VII. Restrictions on Access to Utility Capacity

A. Safety and Reliability Issues

1. Parties' Positions

Parties expressed differing views concerning the extent to which an incumbent utility may deny or limit access to its facilities based on safety and reliability considerations. Parties generally agree that the facilities of electric utilities pose greater and more complex safety concerns that those of the ILECs.

Edison and SDG&E seek the discretion to refuse or limit all carriers' access to facilities where, in the utility's best judgment, access would create safety concerns or pose a risk to the electric system's reliability or stability. In particular, Edison and SDG&E seek to categorically exempt facilities that are in direct proximity to primary energized voltage conductors from any mandatory access requirements,¹³ arguing that the potential harm to worker safety, public safety and system reliability outweigh the benefit of access to these facilities.

PG&E argues that the Commission's rules need to distinguish between nondiscriminatory access to telecommunications facilities as opposed to electric utility facilities to avoid detrimental consequences to a safe, reliable, and efficient electric system. Electric utilities are in a completely different business which requires different technical, engineering, and safety standards from telecommunications.

PG&E seeks to preserve the option of electric utilities to deny telecommunications carriers access based on safety, reliability, and other reasonable terms. PG&E argues that applicable GO rules need to be strictly followed, especially for underground installations, to protect the safety of its work force and the reliable and safe installation, operation and repair/replacement of power cables. The reliability of PG&E's transmission facilities is further governed by the Western Systems Coordinating Council operating guidelines which prescribe how PG&E will operate its transmission facilities to maintain the reliability of the Western regional United States transmission grid system. Once an independent system operator assumes operational control of PG&E's transmission system, additional requirements above and beyond GOs 95 and 128 may be established. PG&E further argues that differences in legal and regulatory requirements may raise issues which are unique to Electric utilities. For example, Electric Tariff Rules 15 and 16 govern electric line and service extensions, while PU Code § 783 places procedural requirements on changes to line extension rules. PG&E also argues that any rules adopted providing for access to electric distribution facilities should not be allowed to create conflicts with electric industry restructuring.

Edison argues that no third party should install or modify an attachment without providing prior notice to, and receiving approval from, the utility. For instance, changing the size or type of any attachment, or increasing the size or amount of cable support by an attachment (including overlashing existing cable with fiber optic cable) has safety and reliability implications that the utility must evaluate before work begins. Edison and SDG&E argue that the telecommunication providers should comply with at least the same safety practices as trained and experienced electric utility workers when working on an electric utility facilities or ROW to avoid exposing the public to grave danger and potentially fatal injuries. Further, Edison believes that utilities must receive advance notice and supervise all facility installations and modifications to ensure adherence to appropriate design and safety standards.

Edison believes that the Commission's GO 95 and the provision of the California Office of Occupational Safety and Health Administration (CAL-OSHA) Title 8 adequately address the safety issues that arise from third-party access to the utility's overhead distribution facilities. GO 95 prescribes uniform requirements for overhead electrical line construction to ensure safety of workers and the general public as well as reliability. Edison expresses reservations, however, about allowing telecommunications carrier access to underground electrical facilities without strictly-observed notification and utility supervision requirements that supplement GO 128 and CAL-OSHA Title 8, because of the confined space in underground electric facilities (e.g., underground vaults) and the associated increased safety concerns. GO 128 requires separation between the underground facilities of telecommunications carriers and those of electric utilities and prohibits the collocation of telecommunications carriers facilities in the conduit systems of electric utilities except under certain specific conditions. Edison states that each utility has developed unique operating practices tailored to the type of electric equipment contained in a particular structure and, in some cases, the type of structure itself. Installation, repairs, and maintenance performed by workers who are unfamiliar with the existing system and its unique characteristics create the danger of accidents, personal injury, damage to property, and service interruptions.

PG&E notes that installation and construction sometimes need to be done at a level slightly above the published GO standards, and that GO 95 and 128 should be viewed as the minimum standards which the utility must meet. At times, safety needs will arise from other laws or standards. In addition, PG&E believes that because not all situations can be anticipated in the GOs or other rules, electric utilities should be allowed to exercise their judgment if they determine that something is required for safety or reliability reasons.

