[Federal Register Volume 62, Number 159 (Monday, August 18, 1997)]
[Proposed Rules]
[Pages 43963-43974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21818]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 97-151; FCC 97-234]
Pole Attachments
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Commission has adopted a Notice of Proposed Rulemaking
seeking comment on its continued implementation of the pole attachment
provisions of the Telecommunications Act of 1996. We seek comment on a
methodology to ensure just, reasonable, and nondiscriminatory maximum
pole attachment and conduit rates for telecommunications carriers, and
on how to ensure that rates charged for use of rights of way are just,
reasonable and nondiscriminatory. The Commission explores this issue to
fulfill its obligation under the Telecommunications Act of 1996 to
adopt rules concerning pole attachments. The item will help the
Commission create a record on this issue, which will assist the
Commission in designing new or amending current regulations concerning
pole attachments.
DATES: Comments are due on or before September 26, 1997 and reply
comments on or before October 14, 1997.
FOR FURTHER INFORMATION CONTACT: Larry Walke, Cable Services Bureau,
(202) 418-7200. For additional information concerning the information
collections contained herein, contact Judy Boley at 202-418-0217, or
via the Internet at jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Proposed Rulemaking in CS Docket No. 97-151, FCC 97-234,
adopted July 1, 1997 and released August 12, 1997. The full text of
this decision is available for inspection and copying during normal
business hours in the FCC Reference Center (room 239), 1919 M Street,
NW, Washington, DC 20554, and may be
[[Page 43964]]
purchased from the Commission's copy contractor, International
Transcription Service, (202) 857-3800, 1919 M Street, NW, Washington,
DC 20554.
I. Introduction
1. In this Notice of Proposed Rulemaking (``NPRM''), the Commission
continues its implementation of section 703 of the Telecommunications
Act of 1996 (``1996 Act''), Pub. L. 104-104, 110 Stat. 61, 149-151
(February 8, 1996), by proposing amendments to the Commission's rules
relating to pole attachments. The 1996 Act expanded the scope of
section 224 of the Communications Act of 1934 (``Communications Act'')
to telecommunications carriers and created a distinction between pole
attachments used by cable systems solely to provide cable service and
pole attachments used by cable systems or by telecommunications
carriers to provide any telecommunications service. In this NPRM we
seek comment on the implementation of a methodology to ensure just,
reasonable, and nondiscriminatory maximum pole attachment and conduit
rates for telecommunications carriers. We also seek comment on how to
ensure that rates charged for use of rights of way are just, reasonable
and nondiscriminatory.
2. The Commission must prescribe the new methodology for
telecommunications carriers within two years of enactment of the 1996
Act, with these rules becoming effective five years from enactment.
Section 224(d)(3) of the Communications Act applies the Commission's
existing pole attachment methodology to both cable television systems
and telecommunications carriers until the effective date of the new
formula. We note that section 257 of the Communications Act provides
that the Commission promote policies that eliminate ``* * * market
entry barriers for entrepreneurs and other small businesses in the
provision and ownership of telecommunications services and information
services. * * *''
II. Background
A. Prior to the 1996 Act
3. It is common practice for telecommunications carriers to lease
space from utilities on poles or in ducts, conduits, or rights-of-way,
in order to provide telecommunications services. The federal government
did not regulate these arrangements until 1978, when Congress enacted
section 224 of the Communications Act in response to concerns raised by
cable television operators. Section 224 was enacted to stop utilities
from ``unfair pole attachment practices * * * and to minimize the
effect of unjust or unreasonable pole attachment practices on the wider
development of cable television service to the public.''
4. Section 224(b)(1) grants the Commission authority to regulate
the rates, terms, and conditions governing pole attachments to ensure
that they are just and reasonable. Generally, the Commission does not
have authority where a state regulates pole attachment rates, terms,
and conditions. Section 224(d)(1) defines a just and reasonable rate as
ranging from the statutory minimum (incremental costs) to the statutory
maximum (fully allocated costs). Incremental costs include pre-
construction survey, engineering, make-ready and change-out costs
incurred in preparing for cable attachments. Congress expected pole
attachment rates based on incremental costs to be low because utilities
generally recover the make-ready or change-out charges directly from
cable systems. Fully allocated costs refer to the portion of operating
expenses and capital costs that a utility incurs in owning and
maintaining poles that is equal to the portion of usable pole space
that is occupied by an attacher.
