Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations 34569

PART 180—[AMENDED]

1. The authority citation for part 180

continues to read as follows:

Authority: 21 U.S.C. 321(q), 346(a) and

371.

2. Section 180.572 is added to read as

follows:

§ 180.572 Bifenazate; tolerance for

residues.

(a) General. [Reserved]

(b) Section 18 emergency exemptions.

Time limited tolerances are established

for combined residues of bifenazate,

(hydrazine carboxylic acid, 2-(4-

methoxy-[1,1’-biphenyl]-3-yl-, 1-

methylethyl ester) and

diazenecarboxylic acid, 2-(4-methoxy-

[1,1’-biphenyl]-3-yl-, 1-methylethyl ester

in connection with use of the pesticide

under section 18 emergency exemptions

granted by the EPA. The tolerances will

expire and are revoked on the dates

specified in the following table.

Commodity Parts per million Expiration/Revocation Date

Tomato ......................................................................................................................................................... 0.70 6/30/03

(c) Tolerances with regional

registrations. [Reserved]

(d) Indirect or inadvertent residues.

[Reserved]

[FR Doc. 01–16441 Filed 6–28–01; 8:45 am]

BILLING CODE 6560–50–S

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 1

[CS Docket Nos. 97–98 and 97–151; FCC

01–170]

Rules and Policies Governing Pole

Attachments; Implementation of

Section 703(e) of the

Telecommunications Act of 1996

AGENCY: Federal Communications

Commission.

ACTION: Final rule; petitions for

reconsideration.

SUMMARY: This document responds to

petitions for reconsideration of the

Report and Order in CS Docket No. 97–

151, and the Report and Order in CS

Docket No. 97–98. This document

consolidates 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. This document reconsiders

affirms and clarifies the pole attachment

rate formula for cable attachers as well

as the formula for telecommunications

attachers.

DATES: Effective July 30, 2001.

FOR FURTHER INFORMATION CONTACT:

Kathleen Costello at (202) 418–7200 or

via the Internet at kcostell@fcc.gov, or

Cheryl King at (202) 418–2284 or via the

Internet at cking@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Order on

Reconsideration, CS Dkt. Nos. 97–98

and 97–151, FCC 01–170, adopted May

22, 2001; release May 25, 2001. The full

text of the Commission’s Order on

Reconsideration is available for

inspection and copying during normal

business hours in the FCC Reference

Center (Room CY–A257) at its

headquarters, 445 12th Street, SW.,

Washington, DC 20554, or may be

purchased from the Commission’s copy

contractor, International Transcription

Service, Inc., (202) 857–3800, 1231 20th

Street, NW., Washington, DC 20036, or

may be reviewed via Internet at http://

www.fcc.gov/csb/.

Paperwork Reduction Act

The requirements adopted in the

Order on Reconsideration have been

analyzed with respect to the Paperwork

Reduction Act of 1995 (‘‘1995 Act’’) and

found to impose no new or modified

information collection requirements on

the public.

Synopsis of the Order on

Reconsideration

I. Introduction

1. This Order on Reconsideration

grants in part and denies in part

petitions for reconsideration and/or

clarification of Report and Order,

Implementation of Section 703(e) of the

Telecommunications Act of 1996,

Amendment to the Commission’s Rules

and Policies Governing Pole

Attachments, CS Docket No. 97–151,

FCC 98–20, 63 FR 12013, published

March 12, 1998, 13 FCC Rcd 6777

(1998) (‘‘Telecom Order’’) and Report

and Order, Amendment of Rules and

Policies Governing Pole Attachments,

CS Docket No. 97–98, FCC 00–116, 65

FR 31270, published May 17, 2000,

corrected 65 FR 34820, May 31, 2000, 15

FCC Rcd 6453 (2000) (‘‘Fee Order’’),

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’’),

47 U.S.C. 224 and Subpart J of the

Commission’s Rules, 47 CFR 1.1401–

1.1418.

2. This Order on Reconsideration

affirms our decision not to impose

additional regulation on the negotiation

process or on the rules for resolution of

pole attachment complaints; affirms the

continued use, in the pole attachment

rate calculation formulas, of specific

regulatory accounts maintained by

utilities and identify the actual costs

incurred by the utilities for the poles,

ducts, conduits and rights-of-way that

are the subject of the attachment;

reconsiders and clarifies 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; reconsiders and

clarifies the geographic areas used to

determined average numbers of

attaching entities for use in calculations

of the formulas of telecommunications

pole attachment rates, and establish two

presumptive averages that may be used

in our formulas after February 8, 2001;

affirms and clarifies decisions regarding

third party overlashing; affirms the

presumption that a pole attachment

occupies one foot of usable space and

that this presumption is rebuttable by

either party; affirms that the formula

adopted in the Fee Order, for calculating

the rate for use of capacity in a conduit,

is applicable to telecommunications

systems; affirms 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; affirms that there is no

unusable capacity in a conduit; affirms

our decision that a utility may not

exclude reserved capacity within a

conduit system when calculating total

capacity upon which the pole

attachment rate in a conduit is based;

affirms that complaints regarding

nondiscriminatory access, rates, terms

and conditions for non-traditional pole

attachments, such as attachments to

34570 Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations

rights-of-way, wireless attachments and

transmission facilities attachments, will

be considered under our rules on a caseby-case basis; reconsiders and clarifies

the methodology for calculating

maximum pole maximum pole

attachment rates when the net pole

investment becomes zero or negative;

declines or reconsider at this time and

reserves for later review; our decision

that Internet service has a neutral affect

on an attacher’s classification as a cable

system or telecommunications system;

declines to reconsider at this time and

reserves for later review; our decision

that providers of wireless

telecommunications services are

entitled to the benefits and protection of

the Pole Attachment Act; and adopts

amended rules. Generally, the

petitioners and commenters represent

the interests of one of the following

three categories: (1) Electric utilities; (2)

cable operators; and (3)

telecommunications carriers.

II. Background

3. In 1978, Congress enacted section

224 of the Communications Act, 47

U.S.C. 224, granting the Commission

authority to regulate the rates, terms,

and conditions governing pole

attachments, requiring that such rates,

terms and conditions be just and

reasonable. The Commission is

authorized to adopt procedures

necessary to hear and to resolve

complaints concerning such rates,

terms, and conditions. Congress sought

to constrain the ability of utilities to

extract monopoly profits from cable

television system operators in need of

pole, duct, conduit or right-of-way space

for pole attachments.

4. Section 224(d)(1) of the Pole

Attachment Act defines a just and

reasonable rate as ranging from the

statutory minimum based on the

additional costs of providing pole

attachments, to the statutory maximum

based on fully allocated costs. The

additional, or incremental, costs are the

costs that would not be incurred by the

utility but for the pole attachments. The

maximum rate, identified as a

percentage of fully allocated costs, refers

to the portion of operating expenses and

capital costs that a utility incurs in

owning and maintaining pole

attachment infrastructure that is equal

to the portion of space on a pole, or

capacity of a duct, conduit, or right-ofway, that is occupied by an attacher.