PG&E states that, to determine if poles have adequate space and strength to accommodate a new or reconstructed attachment, the telecommunications carrier requesting the attachment should be required to give the electric utility a complete and accurate engineering analysis for each pole or anchor location. The analysis would show the loading on the pole (a) from existing telecommunications equipment, and (b) from all telecommunications equipment after the attachment, and would consider windloading, bending moment, and vertical loading to determine if the pole(s) are or will be overloaded and overstressed. PG&E argues that, until the engineering analysis is done and the pole (s) either is found to have sufficient space and strength for the new attachment, or is upgraded as needed, the telecommunications carrier should not make its attachment. If there are potentially serious or costly consequences for allowing use of electric facilities to provide telecommunications, PG&E argues that the electric utility should not have to allow that access at its peril.

PG&E argues that the ROW access issues in this proceeding overlap to a considerable extent with issues before the Commission in Application (A.).94-12-005/Investigation (I.) 95-02-015, regarding PG&E's response to the severe storms of December 1995. During the evidentiary proceedings reviewing PG&E's response to the December 1995 storm, the Commission staff questioned the adequacy of the windloading requirements in GO 95 for wood power poles. The Division of Ratepayer Advocates (now the Office of Ratepayer Advocates (ORA)) and the Utilities Safety Branch (USB) sponsored testimony in that proceeding, expressing concern that:

"increasing numbers of joint-use wood power line poles have been found to be structurally overstressed by excessive loading of electrical and communication wires and equipment under the main electrical conductors." (A.94-12-005, Exhibit 510, p. 5-1.)

ORA recommended a complete inspection of PG&E's entire pole inventory for overstressed poles (which would span several years), and the improvement of communications among utilities utilizing the poles. ORA and PG&E disagreed over the interpretation of GO 95 as applied to loading capacity of wire attachments to wood power line poles. ORA's interpretation would increase the threshold at which the existing poles require upgrades and replacements to meet GO 95 standards before any additional facilities could be attached to the pole. PG&E anticipates that under ORA's interpretation, a large percentage of power poles would need to be replaced with stronger grade poles before any additional attachments could safely be made by CLCs. In that proceeding, PG&E, the ORA, and the USB filed joint testimony (Exhibit 517) proposing that the Commission establish an Order Instituting Investigation (OII) to review, among other things, GO 95 design standards on wood pole loading requirements. A Commission decision is pending in A.94-12-005. PG&E believes that there is considerable tension between the requirements and goals in A.94-12-005 and the demands by CLCs in this case for prompt, immediate access to poles, and that the potential for extensive buildout and reconstruction by CLCs complicate and aggravate the problem of overloading and overstressing the poles.

Pacific believes that for jointly owned poles, the standards agreed to by the owners in conjunction with GO 95 and national requirements adequately address safety concerns. With an increased number of parties seeking attachments, however, Pacific believes that the owners should coordinate attachments by third parties in order to ensure the continuing safety and reliability of the facilities.

The Coalition acknowledges the need for utilities to provide for the safety and reliability of their facilities - so long as the safety and reliability concerns are genuine and have not been manufactured as excuses for a plainly discriminatory access policy. The Coalition argues that any utility that contends that safety and reliability concerns preclude additional attachments should bear the burden of demonstrating that such concerns have not been fabricated as an excuse of denying access.

2. Discussion

We generally agree that the incumbent utility, particularly electric utilities, should be permitted to impose restrictions and conditions which are necessary to ensure the safety and engineering reliability of its facilities. In the interest of public health and safety, the utility must be able to exercise necessary control over access to its facilities to avoid creating conditions which could risk accident or injury to workers or the public. The utility must also be permitted to impose necessary restrictions to protect the engineering reliability and integrity of its facilities.

Telecommunications carriers must obtain express written authorization from the incumbent utility and must comply with applicable notification and safety rules before attempting to make a new attachment or modifying existing attachments. Any unauthorized new attachments or modifications of existing attachments are strictly prohibited. Before an attachment to a utility pole or support structure is made, we shall require successful completion of a fully executed contract.

