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[Federal Register Volume 62, Number 159 (Monday, August 18, 1997)]
[Proposed Rules]
[Pages 43963-43974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21818]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 97-151; FCC 97-234]

Pole Attachments

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission has adopted a Notice of Proposed Rulemaking 
seeking comment on its continued implementation of the pole attachment 
provisions of the Telecommunications Act of 1996. We seek comment on a 
methodology to ensure just, reasonable, and nondiscriminatory maximum 
pole attachment and conduit rates for telecommunications carriers, and 
on how to ensure that rates charged for use of rights of way are just, 
reasonable and nondiscriminatory. The Commission explores this issue to 
fulfill its obligation under the Telecommunications Act of 1996 to 
adopt rules concerning pole attachments. The item will help the 
Commission create a record on this issue, which will assist the 
Commission in designing new or amending current regulations concerning 
pole attachments.

DATES: Comments are due on or before September 26, 1997 and reply 
comments on or before October 14, 1997.

FOR FURTHER INFORMATION CONTACT: Larry Walke, Cable Services Bureau, 
(202) 418-7200. For additional information concerning the information 
collections contained herein, contact Judy Boley at 202-418-0217, or 
via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Proposed Rulemaking in CS Docket No. 97-151, FCC 97-234, 
adopted July 1, 1997 and released August 12, 1997. The full text of 
this decision is available for inspection and copying during normal 
business hours in the FCC Reference Center (room 239), 1919 M Street, 
NW, Washington, DC 20554, and may be

[[Page 43964]]

purchased from the Commission's copy contractor, International 
Transcription Service, (202) 857-3800, 1919 M Street, NW, Washington, 
DC 20554.

I. Introduction

    1. In this Notice of Proposed Rulemaking (``NPRM''), the Commission 
continues its implementation of section 703 of the Telecommunications 
Act of 1996 (``1996 Act''), Pub. L. 104-104, 110 Stat. 61, 149-151 
(February 8, 1996), by proposing amendments to the Commission's rules 
relating to pole attachments. The 1996 Act expanded the scope of 
section 224 of the Communications Act of 1934 (``Communications Act'') 
to telecommunications carriers and created a distinction between pole 
attachments used by cable systems solely to provide cable service and 
pole attachments used by cable systems or by telecommunications 
carriers to provide any telecommunications service. In this NPRM we 
seek comment on the implementation of a methodology to ensure just, 
reasonable, and nondiscriminatory maximum pole attachment and conduit 
rates for telecommunications carriers. We also seek comment on how to 
ensure that rates charged for use of rights of way are just, reasonable 
and nondiscriminatory.
    2. The Commission must prescribe the new methodology for 
telecommunications carriers within two years of enactment of the 1996 
Act, with these rules becoming effective five years from enactment. 
Section 224(d)(3) of the Communications Act applies the Commission's 
existing pole attachment methodology to both cable television systems 
and telecommunications carriers until the effective date of the new 
formula. We note that section 257 of the Communications Act provides 
that the Commission promote policies that eliminate ``* * * market 
entry barriers for entrepreneurs and other small businesses in the 
provision and ownership of telecommunications services and information 
services. * * *''

II. Background

A. Prior to the 1996 Act

    3. It is common practice for telecommunications carriers to lease 
space from utilities on poles or in ducts, conduits, or rights-of-way, 
in order to provide telecommunications services. The federal government 
did not regulate these arrangements until 1978, when Congress enacted 
section 224 of the Communications Act in response to concerns raised by 
cable television operators. Section 224 was enacted to stop utilities 
from ``unfair pole attachment practices * * * and to minimize the 
effect of unjust or unreasonable pole attachment practices on the wider 
development of cable television service to the public.''
    4. Section 224(b)(1) grants the Commission authority to regulate 
the rates, terms, and conditions governing pole attachments to ensure 
that they are just and reasonable. Generally, the Commission does not 
have authority where a state regulates pole attachment rates, terms, 
and conditions. Section 224(d)(1) defines a just and reasonable rate as 
ranging from the statutory minimum (incremental costs) to the statutory 
maximum (fully allocated costs). Incremental costs include pre-
construction survey, engineering, make-ready and change-out costs 
incurred in preparing for cable attachments. 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. Fully allocated costs refer to the portion of operating 
expenses and capital costs that a utility incurs in owning and 
maintaining poles that is equal to the portion of usable pole space 
that is occupied by an attacher.
    5. In 1978, the Commission implemented the original section 224 by 
issuing rules governing pole attachment issues and establishing a basic 
formula for pole attachment rates. Subsequent Commission orders have 
reconsidered, amended and clarified the Commission's methodology for 
determining rates, the amount of usable and unusable space on a pole 
and the amount of space occupied by cable systems. In addition, the 
Commission has adjusted complaint procedures, including the information 
accompanying complaints.

B. The 1996 Act

    6. The 1996 Act amended section 224 in important respects. Most 
prominently, it created a right of access for telecommunications 
carriers. New sections 224 (d)(3), (e), (f), (g), (h) and (i) 
proscribed expanded access and established a new methodology for 
determining just and reasonable rates for telecommunications carriers. 
The 1996 Act also amended the definitions of ``utility'' and ``pole 
attachment'' in sections 224 (a)(1) and (a)(4); recognized a State's 
authority to regulate pole attachments involving telecommunications 
carriers in sections 224 (c)(1) and (c)(2)(B); and added section 
224(a)(5) to exempt incumbent local exchange carriers (``LECs'') from 
the definition of telecommunications carriers.
    7. Under section 224(d)(3) the Commission's existing rules are 
applicable to both cable television systems and to telecommunications 
carriers until such time as the new rules become effective. On March 
14, 1997, the Commission released a Notice of Proposed Rulemaking, 
Amendment of Rules and Policies Governing Pole Attachments, CS Docket 
No. 97-98 (``Pole Attachment NPRM''), 62 FR 18074 (April 14, 1997), 
relating to the existing formula for pole attachments. Parties need not 
file duplicate comments to address issues raised in that proceeding. We 
have determined that, to the extent such comments are relevant in the 
instant proceeding, they will be incorporated by reference within this 
proceeding. That proceeding specifically seeks comment on the 
Commission's use of the current presumptions, on carrying charge and 
rate of return elements of the formula, on the use of gross versus net 
data, and on a new conduit methodology. Commenters to the Pole 
Attachment NPRM are encouraged to distinguish their comments in that 
proceeding if they vary from those filed in response to this NPRM, as 
well as providing comment on the new and different issues raised in 
this NPRM as a result of 1996 Act. We invite further comment in this 
proceeding to establish a full record for attachments made by cable 
systems offering telecommunications services. In Implementation of 
Section 703 of the Telecommunications Act of 1996, CS Docket No. 96-166 
(``Self-Effectuating Order''), 61 FR 43023 (August 20, 1996), the 
Commission amended its rules to reflect the self-effectuating additions 
and revisions to section 224. In Implementation of the Local 
Competition Provisions in the Telecommunications Act of 1996 (``Local 
Competition Provisions Order''), 61 FR 45476 (August 29, 1996), the 
Commission implemented the access provisions of the 1996 Act, sections 
224 (c)(1), (f) and (h).
    8. Most significantly for purposes of this NPRM, the 1996 Act added 
the following provisions of section 224(e):

    (e)(1) The Commission shall, no later than 2 years after the 
date of enactment of the Telecommunications Act of 1996, prescribe 
regulations in accordance with this subsection to govern charges for 
pole attachments used by telecommunication carriers to provide 
telecommunications services, when the parties fail to resolve a 
dispute over such charges. Such regulations shall ensure that a 
utility charges just, reasonable, and nondiscriminatory rates for 
such pole attachments.
    (e)(2) A utility shall apportion the cost of providing space on 
a pole, duct, conduit, or right-of-way other than usable space among

[[Page 43965]]

entities so that such apportionment equals two-thirds of the costs 
of providing space other than the usable space that would be 
allocated to such entity under an equal apportionment of such costs 
among all attaching entities.
    (e)(3) A utility shall apportion the cost of providing usable 
space among all entities according to the percentage of usable space 
required for each entity.
    (e)(4) The regulations required under paragraph (1) shall become 
effective five years after enactment of the Telecommunications Act 
of 1996. Any increase in the rates for pole attachments that result 
from the adoption of the regulations required by this subsection 
shall be phased in equal annual increments over a period of five 
years beginning on the effective date of such regulations.