5. In 1978, the Commission implemented the original section 224 by
issuing rules governing pole attachment issues and establishing a basic
formula for pole attachment rates. Subsequent Commission orders have
reconsidered, amended and clarified the Commission's methodology for
determining rates, the amount of usable and unusable space on a pole
and the amount of space occupied by cable systems. In addition, the
Commission has adjusted complaint procedures, including the information
accompanying complaints.
B. The 1996 Act
6. The 1996 Act amended section 224 in important respects. Most
prominently, it created a right of access for telecommunications
carriers. New sections 224 (d)(3), (e), (f), (g), (h) and (i)
proscribed expanded access and established a new methodology for
determining just and reasonable rates for telecommunications carriers.
The 1996 Act also amended the definitions of ``utility'' and ``pole
attachment'' in sections 224 (a)(1) and (a)(4); recognized a State's
authority to regulate pole attachments involving telecommunications
carriers in sections 224 (c)(1) and (c)(2)(B); and added section
224(a)(5) to exempt incumbent local exchange carriers (``LECs'') from
the definition of telecommunications carriers.
7. Under section 224(d)(3) the Commission's existing rules are
applicable to both cable television systems and to telecommunications
carriers until such time as the new rules become effective. On March
14, 1997, the Commission released a Notice of Proposed Rulemaking,
Amendment of Rules and Policies Governing Pole Attachments, CS Docket
No. 97-98 (``Pole Attachment NPRM''), 62 FR 18074 (April 14, 1997),
relating to the existing formula for pole attachments. Parties need not
file duplicate comments to address issues raised in that proceeding. We
have determined that, to the extent such comments are relevant in the
instant proceeding, they will be incorporated by reference within this
proceeding. That proceeding specifically seeks comment on the
Commission's use of the current presumptions, on carrying charge and
rate of return elements of the formula, on the use of gross versus net
data, and on a new conduit methodology. Commenters to the Pole
Attachment NPRM are encouraged to distinguish their comments in that
proceeding if they vary from those filed in response to this NPRM, as
well as providing comment on the new and different issues raised in
this NPRM as a result of 1996 Act. We invite further comment in this
proceeding to establish a full record for attachments made by cable
systems offering telecommunications services. In Implementation of
Section 703 of the Telecommunications Act of 1996, CS Docket No. 96-166
(``Self-Effectuating Order''), 61 FR 43023 (August 20, 1996), the
Commission amended its rules to reflect the self-effectuating additions
and revisions to section 224. In Implementation of the Local
Competition Provisions in the Telecommunications Act of 1996 (``Local
Competition Provisions Order''), 61 FR 45476 (August 29, 1996), the
Commission implemented the access provisions of the 1996 Act, sections
224 (c)(1), (f) and (h).
8. Most significantly for purposes of this NPRM, the 1996 Act added
the following provisions of section 224(e):
(e)(1) The Commission shall, no later than 2 years after the
date of enactment of the Telecommunications Act of 1996, prescribe
regulations in accordance with this subsection to govern charges for
pole attachments used by telecommunication carriers to provide
telecommunications services, when the parties fail to resolve a
dispute over such charges. Such regulations shall ensure that a
utility charges just, reasonable, and nondiscriminatory rates for
such pole attachments.
(e)(2) A utility shall apportion the cost of providing space on
a pole, duct, conduit, or right-of-way other than usable space among
[[Page 43965]]
entities so that such apportionment equals two-thirds of the costs
of providing space other than the usable space that would be
allocated to such entity under an equal apportionment of such costs
among all attaching entities.
(e)(3) A utility shall apportion the cost of providing usable
space among all entities according to the percentage of usable space
required for each entity.
(e)(4) The regulations required under paragraph (1) shall become
effective five years after enactment of the Telecommunications Act
of 1996. Any increase in the rates for pole attachments that result
from the adoption of the regulations required by this subsection
shall be phased in equal annual increments over a period of five
years beginning on the effective date of such regulations.
