern  New  England  Telephone  Telecom  Order  comments  at  2.
 73  See,  e.  g.,  UTC/  EEI  Telecom  Order  petition  at  8.
 74  See,  e.  g.,  Joint  Cable  Parties  Telecom  Order  comments  at  20-  21;  MCI  Telecom  Order  comments  at  7-  8;  NCTA
 Telecom  Order  comments  at  14-  18.
 75  See,  e.  g.,  American  Electric  Fee  Order  comments  at  14-  95,  American  Electric  Telecom  Order  comments  at  v,
 13,  17-  20,  39;  Duquesne  Light  Fee  Order  comments  at  12-  13,  Telecom  Order  comments  at  13-  17;  UTC/  EEI  Fee
 Order  comments  at  14-  15,  Telecom  Order  comments  at  8.
 76  12  FCC  Rcd  11725  (1997).  See,  e.  g.,  Comcast,  et  al.,  Telecom  Order  comments  at  5;  NCTA  Telecom  Order
 reply  at  12-  17;  USTA  Telecom  Order  reply  at  1-  6.
 77  See,  e.  g.,  NCTA  Fee  Order  comments  at  24-  25;  Time  Warner  Fee  Order  reply  at  1-  9.
 78  Telecom  Order  at    124.
 79  Fee  Order  at    10.
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 stated  that  the  continued  use  of  historical  costs  accomplishes  key  objectives  of  assuring,  to  both
 the  utility  and  the  attaching  parties,  just  and  reasonable  rates;  establishes  accountability  for  prior
 cost  recoveries;  and  accords  with  generally  accepted  accounting  principles.  80
 16.  Electric  utilities  continue  to  urge  that  we  abandon  our  use  of  regulatory  accounts
 based  on  historical  costs.  81  Petitioners  assert  that  pricing  methodologies  for  use  in  pole
 attachment  formulas  should  reflect  replacement  costs  or  the  rates  calculated  are  not  constitutional
 because  they  cannot  provide  just  compensation.  82  American  Electric  asserts  that  we  should  review
 the  constitutionality  of  the  rate  methodology  in  light  of  the  Gulf  Power  I  decision,  which  held  that
 the  mandatory  access  provisions  of  the  1996  Act  amendments  to  the  Pole  Attachment  Act
 constitute  a  taking  of  property.  83  UTC/  EEI  asserts  the  proper  measure  of  just  compensation  is  the
 "fair  market  value"  of  the  property  at  the  time  of  the  taking.  84  Southern  Co.  argues  that  in
 instances  where  there  is  no  clear  market  value,  several  different  proxies  for  market  value  have
 been  used  to  determine  just  compensation,  including  replacement  costs.  85  American  Electric
 attempts  to  demonstrate  that  replacement  costs  are  necessary  to  provide  just  compensation  for
 pole  attachments.  86
 17.  We  affirm  our  decision  that  the  Cable  Formula,  which  includes  regulatory  accounts
 maintained  using  historical  costs,  encompasses  the  statutory  directive  to  provide  just  and
 reasonable  rates  for  pole  attachments,  87  adding  certainty  and  clarity  to  negotiations.  88  We  have
 been  presented  with  no  persuasive  evidence  89  that  utility  owners  do  not  recover  a  just  and
 80  Fee  Order  at    10.
 81  See,  e.  g.,  AEPSC  Telecom  Order  petition  at,  UTC/  EEI  Telecom  Order  petition  at  9-  11,  Fee  Order  petition  at  8;
 Southern  Co.  Telecom  Order  petition  at  8-  11.  But  see,  Joint  Cable  Parties  Telecom  Order  comments  at  10-  15,
 Telecom  Order  reply  at  8,  NCTA  Fee  Order  reply  at  1;  WorldCom  Fee  Order  comments  at  2-  6.
 82  American  Electric  Fee  Order  petition  at  2-  7;  UTC/  EEI  Fee  Order  petition  at  7.
 83  American  Electric  Fee  Order  petition  at  2-  7.
 84  UTC/  EEI  Fee  Order  petition  at  7.
 85  See,  e.  g.,  Southern  Co.  Fee  Order  recon.  reply  at  3.
 86  American  Electric  claims  a  report  demonstrating  that  the  Cable  and  Telecom  Formulas  deny  the  electric  utilities
 just  compensation  in  all  cases,  and  that  the  report  is  imminent.  American  Electric  Fee  Order  recon.  reply  at  2-  3.
 No  report  was  received.
 87  1977  Senate  Report  at  19-  21;  47  U.  S.  C.    224(  d)(  1)  and    224(  e)(  1).
 88  See,  e.  g.,  Joint  Cable  Parties  Telecom  Order  comments  at  10-  15;  see  also,  Association  of  Local
 Telecommunications  Services  Fee  Order  comments  at  14;  AT&  T  Fee  Order  reply  at  13-  14;  NCTA  Fee  Order
 comments  at  24-  25;  TCI  Fee  Order  reply  at  3;  Time  Warner  Fee  Order  reply  at  1-  9.
 89  See,  e.  g.,  Joint  Cable  Parties  Telecom  Order  comments  at  10-  15;  NCTA  Fee  Order  recon.  reply  at  3-  6;
 WorldCom  Fee  Order  recon.  opposition  at  2-  6.  See,  e.  g.,  UTC/  EEI  Telecom  Order  petition  at  9-  11;  see  also,  e.  g.,
 American  Electric  Telecom  Order  comments  at  11-  18,  Fee  Order  comments  at  14-  95;  UTC/  EEI  Telecom  Order
 comments  at  8.
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 reasonable  compensation  90  for  pole  attachments  from  use  of  the  Cable  Formula.  91  The
 application  of  the  well-  established  Cable  Formula,  with  technical  adjustments  adopted  from  time
 to  time,  is  consistent  with  establishing  a  just,  reasonable,  and  nondiscriminatory  maximum  pole
 attachment  rate  as  envisioned  by  Congress.  92  The  statute  requires  the  Commission  to  develop  a
 methodology  to  compensate  the  pole  owner  for  its  actual  costs  associated  with  the  amount  of
 space  used  by  an  attacher.  93  Congressional  intent  to  rely  on  existing  regulatory  accounts  and  avoid
 a  prolonged  rate  making  process  is  realized  in  the  Commissions  regulations.  94
 18.  Both  the  decision  in  Gulf  Power  I  95  and  Gulf  Power  II  96  support  our  analysis  on  the
 issue  of  just  compensation.  While  the  decisions  recognize  that  the  Pole  Attachment  Act  and  the
 Commissions  rules  invoke  constitutional  standards  because  of  the  mandatory  access
 requirements,  neither  the  statute  nor  the  Commissions  rules  were  found  to  be  facially
 unconstitutional.  In  both  cases,  the  11  th  Circuit  Court  of  Appeals  held  that  the  issue  of  just
 compensation  was  not  ripe  for  review  because  the  utilities  had  not  shown  that  the  1996  Act  nor
 the  Commissions  rules  would  operate  to  deny  them  just  compensation  in  every  case.  97  As  the
 Court  stated  in  Gulf  Power  II,  "  .  .  .  we  are  not  confident,  given  the  record  at  hand,  that  the
 formula  will  deny  just  compensation  in  all  cases."  98  Indeed,  as  the  Supreme  Court  stated  in
 Duquesne  Light  Company  v.  Barasch,  ("  Duquesne  Light"),  99  "[  f]  orty-  five  years  ago  in  the
 90  The  U.  S.  Supreme  Court  held  all  that  is  required  is  that  a  "reasonable,  certain  and  adequate  provision  for
 obtaining  compensation"  exist  at  the  time  of  the  taking,  stating:  "[  i]  f  the  government  has  provided  an  adequate
 process  for  obtaining  compensation,  and  if  the  resort  to  that  process  `yield[  s]  just  compensation,  '  then  the  property
 owner  `has  no  claim  against  the  Government'  for  a  taking."  Williamson  County  Regional  Planning  Comm'n  v.
 Hamilton  Bank  of  Johnson  City,  473  U.  S.  172,  194  (1985),  quoting  Ruckelshaus  v.  Monsanto  Co.,  467  U.  S.  986,
 1013,  1018  n.  21  (1984).
 91  Cf.    224(  d)(  1)  and    224(  e)(  1).
 92  See,  e.  g.,  1977  Senate  Report;  FCC  v.  Florida  Power  Corporation,  et  al.,  107  S.  Ct.  1107,  1113  (1987)  (rate
 imposed  [when]  calculated  according  to  the  statutory  formula  for  the  determination  of  a  rate  providing  for  the
 recovery  of  fully  allocated  cost,  including  the  actual  cost  of  capital,  is  [not]  confiscatory);  see  also,  Gulf  Power  v.
 U.  S.  A.,  998  F.  Supp.  1398  (N.  D.  Fla.  Mar.  1998)(  just  compensation  provided  by  47  U.  S.  C.    224),  aff'd,  187  F.  3d
 1324  (11th  Cir.  1999).
 93  47  U.  S.  C.    224  (d)  (1)  (".  .  .  a  rate  is  just  and  reasonable  if  it  assures  a  utility  the  recovery  of  not  less  than  the
 additional  costs  of  providing  pole  attachments,  nor  more  than  an  amount  determined  by  multiplying  the  percentage
 of  the  total  usable  space,  or  the  percentage  of  total  duct  or  conduit  capacity,  which  is  occupied  by  the  pole
 attachment  by  the  sum  of  the  operating  expenses  and  actual  capital  costs  of  the  utility  attributable  to  the  entire  pole,
 duct,  conduit  or  right-  of-  way.").
 94  1977  Senate  Report  at  20.
 95  187  F.  3d  1324  (11th  Cir.  1999).
 96  208  F.  3d  1263  (11  th  Cir.  2000).
 97  See  Gulf  Power  I,  187  F.  3d  1324,  1338  (11th  Cir.  1999).
 98  Gulf  Power  II,  208  F.  3d  1263,  1272  (11  th  Cir.  2000).
 99  488  U.  S.  299  (1989).
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 landmark  case  of  [Hope  Natural  Gas  100  ],  this  Court  .  .  .  held  that  the  'fair  value  rule'  is  not  the
 only  constitutionally  acceptable  method  of  fixing  utility  rates.  In  [Hope  Natural  Gas]  we  ruled
 that  historical  cost  was  a  valid  basis  on  which  to  calculate  utility  compensation."  101
 19.  Several  parties  observe  that  the  Commission  applies  a  different  methodology  in  the
 context  of  universal  service  requirements  and  interconnection  agreements  as  opposed  to  pole
 attachments.  They  argue  that  consistency  demands  that  the  same  pricing  methodology  be  applied
 throughout  the  1996  Act.  We  disagree  that  the  Commissions  continued  use  of  a  historical  cost
 methodology  in  the  pole  attachment  context  is  arbitrary  and  capricious.  As  explained  in  detail
 below,  the  Commission  had  a  rational  basis,  amply  supported  by  record  evidence,  for  choosing
 different  pricing  methodologies  in  these  different  contexts.  102
 20.  In  the  Universal  Service  Order  103  and  Local  Competition  Order,  104  the  Commission
 reasonably  and  in  detail  explained  that,  in  connection  with  universal  service  requirements  and
 interconnection  agreements,  ratemaking  on  the  basis  of  forward-  looking  economic  cost  would
 best  effectuate  the  new  competitive  objectives  of  the  1996  Act.  These  objectives  were  to
 stimulate  direct  competition  in  local  telecommunications  markets,  to  ensure  the  efficient  use  of
 existing  telecommunications  network  facilities,  and  to  encourage  new  entrants  to  make
 economically  rational  decisions  about  whether  or  how  to  enter  a  local  telecommunications  market.  105  The  Commission  found  the  use  of  a  forward-  looking  cost  methodology  particularly
 important  in  this  context  because  we  determined  that  a  firm  compares  forward-  looking  costs  with
 existing  market  prices,  in  making  decisions  about  entry,  expansion,  and  price.  106
 21.  By  contrast,  the  predominant  legislative  goal  for  Congress  in  enacting  the  Pole
 Attachment  Act  was  "to  establish  a  mechanism  whereby  unfair  pole  attachment  practices  may
 come  under  review  and  sanction,  and  to  minimize  the  effect  of  unjust  or  unreasonable  pole
 attachment  practices  on  the  wider  development  of  cable  television  service  to  the  public."  107  Due
 to  the  local  monopoly  in  ownership  or  control  of  poles,  the  legislative  record  indicated  that  some
 utilities  had  abused  their  superior  bargaining  position  by  demanding  exorbitant  rental  fees  and
 100  FPC  v.  Hope  Natural  Gas  Co.,  320  U.  S.  591  (1944).
 101  Duquesne  Light  at  310.
 102  See  Federal  Communications  Commission,  et  al.  v.  National  Citizens  Committee  for  Broadcasting,  et  al.,  436
 U.  S.  775,  803  (1978).  See  also,  Chevron,  U.  S.  A.,  Inc.  v.  Natural  Resources  Defense  Council,  Inc.,  467  U.  S.  837,
 842-  843  (1984)  (the  standard  of  review  of  an  agency  action  for  arbitrariness  or  capriciousness  is  a  deferential
 standard  by  which  a  reviewing  court  will  uphold  an  agency  action  if  its  has  a  rational  basis).
 103  Federal-  State  Joint  Board  on  Universal  Service,  FCC  96J-  3,  12  FCC  Rcd  87  (1997).
 104  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  FCC  96-  325,  11
 FCC  Rcd  15499  (1996).
 105  Local  Competition  Order,  11  FCC  Rcd  at  15813,  15817,  15846  (  620,  630,  679).
 106  Local  Competition  Order,  11  FCC  Rcd  at  15813,  15846  (  620,  679).
 107  S.  Rep.  No.  95-  580,  95th  Cong.,  1st  Sess.  (1977),  reprinted  in  1978  U.  S.  C.  C.  A.  N.  109.
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 other  unfair  terms  in  return  for  access  by  cable  companies  to  their  pole  space.  108  This  actual  and
 potential  anti-  competitive  behavior  prompted  Congress  to  pass  the  Pole  Attachment  Act.  It  was
 in  this  context  that  the  Commission,  guided  by  Congressional  direction  to  use  existing  accounting
 measures  to  determine  costs,  decided  to  employ  a  historical  cost  based  pole  attachment  formula  in
 implementing  the  Pole  Attachment  Act.  109  There  is  nothing  novel  about  the  Commissions  use  of
 a  historical  cost  methodology  in  the  context  of  regulating  monopoly  rates.  For  example,  to  carry
 out  the  statutory  goal  of  section  623(  b)  of  the  Communications  Act    i.  e.,  to  ensure  that
 individual  retail  subscribers  of  monopoly  cable  providers  were  not  exploited  --  the  Commission,  in
 addition  to  using  a  benchmark  approach,  also  adopted  a  historical,  cost-  of-  service  alternative
 methodology  for  the  cable  television  industry.  110
 22.  Since  1978,  the  Commission  has  applied  an  embedded  cost  methodology,  which  has
 been  upheld  by  the  United  States  Supreme  Court.  111  The  Commissions  continued  use  of  a  historical
 cost  methodology  in  the  pole  attachment  context  is  consistent  with  Congressional  expectations.
 Specifically,  while  the  Commissions  pole  attachment  formula  has  been  in  place  since  1978,
 Congress  did  not  directly  or  by  implication  instruct  the  Commission  to  deviate  from  the  use  of
 historical  costs  when  it  amended  the  Pole  Attachment  Act  in  1996.  112  By  comparison,  the  local
 competition  provisions  of  the  Telecommunications  Act  of  1996  contemplated  some  degree  of
 departure  by  the  Commission  from  its  past  practice  of  setting  rates  on  the  basis  of  rate  based/  rate-of-
 return  regulation.  113  Specifically,  section  252(  d)(  1)(  A)(  i)  requires  that  rates  be  based  on  the
 "cost"  of  providing  the  interconnection  or  network  element  "determined  without  reference  to  a
 rate-  of-  return  or  rate-  based  proceeding."  114
 23.  In  addition,  the  benefits  of  using  a  forward-  looking  cost  methodology  are  less
 pronounced  in  the  pole  attachment  context  than  in  the  universal  service/  interconnection  context.
 The  Pole  Attachment  Act  protects  cable  and  telecommunications  attachers  from  monopoly  prices
 set  by  utilities  that  are  not  necessarily  in  direct  competition  with  the  attachers,  although  there  may
 be  potential  for  direct  competition.  115  The  Pole  Attachment  Act  does  not  set  out  a  scheme  for
 108  Id.
 109  See  In  the  Matter  of  Adoption  of  Rules  for  the  Regulation  of  Cable  Television  Pole  Attachments,  First  Report
 and  Order,  68  FCC  2d  1585  (1978);  In  the  Matter  of  Adoption  of  Rules  for  the  Regulation  of  Cable  Television
 Pole  Attachments,  Memorandum  Opinion  and  Second  Report  and  Order,  72  FCC  2d  59  (1979).
 110  47  U.  S.  C.    543(  b);  Implementation  of  Sections  of  the  Cable  Television  Consumer  Protection  and  Competition
 Act  of  1992:  Rate  Regulations,  9  FCC  Rcd  4527  (1994).  See  also  Time  Warner  Entertainment  Co.  v.  FCC,  56
 F.  3d  151,  178-  87  (D.  C.  Cir.  1995),  cert.  denied,  116  S.  Ct.  911  (1996).
 111  See  First  Report  and  Order,  68  FCC  Rcd  1585,    25;  affd,  Second  Report  and  Order,  72  FCC  2d  59,    15;  see
 also  FCC  v.  Florida  Power  Corporation,  480  U.  S.  245  (1987).
 112  See  S.  Conf.  Rep.  No.  104-  230,  104  th  Cong.,  2  nd  Sess.  (1996).
 113  See  Local  Competition  Order,  11  FCC  Rcd  at  15857  (  704).
 114  47  U.  S.  C.    252(  d)(  1)(  A)(  i).
 115  We  recognize  that  increasing  convergence  of  services  and  electric  utilities  entry  into  telecommunications  may
 (  continued)
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 attachers  to  access  the  network  elements  of  a  utilitys  core  business.  The  majority  of  poles
 nationwide  are  owned  or  controlled  by  electric  utilities,  with  the  remaining  poles  owned  or
 controlled  by  telephone  companies.  116  Thus,  while  in  some  cases  pole  owner  and  attacher  may
 both  provide  telecommunications  services,  most  typically  a  cable  attacher  or  telecommunications
 attacher  is  seeking  relief  under  the  Pole  Attachment  Act  from  the  rates,  terms  and  conditions
 imposed  by  an  electric  utility  pole  owner.  In  the  telecommunications  interconnection  context,  on
 the  other  hand,  the  statute  sets  out  a  scheme  for  determining  rates  solely  between  competing
 telecommunications  carriers.  Thus,  rate  regulation  in  the  context  of  pole  attachments  is  not
 focused  primarily  on  the  same  concerns  that  predominate  with  interconnection.
 24.  In  addition,  the  assets  being  regulated  in  the  two  contexts  are  very  different.  The  Pole
 Attachment  Act  addresses  access  to  poles,  ducts,  conduits  and  rights-  of-  way,  in  contrast  to  the
 unbundled  elements  of  an  incumbents  telecommunications  network  that  are  addressed  in  the
 interconnection  context.  These  telecommunications  network  elements,  in  contrast  to  poles,  ducts
 and  conduits,  are  subject  to  a  rapidly  changing  technology.  A  forward  looking  cost  pricing
 methodology  reflects  the  cost  of  replacing  the  functions  of  an  asset  using  the  most  efficient
 technology  available  so  as  to  appropriately  capture  the  technological  changes  that  are  occurring.  117  As  a  result,  new  entrants  are  given  the  proper  cost  signals  to  decide  whether  to
 construct  their  own  networks  or  to  use  the  incumbents.  In  the  context  of  pole  attachments,  there
 has  been  significantly  less  change  in  the  nature  of  the  asset  since  their  deployment  decades  ago,  so
 it  is  not  as  critical  to  employ  a  formula  that  accounts  for  such  factors.  Indeed,  given  the  nature  of
 the  pole  attachment  asset,  the  two  methodologies    i.  e.,  historical  and  forward  looking  --  may
 likely  produce  similar  cost  results  in  the  pole  attachment  context.  118  In  addition,  cable  attachers
 frequently  do  not  have  a  realistic  option  of  installing  their  own  poles  or  conduits  both  because,  in
 many  cases,  attachers  are  foreclosed  by  local  zoning  or  other  right  of  way  restrictions  from
 constructing  a  second  set  of  poles  of  their  own  and  because  it  would  be  prohibitively  expensive
 for  each  attacher  to  install  duplicative  poles.  119  Thus,  because  attachers  frequently  do  not  face  a
 realistic  "make  or  buy"  decision,  the  benefits  of  giving  proper  cost  signals  to  new  entrants  are  less
 pronounced  in  the  pole  attachment  context.  Moreover,  the  pole  attachment  formula  does  account
 for  the  costs  incurred  when  poles  are  replaced  by  utilities  in  the  normal  course  of  their  business
 (  continued  from  previous  page)
 change  this  situation  in  the  future.
 116  See  1977  Senate  Report.  In  the  1977  Senate  Report,  Congress  also  noted  that  poles  owned  by  cable  companies
 were  less  than  0.1  percent  of  the  total  number  of  poles  nationwide.  There  is  nothing  in  the  record  to  suggest  that
 this  percentage  has  markedly  changed.
 117  See  47  C.  F.  R.    51.505(  b)(  1)  (forward-  looking  cost  "should  be  measured  based  on  the  use  of  the  most  efficient
 telecommunications  technology  currently  available  and  the  lowest  cost  network  configuration").
 118  See  Local  Competition  Order,  11  FCC  Rcd  at  1585  (  705)  (stating  that  it  cannot  be  determined  in  the  abstract
 whether  a  forward-  looking  cost  approach  or  a  historical  approach  will  produce  higher  cost  figures  in  a  particular
 setting).
 119  In  addition,  it  is  not  clear  that  a  policy  which  would  encourage  the  erection  of  multiple  duplicative  poles  in  the
 public  right  of  way  is  consistent  with  the  Pole  Attachment  Act.
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 because  the  formula  uses  actual  year  end  asset  and  expense  data  from  records  maintained  and
 publicly  reported  as  part  of  the  utilities  regulated  core  electric  or  telephone  business  services.  In
 fact,  if  a  utility  is  required  to  replace  a  pole  in  order  to  provide  space  for  an  attacher,  the  attacher
 pays  the  full  cost  of  the  replacement  pole.  120
 25.  We  have  recognized  that  the  continued  use  of  the  historical  cost  based  pole  attachment
 formula  brings  certainty  to  the  regulatory  process.  For  more  than  two  decades,  121  the  pole
 attachment  formula  has  provided  a  stable  and  certain  regulatory  framework,  which  may  be  applied
 "simply  and  expeditiously"  requiring  "a  minimum  of  staff,  paperwork  and  procedures  consistent
 with  fair  and  efficient  regulation."  122  We  have  found  that  switching  to  a  methodology  based  on
 forward-  looking  economic  costs  would  significantly  change  and  burden  the  Commissions
 processes,  requiring  the  Commission  to  develop  a  new  formula,  which  would  necessitate  a
 protracted  rulemaking  proceeding  involving  complicated  pricing  investigations.  123  We  have
 acknowledged  that,  in  certain  contexts,  setting  prices  on  the  basis  of  forward-  looking  economic
 costs  has  advantages,  such  as  giving  the  appropriate  signal  for  new  entrants  to  invest  in  network
 facilities;  but,  as  explained  above,  these  advantages  are  less  pronounced  in  the  pole  attachment
 context  because  pole  attachers  are  less  likely  to  build,  or  may  be  prohibited  from  building,  their
 own  poles  and  conduit.  124  We  have  concluded  and  continue  to  find  that,  in  the  context  of  pole
 attachments,  the  continued  use  of  historical  costs  accomplishes  the  key  objectives  of  assuring  just
 and  reasonable  rates  to  both  the  utility  and  the  attaching  parties,  establishing  accountability  for
 prior  cost  recoveries,  and  encouraging  negotiation  among  the  parties  by  providing  regulatory
 certainty.  125  For  the  reasons  stated  above,  we  will  continue  to  calculate  maximum  pole  attachment
 rates  under  the  Pole  Attachment  Act  using  regulatory  accounts  based  on  historical  costs.
 120  If  there  is  not  adequate  space  on  an  existing  pole  for  an  attacher,  the  attacher  is  usually  required  to  pay  up  front
 to  replace  the  pole  with  a  larger  pole.  The  Commission  has  never  held  that  the  Pole  Attachment  Act,  which
 anticipates  a  range  of  reasonable  rates,  prohibits  a  utility  from  being  directly  compensated  by  an  attacher  for  such
 incremental,  non-  recurring  costs.  Alternatively,  a  utility  could  include  an  allocated  portion  of  these  costs  in  its
 annual  rental  rate,  but  most  utilities  prefer  to  recover  up  front,  the  full  amount  of  make-  ready  or  pole  change  out
 costs.  Such  costs  are  required  to  be  excluded  from  the  annual  rate  calculation  to  avoid  a  double  recovery  by  the
 utility.  See  Amendment  of  Rules  and  Policies  Governing  Pole  Attachments,  FCC  00-  116,  15  FCC  Rcd  6453  at    28
 (2000).
 121  See  Amendment  of  Rules  and  Policies  Governing  Pole  Attachments,  FCC  00-  116,  15  FCC  Rcd  6453  at    9
 (2000).
 122  See  1977  Senate  Report  at  21  (stating  that  it  was  the  desire  of  the  drafters  that  the  Commission  institute  a
 simple  and  expeditious  CATV  pole  attachment  program  which  will  necessitate  a  minimum  of  staff,  paperwork  and
 procedures  consistent  with  fair  and  efficient  regulation).
 123  See  Amendment  of  Rules  and  Policies  Governing  Pole  Attachments,  FCC  00-  116,  15  FCC  Rcd  6453  at    9
 (2000).
 124  Id.
 125  See  Amendment  of  Rules  and  Policies  Governing  Pole  Attachments,  FCC  00-  116,  15  FCC  Rcd  6453  at    10
 (2000).
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 2.  When  Net  Pole  Investment  is  Zero  or  Negative
 26.  In  enacting  the  Pole  Attachment  Act,  Congress  directed  the  Commission  to  institute  an
 expeditious  program  for  determining  just  and  reasonable  pole  attachment  rates  that  would
 necessitate  a  minimum  of  staff,  paperwork  and  procedures  consistent  with  fair  and  efficient
 regulation.  126  Congress  determined  that  the  rates  should  permit  the  utility  to  recover  its  fully
 allocated  costs,  as  defined  by  Section  224(  d)(  1).  Congress  stated  that  although  there  may  be
 some  difficulty  in  determining  certain  components  of  a  utility's  operating  expenses  and  actual
 capital  costs,  special  accounting  measures  or  studies  should  not  be  necessary  because  the  majority
 of  cost  and  expense  items  attributable  to  utility  pole  plant  were  already  established  and  reported
 to  various  regulatory  bodies  and  therefore  the  information  was  already  a  matter  of  public  record.  127  Congress  did  not  expect  the  Commission  to  re-  examine  the  reasonableness  of  the  cost
 methodologies  that  various  regulatory  agencies  had  sanctioned;  it  recognized  that  the  Commission
 would  have  to  "make  its  best  estimate"  of  some  of  the  less  readily  identifiable  costs.  128
 27.  Under  Section  224(  d)(  1),  fully  allocated  costs  refer  to  the  portion  of  operating
 expenses  and  capital  costs  that  a  utility  incurs  in  owning  and  maintaining  poles  that  are  associated
 with  the  space  occupied  by  pole  attachments.  129  The  Commission  originally  derived  the  formulas  for
 determining  maximum  allowable  pole  attachment  rates  under  the  Pole  Attachment  Act  by  applying  the
 legislative  direction  in  individual  complaint  cases.  130  These  cases  led  to  a  generally  applicable  formula
 for  calculating  the  maximum  just  and  reasonable  rate:  131
 126  1977  Senate  Report  at  21.
 127  Id.  at  19-  20.  Incumbent  local  exchange  carriers  ("  ILECs")  and  competitive  local  exchange  carriers  ("  CLECs")  are
 regulated  by  the  Commission  Rules  at  47  U.  S.  C.  Title  II.  Electric,  gas,  water,  steam  and  oil  utilities  are  regulated
 by  FERC,  an  independent  regulatory  agency  within  the  Department  of  Energy  under  authority  from  the  Federal
 Power  Act  of  1935,  49  Stat.  847;  the  Natural  Gas  Act  of  1938,  52  Stat.  821;  the  Natural  Gas  Policy  Act  of  1978,  92
 Stat.  3350,  Pub.  L.  No.  95-  621;  the  Public  Utility  Regulatory  Policies  Act  of  1978,  92  Stat.  3117,  Pub.  L.  No.  95-
 617;  and  the  Energy  Policy  Act  of  1992,  106  Stat.  2776,  Pub.  L.  No.  102-  486.
 128  Id.  at  20.
 129  Id.  at  19-  20.  47  U.  S.  C.    224  (d)(  1)  states  that  a  rate  is  just  and  reasonable  if  it  assures  a  utility  the  recovery  of  not  more
 than  "an  amount  determined  by  multiplying  the  percentage  of  the  total  duct  or  conduit  capacity,  which  is  occupied  by  the
 pole  attachment  by  the  sum  of  the  operating  expenses  and  actual  capital  costs  of  the  utility  attributable  to  the  entire  pole,
 duct,  conduit,  or  right-  of-  way."
 130  See,  e.  g.,  Teleprompter  of  Fairmont,  Inc.  v.  Chesapeake  and  Potomac  Telephone  Co.  of  West  Virginia,  PA  79-  0029,  79
 FCC  2d  232  (1980);  Continental  Cablevision  of  New  Hampshire,  Inc.  v.  Concord  Electric  Co.,  Mimeo  No.  5536  (Com.
 Car.  Bur.,  July  3,  1985).
 131  Pole  Attachment  Order,  2  FCC  Rcd  4387  (1987)  at    6;  47  U.  S.  C.    224(  b)(  1),  (d).
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 Rate  Charge  Carrying  x  Pole  Bare  a  of  Cost  x  Space  Usable  Total
 Occupied  Space  =
 Rate  Maximum
 The  second  component  of  the  overall  formula  is  the  net  cost  of  a  bare  pole.  This  net  cost  equals  a
 factor,  0.  85  for  electric  utilities  or  0.  95  for  telephone  companies,  132  mult  iplied  by  the  net  invest  ment  per
 pole,  as  shown  in  the  following  formula:
 Net  Cost  of  a  =  Factor  x  Net  Pole  Investment
 Bare  Pole  133  Number  of  Poles
 28.  The  final  component  of  the  pole  attachment  formula  is  the  carrying  charge  rate.
 Carrying  charges  are  the  costs  incurred  by  the  utility  in  owning  and  maintaining  poles  regardless
 of  the  presence  of  pole  attachments.  The  carrying  charges  include  the  utility's  administrative,
 maintenance,  and  depreciation  expenses,  a  return  on  investment,  and  associated  income  taxes.  To
 help  calculate  the  carrying  charge  rate,  we  developed  formulas  that  relate  each  of  these
 components  to  the  utility's  net  pole  investment.
 29.  The  pole  attachment  formulas  rely  on  the  investment  and  expense  data  utilities
 maintain  in,  or  derive  from,  their  accounting  records.  The  investment  data  take  two  forms:
 "gross"  data,  which  provide  the  original  cost  of  the  plant  being  considered;  and  "net"  data,  which
 adjust  the  gross  data  to  reflect  accumulated  depreciation  and  deferred  income  taxes  associated
 with  that  plant.  The  pole  attachment  formulas  generally  allocate  the  costs  of  owning  and
 maintaining  poles  on  the  basis  of  net  pole  or  net  plant  investment.  134  In  the  Fee  Order,  we
 affirmed  our  long  practice  of  calculating  pole  attachment  rates  using  net  book  costs,  continuing  to
 allow  the  use  of  gross  book  costs  if  all  parties  agreed  to  that  usage.  135  We  concluded  that  the
 important  goal  is  to  ensure  that  like  figures  are  used,  whether  net  or  gross.  We  affirm  our
 132  The  two  factors  reflect  the  differences  between  telephone  companies'  and  electric  utilities'  investment  in  crossarms  and
 other  non-  pole  investment  that  is  recorded  in  the  pole  accounts.  Electric  utilities  typically  have  more  investment  in
 crossarms  than  telephone  companies  have.  The  0.  85  factor  for  electric  utilities  recognizes  this  fact.  See  Pole  Attachment
 Order,  2  FCC  Rcd  at  4390.
 133  See  Pole  Attachment  Order,  2  FCC  Rcd  at  4402,  Appendix  A.  This  formula  rearranges  the  Pole  Attachment  Order's
 net  cost  of  a  bare  pole  formula  for  presentation  purposes.  Net  pole  investment  is  defined  as  the  gross  investment  in  poles
 less  accumulated  depreciation  and  accumulated  deferred  income  taxes  with  respect  to  pole  investment.
 134  Net  pole  investment  is  defined  as  the  gross  investment  in  poles  less  accumulated  depreciation  and  accumulated  deferred
 income  taxes  with  respect  to  pole  investment.  Net  plant  investment  is  defined  as  the  gross  plant  in  service  less
 accumulated  depreciation  and  accumulated  deferred  income  taxes  with  respect  to  plant  in  service.
 135  See,  e.  g.,  Capital  Cities  Cable,  Inc.  v.  Southwestern  Public  Service  Co.,  Mimeo  No.  5431  (June  28,  1985);
 Booth  American  Co.  v.  Duke  Power  Co.,  Mimeo  3064  (Com.  Car.  Bur.,  Mar.  22,  1984);  Teleprompter  of
 Greenwood,  Inc.  v.  Duke  Power  Co.,  Mimeo  001866  (Com.  Car.  Bur.,  July  6,  1981).
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 continued  use  of  net  figures  in  the  formulas  unless  the  parties  agree  otherwise,  with  the  following
 limited  exception.
 30.  In  certain  cases,  negative  net  asset  values  for  poles  may  occur  as  a  result  of  the  way
 the  Commission  calculates  depreciation  rates.  We  generally  prescribe  depreciation  rates  at  levels
 sufficient  to  give  a  telecommunications  utility  an  opportunity  to  recover  its  plant  investment,
 including  poles,  on  a  straight-  line  basis  over  the  life  of  the  associated  plant.  In  order  to
 accomplish  this,  we  calculate  depreciation  rates  by  using  the  following  formula:
 Depreciation  Rate  =  100%  -  Accumulated  Depreciation  %  -  Future  Net  Salvage  %
 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  ut  ilit  y  would  receive  as  salvage  for  sale  of  retired  poles  and  the  utilit  y's  est  imat  ed  cost  of
