II. Statutory Authority For ROW Access Rulemaking

The current rights and obligations of public utilities with respect to ROW access are addressed in various federal, state, and local statutes. The rules we adopt expand, elaborate , or clarify previously existing access rights and obligations with a view toward promoting a more competitive market for telecommunications services. The rules we adopt shall apply to the major ILECs as well as to the major investor-owned electric utilities under our jurisdiction. We establish rules for ROW access in this decision pursuant to our jurisdictional authority, as discussed below.

Legal disputes relating to accessing the ROW and support structures of public utilities became significant nationally in the late 1970s as the newly-emerging cable television industry sought to gain access to the utility poles and underground conduit owned by incumbent public utilities. In 1978, Congress enacted the Pole Attachments Act (47 U.S.C. § 224) which gave the Federal Communications Commission (FCC) jurisdiction to regulate the rates, terms, and conditions of attachments by cable television operators to the poles, conduit or ROW owned or controlled by utilities in the absence of parallel state regulation. More recently, with the accelerated implementation of competition for telecommunications services, Congress has further addressed and modified federal law pertaining to ROW access rights and obligations. In the Telecommunications Act of 1996 (the "Act") Congress expanded the scope of § 224 to include pole attachments by telecommunications carriers. It also gave the FCC the authority to regulate nondiscriminatory access to poles, ducts, conduits and ROW.5 As amended by the Act, § 224 provides that "a utility shall provide a cable television system or any telecommunications carrier with nondiscriminatory access to any pole, duct, conduit, or right-of-way owned or controlled by it."6 Section 251(b)(4) of the Act further provides that "all local exchange carriers have the duty to afford access to the poles, ducts, conduits, and rights-of-way of such carriers to competing providers of telecommunications services on rates, terms, and conditions that are consistent with § 224." Similarly, § 271(c)(2)(B), checklist item (iii), requires "[n]ondiscriminatory access to the poles, ducts, conduits, and rights-of-way owned or controlled by a Bell operating company at just and reasonable rates in accordance with the requirements of § 224 "prior to that Bell operating company being able to provide certain in-region inter-Local Access and Transport Area services.

The FCC adopted rules governing access to ROW in its Interconnection Order, FCC 96-325, adopted August 1, 1996, in conformance with the Act. As set forth in § 224(c)(1), however, the FCC does not have "jurisdiction with respect to rates, terms, and conditions, or access to poles, ducts, conduits, and rights-of-way as provided in subjection (f) for pole attachments in any case where such matters are regulated by a State." This Commission, therefore, has jurisdiction to exercise reverse preemption, setting our own rules governing access to ROW, and we are not obligated to conform to the FCC rules. The discretion of state and local authorities to regulate in the area of pole attachments is circumscribed by § 253 which invalidates all state or local legal requirements that "prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service." This restriction does not prohibit a state from imposing "on a competitively neutral basis and consistent with Section 254, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers." In addition, § 253 specifically recognizes the authority of state and local governments to manage public ROW and to require fair and reasonable compensation for the use of such ROW.

In order to establish our jurisdiction, the Commission must satisfy the conditions of §§ 224(c)(2) and (3), which provide:

(A) it regulates such rates, terms, and conditions; and

The Commission must prescribe rules governing access to public utility ROW consistent with state statutory law as set forth in Public Utilities (PU) Code § 767 which provides in pertinent part:


"Whenever the commission, after a hearing had upon its own motion or upon complaint of pubic utility affected, finds that public convenience and necessity require the use by one public utility of all or any part of the conduits, subways, tracks, wires, poles, pipes, or other equipment, on, over, or under any street or highway, and belonging to another public utility, and that such will not result in irreparable injury to the owner or other users of such property or equipment or in any substantial detriment to the service, and that such public utilities have failed to agree upon such use or the terms or conditions or compensation therefore, the commission may by order direct that such use be permitted, and prescribe a reasonable compensation and reasonable terms and conditions for the joint use. . ."

By virtue of the rules we issue pursuant to the instant decision, we hereby certify to the FCC that we regulate the rate, terms, and conditions of access to poles, ducts, conduits, and ROW in conformance with §§ 224( c)(2) and (3).