The Commission developed a

methodology to determine the

maximum allowable pole attachment

rate under section 224(d)(1) of the Pole

Attachment Act, which is referred to as

the Cable Formula.

5. Subsequently, Congress enacted the

1996 Act ‘‘to accelerate rapidly private

sector deployment of advanced

telecommunication and information

technologies and services.’’ Section

703(6) of the 1996 Act added a new

section 224(d)(3), which expanded the

scope of section 224 by applying the

Cable Formula to rates for pole

attachments made by

telecommunications carriers, in

addition to cable systems, until a

separate methodology became effective

for telecommunications carriers in 2001.

Section 703(7) of the 1996 Act added

new sections 224(e)(1–4), which set

forth a separate methodology to govern

charges for pole attachments used to

provide telecommunications services

beginning February 8, 2001 (‘‘Telecom

Formula’’). Further, the 1996 Act gave

cable operators and telecommunications

carriers a right of nondiscriminatory

access to utility poles, ducts, conduit

and rights-of-way.

III. Order on Reconsideration

A. Complaint Procedures and

Negotiated Agreements

6. 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. Our experience has

taught us, and the record gained through

these proceedings demonstrates, that

without our rules and the use of

presumptions in a formula

methodology, attaching entities would

not be able to challenge any rate offered

by a utility. There would be no

reasonable negotiation without a

benchmark rate against which to

compare the utility’s proposed rate. We

continue to reject arguments by utilities

that attaching parties should be required

to take exception to terms or conditions

when the pole attachment agreement is

negotiated or be estopped from filing a

complaint about those issues. 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

7. Electric utilities continue to urge

that we abandon our use of regulatory

accounts based on historical costs.

Petitioners assert that pricing

methodologies for use in pole

attachment formulas should reflect

replacement costs or the rates calculated

are not constitutional because they

cannot provide just compensation. We

affirm our decision that the Cable

Formula, which includes regulatory

accounts maintained using historical

costs, encompasses the statutory

directive to provide just and reasonable

rates for pole attachments, adding

certainty and clarity to negotiations. We

have been presented with no persuasive

evidence that utility owners do not

recover a just and reasonable

compensation for pole attachments from

use of the Cable Formula. Congressional

intent to rely on existing regulatory

accounts and avoid a prolonged rate

making process is realized in the

Commission’s regulations.

8. We have recognized that the

continued use of the historical cost

based pole attachment formula brings

certainty to the regulatory process. For

more than two decades, the pole

attachment formula has provided a

stable and certain regulatory framework,

which may be applied ‘‘simply and

expeditiously’’ requiring ‘‘a minimum of

staff, paperwork and procedures

consistent with fair and efficient

regulation.’’ We have found that

switching to a methodology based on

forward-looking economic costs would

significantly change and burden the

Commission’s processes, requiring the

Commission to develop a new formula,

which would necessitate a protracted

rulemaking proceeding involving

complicated pricing investigation. 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 these

advantages are less pronounced in the

pole attachment context because pole

attachers are less likely to build, or may

be prohibited from building, their own

poles and conduit. We have concluded

and continue to find that, in the context

of pole attachments, the continued use

of historical costs accomplishes the key

objectives of assuring just and

reasonable rates to both the utility and

the attaching parties, establishing

accountability for prior cost recoveries,

and encouraging negotiation among the

parties by providing regulatory

certainty. We will continue to calculate

Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations 34571

maximum pole attachment rates under

the Pole Attachment Act using

regulatory accounts based on historical

costs.

2. When Net Pole Investment Is Zero or

Negative

9. 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. 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.

10. The pole attachment formulas rely

on the investment and expense data

utilities maintain in, or derive from,

their accounting records. The

investment data take two forms: ‘‘gross’’

data, which provide the original cost of

the plant being considered; and ‘‘net’’

data, which adjust the gross data to

reflect accumulated depreciation and

deferred income taxes associated with

that plant. The pole attachment

formulas generally allocate the costs of

owning and maintaining poles on the

basis of net pole or net plant

investment. In the Fee Order, we

affirmed our long practice of calculating

pole attachment rates using net book

costs, continuing to allow the use of

gross book costs if all parties agreed to

that usage. We concluded that the

important goal is to ensure that like

figures are used, whether not or gross.

We affirm our continued use of net

figures in the formulas unless the

parties agree otherwise, with the

following limited exception.

11. In certain cases, negative net asset

values for poles may occur as a result

of the way the Commission calculates

depreciation rates. 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.

12. 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. 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.

13. 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.

We have previously determined that

allocation of expenses based on net pole

investment is reasonable. We continue

to agree 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.

14. In proposing this methodology, we

acknowledge that only the

administrative and tax elements of the

carrying charges are affected by the

change. The maintenance, depreciation

and return elements yield the same

maximum rate whether net or gross

figures are used. The administrative and

tax elements may be higher or lower due

to the different ratios of accumulated

depreciation and accumulated deferred

taxes to gross total plant as opposed to

gross pole plant. The rate of return

element will be negative and is

subtracted from the positive elements of

the carrying charge. We believe this

result is reasonable because the utility

has, in effect, already recovered more

than the original cost of its pole plant

through depreciation charges. While

this ‘‘over-recovery’’ is necessary to

defray the costs of disposing of the poles

when they are retired from service, the

utility has the use of any ‘‘overrecovered’’ amounts throughout the

poles’ useful lives. Our conclusion that

the utility’s pole attachment rates

should reflect the over-recovery in the

form of a negative rate of return carrying

charge properly recognizes this fact.

15. The formula using the gross

approach yields the following

calculation:

(A). Gross Plant (Poles)

(B). Net Plant (Poles)

(C). Depreciation Rate (Poles)

(D). Maintenance Expense (Poles)

(E). Quantity of Poles

(F). Authorized Rate of Return

(G). Administrative Expenses (Total)

(H). Taxes (Total)

(I). Gross Plant (Total)

(J). Net Plant (Total)

(K). Usable Space Factor (.074)

(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 × Net

Plant (Poles) ÷ Gross Plant (Poles) =

[(F) × (B)] ÷ (A)

Administrative = Administrative

Expenses (Total) ÷ Gross Plant

(Total)

Element = (G) ÷ (I)

Tax Element = Taxes (Total) ÷ Gross

Plant (Total) = (H) ÷ (I)

Total Carrying Charge = Sum of Maint.,

Depr., Ret. (¥), Admin. and Tax

Elements

Max Rate = Space Factor × Bare Pole

Factor × Gross Plant (Poles) × Total

Carrying Charges ÷ Quantity of

Poles = [(K) × (L) × (A) × Total

Carrying Charges] ÷ (E)

We reiterate that in all other cases,

where the net pole investment is

34572 Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations

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

16. In the Telecom Order, we stated

that the record was not sufficient to

enable us to adopt detailed standards

that would govern all of these

situations. We believe our basic rate

methodology is adaptable to

attachments that fit these categories. A

complaint involving a dispute about

these attachments would be treated as

any other pole attachment complaint.

