5. Position of PFL

PFL presented its evidence through the testimony of two environmental specialists retained by the company to monitor the conduit project, two corporate officers who had directed the project, and two attorneys who had dealt with the Commission on CEQA issues. By stipulation, PFL also introduced the deposition transcripts of six wardens for the Department of Fish and Game.

R. John Little, president of Sycamore Environmental Consultants, Inc., and James K. Nickerson, western region science manager for Foster Wheeler Environmental Corporation, testified that their companies were retained by PFL in September 1998 to conduct environmental reviews of the fiber optic project. They stated that they prepared a comprehensive plan to protect sensitive biological, archeological and historical resources along the construction route and worked with local and state agencies to obtain required permits.

Both witnesses testified that they determined that the Commission was the lead agency for CEQA purposes, but that there appeared to be uncertainty within the Commission about what CEQA obligations applied to an NDIEC like PFL. Nickerson stated that he met with the Commission's environmental staff and that "they were aware of, and approved of, the environmental studies being performed in support of the project." (Exhibit 15, at 7.) He said that the Commission's staff appeared to have no problem with the construction taking place on the rights-of-way of public roads and utilities, but told him that further Commission authorization would be required for regeneration facilities that later would be constructed outside the rights-of-way. Little testified that it was his belief that some sort of paper solution would take place that would satisfy the earlier CEQA requirements for the Commission.

Nickerson testified that PFL obtained all necessary approvals from the Department of Fish and Game, adding that at least two of the department's regional offices had agreed that streambed alteration agreements were not required because PFL planned to drill under waterways and not affect streambeds or banks. He testified that he was not aware of uncorrected betonite spills.

PFL's vice president of planning, James Cox, testified that he thought that the operating authority that the company obtained from the Commission in July 1998 included CEQA authority. He said he knew of three other telecommunications companies that were building fiber optic systems in California and had CEQA approval from the Commission. He learned later that these were competitive local carriers that had obtained their authority under the blanket mitigated declaration process that has since been discontinued. Cox stated that when PFL failed to receive guidance from the Commission on obtaining CEQA approval, the company put together its own environmental review of the project.

In similar testimony, PFL's vice president of operations, Gary D. Anderson, said the company had sought Commission action on CEQA for months. He said that PFL decided to proceed with construction in December 1998 because all local permits were in place, all construction crews had been hired, Yolo County had issued a CEQA exemption for the work, and the word from Commission staff was that the Commission would not stop PFL from beginning work.

Asked in cross-examination about the costs of the Commission's stop-work order between July 1999 and January 2000, Cox testified that losses were not large in terms of the total project value. Anderson, however, estimated that the stop-work order cost PFL approximately $1 million, but he was unable to quantify the loss.

PFL called two lawyers, Julie Hawkins and Anita Taff-Rice, to recount their experiences in dealing with the Commission. Hawkins, practicing with a law firm in Seattle at the time, testified that she was assigned to file for PFL's authority in California in April 1998. She said that she called the Commission's staff on at least 10 occasions and was told to file a registration and not an application for PFL. She said that she was told that the Commission did not do a CEQA review for long distance carriers like PFL. Hawkins said that this did not surprise her because her filings in seven other states had not required environmental review.

On cross-examination, Hawkins acknowledged that she kept no notes of her conversations with Commission staff. She admitted that the two-page registration form she filed on behalf of PFL did not include a description of the fiber optic project, although it did specify that PFL was a facilities-based carrier.

Both Hawkins and Taff-Rice testified that they had reviewed the Commission's Rule 17.1 dealing with the preparation and filing of environmental reports. Both stated that they found the instructions unclear and sought guidance from McIlvain and others on the Commission staff. On cross-examination, Taff-Rice said she found McIlvain "extremely knowledgeable and very helpful," and thus she had no reason to doubt the filing procedures he described. Taff-Rice went on to state:

"There were other carriers out there doing precisely what we contemplated and yet they apparently didn't need an exemption and were not filing full-blown [Proponent's Environmental Assessments]. So we tried to read the rule and compare that to what I knew was going on in the real world." (Transcript, at 746.)