V. Discussion

A. Environmental Matters

We do not agree with ORA that we should reject this Master Agreement and require PG&E to refile so we can perform site specific environmental review for each pole attachment or use of underground facilities. The scope of activity enumerated in the Master Agreement is consistent with the Commission Adopted Rules Governing Access to Rights-Of-Way and Support Structures Of Incumbent Telephone and Electric Utilities (ROW Rules), as well as OnFiber's certificate to operate as a telecommunications carrier. In particular, the Master Agreement allows OnFiber to request and utilize only existing PG&E poles and conduits for the placement of cable and related equipment. The terms of the Master Agreement specify that OnFiber will pay fees for such placement and the equipment must not interfere with service to PG&E's customers.

Nothing in the Master Agreement or our approval here authorizes OnFiber to construct facilities. As previously stated, OnFiber must request additional authority and submit to any required CEQA review to undertake such activity. While the Master Agreement indicates that rearrangement and replacement activity may be necessary in some instances, the activity described in this application appears to be consistent with the description of rearrangements, modifications and make ready work contemplated in the ROW Rules.⁸

We also agree with PG&E and OnFiber that this type of activity is exempt from CEQA review under § 15301 of the CEQA Guidelines and Commission Rule 17.1 which both allow minor alterations to existing utility facilities. For these reasons, we will not require a separate application identifying each pole and conduit that will be encumbered under the Master Agreement, and we find that the Commission does not need to perform further environmental review of this application. However, we do note and expect PG&E and OnFiber to comply with ROW Rule VIII regarding Modifications of Existing Support Structures. This rule requires, among other things, that utilities and telecommunications carriers cooperate to develop a means by which notice of planned modifications to utility support structures may be published in a centralized, uniformly accessible location (e.g., a "web page" on the Internet).

B. Interplay of G.O. 69-C and Section 851

In prior orders, we have described that we are troubled by the emerging pattern of a utility licensing property under G.O. 69-C as a precursor to a planned application for sale or lease of the same property under § 851.⁹ In these prior cases, we have stated an unwillingness to approve future applications to encumber of dispose of utility property where the structure of the transaction was designed to circumvent the advance review requirements of § 851 or the appropriate environmental review.

In this application, we do not find that environmental review has been circumvented based on the discussion in the preceding section. In addition, we do not find that the transaction circumvents the advance review requirements of § 851 because the terms of the license under G.O. 69-C differ from the terms under the lease. Specifically, the license allows PG&E to resume the use of the property under the license whenever "it shall appear necessary or desirable to do so" in the interest of PG&E patrons or customers.¹⁰ The lease sets forth additional conditions for termination of the lease, including 30 days written notice, which differ from the terms of the license.¹¹

On the other hand, we are concerned about the frequency with which this issue comes before us. We have now twice approved transactions based on their unique features, but the basic structure of these transactions is still suspect. From a business point of view, we do not think it is in the interest of applicants to rely on the possibility that they may be able to use the G.O. 69-C process, rather than simply seeking pre-approval under § 851. Nevertheless, having found that the facts of this case do not present a situation where PG&E is using G.O. 69-C improperly, we may now consider whether to approve the Master Agreement.

C. Public Interest

We will grant PG&E the requested approval of the Master Agreement subject to the conditions set forth below. The arrangement between PG&E and OnFiber makes good sense from several perspectives and we have approved similar agreements for the use of poles and underground facilities for telecommunication equipment.¹²

The Master Agreement makes productive joint use of available space. As we stated in D.00-07-010:

It is sensible for California's energy utilities, with their extensive easements, rights-of-way, and cable facilities, to cooperate in this manner with telecommunications utilities that are seeking to build an updated telecommunications network. Joint use of utility facilities has obvious economic and environmental benefits. The public interest is served when utility property is used for other productive purposes without interfering with the utility's operation or affecting service to utility customers. (D.00-07-010, mimeo, p. 6.)

The Master Agreement supports the policies we set forth in our ROW decisions. In D.98-10-058, we articulated our expectation that telephone and electric utilities act promptly and reasonably to provide nondiscriminatory access to poles, ducts, conduits, and rights-of-way for competitive telecommunication carriers.¹³ The Master Agreement provides prompt access to PG&E's facilities at rates and terms mutually agreed upon by PG&E and OnFiber, with the added benefit that revenues generated by under the Master Agreement will flow to and benefit PG&E's ratepayers.

The public interest is further served in that OnFiber shall not use these facilities to provide service beyond that authorized under its certificate of public convenience and necessity. Consistent with the Master Agreement, OnFiber shall adhere to the pole attachment requirements of GO 95 or any successor and the underground facilities requirements of GO 128.

As ORA states in its protest, the Master Agreement seeks advance approval without further § 851 review of "additional contacts under this Agreement as a lease on the terms and conditions specified in this Agreement or as amended." (Emphasis added.)¹⁴ We agree with ORA that this language is problematic. While we will approve the application based on the current terms of the Master Agreement, we will require PG&E to file under § 851 for advance Commission review of any amendments to the Master Agreement. Furthermore, as we have done in D.96-10-071 and other similar orders, we shall impose appropriate notification provisions upon PG&E regarding substantive changes under this Master Agreement. PG&E shall notify our Energy Division and ORA by letter within 30 days of the execution, extension or termination of this Master Agreement. PG&E shall also provide notification of substantive changes regarding plant in service and right of way due to the Master Agreement. All notifications should include a description of the site involved.