In order to provide carriers with a strong economic disincentive to attach to poles or occupy conduit without a fully signed contract and authorization to proceed, any carrier found to have engaged in such action, or which has performed an unauthorized modification, shall pay a penalty fee. GTEC has proposed a penalty of five times the recurring monthly rate for each month of the violation. Edison, PG&E, and SDG&E agree that a penalty fee is warranted, but believe that GTEC's proposed penalty is too small to deter unauthorized attachments. Edison argues that many attaching parties may believe such a small penalty is an acceptable risk for unauthorized attachment rather than to incur the costs for negotiating and administering an access request. PG&E and SDG&E propose a $100 fee as an adequately large penalty to discourage unauthorized attachments while Edison proposes a $500 fee. We shall impose an automatic penalty of $500 per violation for unauthorized attachments, based on the proposal of Edison. For purposes of applying the $500 penalty, each unauthorized pole attachment shall constitute a separate violation. The setting of the penalty level at $500 is consistent with PU Code Section 2107 which prescribes default penalties for violations of Commission orders of not less than $500, or more than $20,000, for each offense. If violations continue to occur despite the imposition of this penalty, we may consider increasing the amount of the penalty at a future time.

We shall not adopt specific detailed rules addressing a comprehensive set of safety and reliability requirements given the complexity and diversity of the technical issues involved. Historically, the Commission's GO 95 and GO 128 have dealt with safety requirements for clearances and separation between conductors on poles or in common trenches. These rules have become accepted industry practice and parties agreed generally that they should continue to be enforced. At a minimum, parties must comply with GOs 95 and 128, as well as other applicable local, state, and federal safety regulations including those prescribed by Cal/OSHA Title 8. Attachments to wood poles may be impacted by any rules or restrictions which we subsequently adopt in response to the recommendations made by parties in A.94-12-005/I.95-02-015 regarding PG&E's design standards for utility wood pole loading requirements.

We agree with PG&E that pending the resolution of the parties' dispute over the safety factor for pole attachment loading standards in A.94-12-005/I.95-02-015, an interim safety factor should be adopted. The higher the safety factor is rated, the greater the number of poles which must be replaced before an attachment can be made. The adoption of an interim minimum safety factor for pole loadings will help avoid delays in negotiations over pole attachments relating to claims of pole overloading.

PG&E proposes that an interim windloading safety factor of 2.67 for Grade A poles be adopted in this proceeding as a minimum standard until the Commission reaches a final resolution in A.95-12-005/I.95-02-015. The Coalition concurs in PG&E's proposal to use the 2.67 windloading factor as an interim measure. The basis for the 2.67 windloading factor was explained in the report submitted by the Commission's Utility Safety Branch (USB) in A.94-12-005/I.95-02-015:

"USB believes that due to pole deterioration, G.O. 95 allows the minimum safety factor to be reduced. Section 44.2 modifies the minimum safety factor by reducing it (for Grade A and B construction) to not less than 2/3. As stated in this section, a reduction is allowed for `deterioration or changes in construction arrangement or other condition subsequent to installation.' As an example, a safety factor of 4 can be reduced to 2.67 as allowed by Section 44.2."

Exhibit 511, USB Report, at 32

While the Commission's USB accepted PG&E's interpretation in the PG&E proceeding, ORA did not. PG&E subsequently agreed with ORA and USB in Exhibit. 507 of the PG&E proceeding to not allow facilities to be added to Grade A poles such that the safety factor would be reduced below 4.0 until an OII on GO 95 was completed.

We shall adopt an interim safety factor for utility wood pole loading requirements to equal to 2.67, based upon the proposal by PG&E and USB in A.94-12-005/I.95-02-015. This interim factor shall be subject to revision pending further action in A.94-12-005/I.95-02-015. Once a decision has been issued in that proceeding, we shall solicit comments from parties to this proceeding concerning the general applicability in this docket of any requirements adopted in the PG&E proceeding.

We recognize that electric utility underground facilities pose particular safety hazards. A single mistake in an underground facility could result in fatal injuries to the worker and expose the public to grave danger. Telecommunication providers shall therefore be required to comply with all of the same safety practices as trained and experienced electric workers use in underground facilities. Any utility operating practice that the utility requires of its own employees shall be conclusively presumed to be reasonable and justifiable.

Telecommunications providers shall comply with utility notice, supervision, and inspection requirements for all installation, repair and maintenance activities, but especially work in underground facilities, from entry to procedures for securing the facility when work is completed. These requirements will help ensure that work can be appropriately supervised and inspected, and that it will not interfere with planned electric utility repairs or work being done by other telecommunications carriers.