    9. This NPRM considers the portion of the costs of a bare pole to 
be included in the pole attachment rate. Currently, a portion of the 
total annual cost of a pole is included in the pole attachment rate 
based on the portion of the usable space occupied by the attaching 
entity. This formula will continue to be applicable to cable systems 
providing only cable service. However, for cable systems and 
telecommunications carriers providing telecommunications services, the 
portion of the total annual cost included in the pole attachment rate 
will be determined under a more delineated method. This method 
differentially allocates the costs of the portion of the total pole 
cost associated with the usable portion of the pole and the portion of 
the total pole cost associated with the unusable portion of the pole. 
Generally, this is expected to result, at least initially, in the 
inclusion of greater portions of the carrying charge components in the 
rate. As the number of attaching entities increases, however, smaller 
portions of the carrying charge will be included in each entity's rate. 
As the carrying charge rate is spread amongst the attaching entities, 
the overall rate may become lower over time because the total cost will 
be spread over all attaching entities.
    10. Section 224(e) requires two discrete steps. First, two-thirds 
of the costs relating to the other than usable space on the pole, duct, 
conduit or right-of-way will be apportioned equally among all attaching 
telecommunications carriers. Second, telecommunications carriers will 
also be apportioned the cost of usable space, according to the amount 
of usable space the entity requires.

III. Preference for Negotiated Agreements

    11. In proposing a methodology to implement section 224(e), we note 
that the Commission's role is limited to circumstances ``when the 
parties fail to resolve a dispute over such charges.'' Thus, 
negotiations between a utility and an attacher should continue to be 
the primary means by which pole attachment issues are resolved. We 
believe that an attacher must attempt to negotiate and resolve its 
dispute with a utility before filing a complaint with the Commission. 
However, we also note that in the 1996 Act, Congress recognized the 
importance of access in enhancing competition in telecommunications 
markets and that parties in a pole attachment negotiation do not have 
equal bargaining positions. Congress also recognized that the potential 
for significant barriers to competition emanating from the lack of 
access or unreasonable rates is significant. Accordingly, we propose to 
use our current rule, which requires a complainant to include a brief 
summary of all steps taken to resolve its dispute before filing a 
complaint. 47 CFR 1.1404(i). ``The complaint shall include a brief 
summary of all steps taken to resolve the problem prior to filing. If 
no such steps were taken, the complaint shall state the reason(s) why 
it believed such steps are fruitless.'' We seek comment on our 
tentative conclusions and on the proposed use of our current rule.

IV. Attachment Space Use

    12. Attachment space use must conform to the standards of section 
224(f)(2) with respect to safety, reliability and generally applicable 
engineering standards. When an attaching entity conforms to these 
standards, the issue remaining is whether a utility may impose 
additional limits on the use of the space. We note, for example, in the 
context of a pole attachment by a cable television system which also 
provides nonvideo communication, the Commission has determined that a 
utility may not charge different pole attachment rates depending on the 
type of service provided by the cable operator. See Heritage 
Cablevision Assocs. of Dallas, L.P. v. Texas Utils. Elec. Co., 6 FCC 
Rcd. 7099 (1991), aff'd sub nom. Texas Utils. Elec. Co. v. FCC, 997 
F.2d 925 (D.C. Cir. 1993). The Commission found that ``Section 224 
protects TCI's pole attachments within its franchise service area which 
support equipment employed to provide nonvideo services in addition to 
video and other traditional cable television services'' and that the 
``imposition of a separate charge for TCI's cable system pole 
attachments for nontraditional services violates section 224's 
prohibition against unjust and unreasonable pole attachment rates, 
terms and conditions.'' Id. at 7107. We seek comment on whether our 
holding in Heritage should be extended to other circumstances where 
utilities attempt to condition or limit the use of attachment space.
    13. Given the pro-competitive intent of the 1996 Act, we 
tentatively conclude that telecommunications carriers should be 
permitted to overlash their existing lines with additional fiber when 
building out their system. If a telecommunications carrier is allowed 
to overlash its own lines, should it be permitted to allow third 
parties to use the overlashed facility? Moreover, we seek comment 
whether a cable system or telecommunications carrier may allow a third 
party to use dark fiber in its original lines. Where an attaching 
entity has overlashed with fiber, should it be permitted to allow third 
parties to use dark fiber within its overlashed line? We inquire 
whether a third party should be permitted to overlash to an existing 
cable system or telecommunications carriers' attachment. We also seek 
information whether there are inherent differences between the lines of 
cable systems and those of telecommunications carriers that warrant a 
difference in treatment between overlashing by cable systems and 
telecommunications carriers. Similarly, we request that commenters 
discuss whether, and to what extent, overlashing facilitates the 
provision of services other than cable service by cable operators, such 
as Internet access and local telephone service. We seek information on 
how these situations should be treated for the purpose of counting 
entities in the process of establishing a just and reasonable rate. We 
seek comment on the contractual obligations that utilities should be 
permitted to require of attaching entities who lease excess dark fiber 
or allow overlashing. We inquire how best to promote the rapid 
deployment of competitive telecommunications services in light of these 
issues.

V. Charges for Attaching

A. Presumptions

    14. In a previous order, the Commission found that ``the most 
commonly used poles are 35 and 40 feet high, with usable spaces of 11 
to 16 feet, respectively.'' The Commission recognized the NESC 
guideline that 18 feet of the pole space must be reserved for ground 
clearance and that six feet of pole space is for setting the depth of 
the pole. To avoid a pole by pole rate calculation, the Commission 
adopted rebuttable presumptions of an average pole height of 37.5 feet, 
an average