We recognize guiding principles based

on the Pole Attachment Act to be used

in determining rates for pole

attachments, including attachments to

rights-of-way, wireless attachments and

transmission facilities attachments.

Guiding principles include the

congressionally mandated methodology,

preference for publicly available records

when available, and an acceptable range

of just and reasonable rates. We

continue to believe it prudent to gain

experience through case by case

adjudication to determine whether

additional guiding principles or

presumptions are necessary or

appropriate, and this will be

accomplished through our existing

complaint procedures. We will continue

to address complaints about just and

reasonable rates, terms and conditions,

and nondiscriminatory access for nontraditional attachments on a case-bycase basis.

C. The Space Factor

17. The basic Cable Formula can be

stated as follows:

Maximum

Rate

Space Occupied Cost of a

Bare Pole

Carrying

Ch e Rate = ××

Total Usable Space arg

18. We define total usable space as the

space on the utility pole above the

minimum grade level that is usable for

the attachment of wires, cables, and

related equipment. In the Fee Order, we

affirmed the use of various

presumptions that lead to 13.5 feet as

the presumptive average usable space

on a pole. The Cable Formula uses a

37.5 foot presumptive pole height, an 18

foot average minimum ground

clearance, allocation of the 40-inch

safety space to usable space, and the

inclusion of poles of 30 feet or less

when calculating the costs of a bare

pole. No persuasive evidence or

arguments have been presented which

challenge our long-standing

presumptions resulting in 13.5 feet as

the presumptive usable space.

Application of these presumptions

results in 7.4% as the percentage of

usable space occupied by a pole

attachment.

1. Average Pole Height

19. The record in this proceeding

confirms the prevalent use of 30-foot

poles and reflects that exclusion of such

poles from the Cable Formula

calculations could distort the resulting

rate by excluding a significant portion of

local exchange carrier (‘‘LEC’’) utility

plant investment from the rate

calculation. We affirm our position that

a distorted inventory of poles would be

reflected if utilities were allowed to

‘‘opt out’’ or exclude their poles of 30

feet or less when calculating their pole

attachment rates.

2. Safety Space

20. No new arguments or evidence

was presented in the filings and based

on our previous reasoning, 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, is usable

and used by the electric utility, and we

reject arguments to reduce the

presumptive usable space of 13.5 feet by

40 inches.

3. Minimum Ground Clearance

21. Ground clearance requirements in

the National Electric Safety Code

(‘‘NESC’’) include an average amount of

sag for cable lines. No new evidence or

arguments were provided that would

persuade us to abandon our longstanding reliance on the presumptive

average minimum ground clearance

based on NESC standards.

4. Telecom Formula Space Factor

a. Counting Attaching Entities

22. 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:

Maximum

Rate

Space Occupied Net Cost of a

Bare Pole

Carrying

Ch e Rate = ××

Total Usable Space arg

23. 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:

Maximum

Rate

Net Cost of a

Bare Pole

Carrying

Ch e Rate =× × . arg

074

24. 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 are allocated based

on the number of attaching entities. The

costs of usable space are still calculated

based on the portion of usable space

occupied. In the Telecom Order, we

adopted separate formulas for

determining the unusable space factor

maximum rate and the usable space

factor maximum rate which, when

added together, calculate a maximum

rate under section 224(e) of the Pole

Attachment Act. We now simplify the

two formulas into one combined

formula as follows:

Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations 34573

Maximum

Rate

Space

Occupied

Usable Space

No = Net Cost o



  + × 



 



 



























× ×

2

3 . of Attaching Entities

Pole Height

f a Bare Pole

Carrying

Charge

Rate

25. Using our presumptions in the Telecom Formula, this calculation can be stated as:

Maximum

Rate

No = Net Cost o

( ) + 



 



 



























× ×

1 16

. of Attaching Entities

37.5

f a Bare Pole

Carrying

Charge

Rate

which results in a combined (usable and

unusable) space factor of between .24

and 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.

26. In the Telecom Order, we

recognized that the number of attaching

entities is a significant factor in

determining he maximum rate. We

concluded that certain entities should

be counted as attaching entities

pursuant to the Pole Attachment Act.

We now reconsider and clarify our

methodology for counting the number of

attaching entities used in the Telecom

Formula. We clarify our position that all

utilities should be counted as attaching

entities. In addition, we further

reconsider and clarify that any entity

with a physical attachment to the pole

should be counted as an attaching

entity. We will continue to exclude a

government’s temporary or seasonal

attachments from this category. 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.

27. The term ‘‘attaching entities’’

includes, without limitation, and

consistent with the Pole Attachment

Act, any telecommunications carrier,

incumbent or other local exchange

carrier, cable operator, government

agency, and any electric or other utility,

whether or not the utility provides a

telecommunications service to the

public, as well as any other entity with

a physical attachment to the pole. This

is consistent with the language of the

statute and with Congress’ intent to

count all attaching entities when

allocating the costs of unusable space.

Therefore, we include the utility pole

owner in the count, resulting in a

minimum of two attaching entities being

counted.

28. 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 met 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: 29. 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.

i. Geographic Areas. 30. 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.

Some utilities assert it will not be

feasible to determine averages in any

cost-efficient manner, so we will

provide default averages for urbanized

and non-urbanized areas, for use in the

absence of utility developed averages.

31. 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. 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.

32. We will require utility pole

owners to calculate an average number

of attaching entities by service area.

Where a utility territory or service area

in which an attaching entity seeks to

install pole attachments can be

identified as either urbanized or nonurbanized, 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 nonurbanized because it crosses into both

an urbanized and non-urbanized area,

and the utility is unable to identify a

separate service area as non-urbanized,

the default averages, or the actual

averages if developed by the utility, for

an urbanized area should be used. If any

part of a specific service area, as

identified by the utility, is urbanized,

then all that service area would be

considered urbanized for pole

attachment purposes. This will facilitate

an equitable calculation of pole

attachment rates for

telecommunications carriers. Utilities

that have multiple service areas in a

state would classify each service area, as

either urbanized or non-urbanized

depending on whether any part of the

service area is within an area designated

by the Bureau of Census as urbanized.

Utilities advise this would be equitable

because in a service area in which any

part is considered urbanized, the

34574 Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations

development potential for the entire

area to become urbanized is great.

33. We emphasize our preference that

each utility use the data it has available

in its corporate and regulatory records,

and not go to extraordinary lengths to be

precise when reasonable estimates will

generally provide an equitable process.

The utility shall make available its data,

information and methodology upon

which the averages were developed,

unless the default averages are used. We

clarify that when a distinct area defined

by the Bureau of Census as urban falls

within an urbanized area, a separate

average number of attaching entities for

that urban area is not required. The

record demonstrates that in some states,

and for some utilities, there may be no

significant difference in the number of

attaching entities for rural areas and for

urban areas that are outside urbanized

areas. Therefore, we provide utilities the

option of using our presumptive

averages presented below, or developing

averages for two areas: (1) Urbanized

(50,000 or higher population), and (2)

non-urbanized (less than 50,000

population).