In the event of an emergency (e.g. a downed pole or poles, an earthquake or power outage) electric utility repairs shall take precedence over telecommunications repairs, to the extent the electric utility determines that both types of repairs cannot occur at the same time. In an emergency situation such as downed pole, if the electric utility determines that it must disconnect, remove or repair telecommunications equipment for safety or reliability reasons, these rules permit the electric utility to do so.

We expect parties to resolve most issues relating to safety and reliability restrictions not explicitly covered in our rules through mutual negotiation among themselves. In the event that parties cannot resolve disputes among themselves over whether a particular restriction or denial of access is necessary in order to protect public safety or ensure the engineering reliability of the system, any party to the negotiation may request Commission intervention under the dispute resolution procedures we adopt below. In the event of such dispute, the burden of proof shall be on the incumbent utility to justify that its proposed restrictions or denials are necessary to address valid safety or reliability concerns and are not unduly discriminatory or anticompetitive.

B. Reservations of Capacity

Parties' Positions

The parties generally agree that access to finite capacity should be granted on a first-come, first-serve basis, but disagree concerning whether or to what extent access to facilities may be denied based on the incumbent utility's right to reserve currently unused capacity for its own future growth needs.

Pacific and GTEC each argue that the ILEC, as a provider of last resort, must have the ability to reserve capacity for future growth of its own loop network to serve all customers. Pacific's current practice is to construct its conduit and pole lines with sufficient capacity to meet anticipated needs based only on the information available at the time of construction. Pacific does not, however, install all of the cables in all of the ducts at the time of the conduit construction. Upon a request for access, Pacific's forecasts are reviewed and updated to determine current availability. If the original forecast is no longer valid, Pacific will make available the reserved duct for use by third parties. If Pacific is unable to reserve space for future use, it will be forced either to install all of its cables at the time of construction, build additional conduit to meet its service needs, or evict users of the needed duct space under GO 69-C. GO 69-C permits a utility to grant easements, licenses or permits for the use of its operating property without special authorization by the Commission as long as the utility retains the right to reclaim its property if necessary to serve its customers. As GO 69-C promotes both reciprocal access and a utility's continuing ability to provide service upon demand, Pacific believes it is applicable to these proceedings.

Pacific proposes that, at a minimum, ILECs and other attaching carriers be allowed to reserve space for "imminent use" if the ILEC has a construction plan in place which requires the installation of the ILEC's facilities within six months of a request for access (or within 18 months if construction will be delayed as a result of an action by a third party such as a permitting body). In such cases, Pacific proposes that the ILEC be permitted to deny the request for space.

Pacific and GTEC both contend that a complete prohibition against their ability to reserve capacity, particularly when that capacity has been reserved for a future use, is a taking of property within the meaning of the Fifth Amendment. In Federal Communications Commission v. Florida Power Corporation. (1986) 480 U. S. 245, the United States Supreme Court held that the prior requirements of § 224, which applied only to cable companies, did not effect an unconstitutional taking, since utility companies were neither required to permanently give cable companies space on utility poles nor prohibited from refusing to enter into attachment agreements: "Since the Act clearly contemplates voluntary commercial leases rather than forced governmental licensing, it merely regulates the economic relations of utility company landlords and cable company tenants, which regulation is not a per se taking." Id. at 250.

Pacific notes that the Supreme Court , however, was not deciding what the outcome would be if the FCC in the future required utilities to enter into, renew or refrain from terminating pole attachment agreements.

"[Property] law has long protected an owner's expectation that he will be relatively undisturbed at least in the possession of his property. To require, as well, that the owner permit another to exercise complete dominion literally adds insult to injury. Furthermore, such an occupation is qualitatively more severe than a regulation of the use of property, even a regulation that imposes affirmative duties on the owner, since the owner may have no control over the timing, extent, or nature of the innovations." Id. at 252 quoting Loretto v. Teleprompter Manhattan CATV Corporation. (1982) 458 U.S. 419, 436.

Pacific and GTEC claim that denial of their right to reserve space would permit a third party to exercise dominion over the LEC's property, thereby triggering Fifth Amendment scrutiny. At the very least, Pacific argues, the Commission should permit an LEC to reclaim space previously provided to a third party that is necessary for use by the LEC to meet its own service needs.

GTEC argues that it must be able to satisfy both its current needs as well its future space requirements relative to the poles and conduits which it owns, places, and maintains. GTEC forecasts its future space requirements on the basis of a five-year horizon. In order to ensure continued investment in facilities infrastructure, GTEC argues that facilities owners must be allowed correspondingly to reserve reasonable space for future use, while treating all competitors equally. GTEC argues that depriving it of the ability to maintain reserved capacity would impair service to the public, cause an extraordinary cost increase, and have a significant adverse effect on GTEC's future investment in poles and conduits. If GTEC cannot reserve space in its own facilities, it argues, there is no incentive to construct facilities sufficient to satisfy future needs, with a resulting loss of economic and efficient investment, with long-range strategic planning rendered impossible.

GTEC objects to the FCC's interpretation of § 224(f)(1) as prohibiting GTEC from reserving space on its own facilities for its own future needs. GTEC argues that this interpretation conflicts with § 224(f)(1), which applies the nondiscrimination requirement only to those for whom access must be "provided," not to the owner, whose "access" is synonymous with its ownership right. GTEC contends that the concept of "nondiscriminatory access" does not mean that its rights as an owner of poles and conduits must be relegated to the status of a mere licensee occupant, but only that GTEC must treat equally all companies seeking access.

GTEC further argues that if the Commission were to adopt the FCC's interpretation of the term "nondiscriminatory access" (as used in 47 U.S.C. § 224(f)(1)) precluding an ILEC from reserving space on its own facilities for its own needs, the Commission would effect an unconstitutional taking of GTEC's property. GTEC contends that such a restriction would interfere with its "investment-backed expectations" and "eviscerate" a "critical expectation of GTE" that "additional space would be available as needed in the future."

The Coalition disputes GTEC's argument, noting that § 767.5 only permits attachments in "vacant space" or "excess capacity" on or in utility support structures, and that the statute requires that:

"... the cable television corporation shall either (1) pay all costs for rearrangements necessary to maintain the pole attachment or (2) remove its cable television equipment at its own expense." (PU Code § 767.5(d).)

Thus, the Coalition argues, a utility has no need to reserve vacant space or excess capacity and keep it, as it were, "lying fallow" until such time as it may need it since the utility can reclaim vacant space if needed.

CCTA notes that the FCC Interconnection Order does allow an electric utility to reserve space for its future use, but only if it is in accordance with a "bona fide development plan" for the delivery of electricity through specific projects. ¹⁴ CCTA argues that for purposes of providing any communications services, an electric utility should be on equal terms with other telecommunications companies and the reservation of space for communications would not qualify as a "bona fide development plan." The electric utility must allow the space to be used until it has an actual need for it.

Edison and SDG&E propose that the amount of capacity made available for access be limited to only what is expected to be needed by the telecommunications carrier within a specified time period. Any capacity that the telecommunications provider does not use within that period would revert to the electric utility and become available for another telecommunications provider's use. PG&E also states that the electric utility should be allowed to call back capacity that a telecommunications carrier has utilized in the interim when the need materializes.

PG&E's present practice is to allow telecommunications providers access to overhead distribution facilities until PG&E needs the capacity for electric service. Each telecommunication provider thereby decides between incurring the upgrade costs at the outset, or deferring upgrade until the electric utility's need materializes. PG&E argues that this approach makes sense because future electric distribution capacity needs usually are planned on an area basis, and not on a specific pole/line basis.

PG&E also proposes that the following matters should be completed before a first-come-first-served access authorization is applied in a particular situation: (a) successful completion of negotiations with a fully executed contract; (b) identification of the specific ROW support structures for which an attachment is requested; and (c) payment of the attachment fee in accordance with the executed contract. (PG&E Comments, p. 27.)

The Coalition believes that the Commission should not permit reservations of capacity or, if allowed at all, that they should be strongly disfavored, and permitted only for electric utilities that can demonstrate there is no other feasible solution and that they had a bona fide development plan prior to the request justifying the reservation. The Coalition argues that adoption of such a policy is critical to the vigorous development of facilities-based competition in California. The Coalition argues that permitting reservations of capacity for an incumbent's own use enables the incumbent to discriminate against all carriers as long as it has treated them all in an equally harsh and equally discriminatory manner.

Edison and SDG&E oppose the Coalition's proposal requiring the electric utility to demonstrate it has a "bona fide development plan" prior to requesting a reservation of capacity. Edison and SDG&E argue that electric utilities' obligation to provide safe and reliable electric service can only be met if the utilities can reserve capacity for future use or take back the capacity when needed for electric utility purposes.