 removal.  Average  remaining  life  is  the  estimated  future  life  expectancy  of  the  investment.
 31.  As  accumulated  depreciation  rises,  for  plant  with  high  removal  costs  such  as  poles,  the
 application  of  the  depreciation  rate  formula  can  lead  to  a  net  asset  value  becoming  negative.  This
 is  because,  in  computing  the  net  pole  investment,  the  formula  subtracts  from  gross  pole
 investment  an  accumulated  depreciation  that  includes  both  a  recovery  of  original  investment  and  a
 recovery  of  costs  of  removal  (less  salvage).  Because  gross  pole  investment  only  includes  the
 original  cost  of  the  poles,  subtracting  both  components  from  the  gross  pole  investment  may  lead
 to  a  zero  or  negative  net  pole  investment.  The  carrying  charge  formulas  compute  percentages  for
 each  element  (administrative,  maintenance,  and  depreciation  expenses,  taxes,  and  rate  of  return)
 which  are  added  and  then  multiplied  against  the  net  pole  investment.  For  example,  if  the  carrying
 charge  formulas  yield  10%  for  each  element,  the  carrying  charge  rate  would  be  50%.  This  rate
 would  then  be  multiplied  by  net  pole  investment  (expressed  on  a  per  pole  basis  as  net  cost  of  a
 bare  pole)  and  the  percentage  of  usable  pole  space  occupied  by  the  attachment,  to  determine  the
 maximum  just  and  reasonable  rate  per  pole.  When  the  net  pole  investment  is  zero  or  negative,  the
 formula  cannot  be  calculated  properly.  In  those  instances,  our  pole  attachment  formula,  using  net
 figures,  cannot  be  used  to  calculate  a  maximum  rate  based  on  fully  allocated  costs.
 32.  In  the  Fee  Order,  we  affirmed  the  calculation  of  net  cost  of  a  bare  pole  as  total
 investment  in  poles  less  accumulated  depreciation  136  for  poles  and  less  accumulated  deferred
 income  taxes.  137  We  also  affirmed  our  adjustment  to  a  utility's  net  pole  investment  of  15%  for
 136  The  Pole  Attachment  Order,  used  the  term  "depreciation  reserve"  in  this  formula.  We  updated  our  terminology
 to  reflect  Generally  Acceptable  Accounting  Principles  (GAAP)  and  now  use  the  term  "accumulated  depreciation."
 See  Pole  Attachment  Order,  2  FCC  Rcd  4387  (1987)  at    10-  19  &  Appendix  B;  see  also  Fee  Order  at    31,  n.
 127.
 137  Fee  Order  at    34-  35  (LECs),    41-  42  (electric  utilities);  see  also  Pole  Attachment  Order,  2  FCC  Rcd  4287,
 (  continued)
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 Federal  Communications  Commission  FCC  01-  170
 21
 electric  utilities  and  5%  for  LECs  to  eliminate  the  investment  in  crossarms  and  other  non-  pole
 related  items.  138  In  the  Fee  Order,  we  attempted  to  adjust  the  formula  for  application  in  situations
 that  involve  negative  net  pole  investment  by  eliminating  the  cause  of  the  negative  results.  We
 concluded  that  the  accumulated  depreciation  attributable  to  removal  costs  should  be  removed
 from  the  total  accumulated  depreciation  when  calculating  net  pole  investment.  We  redefined  net
 pole  investment  in  those  cases  involving  negative  net  pole  investment  as  follows:
 4340)  &  4100  (Accounts  (Poles)  Taxes  Income
 Deferred  d  Accumulate  _
 3100)  (Account  (Poles)  on  Depreciati
 d  Accumulate
 2411)  (Account  Investment
 Pole  Gross  =  Investment  Pole  Net  
 where  Accumulated  Depreciation  (Poles)  includes  only  that  portion  of  Account  3100  which  arises
 from  the  depreciation  of  Account  2411.
 33.  Fee  Order  petitioners  urge  us  to  modify  or  clarify  our  methodology  for  avoiding
 negative  pole  cost.  TxCTA  and  USTA  urge  us  to  review  paragraphs  62-  70  of  the  Fee  Order  in
 which  we  sought  to  adjust  the  formula  for  application  to  a  negative  rate  base.  139  USTA  asserts
 that  our  correction  for  the  alleged  negative  rate  situation  assumed  a  level  of  accounting  detail  that
 may  not  exist.  140  USTA  asserts  that  LECs  do  not  keep  that  level  of  detail  in  the  accounting
 records.  141  USTA  further  explains  that  if  we  eliminate  the  removal  costs  from  accumulated
 depreciation  in  Account  3100  we  must  also  do  the  same  in  the  application  of  accumulated
 deferred  income  taxes  in  Accounts  4100  and  4340.  USTA  adds  that  they  have  been  working  with
 the  Commission  to  reduce  the  accounting  burdens  on  LECs  and  that  in  the  foreseeable  future,  the
 reporting  requirements  may  be  even  less  comprehensive  than  they  are  today.  142  In  the  alternative,
 TxCTA  again  calls  on  us  to  set  the  maximum  rate  at  the  last  point  a  positive  valuation  existed
 (  continued  from  previous  page)
 at    10-  19  &  Appendix  B.
 138  See  Fee  Order  at    31,  33-  34;  see  also  Pole  Attachment  Order,  2  FCC  Rcd  at  4387,  4390,  (1987)  at    19.  The
 two  factors  reflect  the  differences  between  LECs'  and  electric  utilities'  investment  in  crossarms  and  other  non-  pole
 investment  that  is  recorded  in  the  pole  accounts.  Electric  utilities  typically  have  more  investment  in  crossarms
 than  LECs.  The  0.  85  factor  for  electric  utilities  recognizes  this  difference.  These  adjustment  factors  are
 rebuttable.
 139  TxCTA  Fee  Order  petition  at  1;  USTA  Fee  Order  petition  at  6-  9.
 140  USTA  Fee  Order  petition  at  7.
 141  Id.;  see  also  Verizon  Fee  Order  recon.  comments  at  3.
 142  USTA  Fee  Order  petition  at  6-  9.
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 under  the  current  formula.  143  Verizon  supports  USTAs  alternative  method  for  estimating  the
 amount  of  removal  costs  when  calculating  net  pole  investment.  144
 34.  NCTA  asserts  USTAs  solution  would  not  effectuate  the  Commissions  intention  to
 "unbundle  accumulated  depreciation  so  that  the  amounts  already  recovered  through  advance
 expensing  of  anticipated  net  salvage  would  be  removed."  145  According  to  NCTA,  the  negative  net
 salvage  associated  with  additions  to  the  depreciation  reserve  varies  substantially  over  time  and
 necessary  records  do  not  appear  to  be  publicly  available.  146
 35.  On  reconsideration  of  this  matter,  we  modify  and  clarify  our  guidance  to  utilities  and
 attaching  entities  on  how  to  apply  the  formula  in  those  cases  where  the  net  pole  investment  is  zero
 or  negative.  Our  proposal  in  the  Fee  Order  was  predicated  on  a  belief  that  the  depreciation
 attributable  to  removal  costs  was  identifiable.  Fee  Order  petitioners  and  other  parties  request
 clarification  or  reconsideration  of  our  adopted  solution  on  this  issue.  147  We  also  have  received
 inquiries  outside  of  the  reconsideration  proceedings  concerning  implementation  of  our  solution.
 Many  parties  representing  LECs  as  well  as  attaching  entities  have  observed  that  the  records  of
 LECs  are  not  sufficiently  detailed  for  identifying  the  portion  of  accumulated  depreciation  that
 represents  pole  removal  costs.  148  Furthermore,  they  observe  that  adjustments  to  the  accumulated
 deferred  taxes  reported  in  Accounts  4100  and  4340  would  also  need  to  be  modified  to  the  extent
 that  they  arose  from  the  depreciation  of  removal  costs.
 36.  As  an  alternative,  USTA  proposes  a  method  of  estimating  the  amount  of  pole  removal
 costs  that  should  be  excluded  from  the  rate  formula.  149  Specifically,
 The  FCC  should  allow  LECs  to  identify  the  portion  of  accumulated  depreciation  that  is
 'attributable  to  poles'  by  subtracting  the  'future  net  salvage'  component  from  the  pole
 depreciation  rate.  For  example,  if  the  depreciation  rate  for  poles  is  7  percent,  and  3
 percent  represents  future  net  salvage,  the  portion  'attributable  to  poles'  would  be  4
 percent.  The  LEC  would  then  calculate  net  pole  investment  by  subtracting  4/  7ths  of  the
 balance  in  the  Accumulated  Depreciation  Account  3100  (Poles)  from  Gross  Pole
 Investment  in  Account  2411.  150
 143  TxCTA  Fee  Order  petition  at  1.
 144  Verizon  Fee  Order  recon.  comments  at  3.
 145  NCTA  Fee  Order  recon.  reply  at  2-  3.
 146  Id.
 147  TxCTA  Fee  Order  petition  at  1-  2;  USTA  Fee  Order  petition  at  6-  9;  see  also,  Cole,  Raywid,  et  al.  Ex  parte  on
 Fee  Order  reconsideration,  November  2000;  Verizon  Fee  Order  recon.  comments  at  3.
 148  See,  e.  g.,  USTA  CS  Fee  Order  petition  at  6-  9;  TxCTA  Fee  Order  petition  at  1-  2;  Cole,  Raywid,  et  al.  Ex  parte
 on  Fee  Order  recon.,  November  2000.
 149  USTA  Fee  Order  petition  at  6-  9.
 150  Id.
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 Federal  Communications  Commission  FCC  01-  170
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 37.  This  approach  raises  concern  because  it  suggests  that  only  the  current  relative
 relationship  between  gross  pole  investment  and  future  net  salvage  value  should  be  considered  as  a
 basis  for  the  proration  necessary  to  calculate  the  required  data.  This  overlooks  the  dramatic
 change  in  the  relative  relationship  between  gross  pole  investment  and  future  net  salvage  value
 over  the  period  for  which  depreciation  adjustments  are  needed;  because  future  net  salvage  value
 now  comprises  a  far  greater  percentage  of  gross  pole  investment  than  in  the  past,  an  adjustment
 on  this  basis  would  be  overstated.  The  same  would  be  true  of  any  corresponding  adjustment  to
 deferred  income  taxes.  Therefore,  on  this  basis,  we  disagree  with  USTA's  claim  that  this
 approach  provides  a  reasonable  estimate  of  the  amount  of  removal  costs  that  should  be  removed
 from  the  formula.  151
 38.  Some  commenters  continue  to  advocate  relying  upon  the  last  rate  calculated  using  a
 positive  net  pole  investment.  152  This  calculation  is  readily  achievable  based  on  publicly  available
 data.  However,  this  calculation  would  not  reflect  subsequent  changes  in  the  carrying  charges.
 While  we  encourage  parties  to  negotiate  rates  using  this  method  if  they  choose,  we  do  not  at  this
 time  believe  that  it  is  the  most  reasonable  method  for  addressing  the  problem.
 39.  On  reconsideration,  we  find  that  our  approach  in  the  Fee  Order  failed  to  acknowledge
 that  the  utilities  recovery  through  depreciation  of  the  future  costs  of  removing  poles  should  be
 reflected  in  the  rate.  Moreover,  because  utilities  install  poles  over  time  at  various  original  costs
 and  because  net  salvage  estimates  vary  over  time,  the  extraction  of  depreciation  due  to  net
 salvage  costs  from  accumulated  depreciation  would  be  exceedingly  difficult.  Current  ARMIS  and
 FERC  accounting  reports  do  not  provide  information  with  respect  to  the  net  salvage  effect.  Due
 to  the  limitations  of  available  data  and  the  complex  relationships  between  rate  calculation  factors,
 we  believe  that  the  solution  we  prescribe  must  be  simple  yet  equitable  and  produce  consistent
 results.  We  have  determined  that  the  most  reasonable  and  efficient  method  is  to  apply  the  formula
 using  gross  figures  rather  than  net  figures,  with  the  exception  of  the  rate  of  return  element  of  the
 carrying  charges  which  is  always  a  net  calculation.  For  example,  we  currently  allocate
 administrative  expenses  by  dividing  total  administrative  and  general  expenses  by  net  plant
 investment.  This  yields  a  percentage  that  is  applied  against  the  net  cost  of  a  bare  pole.  In
 contrast,  a  gross  approach  to  allocation  would,  for  example,  divide  total  administrative  and
 general  expenses  by  gross  plant  investment.
 40.  With  the  exception  of  the  maintenance  component,  the  expense  accounts  upon  which
 the  pole  attachment  rates  rely  are  not  kept  by  type  of  plant.  Because  utilities  cannot  directly
 measure  the  amount  of  administrative  expenses  or  taxes  that  are  incurred  because  of  poles,  we
 must  allocate  administrative  expenses  and  taxes  to  poles  on  some  rational  basis.  In  the  Pole
 Attachment  Order,  we  determined  that  allocation  of  expenses  based  on  net  pole  investment  was
 151  See  USTA  Fee  Order  petition  at  6-  9.
 152  See,  e.  g.,  TxCTA  Fee  Order  petition  at  1;  see  also  NCTA  Fee  Order  comments  at  24.
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 reasonable.  We  continue  to  agree  with  the  Pole  Attachment  Order  that  the  appropriate  figures  to
 use  in  the  normal  situation  are  the  net  figures.  However,  in  the  unusual  situations  where  net  pole
 investment  is  zero  or  negative,  we  find  application  of  the  formula  using  gross  figures,  with  the
 noted  net  adjustment  to  the  return  element,  to  be  appropriate.
 41.  In  proposing  this  methodology,  we  acknowledge  that  only  the  administrative  and  tax
 elements  of  the  carrying  charges  are  affected  by  the  change.  The  maintenance,  depreciation  and
 return  elements  yield  the  same  maximum  rate  whether  net  or  gross  figures  are  used.  The
 administrative  and  tax  elements  may  be  higher  or  lower  due  to  the  different  ratios  of  accumulated
 depreciation  and  accumulated  deferred  taxes  to  gross  total  plant  as  opposed  to  gross  pole  plant.
 The  rate  of  return  element  will  be  negative  and  is  subtracted  from  the  positive  elements  of  the
 carrying  charge.  We  believe  this  result  is  reasonable  because  the  utilit  y  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
 t  he  ut  ilit  y's  pole  at  t  achment  rat  es  should  reflect  the  over-  recovery  in  the  form  of  a  negative  rate  of
 return  carrying  charge  properly  recognizes  this  fact.
 42.  The  formula  using  the  gross  approach  yields  the  following  calculation:
 (A).  Gross  Plant  (Poles)  153  (G).  Administrative  Expenses  (Total)
 (B).  Net  Plant  (Poles)  (H).  Taxes  (Total)
 (C).  Depreciation  Rate  (Poles)  (I).  Gross  Plant  (Total)
 (D).  Maintenance  Expense  (Poles)  (J).  Net  Plant  (Total)
 (E).  Quantity  of  Poles  (K).  Usable  Space  Factor  (.  074)
 (F).  Authorized  Rate  of  Return  (L).  Bare  Pole  Factor  (.  85  or  .95)
 Maintenance  =  Maintenance  Expense  (Poles)    Gross  Plant  (Poles)
 Element  =  (D)    (A)
 Depreciation  =  Depreciation  Rate  (Poles)
 Element  =  (C)
 Return  Element  =  Rate  of  Return  x  Net  Plant  (Poles)    Gross  Plant  (Poles)
 =  [(  F)  x  (B)]    (A)
 153  Gross  pole  plant  should  not  include  costs  for  pole  change-  outs  or  other  make-  ready  costs  that  were  paid  by  the
 attacher.
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 Administrative  =  Administrative  Expenses  (Total)    Gross  Plant  (Total)
 Element  =  (G)    (I)
 Tax  Element  =  Taxes  (Total)    Gross  Plant  (Total)
 =  (H)    (I)
 Total  Carrying  Charge  =  Sum  of  Maint.,  Depr.,  Ret.  (-),  Admin.  and  Tax  Elements
 Max  Rate  =  Space  Factor  x  Bare  Pole  Factor  x  Gross  Plant  (Poles)  x  Total  Carrying  Charges    Quantity  of
 Poles
 =  [(  K)  x  (L)  x  (A)  x  Total  Carrying  Charges  ]    (E)
 We  reiterate  that  in  all  other  cases,  where  the  net  pole  investment  is  positive,  the  appropriate
 figures  to  use  in  the  formula  continue  to  be  the  net  figures,  unless  the  parties  agree  otherwise.
 3.  Case  by  Case  Applications
 43.  Teligent  urges  us  to  adopt  more  specific  rules  regarding  pole  attachments  in  rights-  of-way
 and  wireless  pole  attachments,  rather  than  consider  those  complaints  on  a  case  by  case  basis.  154  MCI  petitions  us  to  adopt  specific  rules  for  addressing  complaints  concerning  rates  for
 access  to  electric  utility  transmission  facilities  rather  than  considering  such  complaints  on  a  case
 by  case  basis.  155
 44.  In  the  Telecom  Order,  we  stated  that  the  record  was  not  sufficient  to  enable  us  to
 adopt  detailed  standards  that  would  govern  all  of  these  situations.  156  We  believe  our  basic  rate
 methodology  is  adaptable  to  attachments  that  fit  these  categories.  157  A  complaint  involving  a
 dispute  about  these  attachments  would  be  treated  as  any  other  pole  attachment  complaint.  158  In
 the  Telecom  Order  159  and  the  Local  Competition  Order,  160  we  recognized  guiding  principles
 based  on  the  Pole  Attachment  Act  to  be  used  in  determining  rates  for  pole  attachments,  including
 attachments  to  rights-  of-  way,  wireless  attachments  and  transmission  facilities  attachments.
 154  Teligent  Telecom  Order  petition  at  7-  9.
 155  MCI  Telecom  Order  petition  at  24-  25.
 156  Telecom  Order  at    120-  121.  See  also,  Local  Competition  Access  Reconsideration  Order,  FCC  99-  266  (1999)
 at  n.  5.
 157  See,  e.  g.,  GTE  Telecom  Order  comments  at  1-  3  (case-  by-  case  only  way  to  go  for  wireless  attachments).  But  see,
 Teligent  Telecom  Order  petition  at  7-  12  (without  clear  specific  guidelines,  providers  of  wireless
 telecommunications  services  will  be  disadvantaged).
 158  47  C.  F.  R.    1.1401-  1.1418.
 159  See  generally,  the  Telecom  Order.
 160  See  Local  Competition  Order,  11  FCC  Rcd  15499  (1996)  at    1143-  1186;  see  also,  Local  Competition  Access
 Reconsideration  Order,  FCC  99-  266  at    23-  46.
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 Guiding  principles  include  the  congressionally  mandated  methodology,  161  preference  for  publicly
 available  records  when  available,  162  and  an  acceptable  range  of  just  and  reasonable  rates.  163  We
 stated  that  we  believed  it  prudent  to  gain  experience  through  case-  by-  case  adjudication  of
 disputes  to  determine  whether  additional  "guiding  principles"  or  presumptions  were  necessary  or
 appropriate  for  non-  traditional  situations.  164  We  concluded  that  complaints  will  be  considered  on
 a  case  by  case  basis.  165
 45.  On  reconsideration,  we  will  not  adopt  separate  or  detailed  regulations  at  this  time  for
 considering  complaints  about  rates,  terms  and  conditions  for  nondiscriminatory  access  for  non-traditional
 attachments.  166  We  have  not  been  persuaded  that  our  current  rules  are  not  satisfactory
 to  provide  all  parties  a  process  by  which  they  may  seek  appropriate  remedies  when  negotiations
 for  attachments  fail.  We  continue  to  believe  it  prudent  to  gain  experience  through  case  by  case
 adjudication  to  determine  whether  additional  guiding  principles  or  presumptions  are  necessary  or
 appropriate,  and  this  will  be  accomplished  through  our  existing  complaint  procedures.  167  We  will
 continue  to  address  complaints  about  just  and  reasonable  rates,  terms  and  conditions,  and
 nondiscriminatory  access  for  non-  traditional  attachments  on  a  case-  by-  case  basis.
 C.  THE  SPACE  FACTOR
 46.  In  the  Fee  Order,  we  affirmed  the  use  of  the  Cable  Formula  to  set  rates  in  disputed
 pole  attachment  cases.  168  As  indicated  above,  the  basic  Cable  Formula  can  be  stated  as  follows:
 Rate  Charge
 Carrying  x
 Pole  Bare
 a  of  Cost  x
 Space  Usable  Total
 Occupied  Space  =
 Rate
 Maximum
 In  order  to  facilitate  the  negotiation  of  just  and  reasonable  rates  and  the  resolution  of  pole
 attachment  complaints,  we  make  use  of  rebuttable  presumptions  in  the  Cable  Formula.  169  In  the
 161  47  U.  S.  C.  224(  d),(  e).
 162  1977  Senate  Report  at  19-  21.
 163  Pole  Attachment  Order,  2  FCC  Rcd  4387  (1978).
 164  Telecom  Order  at    121  n.  390
 165  Telecom  Order  at    121.  See  also  Promotion  of  Competitive  Networks  in  Local  Telecommunications  Markets,
 First  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  WT  Docket  No.  99-  217,  Fifth  Report  and
 Order  and  Memorandum  Opinion  and  Order,  CC  Docket  No.  96-  98,  and  Fourth  Report  and  Order  and
 Memorandum  Opinion  and  Order,  CC  Docket  No.  88-  57,  15  FCC  Rcd  22983,  23024,    91(  2000)  (adopting  case  by
 case  approach  to  determine  rates  for  access  to  in-  building  ducts  and  conduit).
 166  See,  e.  g.,  Teligent  Telecom  Order  petition  at  7-  9;  see  also  WinStar  Telecom  Order  comments  at  13-  16.
 167  47  C.  F.  R.    1.1401-  1.1418.
 168  Fee  Order  at    14;  see  also,  Pole  Attachment  Order,  2  FCC  Rcd  4387  (1987)  at    6;  47  U.  S.  C.    224(  b)(  1),
 (d).
 169  To  avoid  a  pole  by  pole  rate  calculation,  the  Commission  adopted  rebuttable  presumptions  such  as  an  average
 (  continued)
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 Federal  Communications  Commission  FCC  01-  170
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 Fee  Order,  we  reviewed  the  continued  applicability  of  various  factors  and  elements  within  the
 Cable  Formula,  including  certain  presumptions  used  to  determine  the  total  usable  space  or
 capacity  occupied  by  a  pole  attachment.  170
 47.  We  first  discuss  the  rebuttable  presumption  of  the  amount  of  space  occupied  by  the
 attachment  as  a  percentage  of  the  total  usable  space  on  the  pole.  The  1977  Senate  Report
 indicated  a  Congressional  intent  that  cable  system  pole  attachments  be  responsible  for  no  more
 than  12  inches  of  the  usable  space  on  a  pole,  including  actual  space  occupied  plus  clearance  space.  171  The  Commission  established  a  rebuttable  presumption  of  one  foot  as  the  amount  of
 space  a  cable  television  attachment  occupies  when  calculating  a  maximum  rate  under  an  interim
 formula.  172  We  subsequently  refined  our  methodology  for  determining  the  amount  of  usable
 space  and  retained  the  one  foot  presumption  in  the  Cable  Formula.  173  The  same  presumption
 also  applies  to  telecommunications  service  providers.
 48.  The  presumptions  used  in  the  Cable  Formula  have  been  repeatedly  affirmed  since  the
 enactment  of  the  Pole  Attachment  Act.  174  We  define  total  usable  space  as  the  space  on  the  utility
 pole  above  the  minimum  grade  level  that  is  usable  for  the  attachment  of  wires,  cables,  and  related
 equipment.  175  In  the  Fee  Order,  we  affirmed  the  use  of  various  presumptions  that  lead  to  13.5
 feet  as  the  presumptive  average  usable  space  on  a  pole.  The  Cable  Formula  uses  a  37.5  foot
 presumptive  pole  height,  an  18  foot  average  minimum  ground  clearance,  allocation  of  the  40-  inch
 safety  space  to  usable  space,  and  the  inclusion  of  poles  of  30  feet  or  less  when  calculating  the
 costs  of  a  bare  pole.  176  No  persuasive  evidence  or  arguments  have  been  presented  which  challenge
 our  long-  standing  presumptions  resulting  in  13.5  feet  as  the  presumptive  usable  space.
 (  continued  from  previous  page)
 pole  height  of  37.  5  feet,  and  an  average  of  13.  5  feet  of  usable  space  on  a  pole.  See  Second  Report  and  Order,  72
 FCC  2d  at  69-  72;  see  also,  Telecom  Order,  13  FCC  Rcd  6777  (1998).
 170  Fee  Order  at    19;  see  Fee  Order  Notice,  12  FCC  Rcd  at  7449,    17-  37.
 171  1997  Senate  Report  at  20.
 172  Second  Report  and  Order,  72  FCC  2d  at  69-  70.
 173  Second  Report  and  Order,  72  FCC  2d  at  69-  70;  see  also  Petition  to  Adopt  Rules  Concerning  Usable  Space  on
 Utility  Poles,  FCC  84-  325  (rel.  July  25,  1984)  ("  Usable  Space  Order")  at    10.  This  one-  foot  presumption  is
 affirmed  in  the  Fee  Order  at    18-  19.
 174  First  Report  and  Order,  72  FCC  2d  59;  Second  Report  and  Order,  77  FCC  2d  187,  191-  193;  Cable  Information
 Services,  Inc.  v.  Appalachian  Power  Co.,  81  FCC  2d  383  (1980);  Television  Cable  Service,  Inc.  v.  Monongahela
 Power  Co.,  88  FCC  2d  56  (D.  C.  Cir.  1981).
 175  See  72  FCC  2d  at  69;  47  C.  F.  R.    1.1402(  c).
 176  Fee  Order  at    22  (safety  space),    24  (minimum  ground  clearance),  and    26  (30-  foot  poles);  see  Fee  Order
 Notice  at    18-  20.
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 Federal  Communications  Commission  FCC  01-  170
 28
 Application  of  these  presumptions  results  in  7.4%  as  the  percentage  of  usable  space  occupied  by  a
 pole  attachment.  177
 49.  In  the  Telecom  Order,  we  found  that  the  one  foot  presumption  of  space  occupied
 should  continue  to  apply  where  an  attaching  entity  has  overlashed  178  its  own  pole  attachments.  179
 We  also  determined  that  facilities  overlashed  by  third  parties  onto  existing  pole  attachments  are
 presumed  to  share  the  presumptive  one  foot  of  usable  space  of  the  host  attachment.  180  We
 declined  to  adopt  procedures  to  allocate  the  cost  of  usable  space  between  a  third  party  overlasher
 and  the  host  attaching  entity,  in  part,  because  the  benefit  of  third  party  overlashing  as  an
 expeditious  means  for  entry  into  the  market  would  be  undermined  by  such  procedures.  181  In  their
 filings,  the  parties  raise  the  following  specific  issues  relating  to  the  rebuttable  presumptions
 concerning  the  percentage  of  space  occupied.
 1.  Average  Pole  Height
 50.  Some  Fee  Order  petitioners  continue  to  urge  that  we  exclude  30-  foot  poles  from  the
 average  pole  height  calculation  as  well  as  the  bare  pole  calculation.  182  The  record  in  this
 proceeding  confirms  the  prevalent  use  of  30-  foot  poles  and  reflects  that  exclusion  of  such  poles
 from  the  Cable  Formula  calculations  could  distort  the  resulting  rate  by  excluding  a  significant
 portion  of  local  exchange  carrier  ("  LEC")  utility  plant  investment  from  the  rate  calculation.  183  We
 affirm  our  position  that  a  distorted  inventory  of  poles  would  be  reflected  if  utilities  were  allowed
 to  "opt  out"  or  exclude  their  poles  of  30  feet  or  less  when  calculating  their  pole  attachment  rates.  184
 2.  Safety  Space
 177  The  ratio  of  space  occupied  (presumptive  1  foot)  over  usable  space  (presumptive  13.  5  feet)  results  in  a  factor  of
 0.074  for  use  in  calculations  of  the  Cable  Formula.
 178  Overlashing  occurs  when  an  attacher  physically  ties  additional  cables  to  cables  already  attached  to  a  pole.
 179  Telecom  Order  at    92.
 180  Telecom  Order  at    92.  We  noted  that  we  deferred  decision  to  the  Fee  Order  Notice  proceeding  on  the  issue  of
 the  effect  any  increased  burden,  such  as  wind  and  weight  loading,  may  have  on  the  rate  the  utility  pole  owner  may
 charge  the  host  attacher.  In  the  Fee  Order,  we  declared  that  weight  and  wind  loading  may  be  a  consideration  in
 the  make-  ready  plans  and  expenses,  for  safety,  reliability  and  engineering  purposes,  but  not  a  consideration  in
 calculating  the  recurring  rate.  Fee  Order  at    29-  30.
 181  See  Telecom  Order  at    94.
 182  See,  e.  g.,  Southern  Co.  Fee  Order  petition  at  14.  But  see,  WorldCom  Fee  Order  recon.  opposition  at  9.
 183  See,  e.  g.,  GTE  Fee  Order  reply  at  13;  NCTA  Fee  Order  comments  at  12-  16,  Fee  Order  reply  at  21-  22;  Ohio
 Edison  Fee  Order  comments  at  26;  SBC  Fee  Order  comments  at  38-  39;  TCI  Fee  Order  comments  at  13;  Time
 Warner  Fee  Order  comments  at  11-  13,  18-  19;  U  S  West  Fee  Order  comments  at  4.
 184  Fee  Order  at    26.
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 Federal  Communications  Commission  FCC  01-  170
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 51.  UTC/  EEI  continues  to  urge  that  we  consider  as  unusable  the  40-  inch  safety  space  that
 exists  to  minimize  the  likelihood  of  physical  contact  between  employees  working  on  cable
 television  or  telephone  lines  and  the  potentially  lethal  voltage  carried  by  the  electric  lines,  as  well
 as  to  prevent  electrical  contact  between  such  cables.  185  No  new  arguments  or  evidence  was
 presented  in  the  filings  and  based  on  our  previous  reasoning,  186  that  the  space  is  usable  and  used
 by  the  electric  utility,  we  reject  arguments  to  reduce  the  presumptive  usable  space  of  13.5  feet  by
 40  inches.
 185  UTC/  EEI  Fee  Order  petition  at  9-  10.  See,  Second  Report  and  Order,  72  FCC  2d  59,  69-  70  (citing  National
 Electrical  Safety  Code  at  Appendix  C,  at  163,  Table  235-  5  (1977  ed.)  at  n.  25.
 186  Fee  Order  at    21-  22.
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 Federal  Communications  Commission  FCC  01-  170
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 3.  Minimum  Ground  Clearance
 52.  Some  Fee  Order  petitioners  continue  to  urge  that  we  depart  from  our  well-  established
 presumption  of  an  average  minimum  ground  clearance  of  18  feet.  187  Ground  clearance
 requirements  in  the  National  Electric  Safety  Code  ("  NESC"),  188  include  an  average  amount  of  sag
 for  cable  lines.  WorldCom  disagrees  with  petitioners  claims  that  the  average  line  sag  should
 decrease  the  amount  of  usable  space  on  a  pole.  189  No  new  evidence  or  arguments  were  provided
 that  would  persuade  us  to  abandon  our  long-  standing  reliance  on  the  presumptive  average
 minimum  ground  clearance  based  on  NESC  standards.  190
 4.  Telecom  Formula  Space  Factor
 a.  Counting  Attaching  Entities
 53.  Under  the  Cable  Formula,  the  costs  of  unusable  space  are  allocated  based  on  the
 portion  of  usable  space  an  attachment  occupies,  the  space  factor.  Our  formula  is  stated  as
 follows:
 Rate  Charge
 Carrying  x
 Pole  Bare
 a  of  Cost  Net  x
 UsableSpace  Total
 Occupied  Space  =
 Rate
 Maximum
 54.  Using  the  presumptions  in  the  Cable  Formula,  this  results  in  a  space  factor  of  1/  13.5
 or  .074,  multiplied  by  the  net  cost  of  a  bare  pole  and  the  carrying  charge  rate:
 ChargeRate
 Carrying  x
 Pole  Bare
 a  of  Cost  Net  x  .074  =
 Rate
 Maximum
 55.  In  the  Telecom  Order,  191  we  adopted  a  formula  for  the  purpose  of  allocating  costs  of
 unusable  space.  Under  the  Telecom  Formula,  pursuant  to  the  specific  requirements  of  the  Pole
 Attachment  Act,  the  costs  of  unusable  space  are  separated  from  the  costs  of  usable  space  and  are
 allocated  based  on  the  number  of  attaching  entities.  The  costs  of  usable  space  are  still  calculated
 187  See,  e.  g.,  American  Electric  Fee  Order  petition  at  11-  12;  UTC/  EEI  Fee  Order  petition  at  9-  10.
 188  The  National  Electrical  Safety  Code  ("  NESC"),  published  by  the  Institute  of  Electrical  and  Electronics
 Engineers,  Inc.  ("  IEEI")  adopts  certain  standards  that  cover  basic  provisions  for  safeguarding  persons  from  hazards
 arising  from  the  installation,  operation,  or  maintenance  of  (1)  conductors  and  equipment  in  electric  supply  stations,
 and  (2)  overhead  and  underground  electric  supply  and  communication  lines.  NESC,  1997  Edition  (published
 August  1,  1996)  Abstract  and    1,  p.  1.  The  NESC  is  a  voluntary  standard;  however,  some  editions  and  some  parts
 have  been  adopted,  with  or  without  changes,  by  some  state  and  local  jurisdictional  authorities.  NESC,  p.  vi.
 189  WorldCom  Fee  Order  recon.  opposition  at  7-  8.
 190  Fee  Order  at    24.
 191  See  Telecom  Order  at    43-  44.
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 Federal  Communications  Commission  FCC  01-  170
 31
 based  on  the  portion  of  usable  space  occupied.  In  the  Telecom  Order,  192  we  adopted  separate
 formulas  for  determining  the  unusable  space  factor  maximum  rate  and  the  usable  space  factor
 maximum  rate  which,  when  added  together,  calculate  a  maximum  rate  under  section  224(  e)  of  the
 Pole  Attachment  Act.  193  We  now  simplify  the  two  formulas  into  one  combined  formula  as
 follows:  194
 Rate
 Charge
 Carrying
 Pole  Bare  a  of  Cost  Net  Height  Pole  AttachingEntities  of  No.
 UnusableSpace
 3
 2
 Occupied
 Rate
 Maximum  u  u
 u  
   