34. When a utility exercises good faith

in determining average numbers of

attaching entities upon which to base

the costs of providing unusable space,

the burden of proof will be on an

attaching entity to demonstrate the costs

are being unjustly apportioned. In

demonstrating its good faith, the utility

must make its methodology and data

publicly available to the attaching

entity, upon request for information

sufficient for an attaching entity to

project its costs of attaching to that

utility’s infrastructure. The costs of

conducting an exercise to determine

average numbers of attaching entities

shall not be directly passed on to the

attaching entities as make-ready costs.

Expenses relating to the exercise

necessary to develop these averages will

be shared ultimately by all attachers and

the utility when, as a reasonable

business expense incurred as part of

doing business, the expense is reported

to the utility’s appropriate regulatory

accounts and factored into the carrying

charge rate of the Cable Formula. We do

not believe that such expenses would be

within the methodology prescribed by

Congress for individual payment by

each attaching entity for a pole

attachment.

ii. Presumptive Averages. 35. In order

to expedite the process of developing

average numbers of attaching entities,

and allow utilities to avert the expense

of developing location specific averages,

we provide two rebuttable presumptive

averages for use in our Telecom

Formula. This gives both small and

large utilities the option of not

conducting a potentially costly and

burdensome exercise necessary to

develop averages based on their

company specific records. The adoption

of presumptive averages should reduce

cost and effort by all parties.

36. In the Telecom Order, we did not

establish presumptions, but said we

believed the most efficient and

expeditious manner to calculate a

presumptive number of attaching

entities would be for each utility to

develop its own presumptive average

number of attaching entities. We now

reconsider that decision and set

rebuttable presumptive average numbers

of attaching entities for our two

categories, urbanized and nonurbanized. We are now persuaded that

utilities and attaching entities would

benefit from our providing presumptive

averages for their use. Our

establishment of presumptive averages

will expedite the process and allow

utilities to avert the expense of

developing location specific averages.

As with all our presumptions, either

party may rebut this presumption with

a statistically valid survey or actual

data.

37. Based on the expanded record, we

establish presumptive average numbers

of attaching entities in a non-urbanized

(less than 50,000 population) area to be

three (3) attaching entities, based on

information presented in the record and

the expectation that on a pole or in a

conduit, for instance, there would be

electric, telephone and cable attachers.

It is estimated that cable systems now

provide access to cable television

services to over 97% of all households

with a television. Electric power and

telephone service is even more

universal. The record supports a

presumptive average of three attaching

entities in non-urbanized areas.

38. In an urbanized area that is more

densely populated (50,000 or higher

population), more developed

commercially than a non-urbanized

area, and in which we expect both

residential and business commercial

competition to flourish, we set a

presumptive average number of

attaching entities at five (5) to reflect the

inclusion of, but not limited to, the

following possible attaching entities:

electric, telephone, cable, competitive

telecommunications service providers

and governmental agencies. Advanced

telecommunications capability is being

deployed throughout the country. As

noted above, competitive services are

increasing. The record supports a

presumptive average number of five

attachers in urbanized areas.

D. Overlashing

1. Space Occupied by Third Party

Overlashing

39. Cable companies have, through

overlashing been able to decades to

replace deteriorated cables or expand

the capacity of existing communications

facilities, by typing communication

conductors to existing, supportive

strands of cable on poles. The 1996 Act

was designed to accelerate rapid

deployment of telecommunications and

other services, and to increase

competition among providers of these

services. Overlashing existing cable

reduces construction disruption and

associated expense. Accordingly, in the

Telecom Order, we declared our

continued approval of, and support for,

third party overlashing, subject to the

same safety, reliability, and engineering

constraints that apply to overlashing

one’s own pole attachment.

40. We determined that facilities

overlashed by third parties are

presumed to share the presumptive one

foot of usable space occupied by the

host attachment. We did not dictate how

the utility, host attaching and third

party attaching entities would relate to

each other for compensation purposes.

We did not require the host attaching

entity or the third party overlasher to

obtain the consent of the utility beyond

the consent already acquired for the

host attachment although the utility is

entitled to notice of the overlashing. We

stated that third party overlashing did

not disadvantage the utility’s ability to

ensure the integrity of its poles.

41. We decline to impose additional

regulation and clarify several aspects of

our position regarding third party

overlashing. Allowing third party

overlashing reduces construction

disruption and associated expenses

which would otherwise be incurred by

third parties installing new poles and

separate attachments. We clarify that

third party overlashing is subject to the

same safety, reliability, and engineering

constraints that apply to overlashing the

host pole attachment. We affirm our

policy that neither the host attaching

entity nor the third party overlasher

must obtain additional approval from or

consent of the utility for overlashing

other than the approval obtained for the

host attachment.

2. What the Third Party Overlasher Pays

42. Some petitioners urge us to

specify, or at least clarify, what the third

party telecommunications carrier

overlasher pays to the host attacher or

the utility pole owner. We decline to

attempt to regulate this relationship.

However, if the third party overlashing

Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations 34575

cable operator’s pole attachment is a

telecommunications carrier, then the

pole attachment will be considered to be

used to provide telecommunications

services for purposes of calculating the

pole attachment rate. The maximum rate

for that overlashed pole attachment

would then be calculated using the

Telecom Formula after February 8,

2001. In some instances, the host

attaching entity will pay the utility for

a telecommunications carrier pole

attachment. We have stated that the

third party overlasher is not separately

liable to the utility for the usable space

which the overlashing shares with the

host attachment because there would be

no additional usable space occupied.

We expect and encourage the

overlashing and host attaching entities

to negotiate a just and reasonable rate of

compensation between them for the

overlashing, which will represent some

sharing of the usable and unusable

space costs. Until our intervention is

necessary to facilitate pole attachments

for these parties, we will rely on all

parties to act in good faith to develop

their own just and reasonable

compensation.

3. Wind and Weight Load Factors

43. We have reviewed Sections 24 and

26 of the NESC that address loading and

structural requirements in detail. Based

on our analysis and the record, we

continue to believe that an attachment’s

‘‘burden on the pole’’ relates to an

assessment of need for make-ready

changes to the pole structure, including

pole change-out, to meet the strength

requirements of the NESC. For example,

if the addition of overlashed wires to an

existing attachment causes an excessive

weight to be added to the pole requiring

additional support or causes the cable

sag to increase to a point below safety

standards, then the attacher must pay

the make-ready charges to increase the

height or strength of the pole. Makeready costs are non-recurring costs. for

which the utility is directly

compensated and as such are excluded

from expenses used in the rate

calculation. The statutory language

prescribes that we allocate costs based

on space occupied, not load capacity.

44. Fee Order petitioners present no

new or persuasive evidence that the

‘‘burden on the pole’’ due to weight and

wind load is an additional factor for

consideration in the determination of

the amount of space occupied through

which some rate increase would be

calculated. We affirm our position that

the costs of the physical attachments of

an attaching entity are normally paid to

the pole owner as a condition of

attachment, addressing such factors as

weight, wind load and safety space.

