Discussion

In his Ruling, ALJ Bemesderfer took note of the fact that we have never adopted a specific rule covering the application of G.O. 69-C to affiliate transactions, noting that as a result each such proposed transaction "presents both the utility and the Commission with a novel problem for decision." When, as in this case, the utility has chosen to submit the matter to us for consideration either as an application under § 851 or, alternatively, as a potential action under G.O. 69-C, we need to make at least a preliminary examination of the facts to determine under which framework the matter should proceed.

As set forth in the application, the three parcels on which the central offices are located are 80,370 square feet (Irvine), 236,503 square feet (Los Angeles) and 124,968 (Sherman Oaks) in size. At each location, SNET would require 400 square feet of interior space in which to locate signaling equipment necessary to provide service to the interexchange carriers, CLECs and wireless carriers who are its customers. Each 400 square foot space would have wall separation from the rest of the building.

SBC represents that none of the spaces are currently used by SBC, nor does SBC have any plans for their future use. In the original application, SBC proposed to lease these spaces to SNET, pursuant to leases that would be revocable at will. In its reply to ORA's response, SBC volunteered to convert the leases into licenses so as to bring the transactions within the literal language of G.O. 69-C. For purposes of this decision, we will treat the application as having been amended by SBC's reply to an application to license rather than lease the spaces.

G.O. 69-C provides a narrow exception to § 851's requirement for advance Commission approval of any sale, lease, assignment, mortgage or encumbrance of utility property. Under G.O. 69-C, utilities may, in certain circumstances, convey limited, revocable uses of utility property, such as easements, licenses, permits or other limited use of land, to third parties without prior Commission approval.

G.O. 69-C establishes three key criteria for permitting a utility to grant minor interests in utility property without Commission approval pursuant to § 851, as follows: