III. Protest and Response

A protest to A.00-12-026 was jointly filed by AT&T Communication of California, Inc., XO California, Inc., and the California Cable Television Association (collectively, "Protestants"). The Protestants argue that it is improper for PG&E to seek Commission approval of the Master Agreements pursuant to Section 851. Section 851 states, in relevant part, as follows:

No public utility...shall...lease...any part of its...plant, system or other property necessary or useful in the performance of its duties to the public...without first having secured from the commission an order authorizing it to do so. (Emphasis added.)

The Protestants contend that Section 851 does not apply to the Master Agreements, since the Agreements do not allow the carriers to install equipment in space that is necessary or useful to PG&E.

The Protestants next argue that the Master Agreements are licenses that are subject to G.O. 69-C, and such licenses do not require Commission approval under Section 851. G.O. 69-C states, in relevant part, as follows:

[P]ublic utilities...are...authorized to grant...licenses...for use [of their property]...without further special authorization by this Commission whenever it shall appear that the exercise of such...license...will not interfere with the operations...of such public utilities...provided, however, that each such grant...shall be made conditional on the right of the grantor...to commence or resume use of the property in question whenever, in the interest of its service to its patrons or consumers, it shall appear necessary or desirable to do so. (Emphasis added.)

The Protestants assert that there are two key criteria for determining when an agreement is a license that is subject to G.O. 69-C. First, the agreement must be limited to the use of utility property that is not necessary or useful in the performance of the utility's duties to the public. The Protestants believe that the Master Agreements satisfy this criterion for the reasons stated in the previous paragraph. Second, the utility must be able to terminate the agreement at will. The Protestants contend that the Master Agreements satisfy this criterion because Sections 7.1 and 7.3 of the Agreements allow PG&E to terminate the Agreements at will. The Protestants also contend that the Master Agreements are licenses because of their similarity to G.O. 69-C license agreements in Advice Letter (AL) 2063-E that PG&E filed at the Commission on December 20, 2000.

The Protestants argue that the Master Agreements contain unreasonable fees, including (1) a one-time charge of $10,000 to file A.00-12-026, (2) a $5,000 fee for each additional filing, and (3) attachment, engineering, and rearrangement fees that exceed PG&E's costs in contravention of the ROW decisions. The Protestants believe that PG&E's motive for filing A.00-12-026 is to have the Commission ratify the unreasonable fees. The Protestants are concerned that PG&E's attempt to extract unreasonable fees will, if approved, encourage PG&E and other utilities to extract unreasonable fees in the future.

The Protestants note that PG&E has an affiliate engaged in telecommunications-related activities.⁶ The Protestants contend that PG&E is attempting to hinder the affiliate's competitors by making the competitors' access to PG&E's facilities more difficult and expensive. The Protestants also contend that granting A.00-12-026 would create a precedent that allows "incumbent pole owners" to attach equipment to their poles without any Commission review, while competitors must incur the costs and delays associated with § 851. The Protestants argue that such a result would violate the Telecommunications Act of 1996 by imposing requirements that are not competitively neutral.

PG&E denies the Protestants' accusation that it is attempting to make access to its facilities more difficult and expensive. PG&E also disputes the Protestants' claim that the Master Agreements are G.O. 69-C licenses because PG&E can terminate the Agreements at will. PG&E states that Article X of the Agreements provides that once the Commission has approved the Agreements as Section 851 leases, PG&E may terminate the Agreements only under the following circumstances: (l) material breach; (2) failure of a carrier to maintain its CPCN; (3) assignment without consent; (4) failure of the attaching carrier to obtain permission from underlying land owners, which results in legal proceedings; and (5) written mutual agreement.