V. Applicable Statutes and Commission Orders

A. Section 767.5

Section 767.5, enacted in 1980, finds that public utilities have dedicated a portion of their support structures to cable television corporations for pole attachments over many years and that such provision is a public utility service. It also finds that it is in the public interest for this practice to continue. Section 767.5 (c) requires the Commission to establish and enforce the rates, terms, and conditions for pole attachments when public utilities and cable television corporations or an association of cable television corporations are unable to agree on these items. The section requires the Commission to assure a public utility recovery of (1) any actual costs incurred for rearrangements performed at the request of the cable corporation, and (2) an annual recurring fee tied to the public utility's annual cost of ownership for the pole and supporting anchor.

Section 767.5(a)(3) defines "pole attachment" as:

any attachment to surplus space, or use of excess capacity, by a cable television corporation for a wire communication system on or in any support structure located on or in any right-of-way or easement owned, controlled, or used by a public utility.

B. Section 767.7

Section 767.7(b), added by Chapter 623, Statutes of 1994, provides in pertinent part that:

It is...the intent of the Legislature that public utilities and publicly owned utilities be fairly and adequately compensated for the use of their rights-of-way and easements for the installation of fiber optic cable,...

Section 767.7(c) provides that "nothing in this section shall be deemed to change existing law with respect to Section 767.5."

C. The ROW Order

In the ROW Order, issued in October 1998, the Commission adopted rules governing the nondiscriminatory access to poles, ducts, conduits, and other rights-of-way applicable to all competitive local carriers (CLCs) competing in the local exchange telephone market. The Commission made the rules applicable to the major investor-owned electric utilities, namely PG&E, Edison, and SDG&E, as well as to the major incumbent local exchange carriers (ILECs).⁷ The Commission's rules obligated the electric utilities and ILECs to provide nondiscriminatory access to CLCs and to cable companies. Thus, the rules apply uniformly to access by CLCs and cable companies, without the need to distinguish whether a given attachment is used to provide cable television or telecommunications services. (ROW Order, p. 2.)

Appendix A to the ROW Order contains the adopted rules. Part I.A of the rules states that:

These rules govern access to public utility rights-of-way and support structures by telecommunications carriers and cable TV companies in California, and are issued pursuant to the Commission's jurisdiction over access to utility rights of way and support structures under the Federal Communications Act, 47 U.S.C. § 224(c)(1) and subject to California Public Utilities Code §§ 767, 767.5, 767.7, 768, 768.5 and 8001 through 8057. These rules are to be applied as guidelines by parties in negotiating rights of way access agreements. Parties may mutually agree on terms which deviate from these rules, but in the event of negotiating disputes submitted for Commission resolution, the adopted rules will be deemed presumptively reasonable. The burden of proof shall be on the party advocating a deviation from the rules to show the deviation is reasonable, and is not unduly discriminatory or anticompetitive. (Emphasis added.)

In Part II of the rules, the Commission defines the term "Right of way" as follows:

"Right of way" means the right of competing providers to obtain access to the distribution⁸ poles, ducts, conduits, and other support structures of a utility which are necessary to reach customers for telecommunications purposes.

In Part VI.A, the rules require a utility to grant access to its rights-of-way and support structures to telecommunications carriers or cable TV companies on a nondiscriminatory basis. In Part VI.B, the rules set the manner in which the Commission sets the rates, terms, and conditions for pole attachments and rearrangements whenever a public utility and a telecommunications carrier, or cable TV company, or associations, are unable to agree on terms, conditions, or annual compensation for pole attachments. The language of Part VI.B mirrors the language of Section 767.5(c) by requiring recovery of both actual costs for any rearrangements performed and an annual recurring fee for the attachment.

Finally, the ROW Order concludes that parties to pre-existing arrangements for access to utility ROW and support structures shall be bound by the terms of such arrangements even though the terms may differ from the provisions of the ROW Order. An exception to this rule is granted only if the contract expressly provided for amendment or renegotiation to conform to subsequent commission orders. (ROW Order, Conclusion of Law 19, p. 122.)

D. Decision on Petition to Modify ROW Order

In April 2000, the Commission granted in part a joint petition by Daniels and CCTA for modification of the ROW Order. The petition questioned whether the Commission exempted transmission poles from the rules and requested that the Commission clarify that transmission poles are subject to the Commission's ROW rules, identical to the rules' application to distribution poles. In responding to this request, D.00-04-061 states that the ROW Order was not intended to create any loophole, such as exempting transmission poles, which would threaten facilities-based competition. (D.00-04-061, pp. 6-7.) Thus, the Commission granted modification of the ROW Order to clarify that distribution and transmission poles, support structures, and rights of way are within the scope of the ROW rules. (Id., Ordering Paragraph 2, p. 11.)

The decision also noted the dispute between Daniels and SDG&E regarding payment of an access fee for fiber optic lines attached to transmission poles, in addition to the pole attachment fee. On this topic, the order stated that:

The record, however, does not support a finding of whether the rules concerning compensation for attachments to transmission poles would provide adequate compensation for the costs of transmission easements. (Id., p. 8.)

Rather, the Commission stated that since the rulemaking that established the ROW rules was not the proper forum for a contractual dispute between the parties, Daniels could file a complaint against SDG&E to resolves its specific factual disputes. The order also suggested that further deliberations might be needed before the Commission could adopt generic rules related to compensation for transmission easements.