   
   
   
 
 
   
 
   
 
   
 
   
 
 Space
 56.  Using  our  presumptions  in  the  Telecom  Formula,  this  calculation  can  be  stated  as:
 
 Rate
 Charge
 Carrying
 Pole  Bare  a  of  Cost  Net  37.5  Entities  Attaching  of  No.
 16  1
 Rate
 Maximum  u  u
 
   
   
   
   
 
 
   
 
   
 
 
 which  results  in  a  combined  (usable  and  unusable)  space  factor  of  between  .24  for  2  attachers  and
 .098  for  6  attachers  for  telecommunications  attachers,  as  opposed  to  .074  for  cable  attachers.
 The  difference  between  the  two  rate  calculations  is  then  phased  in  over  five  years,  pursuant  to  the
 provisions  of  the  Pole  Attachment  Act.
 57.  In  the  Telecom  Order,  we  recognized  that  the  number  of  attaching  entities  is  a
 significant  factor  in  determining  the  maximum  rate.  We  concluded  that  certain  entities  should  be
 counted  as  attaching  entities  pursuant  to  the  Pole  Attachment  Act.  195  We  now  reconsider  and
 clarify  our  methodology  for  counting  the  number  of  attaching  entities  used  in  the  Telecom
 Formula.  In  the  Telecom  Order,  we  stated  that  for  the  purposes  of  allocating  costs  of  unusable
 space,  parties  to  a  pole  attachment  agreement  should  count  as  separate  entities,  in  addition  to
 telecommunications  carriers  and  cable  operators,  any  incumbent  or  competitive  LEC,  196  all
 192  Telecom  Order  at    50-  51.
 193  Telecom  Order  at    43  (Unusable  Space  Factor)  &    80-  82  (Usable  Space  Factor);  see  also  Telecom  Order  
 102.
 194  Because  we  are  now  using  a  combined  formula  for  calculating  the  Telecom  Formula  rate,  we  will  no  longer
 refer  to  the  separate  rate  calculations  for  usable  and  unusable  space  as  space  factors.  Instead,  the  term  space  factor
 refers  to  the  percentage  of  space  occupied  in  either  formula  that  is  multiplied  by  the  net  cost  of  a  bare  pole  and  the
 carrying  charges  to  determine  the  maximum  rate.
 195  Telecom  Order  at    43-  54.
 196  See  Telecom  Order  at    46.
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 Federal  Communications  Commission  FCC  01-  170
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 governmental  agencies  that  provide  cable  or  telecommunications  service  197  and  any  electric  or
 other  utility  providing  telecommunications  services,  with  a  physical  attachment  to  the  pole.  198  We
 also  included  third  party  overlashers  as  separate  entities.  199
 58.  UTC/  EEIs  Telecom  Order  petition  argues  that  we  should  consider  only  attaching
 telecommunications  carriers  as  entities  in  the  Telecom  Formula.  200  In  contrast,  ICG  asks  us  to
 clarify  that  not  only  electric  utilities  but  all  commercial  users  of  a  pole,  duct,  conduit  or  right-  of-way
 are  attaching  entities  for  purposes  of  the  apportionment  of  unusable  space  in  the  Telecom
 Formula.  201  We  clarify  our  position  that  all  utilities  should  be  counted  as  attaching  entities.  202  In
 addition,  we  further  reconsider  and  clarify  that  any  entity  with  a  physical  attachment  to  the  pole
 should  be  counted  as  an  attaching  entity.  Thus,  in  the  case  of  government  attachments,  we  find
 that  any  physical  attachment  by  a  government  entity  qualifies  the  government  attacher  as  an
 attaching  entity.  The  statute  does  not  provide  an  exclusion  for  non-  telecommunications
 attachments.  We  will  continue  to  exclude  a  governments  temporary  or  seasonal  attachments
 from  this  category.  Because  of  the  temporary  nature  of  these  attachments,  the  burden  of
 identifying  and  counting  such  attachments  outweighs  any  increase  in  accuracy  that  might  ensue
 from  including  them.  We  also  reconsider  our  inclusion  of  third  party  overlashers  as  separate
 entities  and  conclude  that  they  are  not  to  be  counted  as  separate  attaching  entities.  This  is
 consistent  with  our  conclusion  that  an  overlashing  entity  does  not  occupy  additional  space  on  a
 pole.  An  overlashed  cable  is  still  only  attached  to  the  pole  by  the  original  single  attachment.
 59.  The  term  "attaching  entities"  includes,  without  limitation,  and  consistent  with  the  Pole
 Attachment  Act,  any  telecommunications  carrier,  incumbent  or  other  local  exchange  carrier,  cable
 operator,  government  agency,  and  any  electric  or  other  utility,  whether  or  not  the  utility  provides
 a  telecommunications  service  to  the  public,  as  well  as  any  other  entity  with  a  physical  attachment
 to  the  pole.  203  This  is  consistent  with  the  language  of  the  statute  and  with  Congress'  intent  to
 count  all  attaching  entities  when  allocating  the  costs  of  unusable  space.  204  We  believe  that  if
 Congress  intended  that  only  telecommunications  carriers'  with  attachments  on  a  pole,  or  in  a
 197  Telecom  Order  at    54.
 198  The  statute  uses  the  term  "entities"  not  "telecommunications  carriers"  when  indicating  how  the  costs  of  unusable
 space  should  be  allocated.  47  U.  S.  C.    224(  e)(  2).
 199  Telecom  Order  at    69.
 200  UTC/  EEI  Telecom  Order  petition  at  16-  21.  Cf.  ICG  Telecom  Order  petition  at  7-  8.
 201  ICG  Telecom  Order  petition  at  8.
 202  See  Telecom  Order  at    46-  47,  50-  51,  and  54.
 203  See,  e.  g.,  ICG  Telecom  Order  petition  at  7-  8;  NCTA  Telecom  Order  petition  at  5-  8;  see  also,  AT&  T  Telecom
 Order  comments  at  2-  4;  Ameritech  Telecom  Order  comments  at  2-  3;  MCI  Telecom  Order  comments  at  4-  5;  Joint
 Cable  Parties  Telecom  Order  reply  at  3-  5;  Sprint  Telecom  Order  comments  at  2.
 204  See  Conf.  Rpt.  at  220  (the  Commission  shall  .  .  .  recognize  that  the  entire  pole,  duct,  conduit,  or  right-  of-  way
 other  than  the  usable  space  is  of  equal  benefit  to  all  entities  attaching  to  the  pole  and  therefore  apportion  the  cost  of
 the  space  other  than  the  usable  space  equally  among  all  such  attachments).
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 Federal  Communications  Commission  FCC  01-  170
 33
 conduit,  duct  or  right-  of-  way,  should  be  counted  as  attaching  entities  for  the  purpose  of
 apportioning  costs  of  unusable  space  pursuant  to  section  224(  e)(  2),  Congress  would  have  used
 the  specific  term  "telecommunications  carrier"  or  "provider  of  telecommunications  services"
 instead  of  the  more  general  and  more  inclusive  term  "entity"  and  "entities."  205
 60.  We  find  arguments  that  the  pole  owner  must  absorb  unfairly  the  costs  of  government
 attachments  to  be  unpersuasive.  As  we  stated  in  the  Telecom  Order,  because  the  government
 attacher  and  the  pole  owner  have  a  relationship  that  benefits  both  parties,  we  are  not  persuaded
 that  the  pole  owner  is  unfairly  absorbing  the  cost  of  government  attachments  to  the  extent  the
 pole  owners  franchise  so  provides.  Moreover,  many  attachers  pay  a  separate  fee  to  governments
 for  the  ability  to  attach  to  poles  in  public  right  of  ways  in  addition  to  the  pole  rental  fee.  We  also
 find  unpersuasive  arguments  that  the  non-  telecommunications  utility  pole  owner  should  not  be
 included  as  an  attaching  entity.  We  find  no  reasonable  distinction  to  be  drawn  when  comparing
 telecommunications  utility  pole  owners  and  non-  telecommunications  utility  pole  owners  that
 would  warrant  different  treatment  in  counting  attaching  entities.  We  do  not  believe  that  Congress
 intended  for  a  single  attacher,  protected  by  the  Pole  Attachment  Act,  that  uses  one  foot  of  space
 on  a  pole,  to  pay  a  higher  (double)  portion  of  the  unusable  space  cost  than  the  pole  owner  that
 controls,  and  uses  a  good  portion  of,  the  rest  of  the  usable  space.  Therefore,  we  include  the
 utility  pole  owner  in  the  count,  resulting  in  a  minimum  of  two  attaching  entities  being  counted.  206
 61.  Upon  reconsideration,  we  find  that  third  party  overlashers  should  not  be  counted  as
 separate  entities  because  they  are  not  occupying  separately  segregated  pole  space.  This
 conclusion  is  consistent  with  our  finding  that  overlashing  does  not  constitute  a  separate
 attachment  and  our  conclusion  that  all  entities  with  a  physical  attachment  should  be  counted.  Our
 review  of  the  Pole  Attachment  Act  leads  us  to  reconsider  our  previous  decision  and  conclude  that
 the  term  "attaching  entity"  as  it  is  used  in  the  Pole  Attachment  Act  is  not  limited  to  entities  with
 attachments  that  meet  the  definition  of  pole  attachment  as  it  is  used  in  the  Pole  Attachment  Act.
 Rather,  we  conclude  that  any  entity  with  a  physical  attachment  to  the  pole  should  be  counted.
 Our  rule  for  counting  attaching  entities  will  allow  parties  to  pole  attachment  agreements  to
 calculate  an  average  number  of  attaching  entities  for  use  in  the  Telecom  Formula.
 b.  Average  Number  of  Attaching  Entities
 62.  In  the  Telecom  Order,  we  determined  that  the  most  efficient  and  expeditious  manner
 to  identify  an  average  number  of  attaching  entities,  was  for  each  utility  to  develop  its  own  average
 number  of  attaching  entities.  207  We  concluded  that  the  alternative,  the  Commission  undertaking  a
 205  47  U.  S.  C.    224(  e)(  2).
 206  An  attaching  entity  with  its  own  separate  attachment,  that  is  an  affiliate,  subsidiary  or  associate  of  another
 attaching  entity  with  its  own  separate  attachment,  is  counted  as  a  separate  attaching  entity  unless  it  is  a  wholly-owned
 subsidiary  of  the  other  attaching  entity.
 207  Telecom  Order  at    77-  79.
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 survey,  would  be  too  cumbersome  and  would  not  necessarily  enhance  accuracy.  208  Our  decision
 that  the  utility  would  establish  an  average  number  of  attaching  entities  was  premised  on  the  belief
 that  utilities  not  only  possess  information  with  which  to  develop  an  average  number  of  attaching
 entities,  but  also  have  both  the  expertise  to  structure  the  development  of  an  average  and  the
 information  reflecting  where  services  are  being  provided.  In  an  effort  to  have  the  averages  reflect
 the  different  characteristics  of  geographic  areas'  varying  incidents  of  attachments,  we  required
 utilities  to  establish  averages  based  on  rural,  urban,  or  urbanized  service  areas  as  defined  by  the
 Bureau  of  Census,  United  States  Department  of  Commerce  ("  Bureau  of  Census").  209  The  Bureau
 of  Census,  identifies  all  territory,  population  and  housing  as  rural  (population  under  2,500  and  not
 in  an  urbanized  area),  urban  (population  over  2,500),  or  urbanized  (a  central  city  plus  the
 closely-  settled  urban  fringe  that  together  have  a  minimum  population  of  50,000).  210  We  adopted
 these  categories  because  we  believed  they  would  equitably  reflect  the  different  levels  of
 attachment  usage  based  on  characteristics  of  the  locations.  211
 63.  In  the  Telecom  Order,  we  established  the  right  of  attaching  entities  to  challenge  the
 average  number  of  attaching  entities  set  by  the  utilities,  in  the  same  manner  as  challenges  presently
 are  made  to  other  presumptions  used  in  the  Cable  Formula.  212  For  example,  the  challenging  party
 will  identify  and  calculate  the  number  of  attaching  entities  on  the  poles  and  submit  to  the  utility
 what  it  believes  to  be  an  appropriate  average.  Where  the  number  of  poles  is  too  large,  and/  or
 complete  inspection  impractical,  we  found  that  a  statistically  sound  survey  could  be  substituted.  213
 The  utility  will  be  afforded  an  opportunity  to  justify  its  averages  and  where  the  utility's  average  is
 successfully  challenged,  the  resulting  figure  will  be  deemed  to  be  the  number  of  attaching  entities.  214
 208  Id.  at    77.
 209  Id.
 210  A  Guide  to  State  and  Local  Census  Geography,  U.  S.  Census  Bureau,  (issued  June,  1993),  U.  S.  Department  of
 Commerce,  Economics  and  Statistics  Administration,  at  4-  5.  We  note  that  an  urbanized  area  may  contain  one  or
 more  urban  areas.  See  also,  SBC  Telecom  Order  petition  at  10-  16,  SBC  Telecom  Order  Ex  Parte  Presentations
 dated  September  24,  1998  and  December  16,  1998.
 211  We  also  stated  that  a  utility  shall,  upon  request,  provide  all  attaching  entities  and  all  entities  seeking  access  the
 methodology  and  information  by  which  a  utility's  presumption  was  determined.  We  expect  a  good  faith  effort  by  a
 utility  in  establishing  its  presumption  and  updating  it  when  a  change  is  necessitated.  For  example,  when  a  new
 attaching  entity  has  a  substantial  impact  on  the  number  of  attaching  entities,  the  utility's  presumptive  average
 should  be  modified.  This  method  should  be  consistent  with  present  practice,  as  we  understand  most  pole
 attachment  agreements  "provide  for  periodic  field  surveys,  generally  once  every  three  to  seven  years,  to  determine
 which  entities  have  attached  what  facilities  to  whose  poles."  Telecom  Order  at    78  (citing  ICG  Telecom  Order
 Comments  at  37).
 212  See,  e.  g.,  Pole  Attachment  Order,  2  FCC  Rcd  4387  (1987).
 213  Telecom  Order  at    79.  See,  e.  g.,  Capital  Cities  Cable,  Inc.  v.  Mountain  States  Telephone  &  Telegraph  Co.,  56
 RR  2d  393  at    22  (1984)  (establishing  methodology  for  developing  a  statistically  sound  survey).
 214  Telecom  Order  at    79.
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 i.  Geographic  Areas
 64.  Telecom  Order  petitioners  urge  that  we  reconsider  the  geographic  areas  used  by
 utilities  to  determine  an  average  number  of  attachers  for  use  in  calculations  of  the  formulas  for
 pole  attachment  rates.  215  Upon  presentation  of  additional  information  and  consideration  of  the
 record  in  this  proceeding,  we  modify  the  geographic  areas  on  which  a  utility  will  base  its  average
 numbers  of  attaching  entities.  216  Confusion  has  been  demonstrated  on  the  part  of  utilities
 attempting  to  implement  the  Telecom  Order,  because  the  term  "urban"  comprises  all  territory,
 population  and  housing  units  in  places  of  2,500  or  more  people.  217  An  urbanized  area  may  be
 contained  within  an  urban  area,  and  vice-  versa,  and  it  has  been  demonstrated  that  utilities  do  not
 have  the  ability  to  determine  what  portion  of  their  service  areas  fall  within  a  rural,  urban  or
 urbanized  area  without  unreasonable  costs  and  effort.  218  Further  confusion  has  been
 demonstrated  about  the  three  categories  of  areas  for  which  averages  should  be  prepared  because
 individual  utilities  may  have  distinct  service  areas,  specific  to  a  state,  their  company  or  industry,
 that  complicate  the  development  of  averages  as  outlined  in  the  Telecom  Order.  These  distinct
 service  areas  may  not  correspond  to  the  Bureau  of  Census  categories.  219  Some  utilities  assert  it
 will  not  be  feasible  to  determine  averages  in  any  cost-  efficient  manner,  220  so  we  will  provide
 default  averages  for  urbanized  and  non-  urbanized  areas,  for  use  in  the  absence  of  utility  developed
 averages.
 65.  The  purpose  of  having  averages  based  on  geographic  areas  was  to  have  pole
 attachment  rates  reflect  an  appropriate  average  number  of  pole  attachments  in  a  particular
 geographic  area  as  of  February  2001,  when  utilities  begin  calculating  rates  for  telecommunications
 carriers.  221  It  was  expected  that  densely  populated  areas  would  have  more  attachments,  in
 215  SBC  Telecom  Order  petition  at  10-  16;  USTA  Telecom  Order  petition  at  10-  11;  UTC/  EEI  Telecom  Order
 petition  at  22-  23.
 216  See,  e.  g.,  UTC/  EEI  Telecom  Order  petition  at  22,  Telecom  Order  comments  at  18-  19,  Telecom  Order  reply  at
 11-  12;  see  also,  SBC  Telecom  Order  petition  at  10-  16.  In  its  ex  parte  presentations,  SBC  suggested  in  the
 alternative  to  statewide  presumptions,  utilities  could  develop  presumptions  by  service  area  or  by  rural  and  urban,  of
 which  the  urban  would  include  urban  and  urbanized.  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September
 24,  1998  and  December  16,  1998.
 217  See,  e.  g.,  UTC/  EEI  Telecom  Order  petition  at  22;  SBC  Telecom  Order  petition  at  14-  15,  SBC  Telecom  Order  Ex
 Parte  Presentations  dated  September  24,  1998  and  December  16,  1998;  USTA  Telecom  Order  petition  at  10-  11;
 see  also,  e.  g.,  NCTA  Telecom  Order  comments  at  11-  12;
 218  See  UTC/  EEI  Telecom  Order  comments  at  18-  19;  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September
 24,  1998  and  December  16,  1998;  see  also  USTA  Telecom  Order  Written  Ex  Parte,  dated  November  5,  1998.
 219  See,  e.  g  .,  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September  24,  1998  and  December  16,  1998
 (company's  service  areas  rarely  correspond  to  geographic  designations  of  Bureau  of  Census).
 220  See,  e.  g.,  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September  24,  1998  and  December  16,  1998;  USTA
 Telecom  Order  Written  Ex  Parte,  dated  November  5,  1998.
 221  Telecom  Order  at    43-  44  (Unusable  Space  Factor  includes  the  use  of  an  average  number  of  attaching  entities).
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 response  to  various  communities'  diversity  of  communications  and  other  services.  222  For  instance,
 utility  poles  in  a  densely  built  out  urbanized  area  would  be  expected  to  have  multiple  attachments
 of  governmental  entities  that  may  not  exist  in  a  rural  area  without  street  or  pedestrian  directional
 lighting,  and  multiple  service  providers.  It  has  been  suggested  by  SBC  223  and  USTA  224  that  the
 development  of  an  average  number  of  attaching  entities  by  distinct  service  area  within  a  state,
 designated  as  urbanized  or  non-  urbanized,  reflecting  the  demographics  of  the  particular  service
 area,  would  be  an  efficient,  cost-  effective  exercise  resulting  in  averages  for  areas  that  share  similar
 characteristics  relating  to  pole  attachments.  225  A  population  of  50,000  or  greater  (urbanized  area)
 is  a  reasonable  density  in  which  to  expect  greater  penetration  of  service  providers  and
 attachments.  The  record  shows  that  using  urbanized  and  non-  urbanized  areas  allows  a  reasonably
 effective  classification  of  poles  based  upon  the  actual  characteristics  of  pole  inventory  of  different
 utilities.  226
 66.  We  will  require  utility  pole  owners  to  calculate  an  average  number  of  attaching  entities
 by  service  area.  227  Where  a  utility  territory  or  service  area  in  which  an  attaching  entity  seeks  to
 install  pole  attachments  can  be  identified  as  either  urbanized  or  non-  urbanized,  the  default
 averages,  or  the  actual  averages  if  developed  by  the  utility,  for  that  area  should  be  used.
 However,  where  a  utility  territory  or  service  area  in  which  an  attaching  entity  seeks  to  install  pole
 attachments  cannot  be  identified  as  either  urbanized  or  non-  urbanized  because  it  crosses  into  both
 an  urbanized  and  non-  urbanized  area,  and  the  utility  is  unable  to  identify  a  separate  service  area  as
 non-  urbanized,  the  default  averages,  or  the  actual  averages  if  developed  by  the  utility,  for  an
 urbanized  area  should  be  used.  If  any  part  of  a  specific  service  area,  as  identified  by  the  utility,  is
 urbanized,  then  all  that  service  area  would  be  considered  urbanized  for  pole  attachment  purposes.
 This  will  facilitate  an  equitable  calculation  of  pole  attachment  rates  for  telecommunications
 carriers.  Utilities  that  have  multiple  service  areas  in  a  state  would  classify  each  service  area,  as
 either  urbanized  or  non-  urbanized  depending  on  whether  any  part  of  the  service  area  is  within  an
 area  designated  by  the  Bureau  of  Census  as  urbanized.  228  Utilities  advise  this  would  be  equitable
 222  See,  e.  g.,  NCTA  Telecom  Order  comments  at  20-  22;  Comcast  Telecom  Order  comments  at  8-  10.
 223  SBC  Telecom  Order  petition  at  10-  15,  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September  24,  1998
 and  December  16,  1998.
 224  USTA  Telecom  Order  Written  Ex  Parte  Presentation  dated  November  5,  1998.
 225  See  Telecom  Order  Notice  at    26;  Telecom  Order  at    77-  78.
 226  See,  e.  g.,  NCTA  Telecom  Order  comments  at  20-  22;  SBC  Telecom  Order  petition  at  10-  15,  SBC  Telecom  Order
 Ex  Parte  Presentations  dated  September  24,  1998  and  December  16,  1998;  USTA  Telecom  Order  Written  Ex  Parte
 Presentation  dated  November  5,  1998;  see  also  UTC/  EEI  Telecom  Order  reply  at  9-  10.
 227  The  service  area  must  be  representative  of  the  area  for  which  pole  attachment  rates  are  being  set.
 228  See,  e.  g.,  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September  24,  1998  and  December  16,  1998;  USTA
 Telecom  Order  Written  Ex  Parte  Presentation  dated  November  5,  1998.  Cf.  NCTA  Telecom  Order  comments  at
 20-  22.
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 because  in  a  service  area  in  which  any  part  is  considered  urbanized,  the  development  potential  for
 the  entire  area  to  become  urbanized  is  great.  229
 67.  We  emphasize  our  preference  that  each  utility  use  the  data  it  has  available  in  its
 corporate  and  regulatory  records,  and  not  go  to  extraordinary  lengths  to  be  precise  when
 reasonable  estimates  will  generally  provide  an  equitable  process.  230  The  utility  shall  make
 available  its  data,  information  and  methodology  upon  which  the  averages  were  developed,  unless
 the  default  averages  are  used.  231  We  clarify  that  when  a  distinct  area  defined  by  the  Bureau  of
 Census  as  urban  falls  within  an  urbanized  area,  a  separate  average  number  of  attaching  entities  for
 that  urban  area  is  not  required.  The  record  demonstrates  that  in  some  states,  and  for  some
 utilities,  there  may  be  no  significant  difference  in  the  number  of  attaching  entities  for  rural  areas
 and  for  urban  areas  that  are  outside  urbanized  areas.  232  Therefore,  we  provide  utilities  the  option
 of  using  our  presumptive  averages  presented  below,  or  developing  averages  for  two  areas:  (1)
 urbanized  (50,000  or  higher  population),  and  (2)  non-  urbanized  (less  than  50,000  population).  233
 68.  When  a  utility  exercises  good  faith  in  determining  average  numbers  of  attaching
 entities  upon  which  to  base  the  costs  of  providing  unusable  space,  the  burden  of  proof  will  be  on
 an  attaching  entity  to  demonstrate  the  costs  are  being  unjustly  apportioned.  234  In  demonstrating
 its  good  faith,  the  utility  must  make  its  methodology  and  data  publicly  available  to  the  attaching
 entity,  upon  request  for  information  sufficient  for  an  attaching  entity  to  project  its  costs  of
 attaching  to  that  utility's  infrastructure.  235  The  costs  of  conducting  an  exercise  to  determine
 average  numbers  of  attaching  entities  shall  not  be  directly  passed  on  to  the  attaching  entities  as
 make-  ready  costs.  236  Expenses  relating  to  the  exercise  necessary  to  develop  these  averages  will
 be  shared  ultimately  by  all  attachers  and  the  utility  when,  as  a  reasonable  business  expense