[[Page 43966]]

amount of usable space of 13.5 feet, and an average amount of 24 feet 
of unusable space on a pole.
    15. A group of electrical utilities recently filed a Whitepaper 
(``Whitepaper'') in anticipation of this NPRM. The Whitepaper suggests 
that an increase in the current presumptive pole height is appropriate. 
The Whitepaper asserts that over time, and with increased demand, the 
average pole height has increased to an average of 40 feet. At the same 
time, the Whitepaper contends that the usable space presumption should 
also be changed from 13.5 feet to 11 feet. We seek comment in this 
proceeding to establish a full record for attachments made by 
telecommunications carriers under the 1996 Act. We also seek comment on 
an issue raised by Duquesne Light Company (``Duquesne'') in its 
reconsideration petition of the Commission's decision in the Local 
Competition Provisions proceeding. Specifically, Duquesne advocates 
that the number of physical attachments of an attaching entity is not 
necessarily reflective of the burden, and therefore the costs, relating 
to the attachment. Duquesne states that varying attachments place 
different burdens on the pole and proposes that any presumption include 
factors addressing weight and wind loads.
    16. The presumptions were established because developing a data 
base for each utility is impractical. We seek comment on the need for 
presumptions and whether attachments by telecommunications carriers are 
sufficiently different or unique to cause us to reevaluate our 
presumptions. Specifically, we seek comment on the amount of usable 
space occupied by telecommunications carriers and on whether the 
presumptive one foot used for cable is applicable to telecommunications 
carriers generally.
    17. We also propose that the Commission's approach to the safety 
space required to be maintained between power lines and communications 
lines should also apply to telecommunications carriers. The Commission 
has always recognized the NESC requirement that a 40 inch safety space 
must exist between electric lines and communication lines. The NESC 
requires a 40 inch safety space to minimize the possibility of physical 
contact by employees working on cable television or telecommunications 
attachments with the potentially lethal electric power lines. We 
tentatively conclude that the safety space emanates from a utility's 
requirement to comply with the NESC and should properly be assigned to 
the utility as part of its usable space.

B. Allocating the Cost of Other Than Usable Space

    18. Section 224(e)(2) states that ``[a] utility shall apportion the 
cost of providing space on a pole, duct, conduit, or right-of-way other 
than the usable space among entities so that such apportionment equals 
two-thirds of the costs of providing space other than usable space that 
would be allocated to such entity under an equal apportionment of such 
costs among all attaching entities.'' This requirement translates to 
the following basic formula:
[GRAPHIC] [TIFF OMITTED] TP18AU97.000

    19. Under section 224(e)(2), the number of entities with pole 
attachments on each pole affects directly the rate charged. Defining 
what an attacher is and establishing how to calculate the number of 
attachers is critical to formulating a proper cost allocation method 
pursuant to section 224(e)(2). The more attaching entities there are, 
the more widely the costs relating to the unusable space are spread. We 
propose, consistent with the statutory language, requiring equal 
apportionment of two-thirds of the costs of providing unusable space 
among all attaching entities, that any telecommunications carrier, or 
cable operator or LEC attaching to a pole be counted as a separate 
entity for the purposes of the apportionment of two-thirds of the costs 
of the unusable space. We also propose that such costs will be 
apportioned equally to all such attaching entities. We seek comment on 
these tentative conclusions. We also note that section 224(g) requires 
that a utility providing telecommunications services impute to its 
costs of providing service an amount equal to the rate for which such 
company would be liable under this section. We tentatively conclude 
that where a utility is providing telecommunications services, such 
entity would also be counted as an attaching entity for the purposes of 
allocating the costs of unusable space under section 224(e). We seek 
comment on this tentative conclusion.
    20. We also tentatively conclude that an incumbent LEC with 
attachments on a pole should be counted for the purposes of 
apportionment of the costs of unusable space. We note that the 
definition of telecommunications carrier excludes incumbent LECs and a 
pole attachment is defined as any attachment by a cable television 
system or a provider of telecommunications service, and seek comment on 
how these definitions impact our tentative conclusion. We also seek 
comment on the general premise that counts any telecommunications 
carrier as a separate attaching entity for each foot, or partial 
increment of a foot, it occupies on the pole and on such a 
methodology's consistency with the statutory requirement in section 
224(e)(2) for equal apportionment among all attaching entities. We also 
seek information on alternative methodologies to apportion costs, such 
as on a proportion of space occupied basis.
    21. Similarly, we propose that attachments made by a government 
agency be included. A utility may be required under its franchise or 
statutory authorization to provide certain attachments for public use. 
These include traffic signals, festoon lighting, or specific pedestrian 
lighting. Often, the agency does not directly pay for the attachment. 
Since the government agency is using space on the pole, we propose that 
its attachments be counted for purposes of allocating the cost of the 
unusable space. This cost would be borne by the pole owner, since it 
relates to a responsibility under its franchise or statutory 
authorization. We seek comment on this tentative conclusion.
    22. We seek comment on how entities that have either overlashed to 
an existing attachment or are using dark fiber within the initial 
attachment of another entity should be counted for the purpose of 
allocation of costs of unusable space. Should they be considered as 
separate attachers for purposes of counting the number of entities on a 
pole?
    23. We believe a pole-by-pole inventory of the number of entities 
on each pole would be too costly. We propose that each utility develop, 
through the information it possesses, a presumptive average number of 
attachers on one of its poles. We also

[[Page 43967]]

propose that telecommunications carriers be provided the methodology 
and information by which a utility's presumption was determined. We 
seek comment on this proposal and whether any parameters should be 
established for a utility to develop its presumptive average. We also 
seek comment on whether a utility should develop averages for areas 
that share similar characteristics relating to pole attachments and 
whether different presumptions should exist for urban, suburban, and 
rural areas. We seek comment on the criteria to develop and evaluate 
any presumption. As an alternative to a pole by pole inventory by the 
facility owner, we seek comment on whether the Commission should 
determine the average number of attachments. We inquire whether the 
Commission should initiate a survey to gain the necessary data to 
develop a rebuttable presumption regarding the number of attachments. 
We seek comment on the difficulties of administrating a survey, any 
additional data required, and parameters of accuracy and reliability 
required for fair rate determination.
    24. Where a presumptive number of attachers is developed by the 
Commission and used to determine attachment rates, we believe that a 
utility, telecommunications carrier or cable operator may challenge the 
presumption. The challenging party must initially establish that the 
presumption is not proper under the circumstances by identifying and 
calculating the number of attachments on the poles and submitting what 
it believes to be an appropriate average. Where the number of poles is 
large, and complete inspection impractical, a statistically sound 
survey should be submitted. Where a presumption is challenged, the 
challenged party will be afforded an opportunity to justify the 
presumption. Where a presumption is overcome either by submission of 
actual data or by survey, the resulting figures would be used as the 
factor (number of attachers) within the formula to calculate the rate. 
We seek comment on these issues.

C. Allocating the Cost of Usable Space

    25. The Commission has adopted the following generally applicable 
formula for calculating the maximum rate:
[GRAPHIC] [TIFF OMITTED] TP18AU97.001

    26. The first component of the formula, space occupied by 
attachment divided by the total usable space on a pole, is used to 
calculate the percentage of usable space that the attachment occupies 
on an average pole. The Commission's rules define usable space as the 
space on a utility pole above the minimum grade level that can be used 
for the attachment of wires, cables and associated equipment. As 
discussed, for cable television system attachments, the Commission's 
Petition to Adopt Rules Concerning Usable Space on Utility Poles 
assigned one foot of usable space per pole to cable systems.
    27. The second component of the overall formula is the net cost of 
a bare pole. The component is derived from the gross investment in 
poles less accumulated depreciation and accumulated deferred income 
taxes. An adjustment is made to a utility's net pole investment to 
eliminate the investment in crossarms and other non-pole related items. 
To accomplish this, the Commission decided to reduce net pole 
investment by 15% for electric utilities and 5% for telephone 
companies. 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. The 0.85 factor for electric utilities recognizes this 
difference. To arrive at the net cost of a bare pole, a factor, 0.85 
for electric utilities or 0.95 for telephone companies, is multiplied 
by the net investment per pole, as shown in the following formula:
[GRAPHIC] [TIFF OMITTED] TP18AU97.002

