VI. Parties' Comments on the Proposed Rules

A. Pacific Bell Telephone Company (Pacific)

Pacific proposes that the replacement value for facilities that are transferred to the property owner should be valued at fair market value. Pacific states that use of the net book value would constitute an unlawful taking.

Pacific states that it cannot foresee an instance where movement of the MPOE would not cause it to move its current MPOE to the property line. Therefore, there would always be some property transferred to the property owner. Therefore, Pacific recommends that the second sentence of Rule 5: "The utility need not transfer property to the property owner if it is technically feasible to relocate the MPOE without such transfer, and if no state or federal statute, rule, regulation or order requires such transfer" be removed.

Pacific states that the rules for relocation of the MPOE should not be extended to non-continuous property or single-family properties. As an example, when multiple properties are separated by a road, it is unclear whether Pacific can be required to turn over facilities on a public right of way to the property owner as a result of the relocation. It is also unclear whether such a transfer would be legal. Pacific also represents that relocation of the MPOE for a single-family property could raise problems in finding an appropriate location for the MPOE. Pacific also states that relocation of the MPOE for non-continuous property or single-family properties is beyond the scope of this proceeding.

Pacific opposes elimination of the income tax gross up charge because it merely collects taxes Pacific will have to pay.

Pacific recommends that the rules should apply to all utilities. In particular, allowing competitive local carriers (CLCs) to be exempt would allow CLCs to exclude other carriers from access to customers served by them.

B. Verizon California, Inc. (Verizon)

Verizon believes that facilities that are transferred to the property owner should be valued at fair market value. The use of net book value would constitute an unlawful taking.

Verizon states that it should not be required to relocate an established MPOE on the same property because the rules promulgated by the FCC do not require it to do so.

Verizon states that the rules should apply to all utilities. In particular, allowing competitive local carriers (CLCs) to be exempt would allow CLCs to make access to customers served by them more difficult and expensive.

C. Teligent Services, Inc. (Teligent)

Teligent represents that requiring building owners to pay for relocation of the MPOE would make it harder for a CLC to obtain access to multi-tenant buildings. This is because allowing CLC access, if it entails movement of the MPOE, would increase building owner's costs. Teligent suggests several solutions to this problem. First, the Commission could require building owners to permit CLC access on a reasonable and nondiscriminatory basis. Second, the Commission could require the incumbent utility to pay part of the costs since the choice of the current MPOE configuration was the incumbent's choice. Third, the Commission could require the apportionment of the relocation costs between all utilities serving the property in a manner that does not disadvantage the first CLC to serve the property. Under such a plan the first CLC to provide service would pay the costs of movement of the MPOE. Subsequent CLCs would be required to provide a proportionate share of the costs that would be paid to the incumbent who would reimburse previous CLCs. Alternatively, incumbents could charge initial connectors a portion of the costs based on the total estimated demand by other carriers for access to the property.

Teligent recommends that the following language be added to Rule 4 in lieu of the requirement that the property owner agrees, and has the ability, to pay for all relocation expenses reasonably incurred:

"The utility may recover on a proportionate and nondiscriminatory basis from other utilities in the building relocation expenses reasonably incurred with such amounts based upon reasonable estimated occupation of the building by additional utilities. The utility must impute to itself a proportionate charge for reasonably incurred relocation expenses. The utility must refund on a proportionate basis to utilities in the building the full amount of charges recovered from subsequently installed utilities that exceed the actual amount of relocation expenses reasonably incurred."

Teligent suggests that the utility should not be required to transfer facilities to the property owner as a result of the relocation. However, the utility would not be allowed to place restrictions on the removal, modification or replacement of the facilities that would otherwise be transferred. The utilities would also not be allowed to charge for the use of the facilities.

Teligent recommends that tenants and competing carriers should be allowed to request relocation of the MPOE if they have the building owner's approval. The approval should not have to be in writing because the requirement would impose another unnecessary burden on all parties involved.

Teligent believes that the rules should apply to all utilities. This would make it less costly to provide service to properties served by other carriers.