Both Edison and SDG&E conduct their capacity planning based on five-year forecasts of the need for additional capacity within different parts of the system. Detailed planning that identifies the specific facilities affected by the need to provide additional capacity usually does not occur until shortly before the need for additional capacity arises. Edison and SDG&E argue that it would be time-consuming and expensive for the utility to make detailed annual capacity forecasts for every facility within its service territory. Moreover, even if there is no anticipated need for additional capacity at a specific facility within a particular one-year period, there will frequently be occasions when there is a need for the capacity after the one-year window. Edison and SDG&E believe "take-back" provisions are essential for meeting these future needs; the utility must either have the ability to "reclaim" such space, or be entitled to construct additional space at the expense of the carrier(s) that otherwise would be "displaced" to make additional room for the utility.

Discussion

We must balance two opposing interests in resolving the dispute over reservations of capacity for future use, those of the incumbent utilities and those of the CLCs. On the one hand, incumbent utilities need to be able to exercise reasonable control over access to their facilities in order to meet their obligation to provide reliable service to their customers over time and plan for capacity needs to accommodate future customer growth. On the other hand, CLCs need to be able to gain access to the ROW and support structures of the incumbent utilities in order to provide local exchange service on a nondiscriminatory basis. We shall separately discuss the obligations of ILECs and electric utilities.

The ILEC's reservation of capacity for its own future needs could conflict with the nondiscrimination provisions in § 224(f)(1) of the Act which prohibit a utility from favoring itself or affiliates over competitors with respect to the provision of telecommunications and video services. If the ILEC were permitted to deny access to CLCs by reserving capacity for its own needs under more favorable terms than are offered to the CLCs, the ability of CLCs to compete effectively with the incumbent could be significantly compromised. By virtue of their previous status as monopoly providers of utility service, ILECs have significant control of bottleneck facilities. New competitors lack the advantages of incumbency, and must build and interconnect their systems. The ILECs could use the reservation-of-capacity defense as a means of staving off competitors and perpetuating their competitive advantage over CLCs. Accordingly, we shall not permit the ILECs to deny access to other telecommunications carrier based on general claims that capacity must be reserved for their own future needs.

While we shall not permit ILECs to deny requests for access based on the need to reserve capacity for extended periods, we recognize that ILECs should maintain control over their facilities to plan for their own future growth and to provide for sufficient capacity to serve future customers in a reliable manner. Likewise, CLCs also may require a certain lead time for the actual utilization of space beyond the date at which an access agreement is executed with an incumbent utility.

Just as ILECs should not be permitted to favor themselves in reserving capacity at the expense of CLCs, likewise, CLCs should not be permitted more favorable terms in their ability to reserve capacity than are the ILECs. Thus, CLCs should not be permitted to engage in indefinite delay in the utilization of pole space or conduit capacity following the execution of an agreement with an ILEC authorizing access. We recognize that both ILECs and CLCs may require a certain interval between the time a determination is made that space is needed and the actual use of that space to serve customers. In the interests of nondiscriminatory treatment for both the ILECs and CLCs, we shall impose on them all the same requirements with respect to the time interval for reserving capacity.

We shall require that once CLCs have been granted access, these carriers must make use of the capacity that they leased, within a specified period, or the capacity will revert for use by other carriers. Such a requirement is necessary so that particular carriers do not "bank" capacity, and permit it to be idle while it could be used by other carriers to provide service. GTEC has proposed a period of nine months, beginning from the date on which a CLC receives its access authorization from the ILEC, within which the CLC must either place facilities in use and attach to poles or the facilities will revert to the ILEC. We find the nine-month period reasonable for CLCs' use of capacity of an ILEC and will adopt it for that purpose. This period will allow for the uncertainties of customer service demands and weather limitations in scheduling attachments or installations for ILEC facilities.

Since we are placing this nine-month time limitation on the CLCs with respect to the utilization of capacity, a similar time limitation should likewise apply to the ILECs' utilization of their own capacity in order to assure nondiscriminatory treatment among telecommunications carriers. Our guiding principle is that any discretion ILECs have to reserve capacity be no greater, nor lesser, than that provided to the CLCs. We shall therefore allow both ILECs and CLCs the same nine-month period within which to utilize capacity which is subject to a request for access from competing carriers. In the case of an ILEC, the nine months shall count from the date of any denial of a request submitted by a CLC for a specific attachment to pole space or conduit capacity.