Overlashing does not increase the

amount of space actually occupied by

the attachment.

4. Shared One-Foot Usable Space

45. In the Telecom Order, we found

that the one foot presumption should

continue to apply where an attaching

entity has overlashed its own pole

attachments. We also determined that

facilities overlashed by third parties

onto existing pole attachments are

presumed to share the presumptive one

foot of usable space of the host

attachment. The one foot presumption is

rebuttable by any party. We decline to

abandon or redefine our presumption

for usable space occupied by a pole

attachment, even in instances of

overlashing. The record on

reconsideration affirms that the sharing

and use of the one foot presumption, for

usable space occupied by a pole

attachment, does not lead to a distortion

of the allocation of the costs of the pole

in determining a just and reasonable

compensation for the utility.

5. Cable Operator Not a Utility

Obligated To Provide for Overlashing

46. The Pole Attachment Act does not

define utility to include attachers,

Section 224(f) of the Pole Attachment

Act obligates a utility to provide a cable

television system or any

telecommunications carrier with

nondiscriminatory access for purposes

of a pole attachment. Neither a cable

system attacher nor a

telecommunications attacher has an

obligation to act as a host and share its

pole attachment with a third party

overlasher.

6. Notice to Utility Pole Owner

47. 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 to Telecom Formula

rate when a pole attachment previously

used to provide only cable services is

used to provide telecommunications

services, as a result of a third party

telecommunications carrier overlashing.

When the cable operator’s pole

attachment provides transmission of

telecommunications services, whether

for itself or via third party overlashing,

it will notify the pole owner. We clarify

that it would be reasonable for a pole

attachment agreement to require notice

of third party overlashing.

48. In the Telecom Order, we

concluded that the third party

overlashing entity should be classified

as a separate attaching entity for

purposes of counting entities using the

Telecom Formula. We now reconsider

that decision, and based on our review

of the statute, the record herein and our

decision that an overlasher shares space

with the host attachment, we believe

that the third party overlasher should

not be counted as a separate attaching

entity.

49. We affirm the requirement that a

cable operator notify the utility when

the cable operator begins providing

telecommunications services itself or

via third party overlashing. Cable

attachers stress that this notification

should not provide utilities with an

opportunity to acquire sensitive

proprietary and business development,

planning, or scheduling information

that could result in a competitive

disadvantage to the attaching entity. We

agree. The record fails to demonstrate

any legitimate purpose for a utility to

require commercially-sensitive data or

information to be provided as a part of

this notification of a change of service

status by a cable operator.

50. 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

51. We affirm our holding in the

Telecom Order that if an attachment

previously used for providing solely

cable services would, as a result of the

leasing of dark fiber, also be used for

providing telecommunications services,

the rate for the attachment would be

determined using the Telecom Formula.

However, attaching entities may lease

their dark fiber to third parties without

such leases being considered separate

attachments and without making an

additional payment beyond the host’s

existing attachment rate. The cable

system operator may lease excess fiber

capacity within its existing attachment

to any party for a negotiated rate

without the knowledge or consent of the

pole owner because the physical

attachment will not be altered. The dark

fibers contained within the attaching

host have already been taken into

account in determining the rent for the

attachment. The character and content

of the services provided do not affect

the amount of space occupied by the

34576 Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations

attachment. The type of services

provided over the attachment only affect

the pole attachment rate if the services

are telecommunications services. If the

third party leasing the fiber is, or

becomes, a telecommunications carrier,

then the utility is compensation for the

pole attachment based on the Telecom

Formula and must be notified.

E. Conduit Issues

52. Conduits are structures that

provide physical protection for cables

and allow new cables to be added

inexpensively along a pathway or route.

A conduit consists of one or more ducts,

which are the enclosures that carry the

cables. Often, when a cable operator’s or

telecommunications carrier’s cables are

placed in a duct, three or more inner

duct are inserted into the duct allowing

‘‘one duct to be treated more like

conduit.’’ A collection of conduits,

together with their supporting

infrastructure, constitutes a conduit

system. A conduit system may vary

widely among geographic areas, and

between LEC and electric utilities.

53. 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.

54. Cable operators and

telecommunications carriers alike will

calculate a maximum just and

reasonable rate for a pole attachment in

a conduit by apportioning the cost of

providing capacity among all entities

according to the percentage of capacity

used by each entity. Calculation of the

maximum rate may be simplified by

using the presumptions in the formula.

The carrying charge rate is calculated

for pole attachments in conduit, in the

same manner as the carrying charge rate

in our pole attachment formula. The

conduit formula adopted in the Fee

Order and affirmed here is the

following:

Maximum Ra

Per Linear

Percentage

Conduit Ca Net Linear

of Conduit

Carrying

Ch e

Rate

te

 ft./m.

 of

pacity

Occupied

 Cost = ×× arg

1. Space Factor in Conduit

55. 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. 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. 56.

In the Fee Order, we clarified that a

utility may designate capacity in a duct

for maintenance or emergency use, but

that a duct so designated is usable in the

event it is needed, and therefore is part

of the conduit capacity. Where duct

capacity is set aside for future

municipal use (in the nature of

consideration as a condition for a

license, franchise, or permit), the utility

is compensated for those costs as part of

its net conduit investment and/or in the

carrying charge rate. Collapsed or

otherwise 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.

57. We will not allow capacity

designated for maintenance, future

business plans, or municipal set-asides

to be subtracted from the total duct or

conduit capacity for rate determination

purposes. The record supports our

analysis that capacity in a duct or

conduit that is usable for any of these

purposes is part of the ‘‘total duct or

conduit capacity.’’ For example, a utility

may set-aside capacity for maintenance

or emergencies so that unoccupied

capacity is available into which a

temporary cable may be placed and

spliced into a damaged cable. Capacity

so designated is usable in the event it is

needed, and available for use by the

utility at any time for any purpose, and

is therefore part of the total available

conduit capacity. Such reservation of

capacity is not necessarily identified by

a specific duct or location, can be

created, used, withdrawn or discarded

at the sole discretion of the utility, and

must be considered part of the total

capacity of the conduit. Municipal setasides are also capacity that may be

made available for the use of the local

government as a condition in a

franchise, license, right-of-way or other

agreement.

58. Capacity may be reserved, or kept

unused to be available to an electric

utility for expansion of its core business

services, but that capacity is still part of

the total capacity of the duct or conduit

system and must be made available for

pole attachments until such time as it is

needed by the electric utility under a

bona fide business plan. Under the

policy articulated in the Local

Competition Order, an electric utility is

allowed to reserve capacity for future

business purposes under a bona fide

business plan, but must allow that

capacity to be used for attachments until

an actual business need arises. For

whatever reason capacity may be

reserved or designated for special uses,

by or on behalf of the utility, and

regardless of who may benefit directly

or indirectly from those uses, the

capacity is available for use and

therefore remains part of the total

capacity of the conduit for rate

determination purposes.

b. Occupied Capacity, the Half-Duct

Presumption. 59. 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.