    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. 
We seek comment on the use of these factors for arriving at the net 
cost of bare pole.
    28. The final component of the overall 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 taxes. To help calculate the carrying charge rate, we 
developed a formula that relates each of these components to the 
utility's net investment.
    29. Section 224(e)(3) states that: ``[A] utility shall apportion 
the cost of providing usable space among all entities according to the 
percentage of usable space required for each entity.'' This is the 
allocation methodology developed by the Commission as applicable to 
cable systems--except that under the Commission's method the allocation 
rate is applied to the full cost of the pole. As noted, in the Pole 
Attachment NPRM, we are seeking comment on various aspects of the 
current formula including the current space presumptions. We propose to 
continue using our current rate methodology, modified to reflect only 
the cost associated with the usable space, because we believe this 
methodology to be as applicable to telecommunications carriers as to 
cable systems. Thus, we would apply the following formula:

[[Page 43968]]

[GRAPHIC] [TIFF OMITTED] TP18AU97.003

    30. Alternatively, as we did in the Pole Attachment NPRM, we seek 
additional comment in the context of this proceeding on calculating a 
telecommunications carrier pole attachment rate using gross book costs 
instead of net book costs. Under this approach the cost of a bare pole 
and most carrying charges are computed using gross book costs. The rate 
of return and the income tax carrying charges must continue to be 
computed using net book costs because utility prices are generally set 
to allow them to earn an authorized rate of return on their net book 
costs. We currently compute the carrying charge elements for 
maintenance, depreciation and administrative expenses, as well as for 
return on investment and taxes, using net book costs. Under the 
proposed alternative, the carrying charge elements for maintenance, 
depreciation and administrative expenses would be calculated using 
gross book costs for both total plant investment and pole investment. 
For example, the administrative expense element is currently calculated 
by dividing total administrative and general expenses by net book cost. 
This yields a percentage that is applied to the net book cost of a bare 
pole. In contrast, a gross book cost approach to allocation would 
divide total administrative and general expenses by gross book costs. 
The resulting percentage would then be applied to the gross book cost 
of the bare pole. Prior to the Pole Attachment Order, the Commission 
had decided certain cases using gross book costs to calculate maximum 
reasonable pole attachment rates. In addition, the Commission has 
stated that if both parties to a pole attachment complaint agree, the 
pole attachment rates may be computed using gross book costs. The use 
of gross book costs appears consistent with the legislative history 
supporting section 224, which indicates that the Commission has 
significant discretion in selecting a methodology for determining just 
and reasonable pole attachment rates. We seek comment on this 
alternative to ensure a complete record in order to create a reasonable 
telecommunications carrier pole attachment rate methodology. We note, 
however, that because of the way administrative costs are allocated, 
the application of gross book costs may produce a slightly higher rate. 
We seek comment on whether this assumption is true and if so what the 
impact of this change would be.
    31. We also seek comment on the applicability of the above formula 
when an entity either has overlashed to an existing attachment or is 
using dark fiber within the initial attachment of another entity. 
Should we still continue to apply the presumptive one foot of space 
occupied by the attacher when allocating the cost of the usable space 
or should the entity overlashing or using dark fiber be considered a 
separate attacher, with each using one foot of usable space? As noted 
previously, if the presumptive one foot is not appropriate, we inquire 
as to what presumption should be used?

VI. Conduit Attachment Issues

A. Application of the Pole Attachment Formula to Conduits

    32. Conduit systems are structures that provide physical protection 
for cables and also allow new cables to be added inexpensively along a 
route, over a long period of time, without having to dig up the streets 
each time a new cable is placed. Conduit systems are usually multiple-
duct structures with standardized duct diameters. The duct diameter is 
the principle factor for determining the maximum number of cables that 
can be placed in a duct. We seek additional comment on the differences 
between conduit owned and/or used by cable operators and 
telecommunications carriers and conduit owned and or used by electric 
or other utilities. We understand that there are inherent differences 
in the safety aspects of the latter conduits and ducts, and we seek 
comment on physical limitations that would affect the rate for such 
facilities. Where such conduit is shared, we seek information on the 
mechanism for establishing a just and reasonable rate. We seek comment 
on the distribution of usable and unusable space within the conduit or 
duct and how the determination for such space is made. In this NPRM we 
are not addressing the access or safety provisions, as those issues are 
more appropriately addressed in the context of the Local Competition 
Provisions Order. Rather, we are interested in the application of our 
formula for the purpose of setting just and reasonable rates. Our 
present formula does not appear to take such differences into 
consideration, and our experience in resolving disputes relating to 
electric or other utility conduit has been limited.
    33. Usable space is based on the number of ducts and the diameter 
of the ducts. Section 224(e)(3) states that the cost of providing 
usable space shall be apportioned according to the percentage of usable 
space required for the entity using the conduit. In the Pole Attachment 
NPRM, the Commission has sought comment on a proposed conduit 
methodology. Moreover, we propose a half-duct methodology as the amount 
of space used by a cable system or telecommunications carrier that is, 
the space occupied by a cable system was generally a half-duct.
    34. The proposed usable space formula for users of conduits would 
thus be represented as follows:
[GRAPHIC] [TIFF OMITTED] TP18AU97.004

    We seek comment on this presumption's applicability in determining 
usable space and allocating cost to the telecommunications carrier.
    35. As discussed above, section 224(e)(2) requires that two-thirds 
of the cost of the unusable space be apportioned equally among all 
attaching entities. The unusable space formula would then be 
represented as follows:

[[Page 43969]]

[GRAPHIC] [TIFF OMITTED] TP18AU97.005

    We seek comment on what portions of duct or conduit are 
``unusable'' within the terms of the 1996 Act. We propose that a 
presumptive ratio of usable ducts to maintenance ducts be adopted to 
establish the amount of unusable space. We seek comment on how this 
proposal impacts determining an appropriate ratio of usable to unusable 
space within a duct or conduit.
    36. As with poles, defining what an attaching entity is and 
establishing how to calculate the number of attaching entities is 
critical. We also seek comment on the use an attaching entity may make 
of its assigned space, including allowing others to use its dark fiber. 
Consistent with the half-duct convention proposed in the Pole 
Attachment NPRM, we believe that each entity using one half-duct be 
counted as a separate attaching entity. We seek comment on this method 
of counting attaching entities for the purpose of allocating the cost 
of the unusable space consistent with section 224(e).

VII. Rights-of-Way Issues

    37. The access and reasonable rate provisions of section 224 are 
applicable where a cable operator or telecommunications carrier seeks 
to install facilities in a right-of-way but does not make a physical 
attachment to any pole, duct or conduit. The Commission's proceedings 
and cases generally have addressed issues involving physical 
attachments to poles, ducts, or conduits. Our experience relating to 
solely rights-of-way circumstances is limited. We seek information 
regarding the degree rights-of-way access issues will arise and the 
range of circumstances that will be involved. We ask whether the 
Commission should adopt rules reflecting a methodology and/or formula 
to determine a just and reasonable rate, or whether rights-of-way 
complaints should be addressed on a case-by-case basis. We seek comment 
on whether rights-of-way cases will be of such number that a 
methodology is necessary, and whether the range of circumstances 
involving rights-of-way can be discerned into a generic methodology. If 
a methodology is appropriate, we seek comment on the elements, 
including any presumptions, that will calculate the costs relating to 
usable and unusable space. We also seek information regarding whether 
information necessary for any formula is available through a utility's 
accounting structure, as costs relating to rights-of-way may be 
different than poles, ducts and conduit.