 incurred  as  part  of  doing  business,  the  expense  is  reported  to  the  utility's  appropriate  regulatory
 accounts  and  factored  into  the  carrying  charge  rate  of  the  Cable  Formula.  We  do  not  believe  that
 229  See,  e.  g.,  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September  24,  1998  and  December  16,  1998.
 230  1977  Senate  Report  at  19-  21.
 231  Telecom  Order  at    78-  79.
 232  See,  e.  g.,  SBC  Telecom  Order  Ex  Parte  Presentations  dated  September  24,  1998  and  December  16,  1998;  USTA
 Telecom  Order  Written  Ex  Parte  Presentation  dated  November  5,  1998.  Cf.  NCTA  Telecom  Order  comments  at
 20-  22.
 233  Accord,  e.  g.,  Comcast  Telecom  Order  comments  at  7-  11;  NCTA  Telecom  Order  comments  at  20-  21.
 234  See,  e.  g.,  Joint  Cable  Parties  Telecom  Order  reply  at  9;  NCTA  Telecom  Order  comments  at  11-  12,  Telecom
 Order  reply  at  6.
 235  Telecom  Order  at    78-  79.
 236  See,  e.  g.,  Joint  Cable  Parties  Telecom  Order  reply  at  9;  NCTA  Telecom  Order  comments  at  11-  12,  Telecom
 Order  reply  at  6.  But  see,  e.  g.,  MCI  Telecom  Order  comments  at  6-  7;  UTC/  EEI  Telecom  Order  petition  at  22,
 Telecom  Order  comments  at  18-  19,  Telecom  Order  reply  at  11-  12.
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 such  expenses  would  be  within  the  methodology  prescribed  by  Congress  for  individual  payment
 by  each  attaching  entity  for  a  pole  attachment.  237
 237  See  47  U.  S.  C.    224(  b),  (d-  e).
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 ii.  Presumptive  Averages
 69.  In  order  to  expedite  the  process  of  developing  average  numbers  of  attaching  entities,
 and  allow  utilities  to  avert  the  expense  of  developing  location  specific  averages,  238  we  provide
 two  rebuttable  presumptive  averages  for  use  in  our  Telecom  Formula.  239  This  gives  both  small
 and  large  utilities  the  option  of  not  conducting  a  potentially  costly  and  burdensome  exercise
 necessary  to  develop  averages  based  on  their  company  specific  records.  The  adoption  of
 presumptive  averages  should  reduce  cost  and  effort  by  all  parties.  In  the  Telecom  Order,  240  we
 declined  to  set  default  presumptions,  even  though  various  commenters  suggested  the  development
 of  a  rebuttable  presumption  of  at  least  three  attachers  was  appropriate.  241  Comcast  encouraged  a
 presumptive  average  of  six  attaching  entities  based  on  our  Common  Carrier  Bureaus  Fiber
 Deployment  Update  -  End  of  Year  1996  ("  Fiber  Deployment  Update").  242  U  S  West  indicated
 that  having  the  Commission  develop  the  presumptive  average  would  serve  efficiency,  minimize
 complaints,  and  place  the  burden  of  rebuttal  on  the  pole  owner.  243
 70.  In  the  Telecom  Order,  we  did  not  establish  presumptions,  but  said  we  believed  the
 most  efficient  and  expeditious  manner  to  calculate  a  presumptive  number  of  attaching  entities
 would  be  for  each  utility  to  develop  its  own  presumptive  average  number  of  attaching  entities.  244
 We  now  reconsider  that  decision  and  set  rebuttable  presumptive  average  numbers  of  attaching
 entities  for  our  two  categories,  urbanized  and  non-  urbanized.  We  are  now  persuaded  that  utilities
 and  attaching  entities  would  benefit  from  our  providing  presumptive  averages  for  their  use.  Our
 establishment  of  presumptive  averages  will  expedite  the  process  and  allow  utilities  to  avert  the
 expense  of  developing  location  specific  averages.  245  As  with  all  our  presumptions,  either  party
 may  rebut  this  presumption  with  a  statistically  valid  survey  or  actual  data.  246
 71.  Based  on  the  expanded  record,  we  establish  presumptive  average  numbers  of  attaching
 entities  in  a  non-  urbanized  (less  than  50,000  population)  area  to  be  three  (3)  attaching  entities,
 based  on  information  presented  in  the  record  and  the  expectation  that  on  a  pole  or  in  a  conduit,
 238  See  USTA  Telecom  Order  petition  at  6-  7;  see  also,  MCI  Telecom  Order  comments  at  6-  7.
 239  See    41  of  this  Reconsideration  Order,  above.
 240  Telecom  Order  at    76-  78.
 241  AT&  T  Telecom  Order  comments  at  14;  Comcast,  et  al.,  Telecom  Order  comments  at  8-  10.
 242  Jonathan  Kraushaar,  Fiber  Deployment  Update  -  End  of  Year  1996  released  by  the  Common  Carrier  Bureau  of
 the  Federal  Communications  Commission  on  August  29,  1997  ("  Fiber  Deployment  Update");  see  also  Comcast,  et.
 al.,  Telecom  Order  comments  at  8-  10.
 243  U  S  West  Telecom  Order  comments  at  9  n.  25.
 244  Telecom  Order  at    77.
 245  See,  e.  g.,  USTA  Telecom  Order  petition  at  6-  7;  MCI  Telecom  Order  comments  at  6-  7.
 246  See  Pole  Attachment  Order,  2  FCC  Rcd  4387  (1987)  at    19  &  see  also  n.  27.
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 for  instance,  there  would  be  electric,  telephone  and  cable  attachers.  247  It  is  estimated  that  cable
 systems  now  provide  access  to  cable  television  services  to  over  97%  of  all  households  with  a
 television.  248  Electric  power  and  telephone  service  is  even  more  universal.  The  record  supports  a
 presumptive  average  of  three  attaching  entities  in  non-  urbanized  areas.
 72.  In  an  urbanized  area  that  is  more  densely  populated  (50,000  or  higher  population),
 more  developed  commercially  than  a  non-  urbanized  area,  and  in  which  we  expect  both  residential
 and  business  commercial  competition  to  flourish,  we  set  a  presumptive  average  number  of
 attaching  entities  at  five  (5)  to  reflect  the  inclusion  of,  but  not  limited  to,  the  following  possible
 attaching  entities:  electric,  telephone,  cable,  competitive  telecommunications  service  providers
 and  governmental  agencies.  249  Advanced  telecommunications  capability  is  being
 deployed  throughout  the  country.  250  As  noted  above,  competitive  services  are
 increasing.  251  The  record  supports  a  presumptive  average  number  of  five
 attachers  in  urbanized  areas.
 D.  OVERLASHING
 1.  Space  Occupied  by  Third  Party  Overlashing
 73.  Cable  companies  have,  through  overlashing,  been  able  for  decades  to  replace
 deteriorated  cables  or  expand  the  capacity  of  existing  communications  facilities,  by  tying
 communication  conductors  to  existing,  supportive  strands  of  cable  on  poles.  252  The  1996  Act  was
 designed  to  accelerate  rapid  deployment  of  telecommunications  and  other  services,  and  to
 increase  competition  among  providers  of  these  services.  253  Overlashing  existing  cable  reduces
 construction  disruption  and  associated  expense.  254  Accordingly,  in  the  Telecom  Order,  we
 247  See,  e.  g.,  Comcast  Telecom  Order  comments  at  8-  10;  NCTA  Telecom  Order  comments  at  20;  see  also,  SBC
 Telecom  Order  Ex  Parte  Presentations  dated  September  24,  1998  and  December  16,  1998.
 248  American  Electric  Fee  Order  comments  at  8  (citing  Annual  Assessment  of  Status  of  Competition  in  the  Market
 for  Delivery  of  Video  Programming,  CS  Dkt.  96-  133  (reld  Jan.  2,  1997)  at    14.
 249  See,  e.  g.,  AT&  T  Telecom  Order  comments  at  13;  NCTA  Telecom  Order  comments  at  ;  Comcast  Telecom
 Order  comments  at  7-  11;  Joint  C  able  Parties  Telecom  Order  recon.  comments  in  opposition  at  3.  See  also,
 Seventh  Annual  Report  on  Competition  in  Video  Markets,  CS  Docket  No.  00-  132),  (reld  January  8,  2001);
 250  See  Deployment  of  Advanced  Telecommunications  Capability:  Second  Report,  CC  Docket  No.  98-  146,  FCC  00-
 290  (reld  August  2000)  (  2000  Advanced  Services  Report).
 251  Jonathan  Kraushaar,  Fiber  Deployment  Update  -  End  of  Year  1996  released  by  the  Common  Carrier  Bureau  of
 the  Federal  Communications  Commission  on  August  29,  1997  ("  Fiber  Deployment  Update");  see  also  Comcast,  et
 al.,  comments  at  8-  10.
 252  Telecom  Order  at    59-  62.  See  also,  Comcast,  et  al.,  Telecom  Order  reply  at  8  (cable  operators  have  routinely
 overlashed  for  30  years);  NCTA  Telecom  Order  comments  at  5  (overlashing  has  been  a  critical  component  of  cable
 industry's  construction  strategy  for  decades).
 253  See  Conf.  Rpt.  at  124,  Joint  Explanatory  Statement  of  the  Committee  of  Conference.
 254  The  Commission  has  recognized  overlashing  as  a  legitimate  and  desirable  practice,  especially  because  utility
 (  continued)
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 Federal  Communications  Commission  FCC  01-  170
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 declared  our  continued  approval  of,  and  support  for,  third  party  overlashing,  subject  to  the  same
 safety,  reliability,  and  engineering  constraints  that  apply  to  overlashing  one's  own  pole  attachment.  255
 74.  We  determined  that  facilities  overlashed  by  third  parties  are  presumed  to  share  the
 presumptive  one  foot  of  usable  space  occupied  by  the  host  attachment.  256  We  did  not  dictate  how
 the  utility,  host  attaching  and  third  party  attaching  entities  would  relate  to  each  other  for
 compensation  purposes.  257  We  did  not  require  the  host  attaching  entity  or  the  third  party
 overlasher  to  obtain  the  consent  of  the  utility  beyond  the  consent  already  acquired  for  the  host
 attachment  although  the  utility  is  entitled  to  notice  of  the  overlashing.  We  stated  that  third  party
 overlashing  did  not  disadvantage  the  utility's  ability  to  ensure  the  integrity  of  its  poles.  258
 75.  Some  Telecom  Order  petitioners  continue  to  urge  that  we  impose  additional  regulation
 on  third  party  overlashing.  259  We  decline  to  impose  additional  regulation  and  clarify  several
 aspects  of  our  position  regarding  third  party  overlashing.  260  Allowing  third  party  overlashing
 reduces  construction  disruption  and  associated  expenses  which  would  otherwise  be  incurred  by
 third  parties  installing  new  poles  and  separate  attachments.  261  We  clarify  that  third  party
 overlashing  is  subject  to  the  same  safety,  reliability,  and  engineering  constraints  that  apply  to
 overlashing  the  host  pole  attachment.  262  We  affirm  our  policy  263  that  neither  the  host  attaching
 entity  nor  the  third  party  overlasher  must  obtain  additional  approval  from  or  consent  of  the  utility
 for  overlashing  other  than  the  approval  obtained  for  the  host  attachment.  264
 (  continued  from  previous  page)
 poles  are  often  regarded  as  essential  facilities.  See  Overlashing  Public  Notice  (1995);  see  also,  TCI  Cablevision  of
 Oakland  County,  Inc.,  12  FCC  Rcd  21396,  21429  (1997),  aff'd,  FCC  98-  216  (Sept.  4,  1998).
 255  Telecom  Order  at    68;  see  also  discussion  at    59-  64  of  the  Telecom  Order.
 256  Telecom  Order  at    92.
 257  Telecom  Order  at    69.
 258  Telecom  Order  at    68.
 259  See,  e.  g.,  MCI  Telecom  Order  petition  at  8-  13;  SBC  Telecom  Order  petition  at  7-  8;  USTA  Telecom  Order
 petition  at  11-  12;  U  S  West  Telecom  Order  petition  at  2.
 260  Telecom  Order  at    68,  referencing  the  Preamble  to  1996  Act.
 261  See,  e.  g.,  BellSouth  Telecom  Order  comments  at  1-  2;  NCTA  Telecom  Order  comments  at  5-  10.
 262  Telecom  Order  at    68.
 263  See  Local  Competition  Order,  11  FCC  Rcd  15499  (1996)  at    1161-  64;  Telecom  Order  at    68.
 264  See,  e.  g.,  U  S  West  Telecom  Order  petition  at  3-  4;  see  also,  Ameritech  Telecom  Order  comments  at  4-  5;  Bell
 Atlantic  Telecom  Order  comments  at  8;  BellSouth  Telecom  Order  comments  at  1-  2.  Cf.  Local  Competition  Order,
 11  FCC  Rcd  15499  at    1161-  64;  Telecom  Order  at  68.
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 Federal  Communications  Commission  FCC  01-  170
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 2.  What  the  Third  Party  Overlasher  Pays
 76.  Some  petitioners  urge  us  to  specify,  or  at  least  clarify,  what  the  third  party
 telecommunications  carrier  overlasher  pays  to  the  host  attacher  or  the  utility  pole  owner.  265  We
 decline  to  attempt  to  regulate  this  relationship.  266  However,  if  the  third  party  overlashing  a  cable
 operator's  pole  attachment  is  a  telecommunications  carrier,  then  the  pole  attachment  will  be
 considered  to  be  used  to  provide  telecommunications  services  for  purposes  of  calculating  the  pole
 attachment  rate.  The  maximum  rate  for  that  overlashed  pole  attachment  would  then  be
 calculated  using  the  Telecom  Formula  after  February  8,  2001.  267  In  some  instances,  the  host
 attaching  entity  will  pay  the  utility  for  a  telecommunications  carrier  pole  attachment.  268  We  have
 stated  that  the  third  party  overlasher  is  not  separately  liable  to  the  utility  for  the  usable  space
 which  the  overlashing  shares  with  the  host  attachment  because  there  would  be  no  additional
 usable  space  occupied.  We  expect  and  encourage  the  overlashing  and  host  attaching  entities  to
 negotiate  a  just  and  reasonable  rate  of  compensation  between  them  for  the  overlashing,  which  will
 represent  some  sharing  of  the  usable  and  unusable  space  costs.  269  Until  our  intervention  is
 necessary  to  facilitate  pole  attachments  for  these  parties,  we  will  rely  on  all  parties  to  act  in  good
 faith  to  develop  their  own  just  and  reasonable  compensation.
 3.  Wind  and  Weight  Load  Factors
 77.  Fee  Order  petitioners  continue  to  urge  that  we  allow  some  factor  for  increased  weight
 and  wind  load  in  cases  of  overlashing.  270  We  have  reviewed  Sections  24  through  26  of  the  NESC  271  that  address  loading  and  structural  requirements  in  detail.  272  Based  on  our  analysis  and
 the  record,  we  continue  to  believe  that  an  attachments  "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
 265  MCI  Telecom  Order  petition  at  13;  SBC  Telecom  Order  petition  at  7-  8;  USTA  Telecom  Order  petition  at  11-  12;
 U  S  West  Telecom  Order  petition  at  3.
 266  See,  e.  g.,  U  S  West  Telecom  Order  petition  at  3-  4.  But  see,  MCI  Telecom  Order  petition  at  9;  USTA  Telecom
 Order  petition  at  11;  cf.  NCTA  Telecom  Order  comments  at  14.
 267  See  Telecom  Order  at    69  (third  party  overlashing  by  a  telecommunications  carrier);    73  &    94  (discussion  of
 dark  fiber),    73.
 268  47  U.  S.  C.    224(  e).
 269  Telecom  Order  at    94.  Cf.  47  U.  S.  C.    224(  d)(  1)  and  47  U.  S.  C.    224(  e)(  3).
 270  American  Electric,  Fee  Order  petition  at  9-  11;  UTC/  EEI  Fee  Order  petition  at  9-  10.  But  see  WorldCom  Fee
 Order  recon.  comments  at  7.
 271  National  Electric  Safety  Code.
 272  NESC  at  142-  168,  Sections  24-  26.
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 Federal  Communications  Commission  FCC  01-  170
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 are  non-  recurring  costs  for  which  the  utility  is  directly  compensated  and  as  such  are  excluded
 from  expenses  used  in  the  rate  calculation.  273  The  statutory  language  prescribes  that  we  allocate
 costs  based  on  space  occupied,  not  load  capacity.  274
 78.  Fee  Order  petitioners  present  no  new  or  persuasive  evidence  that  the  "burden  on  the
 pole"  due  to  weight  and  wind  load  is  an  additional  factor  for  consideration  in  the  determination  of
 the  amount  of  space  occupied  through  which  some  rate  increase  would  be  calculated.  We  affirm
 our  position  that  the  costs  of  the  physical  attachments  of  an  attaching  entity  are  normally  paid  to
 the  pole  owner  as  a  condition  of  attachment,  addressing  such  factors  as  weight,  wind  load  and
 safety  space.  275  Overlashing  does  not  increase  the  amount  of  space  actually  occupied  by  the
 attachment.
 4.  Shared  One-  Foot  Usable  Space
 79.  In  the  Telecom  Order,  we  found  that  the  one  foot  presumption  should  continue  to
 apply  where  an  attaching  entity  has  overlashed  its  own  pole  attachments.  276  We  also  determined
 that  facilities  overlashed  by  third  parties  onto  existing  pole  attachments  are  presumed  to  share  the
 presumptive  one  foot  of  usable  space  of  the  host  attachment.  277
 80.  Telecom  Order  petitioners  urge  us  to  clarify  that  the  presumption  of  one  foot  of  usable
 space  occupied  by  a  pole  attachment  is  rebuttable.  278  The  one  foot  presumption  is  rebuttable  by
 any  party.  279  We  decline  to  abandon  or  redefine  our  presumption  for  usable  space  occupied  by  a
 pole  attachment,  even  in  instances  of  overlashing.  280  We  have  previously  considered  and  rejected
 ICG's  argument  that  the  one  foot  presumption  is  outdated.  281  The  record  on  reconsideration
 affirms  that  the  sharing  and  use  of  the  one  foot  presumption,  for  usable  space  occupied  by  a  pole
 273  See  Second  Report  and  Order,  72  FCC  2d  59,  at    27.
 274  47  U.  S.  C.    224(  d);  see  also,  e.  g.,  USTA  Fee  Order  recon.  reply  at  13-  14.
 275  See,  e.  g.,  Fee  Order  at    30;  see  also  NCTA  Fee  Order  comments  at  15-  16.
 276  Telecom  Order  at    92.
 277  Telecom  Order  at    92.  We  noted  that  we  deferred  decision  to  the  Fee  Order  Notice  proceeding  on  the  issue  of
 the  effect  any  increased  burden,  such  as  wind  and  weight  loading,  may  have  on  the  rate  the  utility  pole  owner  may
 charge  the  host  attacher.  In  the  Fee  Order,  we  declared  that  weight  and  wind  loading  may  be  a  consideration  in
 the  make-  ready  plans  and  expenses,  for  safety,  reliability  and  engineering  purposes,  but  not  a  consideration  in
 calculating  the  recurring  rate.  Fee  Order  at    29-  30.
 278  ICG  Telecom  Order  petition  at  11-  14;  MCI  Telecom  Order  petition  at  8-  9.
 279  See  Telecom  Order  at    84.
 280  See,  e.  g.,  ICG  Telecom  Order  petition  at  11-  14,  ICG  Ex  Parte  Presentation,  December  9,  1998;  see  also,  MCI
 Telecom  Order  petition  at  8-  9.
 281  See  Telecom  Order  at    87,  referencing  ICG  Telecom  Order  comments  at  39;  see  also  discussion,  Telecom
 Order  at    85-  91.
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 attachment,  does  not  lead  to  a  distortion  of  the  allocation  of  the  costs  of  the  pole  in  determining  a
 just  and  reasonable  compensation  for  the  utility.  282
 5.  Cable  Operator  Not  a  Utility  Obligated  to  Provide  for  Overlashing
 81.  MCI  urges  us  to  classify  cable  operators  and  telecommunications  carriers  with  pole
 attachments  as  utilities  and  therefore  require  them  to  act  as  a  utility  for  a  third  party  overlashing.  283  The  Pole  Attachment  Act  does  not  define  utility  to  include  attachers.  284  Section
 224(  f)  of  the  Pole  Attachment  Act  obligates  a  utility  to  provide  a  cable  television  system  or  any
 telecommunications  carrier  with  nondiscriminatory  access  for  purposes  of  a  pole  attachment.  285
 Neither  a  cable  system  attacher  nor  a  telecommunications  attacher  has  an  obligation  to  act  as  a
 host  and  share  its  pole  attachment  with  a  third  party  overlasher.  286
 6.  Notice  to  Utility  Pole  Owner
 82.  U  S  West  urges  us  to  clarify  that  the  utility  pole  owner  shall  receive  explicit  notice  of  a
 third  party  overlasher.  287  U  S  West  asserts  that  notice  to  the  pole  owner  of  a  third  party
 overlasher  is  necessary  for  the  pole  owner  to  determine  whether  the  overlashing  will  endanger  the
 integrity  of  a  pole  line  or  create  a  hazardous  condition,  as  well  as  to  calculate  Telecom  Formula
 rates  after  February  8,  2001  if  the  overlasher  is  a  telecommunications  service  provider.  288  We
 agree  that  the  utility  pole  owner  has  a  right  to  know  the  character  of,  and  the  parties  responsible
 for,  attachments  on  its  poles,  including  third  party  overlashers.  The  pole  owner  is  entitled  to
 charge  a  Telecom  Formula  rate  when  a  pole  attachment  previously  used  to  provide  only  cable
 services  is  used  to  provide  telecommunications  services,  as  a  result  of  a  third  party
 282  See,  e.  g.,  Bell  South  Telecom  Order  comments  at  2;  UTC/  EEI  Telecom  Order  comments  at  11;  NCTA  Telecom
 Order  comments  at  14-  17;  SBC  Telecom  Order  comments  at  9.
 283  MCI  Telecom  Order  petition  at  10  (cable  [attachers]  may  deny  a  third  party  from  overlashing,  but  if  they  do  so,
 they  may  not  subsequently  offer  telecommunications  services  because  once  they  offer  telecommunications  services
 they  may  not  reserve  space);  see  also,  e.  g.,  SBC  Telecom  Order  comments  at  19-  20  But  see,  NCTA  Telecom
 Order  comments  at  15-  16,  Telecom  Order  reply  at  7-  8.
 284  See  47  U.  S.  C.    224(  a)(  1)  ("  'utility'  means  any  person  who  is  a  local  exchange  carrier  or  an  electric,  gas,  water,
 steam  or  other  public  utility,  and  who  owns  or  controls  poles,  ducts,  conduits,  or  rights-  of-  way  used,  in  whole  or  in
 part,  for  any  wire  communication").  See,  e.  g.,  MCI  Telecom  Order  petition  at  8-  13;  see  also,  SBC  Telecom  Order
 comments  at  19-  20;  TUEC  Telecom  Order  comments  at  5.  But  see,  e.  g.,  Joint  Cable  Parties  Telecom  Order  reply
 at  9-  10;  NCTA  Telecom  Order  comments  at  15-  16,  Telecom  Order  reply  at  7-  8.
 285  47  U.  S.  C.    224(  f)(  1).
 286  See,  e.  g.,  Joint  Cable  Parties  Telecom  Order  comments  at  9-  10;  NCTA  Telecom  Order  comments  at  14-  17.
 However,  a  telecommunications  carrier  may  have  certain  obligations  under  47  U.  S.  C.    251.
 287  U  S  West  Telecom  Order  petition  at  3-  4.
 288  U  S  West  Telecom  Order  petition  at  4;  see  also,  e.  g.,  AT&  T  Telecom  Order  comments  at  4-  5;  Bell  Atlantic
 Telecom  Order  comments  at  7;  GTE  Telecom  Order  reply  at  4.
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 Federal  Communications  Commission  FCC  01-  170
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 telecommunications  carrier  overlashing.  289  When  the  cable  operator's  pole  attachment  provides
 transmission  of  telecommunications  services,  whether  for  itself  or  via  third  party  overlashing,  it
 will  notify  the  pole  owner.  290  We  clarify  that  it  would  be  reasonable  for  a  pole  attachment
 agreement  to  require  notice  of  third  party  overlashing.
 83.  In  the  Telecom  Order,  we  concluded  that  the  third  party  overlashing  entity  should  be
 classified  as  a  separate  attaching  entity  for  purposes  of  counting  entities  using  the  Telecom
 Formula.  291  We  now  reconsider  that  decision,  and  based  on  our  review  of  the  statute,  the  record
 herein  and  our  decision  that  an  overlasher  shares  space  with  the  host  attachment,  we  believe  that
 the  third  party  overlasher  should  not  be  counted  as  a  separate  attaching  entity.  292
 84.  Telecom  Order  petitioners  request  that  we  require  cable  operators  to  certify  that  they
 are  not  providing  telecommunications  service.  293  We  decline  to  adopt  such  a  regulatory  reporting
 requirement  as  it  would  impose  unnecessary  administrative  burdens  on  cable  operators,  utilities,
 and  the  Commission.  294  We  affirm  the  requirement  that  a  cable  operator  notify  the  utility  when
 the  cable  operator  begins  providing  telecommunications  services  itself  or  via  third  party
 overlashing.  295  Cable  attachers  stress  that  this  notification  should  not  provide  utilities  with  an
 opportunity  to  acquire  sensitive  proprietary  and  business  development,  planning,  or  scheduling