As a threshold issue, we must address the extent to which the Commission should prescribe detailed rules or require tariffs governing the pricing and other terms and conditions for access to the ROW and support structures of the incumbent utilities.

The Coalition and CCTA propose a detailed set of rules for adoption by the Commission governing various terms and conditions for ROW access. The Coalition and CCTA argue that detailed rules and minimum performance standards are needed to prevent the ILECs and electric utilities from extracting unreasonable terms of access and excessive rents from CLCs through the negotiation process, impeding the growth of local exchange competition. By contrast, the ILECs and electric utilities oppose the adoption of structured rules and favor negotiations of access agreements with recourse to a dispute resolution process in case of impasse.

The Coalition also argues that incumbents should be required to file tariffs covering the pricing and terms for ROW access, in order to mitigate CLCs' lack of equal bargaining power with the incumbent utilities. The Coalition argues that tariffs avoid the danger of CLCs being forced to accept an anticompetitive contract to gain access to an ILEC's facilities.

The Coalition argues that the incumbent utilities, through their control of essential facilities, have little or no real incentive to reach agreement through negotiations, especially where permitting attachments would simply subject them to greater competition and potential loss of market share. In the absence of fixed rules or performance requirements, and in the absence of a prescribed formula governing the calculation of pole attachment rates, the Coalition argues, negotiations alone will not be productive, but will frustrate the introduction of competition, especially for facilities-based CLCs. The Coalition notes that either through existing affiliates, such as Pacific Bell Communications or GTE Card Services, Inc., and through affiliates that will likely soon be formed by electric utilities, the incumbents will offer competitive telecommunications services of their own. The incumbents' ROW and support structures will be valuable assets for themselves and their affiliates in competing against CLCs.

The Coalition and CCTA propose that the Commission therefore require incumbent electric and telephone utilities to file pole attachment "compliance tariffs" (in compliance with specific provisions in the Commission's decision). The compliance tariffs envisioned by the Coalition and CCTA would, (1) incorporate by reference the rules governing access to incumbent utilities' ROW and support structures adopted by the Commission; (2) contain the per pole attachment rates and per linear foot conduit usage rates presently charged to cable television companies under the contracts which they have entered into pursuant to § 767.5; and (3) set forth the specific charges a utility would collect for copies of any necessary maps, diagrams, and drawings. The Coalition agrees that while some items may be impossible to reduce to tariff form simply because of their infinite variety, negotiation for access to support structures and ROW should always be an option open to an CLC, as long as contracting is not mandatory.

The Coalition is not opposed to CLCs entering into negotiated agreements with incumbent utilities which reflect compensation arrangements different from those contained in the incumbent utility's tariffs. The Coalition believes, however, that negotiations for alternative compensation arrangements are more likely to be successful if, but only if, all parties know, through the adoption of rules requiring incumbent utilities to file "minimum" tariffs, what the standard charge is.

The ILECs and electric utilities oppose the adoption of detailed rules and tariff filing requirements, but believe that the Commission should leave it to the carriers to freely negotiate ROW access through individual contracts. The incumbents argue that the Commission should intervene only where individual carriers cannot agree on specific terms of access. The incumbents argue that detailed rules will unduly constrain the flexibility of parties to creatively negotiate terms and conditions which best fit the individual circumstances of a given carrier. Pacific objects to the Coalition's proposed rules as being overly inclusive, inflexible, and one-sided in favor of the CLCs. Pacific believes that no single set of rules can take into account all of the issues involved in the context of a single installation. In the event that the Commission chooses to adopt detailed rules, Pacific and PG&E have proposed specific modifications to the rules proposed by the Coalition and CCTA. Edison argues that utilities have the best understanding of their system requirements and operating characteristics, and that utility decisions about necessary restrictions to access should be given deference as long as the utility applies its rules in a nondiscriminatory manner to all carriers.

Pacific argues that the Act permits negotiated agreements, which implies that individual rates will differ among CLCs. Pacific disagrees that the term "nondiscriminatory rates" requires exactly uniform rates for all CLCs, including those that also act as cable television providers.