60. 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. The presumption that a

communications cable in a conduit

system occupies one half of a duct is

based on clear evidence that all types of

cable—including electric supply cables

when controlled by the same party as

the communications cable—may share a

duct. We affirm our position that,

because the NESC rule relied on by the

electric utilities does not prohibit the

sharing of a duct by electric and

communications cables when controlled

by the same party or two

communications cables, it is reasonable

to expect there to be more than one

attacher in a duct.

61. The one half duct presumption is

rebuttable and the presence of inner

duct is adequate rebuttal. Where inner

duct is installed, either by the attacher

or in a previous installation, the

maximum rate will be reduced in

proportion to the fraction of the duct

occupied. That fraction will be one

Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations 34577

divided by the actual number of inner

ducts in the duct. We continue to

believe that the use of the one half duct

rebuttable presumption is a simple,

expedient and reasonable

approximation of the actual capacity

occupied by a cable operator or

telecommunications carrier attaching in

a conduit system. When the actual

percentage of capacity occupied is

known, it can and should be used

instead of the one half duct

presumption.

2. Net Linear Cost of Conduit

62. 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.

63. Our goal has always been to adopt

a formula which allows the parties to

calculate the maximum rate using

public data when available, in a fair and

expeditious manner. We also have a

policy against requiring additional

accounting procedures so long as the

information is available from the

utilities upon reasonable request.

a. Net Conduit Investment (LECOwned Conduit). 64. Net Conduit

Investment for LEC-owned conduit is

calculated as follows:

Net Condui

Investment

Gross Cond

ARMIS Account 2441

Accumulated

Depreciation

Accumulated t uit Investment

Conduit

Deferred Taxes

Conduit

= ( ) −

( ) −

( )

65. Gross Conduit Investment for the

LEC consists of Part 32 Account 2441.

For LECs, Accumulated Depreciation

(Conduit) represents the share of ARMIS

Account 3100 that corresponds to

Account 2441. Accumulated

Depreciation related to conduit is

publicly available at the LECs ARMIS

Report 43–02. In the Fee Notice we

proposed the following formula for the

calculation of accumulated deferred

income taxes for conduit:

Accumulated Deferred

Income Tax Gross Cond

Total Gros

es Total Accu

Conduit

uit Investment

s Plant Investment

mulated Deferred Income Taxes

( )

= ×

66. LEC conduit owners objected to

this formula on the basis that the actual

amount of accumulated deferred taxes

for conduit is available directly from the

LEC’s books. BellSouth maintains that

because it is required to keep separate

and accurate records of accumulated

deferred income taxes for poles and

conduit, our formula will improperly

introduce non-conduit related deferred

taxes into rate calculations. NCTA

argued that LECs should not use

accumulated deferred income tax

figures taken from the LEC’s books

because the information is not publicly

available.

67. In the Fee Order, we concluded

that if the LEC conduit owner is

required to keep this data precisely as

required for the formula, we will allow

them to use it in the rate calculation, as

long as it was reported to and available

through our public ARMIS. There is

confusion among utilities and attaching

entities whether this data is available.

Pursuant to our Biennial Regulatory

Review, Review of Accounting and Cost

Allocation Requirements, FCC 99–106

and Biennial Regulatory Review,

Review of ARMIS Reporting

Requirements, FCC 99–107 we require

the LEC conduit owner to keep this data

as required for the formula because we

require LECs to use it in the rate

calculation. This data will be available

at ARMIS Report 43–02 and we will use

this data in our formulas. Until ARMIS

reports for LECs include this required

data after 2001, we will continue to use

the proration method to calculate the

conduit portion of accumulated deferred

taxes for use in the formula to calculate

the net linear cost of conduit.

b. Net Conduit Investment (Electric

Utility-Owned Conduit). 68. Net Conduit

Investment for electric utility-owned

conduit is calculated as follows:

Net Condui

Investment

Gross Cond

FERC Account 366 

Accumulated

Depreciation

Accumulated t uit Investment

Conduit

Deferred Taxes

Conduit

= ( ) −

( ) −

( )

69. For electric utilities, Gross

Conduit Investment is reflected in FERC

Part 101 Account 366. Accumulated

Depreciation (Conduit) represents the

share of FERC Account 108

(Accumulated provision for

depreciation of electric utility plant

(Major only)—a composite account that

is required to be maintained on a

subsidiary basis) that corresponds to

Account 366. Accumulated Deferred

Income Taxes for electric utilities

represents the share of FERC Accounts

190, 281, 282, 283 that correspond to

Account 366.

70. 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

1. Electric Utility Accumulated Deferred

Income Taxes Poles (Correction)

71. In the Fee Order, we stated the

following formula to determine the net

cost of a bare pole for electric utilities:

34578 Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations

Net Cost o

Bare Pole

Electric

Account 36

Accumulated

ncome Taxe

Number of 

f a

4

Accumulated 

Depreciation

Poles

Deferred I s

Poles

Poles ( )

= ×

−

( ) −

( ) 0 85 .

We stated that the Accumulated

Deferred Income Taxes represents the

share of composite FERC Account 190

(Accumulated deferred income taxes)

that corresponds to Account 364. In

error, we neglected to include FERC

Accounts 281, 282, and 283 along with

Account 190. We now correct this

typographical error so that Accumulated

Deferred Income Taxes represents the

share of composite FERC Accounts 190,

281, 282 and 283 that corresponds to

Account 364.

2. Carrying Charge Accounts (LECs)

72. The carrying charge rate reflects

those costs incurred by the utility in

owning and maintaining pole

attachment infrastructure regardless of

the presence of attachments. The

elements of the carrying charge rate are:

administrative, maintenance,

depreciation, taxes and cost of capital

(rate of return). To calculate the carrying

charge rate, we developed formulas that

relate each element to a utility owner’s

net investment. The carrying charge rate

factor of the Cable Formula is calculated

as follows:

Carrying

Ch e Rate Ad istrative Ma enance Depreciation Taxes turn arg

= + + ++ min int Re

73. In May 1986, the Commission

adopted a new uniform system of

accounts for all FCC regulated telephone

companies. The Commission’s Annual

Report Form M was revised on April 27,

1989 to reflect the new accounting

system in Part 32 that replaced the

accounting system in Part 31, effective

January 1, 1988. The Pole Attachment

Order provided formulas for

determining a maximum just and

reasonable pole attachment rate with

regulatory accounts identified. The

formula for LECs used Part 31 accounts

until after adoption of the New USOAPart 32 Adoption, when the Common

Carrier Bureau responded to a request

for clarification of what Part 32 accounts

would be used in place of the Part 31

accounts specified in the Pole

Attachment Order. That guidance was

given the understanding that an exact

tracking of expenses from Part 31

accounts to Part 32 accounts was not

possible. In the Fee Order, we clarified

the Part 32 accounts to be used in the

Cable Formula for LECs utilities.