 information  that  could  result  in  a  competitive  disadvantage  to  the  attaching  entity.  296  We  agree.
 The  record  fails  to  demonstrate  any  legitimate  purpose  for  a  utility  to  require  commercially-sensitive
 data  or  information  to  be  provided  as  a  part  of  this  notification  of  a  change  of  service
 status  by  a  cable  operator.  297
 289  47  U.  S.  C.    224(  e)(  1).
 290  See,  e.  g.,  Telecom  Order  at    35.
 291  Telecom  Order  at    68;  see  47  U.  S.  C.    224(  e)(  2).
 292  See    54-  57  and    69-  74  of  this  Reconsideration  Order.
 293  See,  e.  g.,  UTC/  EEI  Telecom  Order  petition  at  11-  12;  see  also,  Bell  Atlantic  Telecom  Order  comments  at  5.
 294  See,  e.  g.,  Closed  Captioning  Order,  13  FCC  Rcd  19973  (1998)  at    41.
 295  Telecom  Order  at    35.
 296  See,  e.  g.,  Adelphia  and  Lenfest  Telecom  Order  comments  at  11-  12;  NCTA  Telecom  Order  comments  at  3-  9.
 Joint  Cable  Parties  urge  the  Commission  to  reject  utility  efforts  to  secure  competitively  sensitive  data  from  cable
 operators  that  Joint  Cable  Parties  believe  would  result  from  certification.  Joint  Cable  Parties  advise  that  the  New
 York  Public  Service  Commission  similarly  rejected  a  proposal  to  adopt  this  utility  proposal  in  a  1997  pole
 attachment  rulemaking  order,  In  the  Matter  of  the  Proceeding  on  Motion  of  the  Commission  to  Consider  Certain
 Pole  Attachment  Issues,  New  York  Pub.  Serv.  Comm'n.  Case  No.  95-  C-  0341,  1997  N.  Y.  PUC  LEXIS  364  (issued
 and  effective  June  17,  1997),  recon.  denied,  1997  N.  Y.  PUC  LEXIS  639  (October  7,  1997).  See  Joint  Cable
 Parties  Telecom  Order  comments  at  19  (referencing  prior  Commission  actions  denying  utility  access  to  such
 information  in  Telecom  Order  at    35;  Marcus  Cable  Associates,  L.  P.  v.  Texas  Utilities  Electric  Co.,  12  FCC  Rcd
 10362,  8  Comm.  Reg.  (P&  F)  1293  (July  21,  1997).
 297  See,  e.  g.,  Joint  Cable  Parties  Telecom  Order  comments  at  19.  Cf.  Letter  from  Meredith  J.  Jones,  Chief,  Cable
 Services  Bureau  to  Danny  E.  Adams,  Esq.,  Kelley  Drye  &  Warren  LLP,  DA  No.  97-  131  (January  17,  1997)
 (  continued)
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 85.  Finally,  utilities  contend  298  that  they  are  entitled  to  bill  for  and/  or  receive  interest  on
 any  difference  in  rates  between  the  Cable  Formula  rates  and  the  Telecom  Formula  rates,  if  a
 cable  operator  fails  to  notify  the  utility  that  the  cable  operator  is  offering  telecommunications
 services  over  its  pole  attachment.  Pole  attachment  agreements  after  February  8,  2001  could  be
 expected  to  include  a  reasonable  mechanism  for  notification  by  a  cable  operator  of  its  change  of
 status  to  a  telecommunications  carrier.  Pole  attachment  agreements  could  also  be  expected  to
 include  a  reasonable  remedy  for  a  cable  operator's  failure  to  so  notify.  Because  we  have  not
 explored  the  issue  of  a  penalty  for  failure  to  notify  and  have  no  record  on  the  question,  we  will
 not  make  a  determination  on  that  issue  at  this  time.
 7.  Dark  Fiber
 86.  Telecom  Order  petitioners  continue  to  urge  that  we  impose  additional  regulation  on
 the  leasing  of  "dark  fiber"  when  a  pole  attachment  that  has  been  used  to  provide  only  cable
 services  would,  as  a  result  of  activation  of  dark  fiber,  be  used  to  also  provide  telecommunications
 services.  299  We  affirm  our  holding  in  the  Telecom  Order  that  if  an  attachment  previously  used  for
 providing  solely  cable  services  would,  as  a  result  of  the  leasing  of  dark  fiber,  also  be  used  for
 providing  telecommunications  services,  the  rate  for  the  attachment  would  be  determined  using  the
 Telecom  Formula.  300  However,  attaching  entities  may  lease  their  dark  fiber  to  third  parties
 without  such  leases  being  considered  separate  attachments  and  without  making  an  additional
 payment  beyond  the  host's  existing  attachment  rate.  301  The  cable  system  operator  may  lease
 excess  fiber  capacity  within  its  existing  attachment  to  any  party  for  a  negotiated  rate  without  the
 knowledge  or  consent  of  the  pole  owner  because  the  physical  attachment  will  not  be  altered.  The
 dark  fibers  contained  within  the  attaching  host  have  already  been  taken  into  account  in
 determining  the  rent  for  the  attachment.  The  character  and  content  of  the  services  provided  do
 not  affect  the  amount  of  space  occupied  by  the  attachment.  The  type  of  services  provided  over
 the  attachment  only  affect  the  pole  attachment  rate  if  the  services  are  telecommunications
 services.  If  the  third  party  leasing  the  fiber  is,  or  becomes,  a  telecommunications  carrier,  302  then
 the  utility  is  entitled  to  compensation  for  the  pole  attachment  based  on  the  Telecom  Formula  and
 must  be  notified.
 (  continued  from  previous  page)
 regarding  unreasonable  terms  and  conditions  in  pole  attachment  agreements.
 298  See,  e.  g.,  Bell  Atlantic  Telecom  Order  petition  at  6-  7,  Telecom  Order  reply  at  6-  7;  USTA  Telecom  Order
 petition  at  7-  8.
 299  SBC  Telecom  Order  petition  at  7-  8.
 300  Telecom  Order  at    73.
 301  See,  e.  g.,  U  S  West  Telecom  Order  petition  at  2-  3;  Telecom  Order  at    72-  73,  95;  In  the  Matter  of  the  Public
 Utility  Commission  of  Texas,  13  FCC  Rcd  3460,  3541  n.  409  (1997);  see  also,  e.  g.,  NCTA  Telecom  Order  petition
 at  7-  8;  Joint  Cable  Parties  Telecom  Order  reply  at  1-  3.
 302  Telecom  Order  at    73.  A  telecommunications  carrier  is,  by  definition,  "  .  .  .  any  provider  of
 telecommunications  services."  47  U.  S.  C.    153(  44).
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 E.  CONDUIT  ISSUES
 87.  Conduits  are  structures  that  provide  physical  protection  for  cables  and  allow  new
 cables  to  be  added  inexpensively  along  a  pathway  or  route.  A  conduit  consists  of  one  or  more
 ducts,  which  are  the  enclosures  that  carry  the  cables.  303  Often,  when  a  cable  operator's  or
 telecommunications  carrier's  cables  are  placed  in  a  duct,  three  or  more  inner  duct  are  inserted  into
 the  duct  allowing  "one  duct  to  be  treated  more  like  conduit."  304  A  collection  of  conduits,  together
 with  their  supporting  infrastructure,  constitutes  a  conduit  system.  305  A  conduit  system  may  vary
 widely  among  geographic  areas,  306  and  between  LEC  and  electric  utilities.
 88.  In  the  Fee  Order,  we  reviewed  the  Fee  Order  Notice  filings  as  well  as  the  Telecom
 Order  petition  filings  307  and  concluded  that  other  than  collapsed  ducts  which  are  not  counted  in
 determining  total  capacity,  there  is  no  unusable  capacity  in  a  conduit.  308  This  was  a  departure
 from  our  conclusion  in  the  Telecom  Order  and  we  now  affirm  our  conclusion  in  the  Fee  Order.
 The  total  capacity  of  a  duct  or  conduit  is  the  entire  volume  of  available  capacity  in  the  conduit
 system.  All  costs  associated  with  the  construction  of  the  conduit  system  are  considered  in
 determining  the  cost  of  this  total  capacity.  Essentially,  the  lack  of  any  unusable  capacity  in  a
 conduit  makes  the  practical  application  of  the  Pole  Attachment  Act  formulas  the  same  for  both
 cable  attachers  and  telecommunications  attachers  both  before  and  after  February  8,  2001.
 89.  In  the  Fee  Order,  we  adopted  a  conduit  methodology  and  clarified  what  should  be
 considered  the  total  capacity  of  a  conduit  for  purposes  of  determining  a  per  unit  rate  for  use  of  a
 utilitys  conduit.  309  Cable  operators  and  telecommunications  carriers  alike  will  calculate  a
 maximum  just  and  reasonable  rate  for  a  pole  attachment  in  a  conduit  by  apportioning  the  cost  of
 providing  capacity  among  all  entities  according  to  the  percentage  of  capacity  used  by  each
 303  NESC    2.
 304  See  Fee  Order  at    77;  see  also,  e.  g.,  AT&  T  Telecom  Order  comments  at  22;  ICG  Telecom  Order  comments  at
 55;  UTC/  EEI  Fee  Order  comments  at  22,  n.  7.
 305  See  NESC    2;  see  also  American  Electric  Fee  Order  comments  at  84.
 306  See,  e.  g.,  Carolina  Power  Fee  Order  comments  at  62,  65-  75;  Duquesne  Light  Fee  Order  comments  at  7;  NCTA
 Fee  Order  comments  at  40;  Ohio  Edison  Fee  Order  comments  at  43;  Time  Warner  Fee  Order  comments  at  27.
 307  See,  e.  g.,  MCI  Telecom  Order  petition  at  14-  23;  MCI  Telecom  Order  comments  at  2-  4  (conduit  formula  is
 unworkable);  NCTA  Telecom  Order  petition  at  2-  5  (assignment  of  costs  raises  intractable  and  unnecessary
 complications  into  the  conduit-  rate  formula.  .  .  no  publicly  available  data  on  which  one  can  disaggregate  total
 conduit  investment  .  .  .  Commission  should  question  whether  its  initial  approach  .  .  .  is  the  best  interpretation  of
 the  [1996]  Act);  see  also,  SBC  Telecom  Order  petition  at  16-  17  (clarify  method  for  determining  total  capacity);
 U  S  West  Telecom  Order  petition  at  4-  5  (clarify  what  makes  up  total  capacity).  But  see,  e.  g.,  USTA  Telecom
 Order  petition  at  8-  9  (use  proposal  in  original  proceeding  of  Bell  Atlantic  (Bell  Atlantic  Telecom  Order  comments
 at  8)  that  unusable  space  is  all  spare  or  excess  capacity  not  actually  being  used  by  the  conduit  owner  or  any
 attaching  entity)
 308  Fee  Order  at    90  and  see  Fee  Order  at  n.  290.
 309  Fee  Order  at    82-  114.
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 entity.  310  Calculation  of  the  maximum  rate  may  be  simplified  by  using  the  presumptions  in  the
 formula.  311  The  carrying  charge  rate  is  calculated  for  pole  attachments  in  conduit,  in  the  same
 manner  as  the  carrying  charge  rate  in  our  pole  attachment  formula.  312  The  conduit  formula
 adopted  in  the  Fee  Order  and  affirmed  here  is  the  following:  313
 Rate
 Charge
 Carrying
 x  Conduit  of  Cost  Linear  Net  x
 Occupied
 Capacity  Conduit
 of  Percentage
 =  ft./  m.  Linear  Per  Rate  Maximum
 1.  Space  Factor  in  Conduit
 90.  In  the  Fee  Order,  we  concluded  that  all  costs  attributable  to  utilities'  underground
 conduit  systems  are  costs  of  providing  capacity.  The  regulatory  accounts  to  which  LEC  and
 electric  utilities  report  their  gross  conduit  investment  include  the  costs  of  installed  conduit,
 original  permit,  excavation,  sewer  connections  and  other  costs.  314  For  instance,  in  ARMIS
 Account  2441  LECs  report  the  .  .  .  original  cost  of  conduit.  .  .  which  is  reusable  in  place.  .  .
 includ[  ing]  the  costs  of  opening  trenches  and  of  any  repaving  necessary  in  the  construction  of
 conduit  plant.  315  For  electric  utilities,  FERC  Account  366  reports  the  capital  costs  for  installed
 underground  conduit  and  tunnels  used  for  housing  distribution  cables  or  wires.  316  All  costs
 associated  with  the  construction  of  the  conduit  system  are  considered  in  determining  the  cost  of
 this  total  capacity.
 a.  Total  Duct  or  Conduit  Capacity
 91.  In  the  Fee  Order,  317  we  clarified  that  a  utility  may  designate  capacity  in  a  duct  for
 maintenance  or  emergency  use,  but  that  a  duct  so  designated  is  usable  in  the  event  it  is  needed,
 and  therefore  is  part  of  the  conduit  capacity.  Where  duct  capacity  is  set  aside  for  future  municipal
 use  (in  the  nature  of  consideration  as  a  condition  for  a  license,  franchise,  or  permit),  the  utility  is
 compensated  for  those  costs  as  part  of  its  net  conduit  investment  and/  or  in  the  carrying  charge
 310  See  47  U.  S.  C.    224(  e)(  3).
 311  Fee  Order  at    82-  88.
 312  See  Fee  Order  at    82-  114  &  Appendix  C.
 313  For  detailed  formula  methodologies  and  regulatory  accounts  to  be  used  for  calculating  a  maximum  rate
 allowable,  see  Appendix  C  of  Fee  Order.
 314  See,  e.  g.,  FCC  Part  32  Account  2441  (47  C.  F.  R.  Part  32,    32.2441);  FERC  Account  366  (18  C.  F.  R.  Part  101,
 Account  366);  see  also,  discussion  at    70,  above.
 315  47  C.  F.  R.    32.2441(  a)(  1999).
 316  18  C.  F.  R.  Part  101,  Description  of  Accounts.
 317  Fee  Order  at    89.
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 rate.  318  Collapsed  or  otherwise  damaged  ducts  are  no  longer  available  for  pole  attachments,  and
 should  not  be  included  in  the  calculation  of  total  capacity  of  a  conduit  or  duct  in  the  Cable
 Formula.  319
 92.  USTA  continues  to  urge  that  we  declare  that  costs  of  ducts  reserved  for  maintenance
 and  municipal  uses  should  be  treated  as  unusable  space,  thus  reducing  the  total  capacity  used  in
 the  denominator  of  the  rate  methodology  formula.  320  USTA  argues  because  this  duct  space  is
 available  for  the  benefit  of  all  users  it  cannot  be  used  exclusively  by  the  conduit  owner  or  by  any
 party  from  whom  the  owner  can  recover  attachment  charges.  321  Verizon  supports  USTAs  Fee
 Order  petition  that  we  should  reconsider  our  treatment  that  ducts  reserved  for  maintenance
 activities,  or  that  are  set-  aside  for  municipal  use  should  not  be  excluded  from  usable  capacity.  322
 Verizon  asserts  that  these  ducts  are  not  available  for  pole  attachments  and  conduit  owners  are
 "short-  changed"  when  these  set-  asides  are  not  excluded  from  usable  capacity  (i.  e.  not  treated  as
 unusable  space).  323
 93.  We  will  not  allow  capacity  designated  for  maintenance,  future  business  plans,  or
 municipal  set-  asides  to  be  subtracted  from  the  total  duct  or  conduit  capacity  for  rate
 determination  purposes.  The  record  supports  our  analysis  that  capacity  in  a  duct  or  conduit  that
 is  usable  for  any  of  these  purposes  is  part  of  the  "total  duct  or  conduit  capacity."  324  For  example,
 a  utility  may  set-  aside  capacity  for  maintenance  or  emergencies  so  that  unoccupied  capacity  is
 available  into  which  a  temporary  cable  may  be  placed  and  spliced  into  a  damaged  cable.  325
 Capacity  so  designated  is  usable  in  the  event  it  is  needed,  and  available  for  use  by  the  utility  at  any
 time  for  any  purpose,  and  is  therefore  part  of  the  total  available  conduit  capacity.  Such
 reservation  of  capacity  is  not  necessarily  identified  by  a  specific  duct  or  location,  can  be  created,
 used,  withdrawn  or  discarded  at  the  sole  discretion  of  the  utility,  and  must  be  considered  part  of
 the  total  capacity  of  the  conduit.  Municipal  set-  asides  are  also  capacity  that  may  be  made
 318  Fee  Order  at    89.
 319  SBC  Fee  Order  comments  at  72  73.
 320  USTA  Fee  Order  petition  at  5-  6.
 321  USTA  Fee  Order  petition  at  5.
 322  Verizon  Fee  Order  recon.  comments  at  2-  3.
 323  Verizon  Fee  Order  recon.  comments  at  2-  3.
 324  47  U.  S.  C.    224(  d)(  1).  See,  e.  g.,  NCTA  Telecom  Order  petition  at  4-  5;  see  also,  Joint  Cable  Parties  Telecom
 Order  comments  at  6-  9.
 325  See,  e.  g.,  MCI  Telecom  Order  comments  at  3-  4;  see  also:  AT&  T  Fee  Order  Telecom  Order  comments  at  23;
 Carolina  Power  Fee  Order  Telecom  Order  comments  at  63;  Duquesne  Light  Fee  Order  Telecom  Order  comments
 at  7  8;  Ohio  Edison  Fee  Order  Telecom  Order  comments  at  35;  SBC  Fee  Order  Telecom  Order  comments  at  30
 31;  see  also,  Local  Competition  Access  Reconsideration  Order,  FCC99-  266  (1999)  at    69.
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 available  for  the  use  of  the  local  government  as  a  condition  in  a  franchise,  license,  right-  of-  way  or
 other  agreement.  326
 94.  Capacity  may  be  reserved,  or  kept  unused  to  be  available  to  an  electric  utility  for
 expansion  of  its  core  business  services,  but  that  capacity  is  still  part  of  the  total  capacity  of  the
 duct  or  conduit  system  and  must  be  made  available  for  pole  attachments  until  such  time  as  it  is
 needed  by  the  electric  utility  under  a  bona  fide  business  plan.  327  Under  the  policy  articulated  in  the
 Local  Competition  Order,  an  electric  utility  is  allowed  to  reserve  capacity  for  future  business
 purposes  under  a  bona  fide  business  plan,  but  must  allow  that  capacity  to  be  used  for  attachments
 until  an  actual  business  need  arises.  328  For  whatever  reason  capacity  may  be  reserved  or
 designated  for  special  uses,  by  or  on  behalf  of  the  utility,  and  regardless  of  who  may  benefit
 directly  or  indirectly  from  those  uses,  the  capacity  is  available  for  use  and  therefore  remains  part
 of  the  total  capacity  of  the  conduit  for  rate  determination  purposes.  329
 b.  Occupied  Capacity,  the  Half-  Duct  Presumption
 95.  Presumptions  are  used  in  the  Cable  and  Telecom  Formulas  to  expedite  the
 calculations  of  a  just  and  reasonable  rate  so  that  complicated  surveys,  accounting  and  calculations
 may  be  avoided.  330  In  the  Fee  Order  and  Telecom  Order,  in  order  to  identify  a  rebuttable
 presumption  of  the  percentage  of  capacity  occupied  by  an  attachment  in  a  conduit,  we  adopted  a
 rebuttable  presumption  that  a  cable  or  telecommunications  attacher  occupies  one  half  of  a  duct.  331
 We  stated  that  we  believed  that  the  one  half  duct  methodology  is  a  simple  and  reasonable
 presumptive  approximation  of  the  conduit  capacity  used  by  a  cable  operator  or
 telecommunications  carrier.  332  This  method,  patterned  after  the  one  used  by  the  Massachusetts
 Department  of  Public  Utilities  ("  MDPU"),  333  and  relied  on  in  Multimedia  Cablevision,  334  allows
 for  determining  the  cost,  per  foot  or  meter,  of  one  duct  and  then  dividing  by  two,  instead  of
 326  See,  e.  g.,  SBC  Fee  Order  Telecom  Order  comments  at  32  (imposed  as  condition  of  granting  right-  of-  way).
 327  See  Local  Competition  Order  at    1168-  69;  see  also,  ConEd  Fee  Order  comments  at  9  11;  Duquesne  Light
 Fee  Order  comments  at  8;  Ohio  Edison  Fee  Order  comments  at  35.
 328  Local  Competition  Order,  11  FCC  Rcd  15499,  16077-  79  (1996)  at    1165-  1170;  see  also  Local  Competition
 Access  Reconsideration  Order,  14  FCC  Rcd  18049  (1999)  at    65-  70.
 329  Fee  Order  at    92.
 330  Second  Report  and  Order,  72  FCC  2d  59  (1979);  see  also,  NCTA  Fee  Order  Reply  at  46-  47.
 331  Telecom  Order  at    115  (NESC  rule  relied  on  by  the  electric  utilities  does  not  prohibit  the  coexistence  of  electric
 and  communications  facilities  in  a  conduit,  .  .  .  the  rule  conditions  the  coexistence  on  the  maintenance  and
 operation  being  performed  by  the  utility,  citing  NESC  Rule  341(  A)(  6)  that  supply,  control,  and  communication
 cables  shall  not  be  installed  in  the  same  duct  unless  the  cables  are  maintained  or  operated  by  the  same  utility).  Id.
 n.  374.
 332  Telecom  Order  at    115.
 333  See  Greater  Media,  Inc.  v.  New  England  Telephone  and  Telegraph,  Massachusetts  D.  P.  U.  91-  218  (1992).
 334  11  FCC  Rcd  11202  (1996).
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 actually  measuring  the  actual  capacity  occupied.  In  situations  where  the  formula,  or  the
 presumption,  is  inappropriate,  for  instance  because  it  has  been  demonstrated  that  there  are  more
 than  two  users  in  the  duct,  or  that  one  particular  attachment  precludes  sharing  the  duct  with
 another  attachment,  the  one  half  duct  presumption  can  be  rebutted.  If  a  new  entity  is  installing  an
 attachment  in  a  previously  unoccupied  duct,  we  stated  such  an  entity  should  be  encouraged  to
 place  inner  duct  prior  to  placing  its  wires  in  the  duct.  335
 96.  Telecom  Order  petitioners  continue  to  argue  that  our  half-  duct  presumption  of
 capacity  occupied  by  an  attachment  in  a  conduit  system  is  not  an  accurate  reflection  of  capacity
 occupied.  Fee  Order  petitioners  continue  to  assert  that  an  electric  supply  cable  cannot  share  a
 duct  with  a  communications  cable,  and  therefore,  from  the  electric  utility  point  of  view,  the
 communications  cable  occupies  the  entire  duct.  336  Attachers  argue  that  the  presumption  is  too
 large;  337  utilities  argue  that  the  presumption  is  too  small.  338  Joint  Cable  Parties  and  SBC  support
 retention  of  the  half-  duct  presumption.  339  American  Electric  argues  that  electric  conduit  cannot  be
 and  is  not  shared  and  therefore  the  one  half  duct  presumption  leads  to  under  recovery  for  the
 electric  utility.  340  WorldCom  supports  our  conclusion  that  electric  supply  cables,  not
 communications  cables,  effectively  exclude  other  cables  from  occupying  the  same  duct  and
 therefore  the  one  half  duct  presumption  for  a  communications  cable  is  appropriate.  WorldCom
 challenges  petitioners  claims  that  we  misinterpreted  NESC  guidelines  permitting  a
 communications  and  electric  cable  to  share  a  duct  when  both  are  controlled  by  the  same  party.  341
 97.  Petitioners  have  presented  no  new  evidence  to  persuade  us  that  utilities  are  not  justly
 compensated  for  use  of  their  conduit  by  the  one  half  duct  presumption.  We  affirm  our  rebuttable
 presumption  that  a  cable  or  telecommunications  attacher  occupies  a  maximum  capacity  of  one  half
 of  a  duct,  when  determining  a  reasonable  conduit  attachment  rate.  342  We  have  previously
 335  Telecom  Order  at    115.  In  the  alternative,  the  utility  can  install  inner  duct  as  part  of  its  make-  ready,  charging
 the  attaching  entity  the  percentage  of  the  make-  ready  costs  for  the  inner  ducting  that  corresponds  to  the  percentage
 of  inner  duct  the  attachment  occupies  in  relation  to  the  number  of  inner  ducts  installed  (i.  e.,  utility  installs  6  inner
 ducts  in  a  previously  open  duct,  the  pole  attachment  will  occupy  only  one  of  those  inner  ducts,  the  attaching  entity
 pays  one  sixth  of  the  costs  of  the  inner  duct  installation  as  part  of  its  make-  ready  expenses).
 336  See,  e.  g.,  American  Electric  Fee  Order  comments  at  85  87;  ConEd  Fee  Order  comments  at  5  6;  Duquesne
 Light  Fee  Order  comments  at  8;  Edison  Electric/  UTC  Fee  Order  comments  at  20  21.
 337  See,  e.  g.,  MCI  Telecom  Order  petition  at  14-  23;  NCTA  Telecom  Order  petition  at  2-  5;  USTA  Telecom  Order
 petition  at  8-  9;  U  S  West  Telecom  Order  petition  at  4-  5.
 338  See,  e.  g.,  UTC/  EEI  Telecom  Order  comments  at  13.
 339  Joint  Cable  Parties  Telecom  Order  reply  at  7-  8;  SBC  Telecom  Order  comments  at  9-  12.
 340  See,  e.  g.,  American  Electric  Fee  Order  petition  at  11-  12;  Southern  Co.  Fee  Order  petition  at  ii.
 341  WorldCom  Fee  Order  recon.  opposition  at  9-  10.
 342  Telecom  Order  at    115;  see  also  Fee  Order  at    88,  93,  Appendices  C-  3  &  C-  4.  But  see,  e.  g.,  SBC  Telecom
 Order  comments  at  9-  10.
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 considered  and  rejected  petitioners'  arguments  for  a  smaller  presumption  343  and  electric  utilities'
 arguments  that  a  pole  attachment  occupies  a  whole  duct.  344  The  presumption  that  a
 communications  cable  in  a  conduit  system  occupies  one  half  of  a  duct  345  is  based  on  clear
 evidence  that  all  types  of  cable    including  electric  supply  cables  when  controlled  by  the  same