9. This NPRM considers the portion of the costs of a bare pole to
be included in the pole attachment rate. Currently, a portion of the
total annual cost of a pole is included in the pole attachment rate
based on the portion of the usable space occupied by the attaching
entity. This formula will continue to be applicable to cable systems
providing only cable service. However, for cable systems and
telecommunications carriers providing telecommunications services, the
portion of the total annual cost included in the pole attachment rate
will be determined under a more delineated method. This method
differentially allocates the costs of the portion of the total pole
cost associated with the usable portion of the pole and the portion of
the total pole cost associated with the unusable portion of the pole.
Generally, this is expected to result, at least initially, in the
inclusion of greater portions of the carrying charge components in the
rate. As the number of attaching entities increases, however, smaller
portions of the carrying charge will be included in each entity's rate.
As the carrying charge rate is spread amongst the attaching entities,
the overall rate may become lower over time because the total cost will
be spread over all attaching entities.
10. Section 224(e) requires two discrete steps. First, two-thirds
of the costs relating to the other than usable space on the pole, duct,
conduit or right-of-way will be apportioned equally among all attaching
telecommunications carriers. Second, telecommunications carriers will
also be apportioned the cost of usable space, according to the amount
of usable space the entity requires.
III. Preference for Negotiated Agreements
11. In proposing a methodology to implement section 224(e), we note
that the Commission's role is limited to circumstances ``when the
parties fail to resolve a dispute over such charges.'' Thus,
negotiations between a utility and an attacher should continue to be
the primary means by which pole attachment issues are resolved. We
believe that an attacher must attempt to negotiate and resolve its
dispute with a utility before filing a complaint with the Commission.
However, we also note that in the 1996 Act, Congress recognized the
importance of access in enhancing competition in telecommunications
markets and that parties in a pole attachment negotiation do not have
equal bargaining positions. Congress also recognized that the potential
for significant barriers to competition emanating from the lack of
access or unreasonable rates is significant. Accordingly, we propose to
use our current rule, which requires a complainant to include a brief
summary of all steps taken to resolve its dispute before filing a
complaint. 47 CFR 1.1404(i). ``The complaint shall include a brief
summary of all steps taken to resolve the problem prior to filing. If
no such steps were taken, the complaint shall state the reason(s) why
it believed such steps are fruitless.'' We seek comment on our
tentative conclusions and on the proposed use of our current rule.
IV. Attachment Space Use
12. Attachment space use must conform to the standards of section
224(f)(2) with respect to safety, reliability and generally applicable
engineering standards. When an attaching entity conforms to these
standards, the issue remaining is whether a utility may impose
additional limits on the use of the space. We note, for example, in the
context of a pole attachment by a cable television system which also
provides nonvideo communication, the Commission has determined that a
utility may not charge different pole attachment rates depending on the
type of service provided by the cable operator. See Heritage
Cablevision Assocs. of Dallas, L.P. v. Texas Utils. Elec. Co., 6 FCC
Rcd. 7099 (1991), aff'd sub nom. Texas Utils. Elec. Co. v. FCC, 997
F.2d 925 (D.C. Cir. 1993). The Commission found that ``Section 224
protects TCI's pole attachments within its franchise service area which
support equipment employed to provide nonvideo services in addition to
video and other traditional cable television services'' and that the
``imposition of a separate charge for TCI's cable system pole
attachments for nontraditional services violates section 224's
prohibition against unjust and unreasonable pole attachment rates,
terms and conditions.'' Id. at 7107. We seek comment on whether our
holding in Heritage should be extended to other circumstances where
utilities attempt to condition or limit the use of attachment space.