VIII. Implementation

    38. Section 224(e)(4) requires the Commission to implement the 
telecommunications carrier rate methodology on February 8, 2001. 
Section 224(e)(4) states that ``The regulations required under 
paragraph one shall become effective five years after enactment of the 
Telecommunications Act of 1996. Any increase in the rates for pole 
attachments that result from the adoption of the regulations required 
by this subsection shall be phased in equal annual increments over a 
period of five years beginning on the effective date of such 
regulations.'' The statutory language of section 224(e)(4) requires 
that any rate increase be phased in over five years in equal annual 
increments beginning on that date. We propose that the amount of 
increase should be phased in at the beginning of the five years and 
one-fifth of that amount should be added to the rate in each of the 
subsequent five years. We seek comment on this proposed five year phase 
in of the telecommunications carrier rate. We also seek comment on any 
other proposals that would equitably phase in the telecommunication 
carrier rate within the five years allotted by section 224(e)(4).

IX. Initial Regulatory Flexibility Act Analyses

    39. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared an Initial Regulatory Flexibility Analysis 
(IRFA) of the expected significant economic impact on small entities by 
the policies and rules proposed in this Notice of Proposed Rulemaking 
(NPRM). Written public comments are requested on the IRFA. Comments 
must be identified as responses to the IRFA and must be filed by the 
deadlines established in paragraph 76 of this NPRM. The Secretary shall 
send a copy of this NPRM, including the IRFA, to the Chief Counsel for 
Advocacy of the Small Business Administration (SBA) in accordance with 
the RFA.
    40. Need for Action and Objectives of the Proposed Rule. In 1987, 
the Commission adopted its current pole attachment formula for 
calculating the maximum just and reasonable rates utilities may charge 
cable systems for pole attachments. In this NPRM, we seek comment as to 
whether the current pole attachment formula should be modified or 
adjusted to eliminate certain anomalies and rate instabilities 
particular parties assert have occurred. We have also tentatively 
proposed such possible modifications to the formula, should altering 
the formula become necessary, that would improve the accuracy of the 
formula. In addition, we propose changes to the formula to reflect the 
present part 32 accounting system that replaced the former part 31 
rules in 1988. Finally, we propose a new conduit methodology that will 
determine the maximum just and reasonable rates utilities may charge 
cable systems and telecommunications carriers for their attachments to 
conduit systems.
    41. Legal Basis. The authority for the action proposed for this 
rulemaking is contained in sections 1, 4(i), 4(j), 224, 303 and 403 of 
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 
154(j), 224, 303 and 403.
    42. Description and Estimate of the Number of Small Entities 
Impacted. The RFA generally defines a ``small entity'' as having the 
same meaning as the terms ``small business,'' ``small organization,'' 
``small governmental jurisdiction.'' In addition, the term ``small 
business'' has the same meaning as the term small business concern 
under the Small Business Act. A ``small business concern'' is one that: 
(1) Is independently owned and operated; (2) is not dominant in its 
field of operation; and (3) satisfies any additional criteria 
established by the Small Business Administration (SBA). For many of the 
entities described below, the SBA has defined small business categories 
through Standard Industrial Classification (SIC) codes.
    43. Total Number of Utilities Affected. Many of the decisions and 
rules proposed herein may have a significant effect on a substantial 
number of utility companies. Section 224 of the Statue defines a 
``utility'' 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, conduits, 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.'' The SBA has provided 
the

[[Page 43970]]

Commission with a list of utility firms which may be affected by this 
rulemaking. Based upon the SBA's list, the Commission seeks comment as 
to whether all of the following utility firms are relevant to section 
224.
    44. Electric Services (SIC 4911). The SBA has developed a 
definition for small electric utility firms. The Census Bureau reported 
that 447 of the 1,379 firms listed had total revenues below five 
million dollars. The Census Bureau reports that a total of 1,379 
electric utilities were in operation for at least one year at the end 
of 1992. According to SBA, a small electric utility is an entity whose 
gross revenues did not exceed five million dollars in 1992. Electric 
and Other Services Combined (SIC 4931). The SBA has classified this 
entity as a utility whose business is less than 95% electric in 
combination with some other type of service. The Census Bureau reports 
that a total of 135 such firms were in operation for at least one year 
at the end of 1992. The SBA's definition of a small electric and other 
services combined utility is a firm whose gross revenues did not exceed 
five million dollars in 1992. The Census Bureau reported that 45 of the 
135 firms listed had total revenues below five million dollars. 
Combination Utilities, Not Elsewhere Classified (SIC 4939). The SBA 
defines this utility as providing a combination of electric, gas, and 
other services which are not otherwise classified. The Census Bureau 
reports that a total of 79 such utilities were in operation for at 
least one year at the end of 1992. According to SBA's definition, a 
small combination utility is a firm whose gross revenues did not exceed 
five million dollars in 1992. The Census Bureau reported that 63 of the 
79 firms listed had total revenues below five million dollars.
    45. Natural Gas Transmission (SIC 4922). The SBA's definition of a 
natural gas transmitter is an entity that is engaged in the 
transmission and storage of natural gas. The Census Bureau reports that 
a total of 144 such firms were in operation for at least one year at 
the end of 1992. According to SBA's definition, a small natural gas 
transmitter is an entity whose gross revenues did not exceed five 
million dollars in 1992. The Census Bureau reported that 70 of the 144 
firms listed had total revenues below five million dollars. Natural Gas 
Transmission and Distribution (SIC 4923). The SBA has classified this 
entity as a utility that transmits and distributes natural gas for 
sale. The Census Bureau reports that a total of 126 such entities were 
in operation for at least one year at the end of 1992. The SBA's 
definition of a small natural gas transmitter and distributer is a firm 
whose gross revenues did not exceed five million dollars. The Census 
Bureau reported that 43 of the 126 firms listed had total revenues 
below five million dollars. Natural Gas Distribution (SIC 4924). The 
SBA defines a natural gas distributor as an entity that distributes 
natural gas for sale. The Census Bureau reports that a total of 478 
such firms were in operation for at least one year at the end of 1992. 
According to the SBA, a small natural gas distributor is an entity 
whose gross revenues did not exceed five million dollars in 1992. The 
Census Bureau reported that 267 of the 478 firms listed had total 
revenues below five million dollars. Mixed, Manufactured, or Liquefied 
Petroleum Gas Production and/or Distribution (SIC 4925). The SBA has 
classified this entity as a utility that engages in the manufacturing 
and/or distribution of the sale of gas. These mixtures may include 
natural gas. The Census Bureau reports that a total of 43 such firms 
were in operation for at least one year at the end of 1992. The SBA's 
definition of a small mixed, manufactured or liquefied petroleum gas 
producer or distributor is a firm whose gross revenues did not exceed 
five million dollars in 1992. The Census Bureau reported that 31 of the 
43 firms listed had total revenues below five million dollars. Gas and 
Other Services Combined (SIC 4932). The SBA has classified this entity 
as a gas company whose business is less than 95% gas, in combination 
with other services. The Census Bureau reports that a total of 43 such 
firms were in operation for at least one year at the end of 1992. 
According to the SBA, a small gas and other services combined utility 
is a firm whose gross revenues did not exceed five million dollars in 
1992. The Census Bureau reported that 24 of the 43 firms listed had 
total revenues below five million dollars.
    46. Water Supply (SIC 4941). The SBA defines a water utility as a 
firm who distributes and sells water for domestic, commercial and 
industrial use. The Census Bureau reports that a total of 3,169 water 
utilities were in operation for at least one year at the end of 1992. 
According to SBA's definition, a small water utility is a firm whose 
gross revenues did not exceed five million dollars in 1992. The Census 
Bureau reported that 3,065 of the 3,169 firms listed had total revenues 
below five million dollars.
    47. Sewage Systems (SIC 4952). The SBA defines a sewage firm as a 
utility whose business is the collection and disposal of waste using 
sewage systems. The Census Bureau reports that a total of 410 such 
firms were in operation for at least one year at the end of 1992. 
According to SBA's definition, a small sewerage system is a firm whose 
gross revenues did not exceed five million dollars. The Census Bureau 
reported that 369 of the 410 firms listed had total revenues below five 
million dollars. Refuse Systems (SIC 4953). The SBA defines a firm in 
the business of refuse as an establishment whose business is the 
collection and disposal of refuse ``by processing or destruction or in 
the operation of incinerators, waste treatment plants, landfills, or 
other sites for disposal of such materials.'' The Census Bureau reports 
that a total of 2,287 such firms were in operation for at least one 
year at the end of 1992. According to SBA's definition, a small refuse 
system is a firm whose gross revenues did not exceed six million 
dollars. The Census Bureau reported that 1,908 of the 2,287 firms 
listed had total revenues below six million dollars. Sanitary Services, 
Not Elsewhere Classified (SIC 4959). The SBA defines these firms as 
engaged in sanitary services. The Census Bureau reports that a total of 
1,214 such firms were in operation for at least one year at the end of 
1992. According to SBA's definition, a small sanitary service firms 
gross revenues did not exceed five million dollars. The Census Bureau 
reported that 1,173 of the 1,214 firms listed had total revenues below 
five million dollars.
    48. Steam and Air Conditioning Supply (SIC 4961). The SBA defines a 
steam and air conditioning supply utility as a firm who produces and/or 
sells steam and heated or cooled air. The Census Bureau reports that a 
total of 55 such firms were in operation for at least one year at the 
end of 1992. According to SBA's definition, a steam and air 
conditioning supply utility is a firm whose gross revenues did not 
exceed nine million dollars. The Census Bureau reported that 30 of the 
55 firms listed had total revenues below nine million dollars.
    49. Irrigation Systems (SIC 4971). The SBA defines irrigation 
systems as firms who operate water supply systems for the purpose of 
irrigation. The Census Bureau reports that a total of 297 firms were in 
operation for at least one year at the end of 1992. According to SBA's 
definition, an irrigation service is a firm whose gross revenues did 
not exceed five million dollars. The Census Bureau reported that 286 of 
the 297 firms listed had total revenues below five million dollars.
    50. Total Number of Telephone Companies Affected (SIC 4813). Many 
of the decisions and rules proposed herein