Teligent states that the expedited dispute resolution process adopted in D.98-10-058 for easement disputes should apply to disputes resulting from proposed relocation of the MPOE. This would avoid delays resulting from having to file a formal complaint.

D. Pac-West Telecomm, Inc and WorldCom, Inc. (PWWC)

PWWC takes issue with the definition of the MPOE. PWWC believes that CLCs should not be required to locate the LLDP at the MPOE. PWWC states that the requirement to locate the LLDP at the MPOE, which was imposed on Incumbent Local Exchange Carriers (ILECs) in D.92-02-023, does not apply to CLCs. Requiring CLCs to adhere to this requirement would preclude them from providing existing and future services in the most efficient manner, and could preclude them entirely from providing some services. PWWC states that the purpose of D.92-02-023 was to resolve problems of ownership and control of inside wiring by the ILECs. The requirements have no reasonable application to CLCs.

PWWC states that the fact that D.93-05-014 clarified that D.92-02-023 does not apply to fiber optic facilities creates a bias toward fiber over other technologies such as wireless.

E. U.S. Department of Defense and All Other Federal Executive Agencies (DOD)

DOD distinguished between the LLDP and the MPOE. DOD recommends that movement of the LLDP towards the MPOE would promote competition. Movement of the LLDP away from the MPOE would have anti-competitive effects. Therefore, only movement of the LLDP toward the MPOE should be allowed. DOD believes that the utility should assume all of the costs of a relocation of the LLDP which it initiates.

DOD recommends that the Commission should resolve all disputes regarding relocation of the LLDP.

DOD recommends that the rules for relocation of the MPOE should apply to any property rather than just continuous multi-tenant property.

F. Cox California Telecom, L.L.C. dba Cox Communications On Behalf of AT&T Communications of California, Inc., the California Cable Television Association, and Time-Warner Telecom of California, L.P. (Cox)

Cox states that the use of net book value for facilities transferred to the property owner as a result of movement of the MPOE is appropriate. The use of net book value has been found reasonable in the past by the Commission and the courts, and should be used here.

Cox asks that the holdings of D.92-01-023 be affirmed except to the extent they are modified herein. In that way, it would be clear that D.92-01-023 is not being replaced in its entirety.

Cox proposes that the MPOE rules should also apply to single-family dwellings. Cox believes that there is no reason not to apply them to single-family dwellings as long as the owner is willing to pay. Single-family dwelling owners may want to move the MPOE to avoid unnecessary entry of utility personnel onto their property, to receive multiple lines from different carriers at a single point, to avoid drop wires coming down to the building from overhead facilities, etc.

Cox proposes that the property owner or his or her agent be allowed to request movement of the MPOE as long as a legitimate agency relationship exists. Cox also proposes that the agent be allowed to pay for the movement of the MPOE. It should not matter who pays for the movement as long as a legitimate agency relationship exists.

Rule 5 provides that the utility need not transfer property to the property owner if it is technically feasible to relocate the MPOE without such transfer, and if no state or federal statute, rule, regulation or order requires such transfer. Cox believes that these provisions should be removed. Cox states that it is always technically feasible to relocate the MPOE without transferring utility property. Allowing the utility not to transfer the facilities would drive up the costs of relocation. This would make property owners less likely to relocate the MPOE to enhance competition. In addition, D.92-01-023 requires the transfer because it never anticipated that the utility would continue to own facilities on the customer's side of the meter. Such facilities would have to be abandoned if not transferred.

Cox states that Rule 6 should be revised to provide that the income tax gross-up charge should not be applied to MPOE relocation projects. The charge was only intended to apply to special construction projects where the construction results in expansion or improvement of the utility's network facilities. MPOE relocation does not result in expansion or improvement of the utility's network facilities.

Cox proposes that the rules should be revised to provide that disputes over MPOE relocation should be resolved in the same manner as for easement access disputes in the Right-Of-Way Decision (D.98-10-058). The Commission's complaint process is too slow and costly and will allow the serving utility to unnecessarily delay the provision of service by competitors.