IV. Discussion

The application identifies 23 licenses, which permit Cingular to attach its antennas and antenna equipment to Edison property at the following locations:

First Master Attachment Agreement		Second Master Attachment Agreement
Site ID	Site Location	Site ID	Site Location
LA605	Southgate Nursery - Southgate	SM050	La Fresa Substation-Redondo
CM336	Crown Valley-Mission Viejo	SM081	Lincoln Ave-Anaheim
CM383	405 Fwy & Culver-Irvine	SM080	Valley View-La Palma
LA596	YMCA-1000 Oaks	SM082	Audre Drive-Anaheim
CM537	Alicia Pkwy-Laguna Hills	CM377	Olympiad-Mission Viejo
CM358	Highland-Rancho Cucamonga	SM026	Claretta Ave-Cerritos
LA654	Lakewood/Woodruff-Lakewood	CM255	Canyon Rim Rd-Pomona
CM415	Universe & Edinger-Huntington Beach	CM152	Yale Ave-Irvine
LA374	Alamitos Center-Bellflower	VY-061	90th Street-Lancaster
LA594	Grissom-1000 Oaks	CM-102	North Ranch Rd/Canyon Rim-Anaheim
LA 996	Portrero Grande-Monterey Park	/	/
CM294	Ellis-Huntington Beach	/	/
LA605	Southgate Nursery-Southgate	/	/

The conversion of a license to a more durable lease requires Commission approval under § 851, since (1) GO 69-C does not apply to any arrangement that is not revocable within the terms prescribed in that general order, and (2) § 851 requires a public utility to secure Commission authority before, among other things, leasing any property that is "necessary or useful in the performance of its duties to the public."

Prior Commission decisions address the license/lease of antenna and antenna equipment attachment locations, as well as other types of telecommunications infrastructure. As noted above, in D.00-07-010 the Commission authorized use by Edison and PBMS of a similar master attachment agreement for the license/lease of attachment locations for wireless antenna equipment. In D.02-12-023, D.02-12-024, and D.02-12-025 the Commission approved master agreements and associated standard agreements for the license and subsequent lease of Edison antenna equipment locations, and excess space at telecommunications facility sites, to Nextel of California, Inc., Sprint PCS Assets, L.L.C. (Sprint), and AT&T Wireless Services of California, L.L.C. (AT&T Wireless).

Edison is not the only energy utility to ask for such approvals. In March 2002, in D.02-03-059, we reviewed and approved a license/lease arrangement between Pacific Gas and Electric Company (PG&E) and AT&T Wireless and there have been other such decisions. D.02-03-059 is important because it expressly notes the significant difference between the licenses PG&E issued to AT&T Wireless for attachment of removable antenna equipment and other licenses, the subject of a pair of 2001 decisions, that PG&E issued in connection with permanent construction to interconnect two electric generation plants with its system.⁸ While we approved the license/lease agreement between PG&E and AT&T Wireless, we did so with some reservations, stating:

The Applicants in this case negotiated a single "Master License/Lease Agreement" which covers both the license and lease of the property. Under this single agreement, the Applicants have agreed that, upon Commission approval of the §851 application, the provision of the agreement that renders the entire agreement revocable becomes inoperative, which has the effect of transforming a fully revocable arrangement to a more durable lease arrangement.

Our reservations arise from the fact that, by virtue of the single agreement, it appears that the Applicants contemplated that they would eventually be seeking §851 approval. If parties anticipate that they will be entering into an agreement that will require such approval, they should file an application seeking such approval. When parties use the same agreement to convert a license to a lease, our concerns increase that the parties may be attempting to bootstrap upon a GO 69-C license to undermine our analysis of environmental and other factors in the § 851 application.

...

We give notice that single agreements that provide for the conversion of a license to a lease may not be approved in the future. (D.02-03-059, p.7. slip op.)

Like PG&E's licenses to AT&T Wireless and Edison's licenses to Sprint and to AT&T Wireless, this application concerns licenses to locate wireless communications antennas and antenna equipment on utility property. The antennas and associated antenna equipment can be removed readily, if necessary, and constitute a limited use of utility property under GO 69-C. Both the First Master Attachment Agreement and the Second Master Attachment Agreement contemplate, in a single agreement, a license-to-lease conversion, and in this respect resemble the AT&T Wireless and the Sprint licenses, as well.