74. 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:

Ad istrative

Element Gross Plan

Account 20

Accumulated

Account 31

Accumulated

min = ( )

( ) −

( ) −

( )

Administrative and General Accounts 6710 + 6720

t

Investment

01

Depreciation

00

Deferred Taxes, Plant

Accounts 4100 & 4340

75. The Fee Order did not attempt to

establish different accounts to be used

in the administrative elements 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.

76. 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 have a pole attachment

compliant before us. We have chosen

not to disaggregate the major accounts

selected for inclusion in our

calculations in order to eliminate

expenses not directly attributable to

administrative costs with a nexus to

pole attachments, such as corporate

strategic planning. On reconsideration,

we decline to draw in more expenses to

the administrative element because we

already apply a comprehensive set of

expenses in conformance with the

statutory directive to allocate a

percentage of operating expenses

attributable to pole attachments.

3. Carrying Charge Accounts (Electric)

77. Account 593 (maintenance of

overhead lines (Major only)) includes all

the cost of labor, materials used and

expenses incurred in the maintenance of

overhead distribution line facilities, the

book cost of which is includible in

Account 364 (poles, towers and

fixtures), Account 365 (overhead

conductors and devices), and Account

369 (services). In our calculation we

include the net investment for all three

accounts to determine the portion of

Account 593 attributable to Account

364. We have been provided no

additional evidence to rebut the

description of Account 590 or that

‘‘direct field supervision of specific jobs

shall be charged to the appropriate

maintenance account,’’ in this case

Account 593. Fee Order petitioners do

not persuade us that there is any

significant expense related to poles

included in Account 590.

78. 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

Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations 34579

and no additional accounts should be

included as maintenance expenses.

79. Accounts 580, 583, 584, and 588

are operational accounts to which

electric utilities report expenses relating

to the utility’s core regulated business

services, and not pole or conduit

expenses. Account 598 is the

miscellaneous account related generally

to maintenance of equipment on

customer premises and is not associated

with pole or conduit expenses. We will

not include any portion of Accounts

580, 583, 584, 588 or 598 in the

calculation of the maintenance element

of the carrying charge rate for pole or

conduit because the costs or expenses

reported to these accounts do not reflect

a sufficient nexus to the operating

expenses and actual capital costs of the

utility attributable to the pole or conduit

attachment. The pertinent maintenance

expenses are reported in Accounts 593

(poles) and 594 (conduit) and we

include those in the calculation.

4. Investment Accounts (Electric)

80. 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.

81. 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). Those costs

are fully captured in Account 364. The

accounts suggested by petitioners

include capital expenditures which

support the utility’s core business

function and are not related to the pole

cost. 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.

82. We do not believe that the Pole

Attachment Act envisions a drawn out

ratemaking process to determine

whether a lightning arrester, whose only

function is to protect a piece of

equipment which supports the utility’s

core business function of power

distribution, indirectly benefits other

attachers on the pole. Neither do we

propose a complex ratemaking process

to remove every possible cost included

in Account 364 that does not benefit the

pole attacher.

83. 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. All items

associated with the construction of the

conduit are included in this account.

84. 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

85. As required by the Regulatory

Flexibility Act (‘‘REA’’), an Initial

Regulatory Flexibility Analysis

(‘‘IRFA’’) was incorporated in both the

Fee Order Notice and Telecom Order

Notice and a Final Regulatory

Flexibility Analysis (‘‘FRFA’’) was

incorporated in both the Fee Order and

Telecom Order. The Commission sought

written public comment on the

proposals in the Fee Order Notice and

Telecom Order Notice, including

comment on the IRFAs. No comments

were received in response to the IRFA

in either the Fee Order Notice or

Telecom Order Notice, nor did we

receive any petitions for reconsideration

of the Fee Order FRFA or Telecom

Order FRFA. The RFA requires that an

RFA analysis be prepared for notice and

comment rulemaking proceedings,

unless the agency certifies that ‘‘the rule

will not, if promulgated, have a

significant economic impact on a

substantial number of small entities.’’

86. The RFA generally defines a

‘‘small entity’’ as having the same

meaning as the terms ‘‘small business,’’

‘‘small organization,’’ and ‘‘small

governmental jurisdiction.’’ In addition,

the term ‘‘small business’’ has the same

meaning as the term small business

concern under the Small Business Act.

A ‘‘small business concern’’ is one that:

(1) Is independently owned and

operated; (2) is not dominant in its field

of operation; and (3) satisfies any

additional criteria established by the

Small Business Administration

(‘‘SBA’’). As we described in the FRFA

analyses in the Fee Order and Telecom

Order, we estimate that there are small

business entities that might be affected

by those orders.

87. In this Order on Reconsideration,

we affirm most of our prior conclusions

in the Fee Order and Telecom Order.

We have, among other things, amended

certain requirements of §§ 1.1401–

1.1418 of our rules. These amendments

serve to simplify our formulas for

calculating pole attachment rates.

Specifically, we provide a simplified

equation of our formula for

telecommunications attachers; we

simplify the geographic categories for

determining average numbers of

attaching entities; and we allow parties

to a pole attachment proceeding to

substitute presumptive numbers of

attaching entities in the formula in order

to avoid the expense of establishing

numbers based on a survey or

compilation of actual data. We also

provide a simpler methodology for

calculating rates when the net pole

investment is negative or zero. These

changes do not impose additional

compliance burdens on small entities

nor do they alter the number or type of

small entities possibly affected by the

rules published in the Fee Order and

Telecom Order. The changes may, in

fact, reduce the burden on small

entities. Therefore, we certify, pursuant

to Section 605(b) of the RFA, that the

rules adopted herein will not have a

significant economic impact on a

substantial number of small entities.

88. Report to Congress: The

Commission will send a copy of this

Order on Reconsideration, including

this FRFA certification, in a report to be

sent to Congress pursuant to the

Congressional Review Act, 5 U.S.C.

801(a)(1)(A). A copy of this Order on

Reconsideration (or summary thereof)

and this FRFA certification will be

published in the Federal Register, see 5

U.S.C. 605, will be sent to the Chief

Counsel for Advocacy of the Small

Business Administration.

V. Paperwork Reduction Act of 1995

Analysis

89. The requirements adopted in this

Order on Reconsideration 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.

34580 Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations

VI. Ordering Clauses

90. 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 CFR

1.106, the petitions for reconsideration

and/or clarification are denied in part

and granted in part.

91. 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), the Commission’s

rules are hereby amended as set forth in

the Rule Changes.

92. The Commission’s rules, as

amended in the Rule Changes, will

become effective July 30, 2001.

93, The Commission’s Consumer

Information Bureau, Reference

Information Center, SHALL SEND a

copy of this Order on Reconsideration,

including the Final Regulatory

Flexibility Certification, to the Chief

Counsel for Advocacy of the Small

Business Administration.

List of Subjects in 47 CFR Part 1

Administrative practice and

procedures, Cable television,

Communications common carriers,

Conduit, Pole attachments, Poles,

Reporting and recordkeeping

requirements, Telecommunications.

Federal Communications Commission.

William F. Caton,

Deputy Secretary.