 party  as  the  communications  cable    may  share  a  duct.  346  We  affirm  our  position  that,  because  the
 NESC  rule  relied  on  by  the  electric  utilities  does  not  prohibit  the  sharing  of  a  duct  by  electric  and
 communications  cables  when  controlled  by  the  same  party  or  two  communications  cables,  it  is
 reasonable  to  expect  there  to  be  more  than  one  attacher  in  a  duct.  347
 98.  The  one  half  duct  presumption  is  rebuttable  and  the  presence  of  inner  duct  is  adequate
 rebuttal.  348  Where  inner  duct  is  installed,  either  by  the  attacher  or  in  a  previous  installation,  the
 maximum  rate  will  be  reduced  in  proportion  to  the  fraction  of  the  duct  occupied.  That  fraction
 will  be  one  divided  by  the  actual  number  of  inner  ducts  in  the  duct.  We  continue  to  believe  that
 the  use  of  the  one  half  duct  rebuttable  presumption  is  a  simple,  expedient  and  reasonable
 approximation  of  the  actual  capacity  occupied  by  a  cable  operator  or  telecommunications  carrier
 attaching  in  a  conduit  system.  349  When  the  actual  percentage  of  capacity  occupied  is  known,  it
 can  and  should  be  used  instead  of  the  one  half  duct  presumption.  350
 2.  Net  Linear  Cost  of  Conduit
 99.  As  stated  in  the  Fee  Order,  in  the  conduit  context,  we  use  the  net  linear  cost  of  the
 conduit,  as  compared  to  the  net  cost  of  a  bare  pole,  as  one  factor  within  the  formula  for
 determining  a  maximum  permissible  rate  for  attachment  within  conduit.  As  the  net  cost  of  a  bare
 pole  reflects  the  total  system  investment  for  the  above  ground  pole  attachment  infrastructure,  to
 arrive  at  a  system  investment  for  use  in  the  conduit  formula  we  identify  the  net  linear  cost  of  the
 conduit  system.  To  accomplish  this,  the  utility  must  first  establish  the  Net  Conduit  Investment.
 343  See,  e.  g.,  MCI  Telecom  Order  petition  at  20-  23  (one-  third-  duct  presumption);  NCTA  Telecom  Order  comments
 at  25,  Fee  Order  comments  at  42-  43  (adopt  a  one-  quarter  duct  presumption).  But  see,  Joint  Cable  Parties  Telecom
 Order  reply  at  7-  8;  SBC  Telecom  Order  comments  at  9-  10.
 344  Telecom  Order  at    114-  15;  See,  e.  g.,  American  Electric  Telecom  Order  comments  at  54.
 345  See  Fee  Order  at    94,  discussion  at    92-  94.
 346  See  Fee  Order  at    94;  see  also  Verizon  Fee  Order  recon.  comments  at  2-  3  (it  is  the  electric  supply  cables,  not
 communications  cables,  that  effectively  exclude  other  partys  cables  from  occupying  the  same  duct.);  WorldCom
 Fee  Order  recon.  comments  at  10.
 347  See,  e.  g.,  NESC  Rule  341(  A)(  6).
 348  See,  Fee  Order  at    92-  95(  conduit  formula  presumptions  are  adjusted  for  the  presence  of  inner  duct).
 349  Fee  Order  at    94-  95.
 350  Fee  Order  at    95,  see  also  Appendices  C-  3  &  C-  4.
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 100.  Our  goal  has  always  been  to  adopt  a  formula  which  allows  the  parties  to  calculate
 the  maximum  rate  using  public  data  when  available,  in  a  fair  and  expeditious  manner.  351  We  also
 have  a  policy  against  requiring  additional  accounting  procedures  so  long  as  the  information  is
 available  from  the  utilities  upon  reasonable  request.  352
 a.  Net  Conduit  Investment  (LEC-  Owned  Conduit)
 101.  Net  Conduit  Investment  for  LEC-  owned  conduit  is  calculated  as  follows:
 (Conduit)
 Taxes  Deferred  d  Accumulate
 (Conduit)
 on  Depreciati  d  Accumulate
 2441)  Account  (ARMIS
 Investment  Conduit  Gross  =  Investment  Conduit  Net    
 102.  Gross  Conduit  Investment  for  the  LEC  consists  of  Part  32  Account  2441.  353  For
 LECs,  Accumulated  Depreciation  (Conduit)  represents  the  share  of  ARMIS  Account  3100  that
 corresponds  to  Account  2441.  354  Accumulated  Depreciation  related  to  conduit  is  publicly
 available  at  the  LECs  ARMIS  Report  43-  02.  355  In  the  Fee  Notice  356  we  proposed  the  following
 formula  for  the  calculation  of  accumulated  deferred  income  taxes  for  conduit:  357
 Taxes  Income  Deferred  d  Accumulate  Total  x  Investment  Plant  Gross  Total  Investment  Conduit  Gross  =
 (Conduit)
 Taxes  Income
 Deferred  d  Accumulate
 103.  LEC  conduit  owners  objected  to  this  formula  on  the  basis  that  the  actual  amount
 of  accumulated  deferred  taxes  for  conduit  is  available  directly  from  the  LECs  books.  358
 BellSouth  maintains  that  because  it  is  required  to  keep  separate  and  accurate  records  of
 accumulated  deferred  income  taxes  for  poles  and  conduit,  our  formula  will  improperly  introduce
 non-  conduit  related  deferred  taxes  into  rate  calculations.  359  NCTA  argued  that  LECs  should  not
 351  Pole  Attachment  Order,  2  FCC  Rcd  4387  (1987)  at    37.
 352  Second  Report  and  Order,  72  FCC  2d  59  at    32.
 353  47  U.  S.  C.    32.2441.
 354  Part  32  Guidance  Letter,  5  FCC  Rcd  3898  (1990).  See  ARMIS  Report  43-  02,  row  0470.
 355  Part  32  Guidance  Letter,  5  FCC  Rcd  3898  (1990).  See  ARMIS  Report  43-  02,  row  0470.
 356  12  FCC  Rcd  7449  (1997)  at  Appendix  C.
 357  See  Appendices  F-  1  and  F-  2  for  LEC  and  electric  utility  conduit  formulas.
 358  See,  e.  g.,  Bell  South  Fee  Order  comments  at  8;  GTE  Fee  Order  comments  at  14;  SBC  Fee  Order  comments  at
 20.
 359  Bell  South  Fee  Order  comments  at  8.
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 Federal  Communications  Commission  FCC  01-  170
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 use  accumulated  deferred  income  tax  figures  taken  from  the  LECs  books  because  the  information
 is  not  publicly  available.  360
 104.  In  the  Fee  Order,  we  concluded  that  if  the  LEC  conduit  owner  is  required  to  keep
 this  data  precisely  as  required  for  the  formula,  we  will  allow  them  to  use  it  in  the  rate  calculation,
 as  long  as  it  was  reported  to  and  available  through  our  public  ARMIS.  361  There  is  confusion
 among  utilities  and  attaching  entities  whether  this  data  is  available.  Pursuant  to  our  Biennial
 Regulatory  Review,  Review  of  Accounting  and  Cost  Allocation  Requirements,  FCC  99-  106  and
 Biennial  Regulatory  Review,  Review  of  ARMIS  Reporting  Requirements,  FCC  99-  107  362  we
 require  the  LEC  conduit  owner  to  keep  this  data  as  required  for  the  formula  because  we  require
 LECs  to  use  it  in  the  rate  calculation.  363  This  data  will  be  available  at  ARMIS  Report  43-  02  and
 we  will  use  this  data  in  our  formulas.  Until  ARMIS  reports  for  LECs  include  this  required  data
 after  2001,  we  will  continue  to  use  the  proration  method  to  calculate  the  conduit  portion  of
 accumulated  deferred  taxes  for  use  in  the  formula  to  calculate  the  net  linear  cost  of  conduit.
 b.  Net  Conduit  Investment  (Electric  Utility-  Owned  Conduit)
 105.  Net  Conduit  Investment  for  electric  utility-  owned  conduit  is  calculated  as  follows:
 (Conduit)
 Taxes  Deferred  d  Accumulate
 (Conduit)
 on  Depreciati  d  Accumulate
 366)  Account  (FERC
 Investment  Conduit  Gross  =  Investment  Conduit  Net    
 106.  For  electric  utilities,  Gross  Conduit  Investment  is  reflected  in  FERC  Part  101
 Account  366.  364  Accumulated  Depreciation  (Conduit)  represents  the  share  of  FERC  Account  108  (Accumulated  provision  for  depreciation  of  electric  utility  plant  (Major  only)  -  a  composite  account  that  is
 360  NCTA  Fee  Order  reply  at  33  34.
 361  Fee  Order  at    101  &  n.  324.
 362  Biennial  Regulatory  Review,  Review  of  Accounting  and  Cost  Allocation  Requirements,  FCC  99-  106  at    15
 (rel.  June  30,  1999)  and  Biennial  Regulatory  Review,  Review  of  ARMIS  Reporting  Requirements,  FCC  99-  107  at  
 13  (rel.  June  30,  1999)  ("  we  are  requiring  [LECs]  to  continue  to  maintain  subsidiary  records  to  provide  the
 information  needed  for  the  pole  attachment  formula.  .  .  .  The  Commission  is  currently  considering  issues  regarding
 the  pole  attachment  formulas.  See  Amendment  of  Rules  and  Policies  Governing  Pole  Attachments,  CS  Docket  No.
 97-  98,  Notice  of  Proposed  Rulemaking,  12  FCC  Rcd  7449  (1997).  When  a  report  and  order  is  released,  we  will
 specify  the  subsidiary  record  categories  carriers  must  maintain  in  order  to  provide  data  for  the  pole  attachment
 formulas").
 363  See  Biennial  Regulatory  Review,  Review  of  ARMIS  Reporting  Requirements,  FCC  99-  107  at    13  (rel.  June  30,
 1999).
 364  See  18  C.  F.  R.  Part  101  (stating  the  accounts  associated  with  the  conduit  attachment  formula  for  electric
 utilities);  see  also  47  C.  F.  R.  Part  32  (stating  accounts  associated  with  the  conduit  formula  for  LECs).
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 required  to  be  maintained  on  a  subsidiary  basis)  that  corresponds  to  Account  366.  365  Accumulated
 Deferred  Income  Taxes  for  electric  utilities  represents  the  share  of  FERC  Accounts  190,  281,
 282,  and  283  that  correspond  to  Account  366.  366
 107.  UTC/  EEI  argues  that  our  conduit  formula  methodology  should  reflect  differences
 between  urban  and  suburban  conduit.  367  UTC/  EEI  objects  to  the  use  of  system-  wide  data  because
 UTC/  EEI  believes  system-  wide  data  fails  to  account  for  significant  differences  between  the  cost
 of  deploying  conduit  in  urban  and  suburban  areas.  368  However,  in  comments  to  the  Fee  Notice,
 UTC/  EEI  admitted  that  costs  related  to  both  urban  and  non  urban  facilities  are  recorded  in  the
 same  utility  accounts,  such  as  FERC  account  366  (Gross  Conduit  Investment).  369  In  fact,
 UTC/  EEI  further  asserts  that  in  the  absence  of  their  preferred  "market-  based"  approach  to
 establishing  rates,  more  regulatory  certainly  and  greater  market  stability  results  from  the
 application  of  a  uniform  methodology,  avoiding  different  regional  or  urban/  rural  formulas.  370
 Upon  review,  we  found  no  new  information  presented  that  would  persuade  us  to  abandon  the  use
 of  system-  wide  data  in  the  conduit  context,  as  it  is  used  in  the  pole  context.  No  viable  alternate
 suggestion  has  been  offered  and  we  continue  to  find  that  the  use  of  system-  wide  data  is  the  most
 efficient  and  reasonable  methodology.
 F.  FERC  AND  ARMIS  ACCOUNTS  USED  IN  THE  FORMULAS
 108.  Both  telecommunications  and  electric  utilities  continue  to  argue,  as  they  have  since
 the  implementation  of  the  pole  attachment  formula,  that  the  various  permutations  of  the  formulas
 for  poles  and  conduit,  for  LECs  and  electric  utilities,  do  not  include  enough  FERC  or  ARMIS
 regulatory  accounts  to  fully  compensate  the  utilities  for  their  costs.  371  Before  discussing  the
 issues  raised  by  the  parties  concerning  the  accounts  used  in  the  formulas,  we  first  correct  a
 typographical  error  appearing  in  the  Fee  Order.
 1.  Electric  Utility  Accumulated  Deferred  Income  Taxes  Poles  (Correction)
 109.  In  the  Fee  Order,  we  stated  the  following  formula  to  determine  the  net  cost  of  a
 bare  pole  for  electric  utilities:
 365  18  C.  F.  R.  Part  101.
 366  Id.
 367  UTC/  EEI  Fee  Order  petition  at  17-  19.
 368  UTC/  EEI  Fee  Order  petition  at  17,  referencing  Fee  Order  at    85  (citing  Fee  Order  comments  of  Carolina
 Power  at  65,  ConEd  Fee  Order  comments  at  3,  UTC/  EEI  Fee  Order  comments  at  18-  19,  Dayton  P&  L  Fee  Order
 comments  at  3,  Public  Service  Co.  of  NM  Fee  Order  comments  at  5).
 369  See,  e.  g.,  UTC/  EEI  Fee  Order  comments  at  24.
 370  UTC/  EEI  Fee  Order  comments  at  16.
 371  UTC/  EEI  Fee  Order  petition  at  12;  Southern  Co.  Fee  Order  petition  at  12;  USTA  Fee  Order  petition  at  2,
 supported  by  Verizon  Fee  Order  recon.  comments  at  2.
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 Federal  Communications  Commission  FCC  01-  170
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 Poles  of  Number
 (Poles)  Taxes  Income  Deferred  d  Accumulate  (Poles)  on  Depreciati  d  Accumulate  364  Account  x  0.85  =
 (Electric)  Pole  Bare
 a  of  Cost  Net    
 We  stated  that  the  Accumulated  Deferred  Income  Taxes  represents  the  share  of  composite  FERC
 Account  190  (Accumulated  deferred  income  taxes)  that  corresponds  to  Account  364.  372  In  error,
 we  neglected  to  include  FERC  Accounts  281,  282,  and  283  along  with  Account  190.  We  now
 correct  this  typographical  error  so  that  Accumulated  Deferred  Income  Taxes  represents  the  share
 of  composite  FERC  Accounts  190,  281,  282  and  283  that  corresponds  to  Account  364.
 2.  Carrying  Charge  Accounts  (LECs)
 110.  The  carrying  charge  rate  reflects  those  costs  incurred  by  the  utility  in  owning  and
 maintaining  pole  attachment  infrastructure  regardless  of  the  presence  of  attachments.  373  The
 elements  of  the  carrying  charge  rate  are:  administrative,  maintenance,  depreciation,  taxes  and  cost
 of  capital  (rate  of  return).  To  calculate  the  carrying  charge  rate,  we  developed  formulas  that
 relate  each  element  to  a  utility  owner's  net  investment.  374  The  carrying  charge  rate  factor  of  the
 Cable  Formula  is  calculated  as  follows:  375
 Return  Taxes  on  Depreciati  e  Maintenanc  tive  Administra  =  Rate  Charge  Carrying        
 111.  In  May  1986,  the  Commission  adopted  a  new  uniform  system  of  accounts  for  all
 FCC  regulated  telephone  companies.  376  The  Commission's  Annual  Report  Form  M  was  revised
 on  April  27,  1989  377  to  reflect  the  new  accounting  system  in  Part  32  that  replaced  the  accounting
 system  in  Part  31,  effective  January  1,  1988.  378  The  Pole  Attachment  Order  provided  formulas
 for  determining  a  maximum  just  and  reasonable  pole  attachment  rate  with  regulatory  accounts
 identified.  379  The  formula  for  LECs  used  Part  31  accounts  until  after  adoption  of  the  New  USOA-Part
 32  Adoption,  when  the  Common  Carrier  Bureau  380  responded  to  a  request  for  clarification  of
 372  Fee  Order  at    42.
 373  Fee  Order  at    44.
 374  Pole  Attachment  Order,  2  FCC  Rcd  at  4387,  4402-  03,  Attachment  B  (1987).
 375  Fee  Order  at    44.
 376  New  USOA  -  Part  32  Adoption,  51  Fed.  Reg.  24745  (1986)  and  51  Fed.  Reg.  43493  (1986);  recon.  in  part,  2
 FCC  Rcd  1086  (1987).
 377  Common  Carrier  Bureau,  DA  89-  503  (rel.,  May  22,  1989).
 378  Part  32  Guidance  Letter,  5  FCC  Rcd  3898  (1990).
 379  2  FCC  Rcd  4387,  4402-  03  (1987).
 380  Prior  to  1996,  the  Common  Carrier  Bureau  exercised  authority  for  pole  attachment  regulation.  In  1996,  we
 amended  our  rules  regarding  the  functions  of  the  Cable  Services  Bureau  to  provide  the  delegated  authority  for  pole
 attachment  regulation  to  the  Cable  Services  Bureau.  See  Order  In  The  Matter  Of  Amendment  of  Part  0  of  The
 (  continued)
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 Federal  Communications  Commission  FCC  01-  170
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 what  Part  32  accounts  would  be  used  in  place  of  the  Part  31  accounts  specified  in  the  Pole
 Attachment  Order.  That  guidance  was  given  with  the  understanding  that  an  exact  tracking  of
 expenses  from  Part  31  accounts  to  Part  32  accounts  was  not  possible.  381  In  the  Fee  Order,  382  we
 clarified  the  Part  32  accounts  to  be  used  in  the  Cable  Formula  for  LECs  utilities.  383
 112.  In  the  Fee  Order,  we  adopted  the  following  formula  to  determine  the
 administrative  element  of  the  carrying  charge  rate  of  the  Cable  Formula  for  LEC  pole  owners:  384
 4340)  &  4100  (Accounts  Plant  Taxes,  Deferred  d  Accumulate  _  3100)  (Account  on  Depreciati  d  Accumulate  _  2001)  (Account  Investment  Plant  Gross
 6720)  +  6710  (Accounts  General  and  tive  Administra  =
 Element  tive  Administra
 USTA  and  Verizon  ask  us  to  reconsider  our  decision  to  exclude  certain  accounts  as  administrative
 expenses.  385  USTA  asserts  we  should  reconsider  our  decision  to  exclude  expenses  in  ARMIS
 Accounts  6110  (network  support  expenses)  which  includes  costs  of  repairing  and  maintaining  the
 motor  vehicle  fleet;  6120  (general  support  expenses)  which  includes  costs  of  land  and  buildings,
 office  equipment  and  computers;  6534  (plant  operations  and  administrative  expenses)  which
 includes  costs  related  to  the  general  administration  of  plant  operations;  and  6535  (engineering
 expenses)  that  support  all  plant  operations.  386  USTA  argues  that  we  should  include  all  accounts
 that  USTA  claims  indirectly  support  the  administration  of  poles.  387  USTA  argues  that  our
 conclusions  in  the  Fee  Order  contradicted  the  Pole  Attachment  Order  and  the  courts  advice  in
 Alabama  Power  v.  FCC.  388
 113.  NCTA  counters  that  a  one  to  one  mapping  of  accounts  from  Part  31  to  part  32  is
 not  feasible  and  the  accounts  included  in  the  formula  overstate  the  administrative  expenses
 attributable  to  poles  because  administrative  expenses  such  as  research  and  development  for  highly
 complex  technological  and  business  planning  projects  would  far  exceed  the  administrative
 (  continued  from  previous  page)
 Commission's  Rules  To  Make  Changes  In  The  Functions  of  the  Cable  Services  Bureau,  11  FCC  Rcd.  19697  (Dec.
 5,  1996).
 381  Part  32  Guidance  Letter,  5  FCC  Rcd  3898  (1990).
 382  Fee  Order  in  passim  and  at  Appendix  C.
 383  LECs  maintain  their  Part  32  accounts  and  file  their  annual  operating  costs  with  the  Commission's  Automated
 Reporting  and  Management  Information  System  ("  ARMIS").  See  Reporting  Requirements  for  Certain  Class  A
 and  Tier  1  Telephone  Companies  (Parts  31,  43,  67  and  69  of  the  FCC's  Rules),  CC  Docket  No.  86-  182,  2  FCC  Rcd
 5770  (1987),  modified  on  recon.,  3  FCC  Rcd  6375  (1988)  (released  Oct.  14,  1988)  ("  ARMIS  Order").
 384  Fee  Order  at    52.
 385  USTA  Fee  Order  petition  at  2-  4;  Verizon  Fee  Order  comments  at  2.
 386  USTA  Fee  Order  petition  at  2-  4.
 387  Id.
 388  Alabama  Power  v.  FCC,  773  F.  2d  362  (D.  C.  Cir.  1985).
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 Federal  Communications  Commission  FCC  01-  170
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 oversight  for  poles.  389  NCTA  points  out  that  the  conversion  to  Part  32  actually  increased  the
 administrative  expenses  because  Account  6720  includes  costs  that  were  formerly  excluded  under
 Part  31  accounting.  NCTA  notes  that  Account  6720  is  a  composite  account  including  expenses
 for  accounting  and  finance,  390  external  relations,  391  human  resources,  392  information  management,  393  legal,  394  procurement,  395  research  and  development,  396  and  a  general  account
 labeled  "general  and  administrative."  397  NCTA  continues  that  Account  6535  (engineering
 expenses)  is  particularly  inappropriate  because  the  attacher  pays  any  engineering  expenses  related
 to  the  attachment  upfront  in  makeready  charges.  Referring  to  Account  6110  (network  support
 expenses),  NCTA  argues  that  vehicle  expenses  associated  with  attachments  are  already  included
 in  makeready  charges.
 114.  The  Fee  Order  did  not  attempt  to  establish  different  accounts  to  be  used  in  the
 administrative  element  of  the  carrying  charges.  The  Fee  Order  merely  reconciled  the  accounts
 formerly  listed  in  Part  31  to  their  counterpart  accounts  in  Part  32.  This  resulted  in  the
 identification  of  Accounts  6710  and  6720  to  be  included  in  the  administrative  element  of  the
 carrying  charges.  We  agree  with  NCTA  that  these  accounts  provide  a  broad  spectrum  of
 administrative  expenses.  Contrary  to  USTAs  argument,  we  did  not  exclude  general  plant
 administrative  expense  accounts  from  the  calculation.  USTAs  citation  to  Alabama  Power  Co.  v.
 FCC  398  is  not  apropos.  We  are  using  plant-  wide  accounts  representing  administrative  expenses,
 not  pole-  only  administrative  accounts.  399  The  courts  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.
 389  NCTA  Fee  Order  reply  comments,  Declaration  of  Patricia  D.  Kravtin  at  7.
 390  See  47  C.  F.  R.    32.6721.
 391  See  47  C.  F.  R.    32.6722.
 392  See  47  C.  F.  R.    32.6723.
 393  See  47  C.  F.  R.    32.6724.
 394  See  47  C.  F.  R.    32.6725.
 395  See  47  C.  F.  R.    32.6726.
 396  See  47  C.  F.  R.    32.6727.
 397  See  47  C.  F.  R.    32.6728.
 398  773  F.  2d  362  (D.  C.  Cir.  1985).
 399  The  court  in  Alabama  Power  Co.  v.  FCC  found  it  appropriate  to  divide  total  administrative  expenses  by  total
 plant  investment  to  arrive  at  a  percentage  of  investment  representing  administrative  expenses.  Alabama  Power  Co.
 v.  FCC,  773  F.  2d  at  369-  370.
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 Federal  Communications  Commission  FCC  01-  170
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 Capital  accounts  which  are  not  pole  investment  also  should  not  be  included  in  the  administrative
 element.
 115.  We  reviewed  and  considered  the  record  before  us  regarding  the  accounts  to  be
 used  for  the  administrative  element  expenses  for  LECs.  We  do  not  believe  Congress  intended  us
 to  discover  and  aggregate  all  de  minimis  expenses  which  might  have  some  intangible  nexus  to
 pole  attachments.  On  the  contrary,  we  believe  Congress  gave  us  a  clear  mandate  not  to  engage  in
 full-  scale  ratemaking  exercises  every  time  we  had  a  pole  attachment  complaint  before  us.  400  We
 have  chosen  not  to  disaggregate  the  major  accounts  selected  for  inclusion  in  our  calculations  in
 order  to  eliminate  expenses  not  directly  attributable  to  administrative  costs  with  a  nexus  to  pole
 attachments,  such  as  corporate  strategic  planning.  401  On  reconsideration,  we  decline  to  draw  in
 more  expenses  to  the  administrative  element  because  we  already  apply  a  comprehensive  set  of
 expenses  in  conformance  with  the  statutory  directive  to  allocate  a  percentage  of  operating
 expenses  attributable  to  pole  attachments.
 3.  Carrying  Charge  Accounts  (Electric)
 116.  In  the  Fee  Order,  we  rejected  our  tentative  conclusion  to  include  a  portion  of
 FERC  Account  590  in  the  maintenance  element  of  the  carrying  charge  rate.  We  concluded  that
 any  indefinite  and  uncertain  attempt  to  identify  a  possibly  minute  percentage  of  pole  related
 expenses  that  may  be  included  in  Account  590,  is  outweighed  by  the  complexity  of  arriving  at  an
 appropriate  and  equitable  percentage  of  the  account.  402  We  also  concluded  that  pole  related
 maintenance  expenses  would  be  posted  to  Account  593,  which  is  included  in  our  calculation.  403
 Account  590  (maintenance  supervision  and  engineering  (Major  only))  includes  the  cost  of  labor
 and  expenses  incurred  in  the  general  supervision  and  direction  of  maintenance  of  the  distribution
 system.  However,  direct  field  supervision  of  specific  jobs  are  charged  to  the  appropriate
 maintenance  account.  Operating  expense  instruction  1  (supervision  and  engineering  (Major
 utilities))  states  that  the  supervision  and  engineering  includible  in  the  operating  expense  accounts
 shall  consist  of  the  pay  and  expenses  of  superintendents,  engineers,  clerks,  other  employees  and
 consultants  engaged  in  supervising  and  directing  the  operation  and  maintenance  of  each  utility
 function.  404