Also like the AT&T Wireless and Sprint license/lease situations, those presented by this application do not appear to be structured to avoid the

environmental review that may be required when, pursuant to § 851, the Commission considers whether to authorize a lease of public utility property.⁹ As we discuss below, conversion of these licenses into leases does not occasion additional environmental review by the Commission.

We rely upon GO 159-A, which delegates authority to regulate the location and design of cellular facilities to local agencies, though the Commission retains oversight jurisdiction in cases of conflict with Commission goals and/or statewide interests.¹⁰ The First Master Attachment Agreement and the Second Master Attachment Agreement properly require Cingular to apply for all required governmental permits and approvals, which is consistent with GO 159-A. Further, as required by GO 159-A, Cingular must notify the Commission if the permits or approvals are granted or if none are necessary because the proposed construction is minor. We believe these conditions in the master attachment agreements provide that environmental review will occur at the appropriate time.

Edison states that the parties entered into the licenses with the intention to convert them into leases once Commission approval to do so had been obtained. Proceeding in this manner enabled Cingular "to secure locations for the development of its telecommunications network as quickly as possible." (Application, p.7.) Though we disfavor license/lease arrangements generally, since issuing D.02-03-059 we have approved other license-to-lease conversions for wireless equipment attachments.

Edison also states that the license/lease arrangements are examples of its "ongoing effort to pursue opportunities to generate additional revenues from utility assets, while also ensuring that its electrical ratepayers receive substantial benefits without risk." (Id., at p. 4.) Edison proposes to treat the revenues received from Cingular in accordance with the gross revenue sharing mechanism for other operating revenues, known as "OOR," which the Commission adopted in D.99-09-070. Edison states that the two master attachment agreements and associated standard agreements fall within the non-tariff products and services category, or "NTP&S," identified as Use of Communications and Computing Systems, which is subject to a 90%/10% shareholder/ratepayer revenue sharing allocation. In D.02-12-023 and D.02-12-024 the Commission adopted the agreement between Edison and the Commission's Office of Ratepayer Advocates (ORA) that revenues associated with attachment agreements are to be shared between shareholders and ratepayers on a 90/10 basis. The same revenue sharing allocation is appropriate here.

In D.02-03-059 we determined that the PG&E and AT&T Wireless attachment agreements made "good sense from several perspectives" and we quoted D.00-07-010, our earlier decision approving the agreements between Edison and Cingular's corporate predecessor:

It is sensible for California's energy utilities, with their extensive easements, rights-of-way, and cable facilities, to cooperate in this manner with telecommunications utilities that are seeking to build an updated telecommunications network.

Joint use of utility facilities has obvious economic and environmental benefits. The public interest is served when utility property is used for other productive purposes without interfering with the utility's operation or affecting service to utility customers. (D.02-03-059 at p. 9, slip op. quoting D.00-07-010, p. 6.)

We conclude that the attachment agreements at issue in this application likewise make productive joint use of available space, do not interfere with Edison's obligations to its electric utility customers and permit improved service to Cingular's customers. We are also favorably influenced by Edison's commitment to notify the Commission of changed circumstances in connection with these master attachment agreements. We adopt these notification requirements, with one modification, as a condition of our approval. Edison shall:

· Notify ORA and the Commission's Energy Division of all new lases and all substantive extensions or terminations of these attachment agreements.

· Notify ORA and the Energy Division assistant directors for energy, in writing, of any substantive changes to plant in service resulting from implementation of the attachment agreements, within 60 days of the change.

· Notify ORA and the Energy Division assistant directors for energy, in writing, if any right-of-way which is the subject of these attachment agreements ceases to be used and useful for the provision of electric service or if there are any substantive changes in the right-of-way segments which are the subject of these attachment agreements, within 30 days of any such event.

However, we do not accept Edison's proposal to notify ORA and the Energy Division of substantive amendments to the agreements. Instead, consistent with our direction to PG&E in D.02-03-059, Edison shall file an application under § 851 for approval of any such proposed changes to either

master attachment agreement or to its subsidiary standard agreement. Our approval of these 23 leases, and for additional antenna equipment leases executed under the Second Master Attachment Agreement, is based upon the terms in the documents submitted for our review. We do not think it prudent, or consistent with our responsibilities under § 851, to give Edison advance authority to negotiate substantive amendments to these agreements.