II. The Agreement and First Amendment

On May 6, 1999, PG&E and Broadwing entered into the Agreement that would (1) allow Broadwing to install underground and overhead fiber optic facilities on PG&E's electric transmission towers, substations, rights-of-way, and other facilities; (2) vest bare legal title in the fiber optic facilities in PG&E subject to Broadwing's right to use the optical fibers to service its customers; and (3) allow PG&E to use a portion of the fibers in connection with its needs. PG&E would maintain ownership of its facilities subject to Broadwing's right to use them. For purposes other than the bare legal title, Broadwing would be considered the owner of the fiber optic facilities installed pursuant to the Agreement, subject to PG&E's right to use them. PG&E maintains that the Agreement enables it and Broadwing to expand their fiber optic systems more efficiently than if each proceeded independently. PG&E contends that the Agreement will not impair its provision of service to the public. Until the Commission's approval is secured, PG&E states that it has given Broadwing a revocable license to enter its facilities to install fiber optic systems. The current revocable license will convert to an irrevocable lease, which contains the same terms, except as provided in the Agreement and First Amendment, upon our approval of this application.

Broadwing and PG&E executed the First Amendment on August 28, 2000 to allow Broadwing to construct a spur to Santa Clara extending from PG&E's Trimble Substation to First Street in Santa Clara. PG&E filed a supplement to this application on August 29, 2003, submitting the First Amendment for Commission approval.² PG&E contends that benefits to PG&E and its ratepayers, Broadwing, and the public that originated under the Agreement are increased by the First Amendment.