2. Background and Summary of Request

The terms and conditions of the proposed leases between SCE and Sprint are set forth in a Metropolitan Area Network Fiber Optic Lease and Maintenance Agreement (the Lease Agreement) dated July 2, 2003, and five associated product orders, one for each of the fiber optic cable rings or partial rings that SCE proposes to lease to Sprint. Copies of the Lease Agreement and the product orders are attached to the application as Exhibits 1-6.

The Lease Agreement provides a detailed framework for the lease of SCE-owned fiber optic cables to Sprint. The five product orders set forth the specific routes that Sprint will lease upon Commission approval of this application.

SCE states that the Lease Agreement and product orders presented in this application are part of SCE's efforts to generate additional revenues from utility assets, while also ensuring that ratepayers share in those revenues without risk.