[[Page 43971]]

may have a significant effect on a substantial number of small 
telephone companies. The SBA has defined a small business for Standard 
Industrial Classification (SIC) category 4813 (Telephone 
Communications, except Radiotelephone) to be a small entity when it has 
no more than 1500 employees. The Census Bureau reports that, at the end 
of 1992, there were 3,497 firms engaged in providing telephone 
services, as defined therein, for at least one year. This number 
contains a variety of different categories of carriers, including local 
exchange carriers (LECs), interexchange carriers, competitive access 
providers, cellular carriers, mobile service carriers, operator service 
providers, pay telephone operators, PCS providers, covered SMR 
providers, and resellers. It seems certain that some of those 3,497 
telephone service firms may not qualify as small entities or small 
incumbent LECs because they are not ``independently owned and 
operated.'' It seems reasonable to conclude, therefore, that fewer than 
3,497 telephone service firms are small entity telephone service firms 
or small incumbent LECs that may be affected by this NPRM. Below, we 
estimate the potential number of small entity telephone service firms 
or small incumbent LEC's that may be affected by this service category.
    51. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
other than radiotelephone (wireless) companies. The Census Bureau 
reports that, there were 2,321 such telephone companies in operation 
for at least one year at the end of 1992. According to SBA's 
definition, a small business telephone company other than a 
radiotelephone company is one employing no more than 1,500 persons. Of 
the 2,321 non-radiotelephone companies listed by the Census Bureau 
2,295 were reported to have fewer than 1,000 employees. Thus, at least 
2,295 non-radiotelephone companies that might qualify as small entities 
or small incumbent LECs, or small entities based on these employment 
statistics. Although it seems certain that some of these carriers are 
not independently owned and operated, we are unable at this time to 
estimate with greater precision the number of wireline carriers and 
service providers that would qualify as small business concerns under 
SBA's definition. Consequently, we estimate that there are fewer than 
2,295 small entity telephone communications companies other than 
radiotelephone companies that may be affected by the decisions or rules 
that come about from this NPRM.
    52. Local Exchange Carriers. Neither the Commission nor SBA has 
developed a definition of small providers of local exchange services 
(LECs). The closest applicable definition under SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies. The most reliable source of information regarding the number 
of LECs nationwide of which we are aware appears to be the data that we 
collect annually in connection with the Telecommunications Relay 
Service (TRS Worksheet). According to our most recent data, 1,347 
companies reported that they were engaged in the provision of local 
exchange services. Although it seems certain that some of these 
carriers are not independently owned and operated, or have more than 
1,500 employees, we are unable at this time to estimate with greater 
precision the number of LECs that would qualify as small business 
concerns under SBA's definition. Consequently, we estimate that there 
are fewer than 1,347 small incumbent LECs that may be affected by this 
NPRM.
    53. Interexchange Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of interexchange services (IXCs). The closest applicable 
definition under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies (SIC 4813). The most 
reliable source of information regarding the number of IXCs nationwide 
of which we are aware appears to be the data that we collect annually 
in connection with TRS. According to our most recent data, 130 
companies reported that they were engaged in the provision of 
interexchange services. Although it seems certain that some of these 
carriers are not independently owned and operated, or have more than 
1,500 employees, we are unable at this time to estimate with greater 
precision the number of IXCs that would qualify as small business 
concerns under SBA's definition. Consequently, we estimate that there 
are fewer than 130 small entity IXCs that may be affected by the 
decisions and rules proposed in this NPRM.
    54. Competitive Access Providers. Neither the Commission nor SBA 
has developed a definition of small entities specifically applicable to 
providers of competitive access services (CAPs). The closest applicable 
definition under SBA rules is for telephone communications companies 
other than radiotelephone (wireless) companies (SIC 4813). The most 
reliable source of information regarding the number of CAPs nationwide 
of which we are aware appears to be the data that we collect annually 
in connection with the TRS Worksheet. According to our most recent 
data, 57 companies reported that they were engaged in the provision of 
competitive access services. Although it seems certain that some of 
these carriers are not independently owned and operated, or have more 
than 1,500 employees, we are unable at this time to estimate with 
greater precision the number of CAPs that would qualify as small 
business concerns under SBA's definition. Consequently, we estimate 
that there are fewer than 57 small entity CAPs that may be affected by 
the decisions and rules proposed in this NPRM.
    55. Wireless (Radiotelephone) Carriers. Although wireless carriers 
have not historically affixed their equipment to utility poles, 
pursuant to the terms of the 1996 Act, such entities are entitled to do 
so with rates consistent with the Commission's rules discussed herein. 
SBA has developed a definition of small entities for radiotelephone 
(wireless) companies. The Census Bureau reports that there were 1,176 
such companies in operation for at least one year at the end of 1992. 
According to SBA's definition, a small business radiotelephone company 
is one employing no more than 1,500 persons. The Census Bureau also 
reported that 1,164 of those radiotelephone companies had fewer than 
1,000 employees. Thus, even if all of the remaining 12 companies had 
more than 1,500 employees, there would still be 1,164 radiotelephone 
companies that might qualify as small entities if they are 
independently owned and operated. Although it seems certain that some 
of these carriers are not independently owned and operated, we are 
unable at this time to estimate with greater precision the number of 
radiotelephone carriers and service providers that would qualify as 
small business concerns under SBA's definition. Consequently, we 
estimate that there are fewer than 1,164 small entity radiotelephone 
companies that may be affected by this NPRM.
    56. Cellular Service Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
providers of cellular services. The closest applicable definition under 
SBA rules is for telephone communications companies other than 
radiotelephone (wireless) companies (SIC 4812). The most reliable 
source of information regarding the number of cellular service carriers

[[Page 43972]]

nationwide of which we are aware appears to be the data that we collect 
annually in connection with the TRS Worksheet. According to our most 
recent data, 792 companies reported that they were engaged in the 
provision of cellular services. Although it seems certain that some of 
these carriers are not independently owned and operated, or have more 
than 1,500 employees, we are unable at this time to estimate with 
greater precision the number of cellular service carriers that would 
qualify as small business concerns under SBA's definition. 
Consequently, we estimate that there are fewer than 792 small entity 
cellular service carriers that may be affected by the decisions and 
rules proposed in this NPRM.
    57. Mobile Service Carriers. Neither the Commission nor SBA has 
developed a definition of small entities specifically applicable to 
mobile service carriers, such as paging companies. The closest 
applicable definition under SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies. The most 
reliable source of information regarding the number of mobile service 
carriers nationwide of which we are aware appears to be the data that 
we collect annually in connection with the TRS Worksheet. According to 
our most recent data, 117 companies reported that they were engaged in 
the provision of mobile services. Although it seems certain that some 
of these carriers are not independently owned and operated, or have 
more than 1,500 employees, we are unable at this time to estimate with 
greater precision the number of mobile service carriers that would 
qualify under SBA's definition. Consequently, we estimate that there 
are fewer than 117 small entity mobile service carriers that may be 
affected by the decisions and rules proposed in this NPRM.
    58. Broadband Personal Communications Services (PCS) Licensees. The 
broadband PCS spectrum is divided into six frequency blocks designated 
A through F and the Commission has held auctions for each block. The 
Commission has defined ``small entity'' for Blocks C and F as an entity 
that has average gross revenues of less than $40 million in the three 
previous calendar years. For Block F, an additional classification for 
``very small business'' was added and is defined as an entity that, 
together with their affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. These 
regulations defining ``small entity'' in the context of broadband PCS 
auctions has been approved by the SBA. No small businesses within the 
SBA-approved definition bid successfully for licenses in Blocks A and 
B. There were 90 winning bidders that qualified as small entities in 
the Block C auction. A total of 93 small and very small business 
bidders won approximately 40% of the 1,479 licenses for Blocks D, E, 
and F. However, licenses for blocks C through F have not been awarded 
fully, therefore there are few, if any, small businesses currently 
providing PCS services. Based on this information, we conclude that the 
number of broadband PCS licensees will include the 90 winning C Block 
bidders and the 93 qualifying bidders in the D, E, and F blocks, for a 
total of 183 small PCS providers as defined by the SBA and the 
Commission's auction rules.
    59. Specialized Mobile Radio (SMR) Licensees. Pursuant to 47 CFR 
90.814(b)(1), the Commission has defined ``small entity'' in auctions 
for geographic area 800 MHz and 900 MHz SMR licenses as a firm that had 
average annual gross revenues of less than $15 million in the three 
previous calendar years. This definition of a ``small entity'' in the 
context of 800 MHz and 900 MHz SMR has been approved by the SBA. The 
rules adopted in this NPRM may apply to SMR providers in the 800 MHz 
and 900 MHz bands that either hold geographic area licenses or have 
obtained extended implementation authorizations. We do not know how 
many firms provide 800 MHz or 900 MHz geographic area SMR service 
pursuant to extended implementation authorizations, nor how many of 
these providers have annual revenues of less than $15 million. We 
assume, for purposes of this FRFA, that all of the extended 
implementation authorizations may be held by small entities, which may 
be affected by the decisions and rules adopted in this NPRM.
    60. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we conclude that the number of geographic area SMR 
licensees affected by the rule adopted in this Order includes these 60 
small entities. No auctions have been held for 800 MHz geographic area 
SMR licenses. Therefore, no small entities currently hold these 
licenses. A total of 525 licenses will be awarded for the upper 200 
channels in the 800 MHz geographic area SMR auction. However, the 
Commission has not yet determined how many licenses will be awarded for 
the lower 230 channels in the 800 MHz geographic area SMR auction. 
There is no basis, moreover, on which to estimate how many small 
entities will win these licenses. Given that nearly all radiotelephone 
companies have fewer than 1,000 employees and that no reliable estimate 
of the number of prospective 800 MHz licensees can be made, we assume, 
for purposes of this IRFA, that all of the licenses may be awarded to 
small entities who, thus, may be affected by the decisions proposed in 
this NPRM.
    61. Resellers. Neither the Commission nor SBA has developed a 
definition of small entities specifically applicable to resellers. The 
closest applicable definition under SBA rules is for all telephone 
communications companies (SIC 4812 and 4813). The most reliable source 
of information regarding the number of resellers nationwide of which we 
are aware appears to be the data that we collect annually in connection 
with the TRS Worksheet. According to our most recent data, 260 
companies reported that they were engaged in the resale of telephone 
services. Although it seems certain that some of these carriers are not 
independently owned and operated, or have more than 1,500 employees, we 
are unable at this time to estimate with greater precision the number 
of resellers that would qualify as small business concerns under SBA's 
definition. Consequently, we estimate that there are fewer than 260 
small entity resellers that may be affected by the decisions and rules 
adopted in this NPRM.
    62. Cable Systems (SIC 4841). The SBA has developed a definition of 
small entities for cable and other pay television services, which 
includes all such companies generating less than $11 million in revenue 
annually. This definition includes cable systems operators, closed 
circuit television services, direct broadcast satellite services, 
multipoint distribution systems, satellite master antenna systems and 
subscription television services. According to the Census Bureau, there 
were 1,423 such cable and other pay television services generating less 
than $11 million in revenue.
    63. The Commission has developed its own definition of a small 
cable system operator for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company,'' is one serving fewer 
than 400,000 subscribers nationwide. Based on our most recent 
information, we estimate that there were 1,439 cable systems that 
qualified as small cable system operators at the end of 1995. Since 
then, some of those companies may have grown to serve over 400,000 
subscribers, and others may have been involved in transactions that 
caused them to be combined with

[[Page 43973]]

other cable systems. Consequently, we estimate that there are fewer 
than 1,439 small entity cable system operators that may be affected by 
the decisions and rules proposed in this NPRM.
    64. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1 percent of 
all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 61,700,000 
subscribers in the United States. Therefore, we found that an operator 
serving fewer than 617,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
systems serving 617,000 subscribers or less totals 1,450. Although it 
seems certain that some of these cable system operators are affiliated 
with entities whose gross annual revenues exceed $250,000,000, we are 
unable at this time to estimate with greater precision the number of 
cable system operators that would qualify as small cable systems under 
the definition in the Communications Act.
    65. Municipalities: The term ``small governmental jurisdiction'' is 
defined as ``governments of . . . districts, with a population of less 
than fifty thousand.'' There are 85,006 governmental entities in the 
United States. This number includes such entities as states, counties, 
cities, utility districts and school districts. We note that section 
224 of the Act specifically excludes any utility which is cooperatively 
organized, or any person owned by the Federal Government or any State. 
For this reason, we believe that section 224 will have minimal if any 
affect upon small municipalities. Further, there are 18 States and the 
District of Columbia that regulate pole attachments pursuant to section 
224(c)(1). Of the 85,006 governmental entities, 38,978 are counties, 
cities and towns. The remainder are primarily utility districts, school 
districts, and states. Of the 38,978 counties, cities and towns, 37,566 
or 96%, have populations of fewer than 50,000.
    66. Reporting, Recordkeeping, and other Compliance Requirements: 
The rules proposed in this NPRM will require a change in certain record 
keeping requirements. A pole owner will now have to maintain specific 
records relating to the number of attachers for purposes of computing 
the usable and unusable space calculation for the telecommunications 
carrier rate formula. We seek comment on whether small entities may be 
required to hire additional staff and expend additional time and money 
to comply with the proposals set forth in this NPRM. In addition, we 
seek comment as to whether there will be a disproportionate burden 
placed on small entities in complying with the proposals set forth in 
this NPRM.
    67. Significant Alternatives Which Minimize the Impact on Small 
Entities and Which Are Consistent With State Objectives: The 1996 Act 
requires the Commission to propose a telecommunications carrier 
methodology within two years of the enactment of the 1996 Act. We seek 
comment on various alternative ways of implementing the statutory 
requirements and any other potential impact of these proposals on small 
business entities. We seek comment on the implementation of a 
methodology to ensure just, reasonable and nondiscriminatory pole 
attachment and conduit rates for telecommunications carriers. We also 
seek comment on how to develop a rights-of-way rate methodology for 
telecommunications carriers.
    68. Federal Rules which Overlap, Duplicate, or Conflict with the 
Commission's Proposal: None.

X. Initial Paperwork Reduction Act of 1995 Analysis

    69. This NPRM contains either proposed or modified information 
collections. The Commission, as part of its continuing effort to reduce 
paperwork burdens and to obtain regular Office of Management and Budget 
(``OMB'') approval of the information collections, invites the general 
public and OMB to comment on the information collections contained in 
this rulemaking, as required by the Paperwork Reduction Act of 1995. 
Public and agency comments are due at the same time as other comments 
relating to this NPRM; OMB notification of action is due 60 days from 
date of publication of this NPRM in the Federal Register. Comments 
should address: (a) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.

XI. Procedural Provisions

    70. Ex parte Rules--Non-Restricted Proceeding. This is a non-
restricted notice and comment rulemaking proceeding. Ex parte 
presentations are permitted, except during the Sunshine Agenda period, 
provided that they are disclosed as provided in Commission's rules. See 
generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
    71. Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments on or before September 26, 1997 and reply 
comments on or before October 14, 1997. To file formally in this 
proceeding, you must file an original and six copies of all comments, 
reply comments, and supporting comments. Parties are also asked to 
submit, if possible, draft rules that reflect their positions. If you 
want each Commissioner to receive a personal copy of your comments, you 
must file an original and eleven copies. Comments and reply comments 
should be sent to Office of the Secretary, Federal Communications 
Commission, 1919 M Street, NW., Room 222, Washington, DC 20554, with a 
copy to Larry Walke of the Cable Services Bureau, 2033 M Street, NW., 
Room 408A, Washington, DC 20554. Parties should also file one copy of 
any documents filed in this docket with the Commission's copy 
contractor, International Transcription Services, Inc., 2100 M Street, 
NW., Suite 140, Washington, DC 20037. Comments and reply comments will 
be available for public inspection during regular business hours in the 
FCC Reference Center, 1919 M Street, NW., Room 239, Washington, DC 
20554.
    72. Parties are also asked to submit comments and reply comments on 
diskette, where possible. Such diskette submissions would be in 
addition to and not a substitute for the formal filing requirements 
addressed above. Parties submitting diskettes should submit them to 
Larry Walke of the Cable Services Bureau, 2033 M Street, NW., Room 
408A, Washington, DC 20554. Such a submission must be on a 3.5 inch 
diskette formatted in an IBM compatible form using MS DOS 5.0 and 
WordPerfect 5.1 software. The diskette should be submitted in ``read 
only'' mode. The diskette should be clearly labelled with the party's 
name, proceeding, type of pleading (comment or reply comments) and date 
of

[[Page 43974]]

submission. The diskette should be accompanied by a cover letter.
    73. Written comments by the public must be submitted at the same 
time as those of the Office of Management and Budget (OMB) on the 
proposed and/or modified information collections on or before 60 days 
after publication of the NPRM in the Federal Register. In addition to 
filing comments with the Secretary, a copy of any comments on the 
information collections contained herein should be submitted to Judy 
Boley, Federal Communications Commission, Room 234, 1919 M Street, NW., 
Washington, DC 20554, or via the Internet to [email protected], and to 
Timothy Fain, OMB Desk Officer, 10236 NEOB, 725-17th Street, NW., 
Washington, DC 20503 or via the Internet to [email protected].

XII. Ordering Clauses

    74. It is ordered that pursuant to sections 1, 4(i), 4(j), 224, 303 
and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 154(j), 224, 303 and 403, notice is hereby given of the 
proposals described in this Notice of Proposed Rulemaking.
    75. It is further ordered that the Secretary shall send a copy of 
this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the 
Small Business Administration in accordance with the Regulatory 
Flexibility Act, 5 U.S.C. 603 (2).
    76. For additional information regarding this proceeding, contact 
Larry Walke, Policy and Rules Division, Cable Services Bureau (202) 
418-7200.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

    Note: This attachment will not be published in the Code of 
Federal Regulations.

Attachment--Pole Attachment Formulas (Modified as Proposed)

    Telecommunications Companies:

Maximum Rate = (Space Occupied by Attachment  x  Carrying Charge Rate 
x  Net Pole Investment  x  .95)  Total # of Poles
Total Carrying Charge Rate = Administrative + Maintenance +
Depreciation + Taxes + Return
Administrative Carrying Charge Rate = (Total Administrative and General 
(Accounts 6710+6720 + 6110+6120 + 6534+6535))  (Gross Plant 
Investment - Accum. Depreciation, Account 3100 - Accum. Deferred Taxes, 
Plant)
Maintenance Carrying Charge Rate = (Account 6411 - Rental Expense, 
Poles)  Net Pole Investment
Depreciation Carrying Charge Rate = Depreciation Rate, Poles
Tax Carrying Charge Rate = Operating Taxes, Account 7200  
(Gross Plant Investment - Accum. Depreciation, Account 3100 - Accum. 
Deferred Taxes, Plant)
Return Carrying Charge Rate = Applicable Rate of Return
Space Occupied by Attachment = 1 foot
Total Usable Space = 13.5 feet (Subject to Rebuttal)
Gross Plan Investment = Account 2001
Gross Pole Investment = Account 2411
Net Pole Investment = Account 2411 - Accum. Depreciation, Poles - 
Accum. Deferred Income Taxes, Poles

[FR Doc. 97-21818 Filed 8-15-97; 8:45 am]
BILLING CODE 6712-01-P
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