13. Given the pro-competitive intent of the 1996 Act, we
tentatively conclude that telecommunications carriers should be
permitted to overlash their existing lines with additional fiber when
building out their system. If a telecommunications carrier is allowed
to overlash its own lines, should it be permitted to allow third
parties to use the overlashed facility? Moreover, we seek comment
whether a cable system or telecommunications carrier may allow a third
party to use dark fiber in its original lines. Where an attaching
entity has overlashed with fiber, should it be permitted to allow third
parties to use dark fiber within its overlashed line? We inquire
whether a third party should be permitted to overlash to an existing
cable system or telecommunications carriers' attachment. We also seek
information whether there are inherent differences between the lines of
cable systems and those of telecommunications carriers that warrant a
difference in treatment between overlashing by cable systems and
telecommunications carriers. Similarly, we request that commenters
discuss whether, and to what extent, overlashing facilitates the
provision of services other than cable service by cable operators, such
as Internet access and local telephone service. We seek information on
how these situations should be treated for the purpose of counting
entities in the process of establishing a just and reasonable rate. We
seek comment on the contractual obligations that utilities should be
permitted to require of attaching entities who lease excess dark fiber
or allow overlashing. We inquire how best to promote the rapid
deployment of competitive telecommunications services in light of these
issues.
V. Charges for Attaching
A. Presumptions
14. In a previous order, the Commission found that ``the most
commonly used poles are 35 and 40 feet high, with usable spaces of 11
to 16 feet, respectively.'' The Commission recognized the NESC
guideline that 18 feet of the pole space must be reserved for ground
clearance and that six feet of pole space is for setting the depth of
the pole. To avoid a pole by pole rate calculation, the Commission
adopted rebuttable presumptions of an average pole height of 37.5 feet,
an average
[[Page 43966]]
amount of usable space of 13.5 feet, and an average amount of 24 feet
of unusable space on a pole.
15. A group of electrical utilities recently filed a Whitepaper
(``Whitepaper'') in anticipation of this NPRM. The Whitepaper suggests
that an increase in the current presumptive pole height is appropriate.
The Whitepaper asserts that over time, and with increased demand, the
average pole height has increased to an average of 40 feet. At the same
time, the Whitepaper contends that the usable space presumption should
also be changed from 13.5 feet to 11 feet. We seek comment in this
proceeding to establish a full record for attachments made by
telecommunications carriers under the 1996 Act. We also seek comment on
an issue raised by Duquesne Light Company (``Duquesne'') in its
reconsideration petition of the Commission's decision in the Local
Competition Provisions proceeding. Specifically, Duquesne advocates
that the number of physical attachments of an attaching entity is not
necessarily reflective of the burden, and therefore the costs, relating
to the attachment. Duquesne states that varying attachments place
different burdens on the pole and proposes that any presumption include
factors addressing weight and wind loads.
16. The presumptions were established because developing a data
base for each utility is impractical. We seek comment on the need for
presumptions and whether attachments by telecommunications carriers are
sufficiently different or unique to cause us to reevaluate our
presumptions. Specifically, we seek comment on the amount of usable
space occupied by telecommunications carriers and on whether the
presumptive one foot used for cable is applicable to telecommunications
carriers generally.
17. We also propose that the Commission's approach to the safety
space required to be maintained between power lines and communications
lines should also apply to telecommunications carriers. The Commission
has always recognized the NESC requirement that a 40 inch safety space
must exist between electric lines and communication lines. The NESC
requires a 40 inch safety space to minimize the possibility of physical
contact by employees working on cable television or telecommunications
attachments with the potentially lethal electric power lines. We
tentatively conclude that the safety space emanates from a utility's
requirement to comply with the NESC and should properly be assigned to
the utility as part of its usable space.
B. Allocating the Cost of Other Than Usable Space
18. Section 224(e)(2) states that ``[a] utility shall apportion the
cost of providing space on a pole, duct, conduit, or right-of-way other
than the usable space among entities so that such apportionment equals
two-thirds of the costs of providing space other than usable space that
would be allocated to such entity under an equal apportionment of such
costs among all attaching entities.'' This requirement translates to
the following basic formula:
[GRAPHIC] [TIFF OMITTED] TP18AU97.000
19. Under section 224(e)(2), the number of entities with pole
attachments on each pole affects directly the rate charged. Defining
what an attacher is and establishing how to calculate the number of
attachers is critical to formulating a proper cost allocation method
pursuant to section 224(e)(2). The more attaching entities there are,
the more widely the costs relating to the unusable space are spread. We
propose, consistent with the statutory language, requiring equal
apportionment of two-thirds of the costs of providing unusable space
among all attaching entities, that any telecommunications carrier, or
cable operator or LEC attaching to a pole be counted as a separate
entity for the purposes of the apportionment of two-thirds of the costs
of the unusable space. We also propose that such costs will be
apportioned equally to all such attaching entities. We seek comment on
these tentative conclusions. We also note that section 224(g) requires
that a utility providing telecommunications services impute to its
costs of providing service an amount equal to the rate for which such
company would be liable under this section. We tentatively conclude
that where a utility is providing telecommunications services, such
entity would also be counted as an attaching entity for the purposes of
allocating the costs of unusable space under section 224(e). We seek
comment on this tentative conclusion.