 117.  Account  593  (maintenance  of  overhead  lines  (Major  only))  includes  all  the  cost  of
 labor,  materials  used  and  expenses  incurred  in  the  maintenance  of  overhead  distribution  line
 400  See,  e.  g.,  1977  Senate  Report  at  19-  21.
 401  For  example,  Account  6712  includes  "costs  incurred  in  developing  and  evaluating  long-  term  courses  of  action
 for  the  future  operations  of  the  company.  This  includes  performing  corporate  organization  and  integrated  long-range
 planning,  including  management  studies,  options  and  contingency  plans,  and  economic  strategic  analysis.
 See  47  C.  F.  R.    32.6712.
 402  Fee  Order  at    57-  61.
 403  Id.
 404  See  18  C.  F.  R.  Part  101.
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 facilities,  the  book  cost  of  which  is  includible  in  Account  364  (poles,  towers  and  fixtures),
 Account  365  (overhead  conductors  and  devices),  and  Account  369  (services).  In  our  calculation
 we  include  the  net  investment  for  all  three  accounts  to  determine  the  portion  of  Account  593
 attributable  to  Account  364.  UTC/  EEI  and  Southern  Co.  continue  to  argue  that  Account  590,  or
 a  portion  thereof,  should  be  included  in  the  carrying  charge  because  the  expenses  relating  to  the
 maintenance  of  a  distribution  system  may  include  poles.  405  We  disagreed  in  the  Fee  Order,  and  we
 have  been  provided  no  additional  evidence  to  rebut  the  description  of  Account  590  or  that  "direct
 field  supervision  of  specific  jobs  shall  be  charged  to  the  appropriate  maintenance  account,"  in  this
 case  Account  593.  406  Fee  Order  petitioners  do  not  persuade  us  that  there  is  any  significant
 expense  related  to  poles  included  in  Account  590.
 118.  This  same  reasoning  applies  to  Account  594  in  the  conduit  context.  Account  594
 (maintenance  of  underground  lines  (Major  only))  includes  the  cost  of  labor,  materials  used  and
 expenses  incurred  in  the  maintenance  of  underground  distribution  line  facilities,  the  book  cost  of
 which  is  includible  in  Account  366  (underground  conduit),  Account  367  (underground  conductors
 and  devices),  and  Account  369  (Services).  All  expenses  associated  with  Account  366,  the  account
 used  to  determine  conduit  investment,  are  reported  in  Account  594  and  no  additional  accounts
 should  be  included  as  maintenance  expenses.
 119.  Petitioners  also  include  a  list  of  FERC  accounts  that  they  would  like  included  as
 maintenance  expenses  in  the  pole  and  conduit  calculations.  These  include  Accounts  580
 (operation  and  supervision),  583  (overhead  line  expenses  (Major  only)),  584  (underground  line
 expenses  (Major  only)),  584  (operation  of  underground  lines),  588  (miscellaneous  distribution
 operation  expenses),  590  (maintenance  supervision  and  engineering-  Major  only),  and  598
 (maintenance  of  miscellaneous  distribution  plant).  407  Accounts  580,  583,  584,  and  588  are
 operational  accounts  to  which  electric  utilities  report  expenses  relating  to  the  utility's  core
 regulated  business  services,  and  not  pole  or  conduit  expenses.  408  Account  598  is  the  miscellaneous
 account  related  generally  to  maintenance  of  equipment  on  customer  premises  and  is  not
 associated  with  pole  or  conduit  expenses.  409  We  will  not  include  any  portion  of  Accounts  580,
 583,  584,  588  or  598  in  the  calculation  of  the  maintenance  element  of  the  carrying  charge  rate  for
 pole  or  conduit  because  the  costs  or  expenses  reported  to  these  accounts  do  not  reflect  a
 sufficient  nexus  to  the  operating  expenses  and  actual  capital  costs  of  the  utility  attributable  to
 405  See,  e.  g.,  Southern  Co.  Fee  Order  petition  at  11-  13;  UTC/  EEI  Fee  Order  petition  at  16-  17.  But  see  NCTA  Fee
 Order  recon.  reply  at  2.
 406  See,  e.  g.,  NCTA  Fee  Order  comments  at  37;  Time  Warner  Fee  Order  comments  at  26.  Account  593  also
 includes  some  non-  pole  related  expenses,  such  as  expenses  for  the  cleaning  of  insulators  and  bushings,  various
 functions  in  support  of  crossarms,  the  capital  costs  of  which  are  factored  out  of  the  net  cost  of  a  bare  pole  as
 discussed  elsewhere  in  this  Order;  see  also  18  C.  F.  R.  Part  101,  Account  590,  593  description  of  accounts.
 407  See  Edison  Electric/  UTC  Fee  Order  comments  at  26;  Carolina  Power  Fee  Order  comments  at  68  75;  Ohio
 Edison  Fee  Order  comments  at  42  45.
 408  18  C.  F.  R.  Part  101,  Description  of  Accounts.
 409  18  C.  F.  R.  Part  101,  Description  of  Accounts.
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 the  pole  or  conduit  attachment.  410  The  pertinent  maintenance  expenses  are  reported  in  Accounts
 593  (poles)  and  594  (conduit)  and  we  include  those  in  the  calculation.
 4.  Investment  Accounts  (Electric)
 120.  In  addition  to  its  arguments  for  including  additional  accounts  in  the  carrying
 charge  component  of  the  pole  and  conduit  attachment  formulas,  Southern  Co.  argues  that
 additional  capital  accounts  should  be  included  in  the  investment  calculation  for  poles  and  conduit,
 including  FERC  Accounts  360  (land  and  land  rights);  365  (overhead  conductors  and  devices);  368
 (line  transformers)  and  Accounts  389-  399  (General  Plant).  411  UTC/  EEI  joins  in  arguing  for
 inclusion  of  Accounts  360,  365,  367  (underground  conductors  and  devices),  369  (services),  and
 397  (communications  equipment).  We  calculate  net  pole  or  conduit  investment  for  two  purposes
 in  the  formula.  First,  we  calculate  net  investment  to  identify  the  portion  of  net  investment  that  is
 allocable  to  the  physical  attachment.  We  then  apply  the  rate  of  return  against  that  portion  so  that
 the  utility  is  fully  compensated  for  the  capital  investment  that  is  being  used  by  the  attacher.  The
 only  account  pertinent  to  that  calculation  is  the  pole  or  conduit  investment  account.
 121.  We  measure  the  capital  investment  that  is  used  by  determining  the  percentage  of
 physical  space  occupied  by  the  attachment.  For  electric  utility  poles,  we  use  Account  364  (poles,
 towers  and  fixtures).  412  Account  364  includes  the  cost  of  installed  poles,  towers,  and  appurtenant
 fixtures  used  for  supporting  overhead  distribution  conductors  and  service  wires.  Specific  items
 include:  1.  Anchors,  head  arm,  and  other  guys,  including  guy  guards,  guy  clamps,  strain
 insulators,  pole  plates,  etc.;  Brackets;  Crossarms  and  braces;  Excavation  and  backfill,  including
 disposal  of  excess  excavated  material;  Extension  arms;  Foundations;  Guards;  Insulator  pins  and
 suspension  bolts;  Paving;  Permits  for  construction;  Pole  steps  and  ladders;  Poles,  wood,  steel,
 concrete,  or  other  material;  Racks  complete  with  insulators;  Railings;  Reinforcing  and  stubbing;
 Settings;  Shaving,  painting,  gaining,  roofing,  stenciling,  and  tagging;  Towers;  Transformer  racks
 and  platforms.  Even  with  the  15%  reduction  for  non-  pole  appurtenances  such  as  crossarms,  this
 is  still  a  very  generous  account,  including  the  cost  of  towers,  transformer  racks  and  platforms.
 122.  The  attacher  is  paying  to  attach  a  cable  to  the  pole.  The  Pole  Attachment  Act
 requires  the  attacher  to  pay  a  portion  of  the  capital  costs  attributable  to  the  pole.  Those  costs  are
 fully  captured  in  Account  364.  The  accounts  suggested  by  petitioners  include  capital
 expenditures  which  support  the  utilitys  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
 410  47  U.  S.  C.    224(  d)(  1).
 411  The  inclusion  of  Accounts  389-  399  in  Southern  Co.  s  petition  may  have  been  an  error.  Southern  Co.  provides
 absolutely  no  information  or  arguments  in  support  of  including  general  plant  investment  accounts  as  pole
 investment.
 412  18  CFR    101.364.
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 utility.  Any  excavation  relating  to  the  installation  of  the  pole  itself,  including  disposal  of  excess
 material,  is  already  included  in  Account  364.  413  If  tree  trimming  is  required  as  part  of  make-  ready
 activity  to  provide  for  installation  of  an  attaching  entitys  pole  attachment,  the  attacher  pays  or
 reimburses  that  amount  as  part  of  make-  ready  charges.
 123.  Petitioners  also  ask  to  include  Account  360  (land  and  land  rights).  This  account
 includes  the  cost  of  land  and  land  rights  used  in  connection  with  distribution  operations.  It  does
 not  include  the  cost  of  permits  to  erect  poles,  towers,  etc.  which  are  included  in  Account  364.
 Electric  Plant  Instruction  7  states  that  "[  t]  he  accounts  for  land  and  land  rights  shall  include  the
 cost  of  land  owned  in  fee  by  the  utility  and  rights.  Interests,  and  privileges  held  by  the  utility  in
 land  owned  by  others,  such  as  leaseholds,  easements,  water  and  water  power  rights,  diversion
 rights,  submersion  rights,  rights-  of-  way,  and  other  like  interests  in  land.  Do  not  include  in  the
 accounts  for  land  and  land  rights  and  rights-  of-  way  costs  incurred  in  connection  with  first
 clearing  and  grading  of  land  and  rights-  of-  way  and  the  damage  costs  associated  with  the
 construction  and  installation  of  plant.  Such  costs  shall  be  included  in  the  appropriate  plant
 accounts  directly  benefited."  (emphasis  added).  Petitioners  propose  that  they  should  earn  a
 return  on  the  entire  amount  of  Account  360  which  includes  the  entire  cost  of  all  its  land  and  land
 rights  acquisitions  which  support  its  distribution  system.  414  Even  if  some  costs  associated  with  the
 land  or  right  of  way  on  which  the  poles  are  placed  are  included  in  this  account  rather  than
 Account  364,  the  utility  is  enjoying  the  full  use  of  those  rights  and  the  attachers  physical
 occupation  of  a  portion  of  space  on  a  pole  does  not  restrict  the  utilitys  use  of  the  land  for  its
 distribution  network.  The  ratio  of  space  occupied  used  to  determine  the  capital  pole  investment
 allocable  to  the  attachment  bears  no  relationship  to  the  portion  of  land  on  which  the  pole  sits  in
 relation  to  the  entire  inventory  of  square  footage  included  in  Account  360.  In  addition,  an
 attacher  usually  pays  a  separate  franchise,  permit  or  license  fee  to  the  local  government  or
 franchising  authority  for  the  right  to  operate  in  the  public  right  of  ways.  To  the  extent  that  an
 attacher  wished  to  place  a  separate  structure  (pole,  box,  etc.)  on  utility  property,  we  would
 examine  any  rate  issue  on  a  case  by  case  basis.
 124.  Petitioners  also  suggest  that  a  portion  of  Account  368  (line  transformers)  benefits
 other  pole  users  because  the  lightning  arresters  attached  to  the  transformers  to  protect  the
 transformers  may  also  benefit  other  pole  attachments.  Once  again,  Southern  Co.  proposes  using
 an  undisclosed  formula  for  calculating  what  portion  of  these  costs  should  be  attributed  to  the  pole
 investment.  415  We  do  not  believe  that  the  Pole  Attachment  Act  envisions  a  drawn  out  ratemaking
 process  to  determine  whether  a  lightning  arrester,  whose  only  function  is  to  protect  a  piece  of
 equipment  which  supports  the  utilitys  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.
 413  Pole  maintenance  expenses  are  not  included  in  the  investment  calculation.  Our  formula  includes  pole
 maintenance  expenses  in  the  carrying  charges.
 414  See,  e.  g.,  Southern  Co.  Fee  Order  comments  at  46.
 415  See,  e.  g.,  Southern  Co.  Fee  Order  comments  at  48.
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 125.  Another  account  proposed  by  UTC/  EEI  is  Account  367  (underground  conductors
 and  devices)  which  UTC/  EEI  proposes  to  add  to  conduit  investment.  This  account  includes  the
 cost  installed  of  underground  conductors  and  devices  used  for  distribution  purposes.  Items
 included  are:  Armored  conductors,  buried,  including  insulators,  insulating  materials,  splices,
 potheads,  trenching,  etc.;  Armored  conductors,  submarine,  including  insulators,  insulating
 materials,  splices  in  terminal  chamber,  potheads,  etc.;  Cables  in  standpipe,  including  pothead  and
 connection  from  terminal  chamber  or  manhole  to  insulators  on  pole;  Circuit  breakers;
 Fireproofing,  in  connection  with  any  items  listed  herein;  Hollow-  core  oil-  filled  cable,  including
 straight  or  stop  joints,  pressure  tanks,  auxiliary  air  tanks,  feeding  tanks,  terminals,  potheads  and
 connections,  etc.;  Lead  and  fabric  covered  conductors,  including  insulators,  compound-  filled;  oil-filled
 or  vacuum  splices,  potheads,  etc.;  Lightning  arresters;  Municipal  inspection;  Permits;
 Protection  of  street  openings;  Racking  of  cables;  Switches;  and  Other  line  devices.  All  of  these
 items  are  related  to  the  utilitys  distribution  of  power.  416
 126.  Account  366  (underground  conduit),  which  we  include  in  the  investment
 calculation,  includes  the  cost  installed  of  underground  conduit  and  tunnels  used  for  housing
 distribution  cables  or  wires.  Items  included  are:  1.  Conduit,  concrete,  brick  and  tile,  including
 iron  pipe,  fiber  pipe,  Murray  duct,  and  standpipe  on  pole  or  tower;  Excavation,  including  shoring,
 bracing,  bridging,  backfill,  and  disposal  of  excess  excavated  material;  Foundations  and  settings
 specially  constructed  for  and  not  expected  to  outlast  the  apparatus  for  which  constructed;
 Lighting  systems;  Manholes,  concrete  or  brick,  including  iron  or  steel  frames  and  covers,
 hatchways,  gratings,  ladders,  cable  racks  and  hangers,  etc.,  permanently  attached  to  manholes;
 Municipal  inspection;  Pavement  disturbed,  including  cutting  and  replacing  pavement,  pavement
 base,  and  sidewalks;  Permits;  Protection  of  street  openings;  Removal  and  relocation  of  subsurface
 obstructions;  Sewer  connections,  including  drains,  traps,  tide  valves,  check  valves,  etc.;  Sumps,
 including  pumps;  and  Ventilating  equipment.  417  All  items  associated  with  the  construction  of  the
 conduit  are  included  in  this  account.
 127.  Finally,  UTC/  EEI  would  like  to  include  the  costs  of  providing  electric  service  to  its
 customers  homes  and  the  costs  of  its  own  communications  facilities  in  the  pole  investment
 calculation.  They  seek  to  include  Account  369  (services)  which  covers  "the  cost  installed  of
 overhead  and  underground  conductors  leading  from  a  point  where  wires  leave  the  last  pole  of  the
 overhead  system  or  the  distribution  box  or  manhole,  or  the  top  of  the  pole  of  the  distribution
 line,  to  the  point  of  connection  with  the  customer's  outlet  or  wiring."  418  Conduit  used  for  this
 purpose  is  also  included  in  this  account.  Account  397  includes  the  cost  installed  of  telephone,
 telegraph,  and  wireless  equipment  for  general  use  in  connection  with  utility  operations.  Neither  of
 these  accounts  can  be  considered  as  pole  investment.
 416  18  C.  F.  R.    101.367.
 417  18  C.  F.  R.    101.366.
 418  18  CFR    101.369  (emphasis  added).
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 128.  Based  on  our  extensive  review  of  the  record  and  the  description  of  the  accounts,
 we  affirm  that  only  FERC  accounts  to  be  included  in  the  investment  calculation  are  Accounts  364
 for  pole  investment  and  Account  366  for  conduit  investment.  Petitioners  failed  to  provide  any
 new  information  and  their  reiteration  of  the  same  arguments  fail  to  persuade  us  to  include
 additional  accounts  in  our  calculation  of  the  pole  or  conduit  investment.  As  we  have  stated
 above,  any  unusual  requests  involving  access  to  land  or  rights  of  way  other  than  for  a  pole
 attachment  or  conduit  attachment  will  be  considered  on  a  case  by  case  basis.  Our  inclusion  of
 unrelated  expenses  in  certain  accounts  and  our  exclusion  of  possible  minor  expenses  in  other
 accounts  provides  a  balanced  overall  allocation  of  costs  while  avoiding  a  prolonged  and
 contentious  ratemaking  process.
 IV.  FINAL  REGULATORY  FLEXIBILITY  CERTIFICATION
 129.  As  required  by  the  Regulatory  Flexibility  Act  ("  RFA"),  419  an  Initial  Regulatory
 Flexibility  Analysis  ("  IRFA")  was  incorporated  in  both  the  Fee  Order  Notice  and  Telecom  Order
 Notice  420  and  a  Final  Regulatory  Flexibility  Analysis  ("  FRFA")  was  incorporated  in  both  the  Fee
 Order  421  and  Telecom  Order.  422  The  Commission  sought  written  public  comment  on  the  proposals
 in  the  Fee  Order  Notice  and  Telecom  Order  Notice,  including  comment  on  the  IRFAs.  No
 comments  were  received  in  response  to  the  IRFA  in  either  the  Fee  Order  Notice  or  Telecom
 Order  Notice,  nor  did  we  receive  any  petitions  for  reconsideration  of  the  Fee  Order  FRFA  or
 Telecom  Order  FRFA.  The  RFA  requires  that  an  RFA  analysis  be  prepared  for  notice  and
 comment  rulemaking  proceedings,  unless  the  agency  certifies  that  "the  rule  will  not,  if
 promulgated,  have  a  significant  economic  impact  on  a  substantial  number  of  small  entities."  423
 130.  The  RFA  generally  defines  a  "small  entity"  as  having  the  same  meaning  as  the
 terms  "small  business,"  "small  organization,"  and  "small  governmental  jurisdiction."  424  In
 addition,  the  term  "small  business"  has  the  same  meaning  as  the  term  small  business  concern  under
 the  Small  Business  Act.  425  A  "small  business  concern"  is  one  that:  (1)  is  independently  owned
 419  See  5  U.  S.  C.    603.  The  RFA,  see  5  U.  S.  C.    601  et.  seq.,  has  been  amended  by  the  Contract  With  America
 Advancement  Act  of  1996,  Pub.  L.  No.  104-  121,  110  Stat.  847  (1996)  ("  CWAAA").  Title  II  of  the  CWAAA  is  the
 Small  Business  Regulatory  Enforcement  Fairness  Act  of  1996  ("  SBREFA").
 420  Notice  of  Proposed  Rulemaking,  CS  Docket  No.  97-  151,  12  FCC  Rcd  11725,  11741-  51,    45-  74  (1997).
 421  Fee  Order,  15  FCC  Rcd  6453  (2000).
 422  Telecom  Order,  13  FCC  Rcd  6777  (1998).
 423  5  U.  S.  C.    605(  b).
 424  5  U.  S.  C.    601(  6).
 425  5  U.  S.  C.    601(  3)  (incorporating  by  reference  the  definitions  of  "small  business  concern"  in  15  U.  S.  C.    632).
 Pursuant  to  5  U.  S.  C.    601(  3),  the  statutory  definition  of  a  small  business  applies  "unless  an  agency,  after
 consultation  with  the  Office  of  Advocacy  of  the  Small  Business  Administration  and  after  opportunity  for  public
 comment,  establishes  one  or  more  `definitions'  of  such  term  which  are  appropriate  to  the  activities  of  the  agency
 (  continued)
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 and  operated;  (2)  is  not  dominant  in  its  field  of  operation;  and  (3)  satisfies  any  additional  criteria
 established  by  the  Small  Business  Administration  ("  SBA").  426  As  we  described  in  the  FRFA
 analyses  in  the  Fee  Order  and  Telecom  Order,  we  estimate  that  there  are  small  business  entities
 that  might  be  affected  by  those  orders.
 131.  In  this  Reconsideration  Order,  we  affirm  most  of  our  prior  conclusions  in  the  Fee
 Order  and  Telecom  Order.  We  have,  among  other  things,  amended  certain  requirements  of
 Sections  1.1401-  1.1418  of  our  rules.  427  These  amendments  serve  to  simplify  our  formulas  for
 calculating  pole  attachment  rates.  Specifically,  we  provide  a  simplified  equation  of  our  formula
 for  telecommunications  attachers;  428  we  simplify  the  geographic  categories  for  determining
 average  numbers  of  attaching  entities;  429  and  we  allow  parties  to  a  pole  attachment  proceeding  to
 substitute  presumptive  numbers  of  attaching  entities  in  the  formula  in  order  to  avoid  the  expense
 of  establishing  numbers  based  on  a  survey  or  compilation  of  actual  data.  430  We  also  provide  a
 simpler  methodology  for  calculating  rates  when  the  net  pole  investment  is  negative  or  zero.  431
 These  changes  do  not  impose  additional  compliance  burdens  on  small  entities  nor  do  they  alter  the
 number  or  type  of  small  entities  possibly  affected  by  the  rules  published  in  the  Fee  Order  and
 Telecom  Order.  The  changes  may,  in  fact,  reduce  the  burden  on  small  entities.  Therefore,  we
 certify,  pursuant  to  Section  605(  b)  of  the  RFA,  that  the  rules  adopted  herein  will  not  have  a
 significant  economic  impact  on  a  substantial  number  of  small  entities.
 132.  Report  to  Congress:  The  Commission  will  send  a  copy  of  this  Reconsideration
 Order,  including  this  final  certification,  in  a  report  to  Congress  pursuant  to  the  Congressional
 Review  Act,  5  U.  S.  C.    801(  a)(  1)(  A).  A  copy  of  this  Reconsideration  Order  (or  summary
 thereof)  and  this  certification  will  be  sent  to  the  Chief  Counsel  for  Advocacy  of  the  Small
 Business  Administration,  and  will  be  published  in  the  Federal  Register  pursuant  to  5  U.  S.  C.    605.
 V.  PAPERWORK  REDUCTION  ACT  OF  1995  ANALYSIS
 133.  The  requirements  adopted  in  this  Reconsideration  Order  have  been  analyzed  with
 respect  to  the  Paperwork  Reduction  Act  of  1995  (the  "1995  Act")  and  found  to  impose  no  new  or
 modified  information  collection  requirements  on  the  public.
 VI.  ORDERING  CLAUSES
 (  continued  from  previous  page)
 and  publishes  such  definitions  in  the  Federal  Register."
 426  Small  Business  Act,  15  U.  S.  C.    632.
 427  47  C.  F.  R.    1.1401-  1.1418.
 428  Reconsideration  Order  at    51.
 429  Id.  at    63.
 430  Id.  at    67-  68.
 431  Id.  at    22,  et  seq.
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 Federal  Communications  Commission  FCC  01-  170
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 134.  Accordingly,  IT  IS  ORDERED,  pursuant  to  section  405  of  the  Communications
 Act  of  1934,  as  amended,  47  U.  S.  C.    405  and  section  1.106  of  the  Commission's  rules,  47
 C.  F.  R.    1.106,  the  petitions  for  reconsideration  and/  or  clarification  are  DENIED  IN  PART  and
 GRANTED  IN  PART  to  the  extent  indicated  above.
 135.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  Sections  1,  4(  i),  224  and  303(  r)  of
 the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  154(  i),  224  and  303(  r),  this
 Reconsideration  Order  is  hereby  ADOPTED  and  the  Commission's  rules  are  HEREBY
 AMENDED  as  set  forth  in  Appendix  A.
 136.  IT  IS  FURTHER  ORDERED  that  the  Commission's  rules,  as  amended  in
 Appendix  A  hereto,  will  become  effective  30  days  after  the  date  of  publication  of  this
 Reconsideration  Order  (or  summary  thereof)  in  the  Federal  Register.
 137.  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
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 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  ot  her  local  exchange  carriers,  ut  ilit  ies,  government  al  ent  it  ies  and  ot  her  ent  it  ies
 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:
 Rate  Charge  Carrying  x  Pole  Bare  a  of  Cost  Net  x  or  SpaceFact  =  Rate  Maximum
 Space  Usable  Total
 Attachment  by  Occupied  Space  =
 Factor  Space
 Where
 (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
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 cable  operator  providing  telecommunications  services  beginning  February  8,  2001:
         
