Opinion ID: 618656
Heading Depth: 3
Heading Rank: 5

Heading: Fiber Structure Costs: Excavation vs. Trenching

Text: The input for Fiber Structure Costs relates to the costs necessary for the placement of fiber optic cables. There are generally two standard methods for laying cables: excavation and trenching. Excavation is more costly than trenching; accordingly, PRTC prefers excavation and WorldNet prefers trenching (though the Board noted that there are also valid engineering and economic reasons why PRTC would prefer excavation unrelated to the effect on the rates PRTC could charge to WorldNet). The Board decided the Fiber Structure Cost figure in the first instance, and thus we examine whether the Board's determination was arbitrary and capricious. PRTC's proposal assumed that PRTC would rely on the more costly excavation 100 percent of the time. WorldNet's proposal assumed that PRTC would never rely on excavation, instead assuming that PRTC would use trenching 100 percent of the time. The Board opted to split the difference by assuming that 50 percent of the time excavation would be used, following PRTC's accounting measures, and 50 percent of the time trenching would be used, following WorldNet's accounting measures. PRTC argues that such a Solomonic judgment is arbitrary and capricious, particularly where there is no support in the record for the proposition that PRTC uses trenching 50 percent of the time. PRTC further argues that the Board failed to explain why it is likely that some mix of trenching and excavation would be used, and that under the arbitrary and capricious standard, agencies must adequately explain their reasoning. We agree with the district court that the Board's decision was reasonable and supported by record evidence, and thus was neither arbitrary nor capricious. WorldNet III, 707 F.Supp.2d at 211. The Board examined the evidence presented and found that it does not believe that any proposal that relies on 100% of either excavation or trenching is reasonable. The Board observed that the evidence at the hearing convinced us that each method has upsides and downsides. Furthermore, the Board noted that trenching and excavation are used by other providers as they design and execute their networks, including providers in Puerto Rico such as Centennial and cable TV companies. Thus, the Board concluded that in a forward-looking, least cost/most efficient network it is likely that the mix of trenching and excavation would be used. There was no support for either party's absolute position, but there was also no evidence demonstrating the proper exact ratio in a forward-looking network. Under these circumstances, it was perfectly reasonable for the Board to assume a 50/50 split.