Rather than the tariffing of rates, GTEC advocates the use of negotiated agreements based upon an appropriate costing methodology. With tariffed rates, terms, and conditions, GTEC argues, there is little incentive for parties to negotiate anything different, and the tariffed rate(s) in effect becomes the ceiling. GTEC argues that if the Commission decides that tariffing is appropriate, then an expiration date of no longer than one year be set on the applicability of the tariff. GTEC believes that market forces could then determine what the rates, terms, and conditions for such access should be in the future.

Given the complexities of utility facilities and the diversity of ROW access needs, it is not feasible to craft a set of rules or tariffs which addresses every conceivable situation which may arise. Individual carriers must negotiate the terms of ROW access based on the particular circumstances of each situation. On the other hand, the adoption of certain general guiding principles and minimum performance standards concerning ROW access is appropriate to promote a more level competitive playing field in which individual negotiations may take place. In order to guide parties in negotiations, we shall therefore adopt a general set of rules governing ROW access which strike a balance in providing some degree of detailed performance standards while leaving discretion to parties to tailor specific terms to the demands of individual situations.

It is unrealistic to expect that all ROW access agreements will be uniform with respect to prices, terms, or conditions. Differences are acceptable as long as they are justified by the particular circumstances of each situation, and do not merely reflect anticompetitive discrimination among similarly situated carriers. Because telecommunications carriers' ROW requirements and constraints are too diverse to lend themselves to a uniform set of tariff rates and rules for every situation, we shall not require the filing of tariffs covering the terms of ROW access. A similar approach to that adopted for interconnection arrangements in D.95-12-056 is appropriate here. In D.95-12-056, in setting interim rules governing interconnection arrangements for local exchange service, we considered whether interconnection arrangements should be instituted by the filing of tariffs or by contract. Historically, the use of utility tariffs has been relied upon as a way to assure that the rates and terms of service offered by the utility are available on a nondiscriminatory basis. We concluded in D.95-12-056, however, that given the inflexibility and inefficiencies of tariffs, interconnection should be arranged by contract rather than tariff. We concluded that the use of contractual negotiations was more appropriate for the newly emerging world of multiple co-carriers.

We recognize, however, that while the local exchange markets have been opened to competition for some time now, the incumbent utilities still hold a significant advantage in the control of essential ROW corridors and support structures in comparison with CLCs which have only recently entered the local exchange market. We are concerned that the advantages of incumbent status of ILECs and electric utilities may have the potential incentive for discriminatory treatment in negotiating terms of access. In D. 95-12-056, we addressed parties' concerns over imbalance in negotiating power by prescribing a set of "preferred outcomes" which were intended to lead to the most efficient and economic interconnection solutions should the Commission be required to become involved. In approving interconnection agreements, the Commission would consider how well a contract achieved the "preferred outcomes." The "preferred outcomes" were not mandatory requirements, however, and the Commission would still approve an interconnection contract with different terms from those prescribed by the "preferred outcomes" if the proposed terms were mutually agreeable to the parties, were not unduly discriminatory or anticompetitive, and did not violate other Commission rules.

Likewise, we conclude that a similar use of "preferred outcomes" is called for in connection with access-to-ROW arrangements. We shall, therefore, adopt a set of rules as prescribed in Appendix A governing ROW arrangements, and shall administer the rules in the form of "preferred outcomes." Parties may negotiate their own terms and conditions different from those set forth in our rules, tailored to the particular circumstances of a given situation. Yet, the presence of the "preferred outcomes" embodied in our rules will provide a disciplined point of reference as recourse for negotiations to proceed in a competitively neutral manner. The use of these rules as "preferred outcomes" will help guard against unbalanced negotiating power and unfairly discriminatory treatment, yet provide the necessary flexibility to facilitate mutually agreeable arrangements.

In resolving disputes over ROW access, we shall consider how closely each party has conformed with our adopted "preferred outcomes" and whether proposed terms are unfairly discriminatory or anticompetitive. The burden of proof shall be on the party advocating a departure from our adopted standards in prevailing in a disputed agreement. Within the parameters of our prescribed "preferred outcomes" as default criteria, parties shall have the flexibility to negotiate their agreements governing access, tailored to the particular circumstances of each situation.

5 47 U.S.C. §§ 224(a)(4) and (f). 6 47 U.S.C.§ 224 (f)(1).

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