 u  u
 Rate
 Charge
 Carrying
 Rate  Maximum  NetCostofaBarePole  SpaceFactor
   
   
 
 
   
   
 
   
 
   
 
   
 
   
   u  
 Height  Pole
 Entities  Attaching  of  No.
 Space  Unusable
 3
 2
 Occupied
 Space
 WhereSpaceFactor
 (3)  The  following  formula  shall  apply  to  attachments  to  conduit  by  cable  operators  and
 telecommunications  carriers:
 Rate  Charge
 Carrying  x
 Conduit)  a  of  Cost  Linear  (Net
 (ft./  m.)  Length  Duct  System
 Investment  Conduit  Net  x
 Ducts  of  No.  x
 Capacity)  Conduit  of  (Percentage
 of  No.
 1Duct  x
 Ducts  of  Number
 1
 Linearft./m.  per  Rate
 =  Maximum    
   
 
 
   InnerDucts        
 simplified  as:
 Rate  Charge
 Carrying  x
 (ft./  m.)  Length  Duct  System
 Investment  Conduit  Net  x
 InnerDucts  of  No.
 1Duct  =
 Linearft./m.  Per  Rate  Maximum
 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
68
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 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  at  t  aching  ent  it  ies  of  five  (5).  If  any  part  of  the  ut  ilit  y's  service  area  wit  hin  the  st  at  e  has  a  designat  ion
 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  ut  ilit  y  may  est  ablish  its  own  presumpt  ive  average  number  of  at  t  aching  ent  it  ies  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.
69
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 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.
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 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  At  lant  ic  (Bell  At  lant  ic)
 ICG  Communicat  ions  (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  At  lant  ic  (Bell  At  lant  ic)
 BellSout  h  Corporat  ion  (BellSout  h)
 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  )
71
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 Texas  Elect  ric  Ut  ilit  ies  Company  (TUEC)
 Time  Warner  Cable  (Time  Warner)
 WinSt  ar  Communicat  ions  (WinSt  ar)
 Reply  Comments  to  Comments  in  Support  of  or  Opposition  to  Telecom  Order  Petitions  were  filed
 by:
 Association  for  Local  Telecommunications  Services  (ALTS)
 Bell  At  lant  ic  (Bell  At  lant  ic)
 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
 WinSt  ar  Communicat  ions  (WinSt  ar)
 Note:  If  no  abbreviation  appears  in  parentheses  following  the  full  name  of  the  party,  the  full  name  is
 used  in  this  Reconsideration  Order.
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 Appendix  D-  1
 Section  224(  d)  Cable  Formula  for  Determining  Maximum  Rate  For  Use  of  LEC  Utility  Poles
 Using  FCC  ARMIS  Accounts
 Rate  Charge
 Carrying  x  0.95  x
 Poles  of  Number  Total
 Investment  Pole  Net  x
 Space  Usable
 Occupied  Space  =
 Pole  per  Rate  Maximum
 Where:
 )  rebuttable  but  (presumed,  foot  1  =  Occupied  Space
 )  rebuttable  but  (presumed,  feet  13.5  =  Space  Usable
 And:
 s)  4340)(  Pole  4100  (Account  Taxes  Income
 Deferred  d  Accumulate  _
 s)  3100)(  Pole  (Account  on  Depreciati
 d  Accumulate  _
 2411)  (Account  Investment
 Pole  Gross  =
   Investment
 Pole  Net
 Return  Taxes  on  Depreciati  e  Maintenanc  tive  Administra          Rate  Charge  Carrying
 4340)  +  4100  (Accounts  (Plant)  Taxes  Deferred  d  Accumulate  3100)  (Account  on  Depreciati  d  Accumulate  2001)  (Account  Investment  Plant  Gross
 6720)  &  6710  (Accounts  tive  Administra  and  General  Total  =
 Element  tive  Administra    
 Investment  Pole  Net
 (Poles)  Expense  Rental  6411  Account  =
 Element  e  Maintenanc
 
 Investment  Pole  Gross  for  Rate  on  Depreciati  x  Investment  Pole  Net
 2411)  (Account  Investment  Pole  Gross  =
 Element  on  Depreciati
 4340)  +  4100  (Accounts  (Plant)  Taxes  Deferred  d  Accumulate  3100)  (Account  on  Depreciati  d  Accumulate  2001)  (Account  Investment  Plant  Gross
 7200)  (Account  Taxes  Operating  =
 Element  Taxes    
 11.25%)  (default  Return  of  Rate  Applicable  =  Element  Return  {
73
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 Appendix  D-  2
 Section  224(  d)  Cable  Formula  for  Determining  Maximum  Rate  for  Use  of  Electric  Utility  Poles
 Using  FERC  Form  1  Accounts
 Rate  Charge
 Carrying  x  0.85  x
 Poles  of  Number  Total
 Investment  Pole  Net  x
 UsableSpace
 SpaceOccupied  =
 Pole  per  Rate  Maximum
 Where:
 rebuttable)  but  (presumed,  =1foot  Occupied  Space
 rebuttable)  but  (presumed,  feet  =13.5  Space  Usable
 And:
 283)(  Poles)  -  281  (Account190,  Taxes  Income
 Deferred  Accumulated  _
 (Account108)(Poles)  Depreciation
 Accumulated  _
 364)  (Account  Investment
 Pole  Gross  =
 Investment
 Pole  Net
 Return  Taxes  Depreciation  Maintenance  Administrative          Rate  Charge  Carrying
 283)  281  (Accounts190,
 (ElectricPlant)  Taxes
 Deferred  Accumulated
 _  Electric)  -  (Account108  Depreciation  Accumulated  _  (Electric)  Investment  Plant  Gross
 Administrative  Generaland  Total  =
 Element
 Administrative
 
 369  &  364,365,  Accounts  to  related  Taxes  Income
 Deferred  Accumulated  _
 369  &  364,365,  Accounts  to  Related  (Poles)  Depreciation  _  369  &  364,365,  Accounts  Investmentin  Pole
 593  Account  =
 Element  Maintenance
 Investment  Pole  Gross  for  Rate  Depreciation  x  Investment  Pole  Net
 364)  Investment(Account  Pole  Gross  =
 Element  Depreciation
 283)  (Account190,281
 (Plant)  Taxes  Deferred  Accumulated  _
 (Account108)
 Depreciation  Accumulated  _
 (TotalPlant)
 Investment  Plant  Gross
 411.1  411.4  410.1+  409.1+  408.1+  Accounts  =
 Element
 Taxes
 
 
 11.25%)  (default  Return  of  ApplicableRate  =  Element  Return  {
74
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 Appendix  E-  1
 Section  224(  e)  Telecom  Formula  for  Determining  Maximum  Rate  For  Use  of  LEC  Utility  Poles
 Using  FCC  ARMIS  Accounts
     
 
     
   u  u
   
 
 
   
   
 
 
 
     
 
     
   u    
 
   
 
 Rate  Charge
 Carrying
 Poles  of  Number
 Investment  Pole  Net
 Height  Pole
 Entities  Attaching  of  No.
 Space  Unusable
 3
 2
 Occupied  Space  Rate  Maximum
 Where:
 rebuttable)  but  (presumed,  =1foot  Occupied  Space
 rebuttable)  but  (presumed,  feet  24  =  Space  Unusable
 rebuttable)  but  (presumed,  (urbanized)  5  and  urbanized)  -  (non  3  =  Entities  Attaching  of  Number
 rebuttable)  but  presumed,  (average,  feet  37.5  =  Height  Pole
 And:
 4340)(  Poles)  4100  (Account  Taxes  Income
 Deferred  Accumulated  _
 3100)(  Poles)  (Account  Depreciation
 Accumulated  _
 2411)  (Account  Investment
 Pole  Gross  =
   Investment
 Pole  Net
 Return  Taxes  Depreciation  Maintenance  Administrative          Rate  Charge  Carrying
 4340)  +  4100  (Accounts  (Plant)  Taxes  Deferred  Accumulated  3100)  (Account  Depreciation  Accumulated  2001)  (Account  Investment  Plant  Gross
 6720)  &  6710  (Accounts  Administrative  Generaland  Total  =
 Element  Administrative    
 Investment  Pole  Net
 (Poles)  Expense  Rental  6411  Account  =
 Element  Maintenance
 
 Investment  Pole  Gross  for  Rate  Depreciation  x  Investment  Pole  Net
 2411)  (Account  Investment  Pole  Gross  =
 Element  Depreciation
 4340)  +  4100  (Accounts  (Plant)  Taxes  Deferred  Accumulated  3100)  (Account  Depreciation  Accumulated  2001)  (Account  Investment  Plant  Gross
 7200)  (Account  OperatingTaxes  =
 Element  Taxes    
 11.25%)  (default  Return  of  ApplicableRate  =  Element  Return  {
75
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 Appendix  E-  2
 Section  224(  e)  Telecom  Formula  for  Determining  Maximum  Rate  For  Use  of  Electric  Utility
 Poles
 Using  FERC  Form  1  Accounts
             u  u
   
 
 
   
   
 
 
 
     
 
     
   u    
 
   
 
 Rate  Charge
 Carrying
 Poles  of  Number
 Investment  Pole  Net
 Height  Pole
 Entities  Attaching  of  No.
 Space  Unusable
 3
 2
 Occupied  Space  Rate  Maximum
 Where:
 rebuttable)  but  (presumed,  =1foot  Occupied  Space
 rebuttable)  but  (presumed,  feet  24  =  Space  Unusable
 rebuttable)  but  (presumed,  (urbanized)  5  and  urbanized)  -  (non  3  =  Entities  Attaching  of  Number
 rebuttable)  but  presumed,  (average,  feet  37.5  =  Height  Pole
 Income  Taxes
 Deferred  Accumulated  _
 )(  Poles)
 Accumulated  _
 )  (Account  Investment
 Gross  Pole  =
 Investment
 Net  Pole
 281-283)(Poles)  (Account190,  Depreciation(Account108  364
 Return  Taxes  Depreciation  Maintenance  Administrative          Rate  Charge  Carrying
 283)  (Plant)(  Accounts190,281  Taxes
 Deferred  Accumulated
 _  (Account108)
 Depreciation  Accumulated
 _  (Electric)  Investment  Plant  Gross
 tive  Administra  Generaland  Total  =
 Element
 tive  Administra
 
 369  &  364,365,  Accounts  to  related  Taxes  Income
 Deferred  Accumulated  _
 369  &  364,365,  Accounts  to  Related  (Poles)  Depreciation  _  369  &  364,365,  Accounts  Investmentin  Pole
 593  Account  =
 Element  Maintenance
 Investment  Pole  Gross  for  Rate  Depreciation  x  Investment  Pole  Net
 364)  Investment(Account  Pole  Gross  =
 Element  Depreciation
 283)  (Account190,281
 (Plant)  Taxes  Deferred  Accumulated  _
 (Account108)
 Depreciation  Accumulated  _
 Plant)  (Total
 Investment  Plant  Gross
 411.1  411.4  410.1+  409.1+  408.1+  Accounts  =
 Element
 Taxes
 
 
 11.25%)  (default  Return  of  ApplicableRate  =  Element  Return  {
76
 Federal  Communications  Commission  FCC  01-  170
 77
 Appendix  F-  1
 Formula  for  Determining  Maximum  Rate  for  Use  of  LEC  Utility  Conduit
 Using  FCC  ARMIS  Accounts
 Rate
 Charge
 Carrying  x
 Conduit)  a  of  Cost  Linear  (Net
 (ft./  m.)  Length  Duct  System
 Investment  Conduit  Net  x
 Ducts
 of  No.  x
 Capacity)  Conduit  of  e  (Percentag
 Ducts  Inner  of  No.
 Duct  1  x
 Ducts  of  No.
 1
 =  ft./  m.  Linear  per
 Rate  Maximum    
   
 
 
           
 simplified  as:
 Rate  Charge
 Carrying  x
 (ft./  m.)  Length  Duct  System
 Investment  Conduit  Net  x
 InnerDucts  of  No.
 1Duct  =
 Linearft./m.  per  Rate
 Maximum
 Where:
 (Conduit)  Taxes  Income  Deferred  Accumulated  -  (Conduit)  Depreciation  Accumulated  -  Investment  Conduit  Gross  =  Investment  Conduit  Net
 and
 Return  +  Taxes  +  Depreciation  +  Maintenance  +  Administrative  =  ChargeRate  Carrying
 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.
 Rate  Charge
 Carrying  x
 Conduit  of  Cost  Linear  Net  x  Occupied  Capacity  Conduit
 Percentageof  =  Rate  Maximum
 Where:
 Conduit  in  Ducts  of  Number
 1  x
 2)  (  Ducts  Inner  of  Number
 1  =
 t  Occupied
 Capacity  Conduit  Percentageof
 System  in  Conduit  of  Length  Total
 Investment  Conduit  Net  =  OR
 m.)  or  (ft.  Length  Duct  System  Conduit  Total
 Investment  Conduit  Net  x
 Conduit  in  Ducts  of  Number  =  Conduit  of  Cost  Linear  Net
77
 Federal  Communications  Commission  FCC  01-  170
 78
 Conduit)  )(  4340  4100  (Account  Taxes  Income
 Deferred  d  Accumulate  _
 Conduit)  )(  3100  (Account  on  Depreciati  d  Accumulate  _  2441)  (Account  Investment  Conduit  Gross  =  Investment  Conduit  Net  
 Return  Taxes  on  Depreciati  e  Maintenanc  tive  Administra          Rate  Charge  Carrying
 4340)  +  4100  (Accounts  (Plant)  Taxes  Deferred  d  Accumulate  _  3100)  (Account  on  Depreciati  d  Accumulate  _  2001)  (Account  Investment  Plant  Gross
 6720)  &  6710  (Accounts  Expenses  tive  Administra  and  General  Total  =
 Element  tive  Administra
 Investment  Conduit  Net
 6441)  (Account  Expense  e  Maintenanc  Conduit  =
 Element  e  Maintenanc
 Conduit  for  Rate  on  Depreciati  x  Investment  Conduit  Net
 2441)  (Account  Investment  Conduit  Gross  =
 Element  on  Depreciati
 4340)  +  4100  (Accounts  (Plant)  Taxes
 Deferred  d  Accumulate  _
 3100)  (Account  on  Depreciati  d  Accumulate  _  2001)  (Account  Investment  Plant  Gross
 7200)  (Account  Taxes  Operating  =
 Element  Taxes
 11.25%)  (default  Return  of  Rate  Applicable  =  Element  Return  {
78
 Federal  Communications  Commission  FCC  01-  170
 79
 Appendix  F-  2
 Formula  for  Determining  Maximum  Rate  for  Use  of  Electric  Utility  Conduit
 Using  FERC  Form  1  Accounts
 Rate  Charge
 Carrying  x
 Conduit)  a  of  Cost  Linear  (Net
 (ft./  m.)  Length  Duct  System
 Investment  Conduit  Net  x
 Ducts  of  No.  x
 Capacity)  Conduit  of  e  (Percentag
 Ducts  Inner  of  No.
 Duct  1  x
 Ducts  of  No.
 1
 =  ft./  m.  Linear  per
 Rate  Maximum    
   
 
 
           
 Simplified  as:
 Rate  Charge
 Carrying  x
 (ft./  m.)  Length  Duct  System
 Investment  Conduit  Net  x
 InnerDucts  of  No.
 1Duct  =
 Linearft./m.  per  Rate
 Maximum
 Where:
 (Conduit)  Taxes  Income  Deferred  Accumulated  -  (Conduit)  Depreciation  Accumulated  -  Investment  Conduit  Gross  =  Investment  Conduit  Net
 And
 Return  +  Taxes  +  Depreciation  +  Maintenance  +  Administrative  =  Charges  Carrying
 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.
 Rate  Charge
 Carrying  x
 Conduit  of  Cost  Linear  Net  x  Occupied  Capacity  Conduit
 Percentageof  =  Rate  Maximum
 Where:
 Conduit  in  Ducts  of  Number
 1  x
 2)  (  Ducts  Inner  of  Number
 1  =
 t  Occupied
 Capacity  Conduit  Percentageof
79
 Federal  Communications  Commission  FCC  01-  170
 80
 System  in  Conduit  of  Length  Total
 Investment  Conduit  Net  =  OR
 m.)  or  (ft.  Length  Duct  System  Conduit  Total
 Investment  Conduit  Net  x
 Conduit  in  Ducts  of  Number  =  Conduit  of  Cost  Linear  Net
 IncomeTaxes(conduit)
 Deferred  Accumulated  _
 (Conduit)
 Depreciation  Accumulated  _
 366)  (Account
 Investment  Conduit  Gross  Investment=  Conduit  Net
 Return  Taxes  Depreciation  Maintenance  Administrative          Rate  Charge  Carrying
 (ElectricPlant)  Taxes
 Deferred  Accumulated  _
 (ElectricPlant)
 Depreciation  Accumulated  _
 (Electric)
 Investment  Plant  Gross
 Expenses  Administrative  Generaland  Total  =
 Element
 Administrative
 369  &  367,  Accounts366,
 to  related  Taxes  Income
 Deferred  Accumulated
 _  369  &  366,367,  Accounts  in  (Conduit)  Depreciation  _  369  &  366,367,  Accounts  Investmentin  Conduit
 594  Account  =
 Element
 Maintenance
 Conduit  for  Rate  Depreciation  x  Investment  uit  Cond  Net
 366)  (Account  Investment  Conduit  Gross  =
 Element  Depreciation
 (Plant))  Taxes  Deferred  Accumulated  _  (Plant)  Depreciation  Accumulated  _  (TotalPlant)  Investment  Plant  Gross
 411.1  411.4  410.1+  409.1+  408.1+  Accounts  =
 Element
 Taxes  
 11.25%)  (default  Return  of  ApplicableRate  =  Element  Return  {
80