Rule Changes

For the reasons discussed in the

preamble, the Federal Communications

Commission amends 47 CFR Part 1 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. § 1.1402 is amended by revising

paragraph (m) to read as follows:

§ 1.1402 Definitions.

* * * * *

(m) The term attaching entity

includes cable system operators,

telecommunications carriers, incumbent

and other local exchange carriers,

utilities, governmental entities and

other entities with a physical

attachment to the pole, duct, conduit or

right of way. It does not include

governmental entities with only

seasonal attachments to the pole.

* * * * *

3. § 1.1409 is amended by removing

paragraph (e)(4) and revising 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:

Maximum

Rate Space Factor Net Cost oa Bare Pol

Carrying

Ch e Rate = ××

f

e arg

Where

Space

Factor Total Usab = Space Occupied by Attachment

le Space

(2) Subject to paragraph (f) of this section the following formula shall apply to attachments to poles by any telecommunications carrier (to the extent such carrier is not a party to a pole attachment agreement) or cable operator

providing telecommunications services beginning February 8, 2001:

Maximum Rate = Space Factor Net Cost of a Bare Pole 

Carrying

Charge

Rate

e Factor =

Space

Occupied pace

No. of Attaching Entities

t

× ×



















  + × 



 



 



























Where Spac

Unusable S

Pole Heigh

2

3

(3) The following formula shall apply to attachments to conduit by cable operators and telecommunications carriers:

Maximum

Rate per

Linear ft. Number of No

No Net Condui

/m. Ducts

 Duct

 of Inner Ducts of

Ducts

t Investment

System Duct Length (ft./m.)

Carrying

Charge

Rate

 (Percentage of Conduit Capacity) (Net Linear Cost of a Conduit)

= × 



 



 × ×





 



 ×

1 1

.

.

simplified as:

Maximum Rate

No

Net Condui

Per Linear ft./m.

 Duct

 of Inner Ducts

t Investment

System Duct Length (ft./m.)

Carrying

Charge

Rate

=× ×

1

.

Federal Register / Vol. 66, No. 126 / Friday, June 29, 2001 / Rules and Regulations 34581

If no inner-duct is installed the

fraction, ‘‘1 Duct divided by the No. of

Inner-Ducts’’ is presumed to be 1⁄2.

(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. § 1.1417 is amended by revising

paragraphs (a), (b), (c), and the

introductory text of paragraph (d) to

read as follows:

§ 1.1417 Allocation of unusable space

costs.

(a) With respect to the formula

referenced in § 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 cost of unusable

space.

(c) Utilities may use the following

rebuttable presumptive averages when

calculating the number of attaching

entities with respect to the formula

referenced in § 1.1409(e)(2). For nonurbanized service areas (under 50,000

population), a presumptive average

number of attaching entities of three (3).

For urbanized service areas (50,000 or

higher population), a presumptive

average number of attaching entities of

five (5). If any part of the utility’s

service area within the state has a

designation of urbanized (50,000 or

higher population) by the Bureau of

Census, United States Department of

Commerce, then all of that service area

shall be designated as urbanized for

purposes of determining the

presumptive average number of

attaching entities.

(d) A utility may establish its own

presumptive average number of

attaching entities for its urbanized and

non-urbanized service area as follows:

***

* * * * *

5. § 1.1418 is revised to read as

follows:

§ 1.1418 Use of presumptions in

calculating the space factor.

With respect to the formulas

referenced in § 1.1409(e)(1) and

§ 1.1409(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.

[FR Doc. 01–16038 Filed 6–28–01; 8:45 am]

BILLING CODE 6712–01–M

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 36 and 54

[CC Docket Nos. 96–45 and 00–256; FCC

01–157]

Federal-State Joint Board on Universal

Service; Multi-Association Group Plan

for Regulation of Interstate Services of

Non-Price Cap Incumbent Local

Exchange Carriers and Interexchange

Carriers.

AGENCY: Federal Communications

Commission.

ACTION: Final rule; announcement of

effective date.

SUMMARY: This document announces the

effective date of the amendments to our

rules for providing high-cost universal

service support to rural telephone

companies for the next five years based

upon the proposals made by the Rural

Task Force. We believe these

modifications will strike a fair and

reasonable balance among the universal

service principles and goals enumerated

in the Telecommunications Act. The

Fourteenth Report and Order and

Twenty-Second Order on

Reconsideration in CC Docket No. 96–

45, and the Report and Order in CC

Docket No. 00–256 was published in the

Federal Register on June 5, 2001. Some

of the rules contained information

collection requirements.

DATES: Sections 36.605(c)(2), 36.611,

54.305(f), the amendments to

§§ 54.307(b), 54.313(b) and (c), 54.314,

and 54.315 published at 66 FR 30080,

June 5, 2001, were approved by the

Office of Management and Budget

(OMB) on June 19, 2001 and became

effective on June 19, 2001.

FOR FURTHER INFORMATION CONTACT:

Genaro Fullano, Paul Garnett, or Greg

Guice, Attorney, Accounting Policy

Division, Common Carrier Bureau, (202)

418–7400, TTY: (202) 418–0484.

SUPPLEMENTARY INFORMATION: On May

23, 2001, the Commission released a

Fourteenth Report and Order, TwentySecond Order on Reconsideration in CC

Docket No. 96–45, and Report and order

in CC Docket No. 00–256 (Order), 66 FR

30080, June 5, 2001, that took action in

response to the Rural Task Force’s

recommended reforms to rural high-cost

universal service support and the

proposals made by the MultiAssociation Group relating to this

universal service support mechanism.

Specifically, the revised rules will

provide certainty and stability for rural

carriers for the next five years, enabling

them to continue to provide supported

services at affordable rates to American

consumers. The Commission believes

these modifications will preserve and

advance universal service, consistent

with the goals and principles set forth

in section 254 of the Communications

Act of 1934, as amended by the

Telecommunications Act of 1996, and

encourage competition in high-cost

areas, consistent with the competitive

goal of the 1996 Act. A summary of the

Order was published in the Federal

Register. See 66 FR 30080, June 5, 2001.

Some of the rules contained information

collection requirements that required

OMB approval. On June 19, 2001, OMB

approved the information collections.

See OMB No. 3060–0986. The rule

amendments adopted by the

Commission in the Order took effect on

June 19, 2001. This publication satisfies

the statement in the Order that the

Commission would publish a document

in the Federal Register announcing the

effective date of the rules.

List of Subjects

47 CFR Part 36

Jurisdictional separations, Reporting

and recordkeeping requirements,

Telecommunications, Telephone.

47 CFR Part 54

Reporting and recordkeeping

requirements, Telecommunications,

Telephone.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

[FR Doc. 01–16421 Filed 6–28–01; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 76

[CS Docket No. 00–96; FCC 00–417]

Implementation of the Satellite Home

Viewer Improvement Act of 1999:

Broadcast Signal Carriage Issues/

Retransmission Consent Issues

AGENCY: Federal Communications

Commission.

ACTION: Final rule; correction.

SUMMARY: The Commission published a

document in the Federal Register of

January 23, 2001, which implements

certain aspects of the Satellite Home