II. CEQA Issues

In accordance with CEQA provisions, the Commission must assess the potential environmental impact of a CLC's proposed operation in order to determine that adverse effects are avoided, alternatives are investigated, and where applicable, environmental quality is restored or enhanced as necessary. To achieve this objective, Rule 17.1 of the Rules of Practice and Procedure requires the proponent of any project subject to Commission approval to submit with its application for approval of such project a Proponent's Environmental Assessment (PEA). The PEA is used by the Commission to focus on any impacts of the project which may be of concern, and to prepare the Commission's Initial Study to determine whether the project needs a Negative Declaration or an Environmental Impact Report (EIR).

Through the second quarter of 1999, the Commission staff's practice was to prepare a negative declaration covering all CLC petitioners filing for facilities-based CPCN authority during the previous quarter.

In D.99-12-050, the Commission concluded that more individualized treatment of the environmental review of each CPCN request was warranted. Thus, effective with D.99-12-050, and until further notice, each CLC request for CPCN authority is individually reviewed and, if it is determined that a negative declaration or EIR is necessary, it will be prepared on an individual basis.

In D.99-10-025, we noted that various CLC petitioners did not anticipate undertaking any new construction at least for their initial start-up operations. Instead, they intended to collocate their network equipment within the existing structure of the central offices of the Incumbent Local Exchange Carriers, and to provide service by purchasing an ILEC's existing local loop as an unbundled network element (UNE) under federal law. Because UNEs are considered "facilities" under federal law, a facilities-based CPCN is still necessary for a CLC to operate utilizing collocation UNEs. The CLCs argued that the deficiencies identified in the negative declaration should not prevent the Commission from granting such limited facilities-based authority at this time where no construction is involved.

We concluded in D.99-10-025 that under the limited definition of facilities-based service utilizing equipment installed in previously existing structures, no material adverse environmental impacts would result since no external construction would be involved. Accordingly, for purposes of D.99-10-025, we granted limited "facilities-based" authority in this restricted manner to each of the Petitioners covered in that order.

On May 10, 2001, Altrio filed an Amendment to its application requesting that the Commission consider its request in two steps. As the first step, Altrio requests that the Commission immediately grant it limited facilities-based and resale authority to operate as a CLC within the greater Los Angeles metropolitan area, and as a Non-Dominant Interexchange Carrier (NDIEC) statewide, in order to permit Altrio to begin providing service to California residents as quickly as possible. In addition, Altrio requests that this limited facilities-based authority include authority necessary to engage in limited installation of facilities in the areas within the greater metropolitan Los Angeles area, these include: (Component 1) authority to pull fiber-optic and coaxial cable through existing utility conduit, attach fiber-optic and coaxial cable to existing utility poles, and install distribution nodes and optical-electrical interfaces; (Component 2) authority to install backup electric generators within existing utility easements; and (Component 3) limited authority to install approximately 1.2 miles of new utility conduit within existing rights-of-way, as identified on the maps contained in Altrio's Confidential Exhibit 1, filed concurrently with its amendment necessary to cross individual roads, freeways, railroad tracks, and similar obstacles, solely in cases where local authorities have issued to Altrio all necessary street opening or other permits to permit the minor land use alterations these facilities require. Altrio claims that all of these activities fall within one or more of the CEQA exemptions and, as such, . Altrio has not yet filed a PEA, because it contends that no PEA is required before the Commission may grant such limited facilities-based authority As the second step, Altrio requests that the Commission grant it full facilities-based authority to operate as a CLC within the entire local exchange operating territories of the state's four non-rural local exchange carriers and as a NDIEC statewide.

Recently, Altrio submitted a letter requesting that the Commission grant it limited facilities based authority as expeditiously as possible, and stating that Altrio would file a PEA in support of full facilities based authority in the near future.

For purposes of this decision, we shall authorize only limited facilities-based CPCN authority to Altrio, but shall defer consideration of its request for the construction of facilities identified above as "Components 1 through 3" to a later decision. Those Components include requests to construct facilities, e.g., installation of new utility conduit and attaching cables to poles that must be described in a PEA so that the Commission can comply with its obligations under CEQA, before granting Altrio's request. We shall leave this docket open for further consideration of Altrio's Application for full facilities-based authority pending our review of Altrio's PEA to provide necessary support for this request.

As long as construction authority is limited to installing equipment within existing buildings or structures, it can be seen with certainty that there is no possibility that granting this application will have an adverse effect upon the environment. Therefore, we will grant Altrio such limited facilities-based authority as defined in D.99-10-025 at this time.

Under the limited facilities-based authority granted herein, Altrio shall be prohibited from engaging in any construction of buildings, towers, conduits, poles, or trenches or the construction of facilities identified in Components 1 through 3.