To justify denial of access to a CLC, the ILEC must demonstrate that plans are in place for actual utilization or construction to begin within nine months. The ILEC must verify that construction is actually imminent, and not merely "contemplated." If substantial construction activity is not commenced within nine months, the party requesting access must be allowed access to the pole or other support structure forthwith, ahead of the ILEC or other requesting party, unless the delay is demonstrably attributable to severely inclement weather or the delay of a government agency in issuing a needed construction or similar permit. In the latter case, the ILEC may be able to reserve the capacity for an additional period not to exceed nine more months. This same provision shall apply to CLCs.

In the case of any telecommunications carrier's use of capacity of a electric utility, however we conclude that a deadline shorter than nine months is warranted. As noted by SDG&E, particularly in the case of electric utility distribution poles, conditions existing at the time access is granted do not remain static for long. The longer the delay in a telecommunications carrier's exercise of it access rights to poles or conduit, the more significant the potential for major changes to take place in those facilities that could affect the carrier's ability to attach or the safety and engineering aspects of the attachment. Based on review of both GTEC's and SDG&E's comments, we conclude that a shorter duration for telecommunications carriers to exercise their access rights may be more critical in the case of electric utilities . We shall therefore adopt SDG&E's proposal to permit a period of no more than 90 days for a telecommunications carrier to exercise its access rights to the poles and conduits in the case of an electric utility.

We shall permit a somewhat less restrictive policy regarding the electric utilities' ability to reserve capacity for their own use. Since electric utilities have traditionally been engaged in a separate industry from telecommunications, electric utilities have not been in direct competition with CLCs. Accordingly, the specific anticompetitive concerns regarding ILECs' ability to favor themselves at the expense of CLCs have not applied in the case of electric utilities as long as they applied only to core electric service. More recently, however, at least one electric utility has sought entry into the local exchange market.¹⁵ While electric utilities shall not unfairly discriminate against CLCs in responding to CLCs requests for access to pole space or conduit capacity, electric utilities do not violate the nondiscriminatory provisions of the Act, but only so long as they are giving preference to the needs of their own core electric customers over the requests of CLCs. Consistent with the approach followed in the FCC First Report and Order (paragraph 1169), we will permit an electric utility to reserve the space if such reservation is consistent with a bona fide development plan that reasonably and specifically projects a need for that space in the provision of its core electric utility service within one year. Each electric utility must permit use of its reserved space by telecommunications carriers until such time as the utility has an actual need for that space. At that time, the utility may recover the reserved space for its own use per the rules in the next section of this order.

In those situations where parties cannot agree on the terms of access due to a claim by an electric utility asserting the need to reserve capacity for its own future needs, we shall resolve such situations through our dispute resolution process. In order to justify its capacity reservation claim, the electric utility will be required to show that it had a bona fide development plan for the use of the capacity prior to the request for access, and that the reservation of capacity is needed for the provision of its core utility services within one year of the date of the request for access. In cases where the capacity will be needed at a future date beyond one year, the electric utility may not assert the reservation of capacity claim as a basis to deny access. As we have stated above, our preferred outcome for meeting future capacity needs is the expansion of facilities rather than reclamation.

We conclude that the above policy regarding reservations of capacity in no way constitutes an unlawful taking in violation of the incumbent utilities' constitutional rights under the fifth amendment. The rules we establish merely constitute regulation of the terms under which parties may negotiate for access. The access policy we establish does not eliminate the incumbents' ownership of their property nor does it give CLCs dominion over the incumbents' property. Property ownership rights, however, do not give incumbent utilities unlimited discretion to deny access to telecommunications carriers unilaterally. As noted by the Coalition, public utilities are affected with a public interest and are therefore subject to regulation for the public good. The incumbents still retain autonomy over their planning and forecasting of future capacity requirements. Under the rules we establish, the incumbents still retain ultimate control over their property by virtue of their rights to require a signed contract expressly granting permission before third-party access may proceed.

Moreover, third parties which elect to remain on the pole shall be required to pay for the cost of any rearrangements to the extent they benefit there-from as discussed below. Therefore, the incumbents are fairly compensated for the use of their property, and there is no unlawful taking.