20. We also tentatively conclude that an incumbent LEC with
attachments on a pole should be counted for the purposes of
apportionment of the costs of unusable space. We note that the
definition of telecommunications carrier excludes incumbent LECs and a
pole attachment is defined as any attachment by a cable television
system or a provider of telecommunications service, and seek comment on
how these definitions impact our tentative conclusion. We also seek
comment on the general premise that counts any telecommunications
carrier as a separate attaching entity for each foot, or partial
increment of a foot, it occupies on the pole and on such a
methodology's consistency with the statutory requirement in section
224(e)(2) for equal apportionment among all attaching entities. We also
seek information on alternative methodologies to apportion costs, such
as on a proportion of space occupied basis.
21. Similarly, we propose that attachments made by a government
agency be included. A utility may be required under its franchise or
statutory authorization to provide certain attachments for public use.
These include traffic signals, festoon lighting, or specific pedestrian
lighting. Often, the agency does not directly pay for the attachment.
Since the government agency is using space on the pole, we propose that
its attachments be counted for purposes of allocating the cost of the
unusable space. This cost would be borne by the pole owner, since it
relates to a responsibility under its franchise or statutory
authorization. We seek comment on this tentative conclusion.
22. We seek comment on how entities that have either overlashed to
an existing attachment or are using dark fiber within the initial
attachment of another entity should be counted for the purpose of
allocation of costs of unusable space. Should they be considered as
separate attachers for purposes of counting the number of entities on a
pole?
23. We believe a pole-by-pole inventory of the number of entities
on each pole would be too costly. We propose that each utility develop,
through the information it possesses, a presumptive average number of
attachers on one of its poles. We also
[[Page 43967]]
propose that telecommunications carriers be provided the methodology
and information by which a utility's presumption was determined. We
seek comment on this proposal and whether any parameters should be
established for a utility to develop its presumptive average. We also
seek comment on whether a utility should develop averages for areas
that share similar characteristics relating to pole attachments and
whether different presumptions should exist for urban, suburban, and
rural areas. We seek comment on the criteria to develop and evaluate
any presumption. As an alternative to a pole by pole inventory by the
facility owner, we seek comment on whether the Commission should
determine the average number of attachments. We inquire whether the
Commission should initiate a survey to gain the necessary data to
develop a rebuttable presumption regarding the number of attachments.
We seek comment on the difficulties of administrating a survey, any
additional data required, and parameters of accuracy and reliability
required for fair rate determination.
24. Where a presumptive number of attachers is developed by the
Commission and used to determine attachment rates, we believe that a
utility, telecommunications carrier or cable operator may challenge the
presumption. The challenging party must initially establish that the
presumption is not proper under the circumstances by identifying and
calculating the number of attachments on the poles and submitting what
it believes to be an appropriate average. Where the number of poles is
large, and complete inspection impractical, a statistically sound
survey should be submitted. Where a presumption is challenged, the
challenged party will be afforded an opportunity to justify the
presumption. Where a presumption is overcome either by submission of
actual data or by survey, the resulting figures would be used as the
factor (number of attachers) within the formula to calculate the rate.
We seek comment on these issues.
C. Allocating the Cost of Usable Space
25. The Commission has adopted the following generally applicable
formula for calculating the maximum rate:
[GRAPHIC] [TIFF OMITTED] TP18AU97.001
26. The first component of the formula, space occupied by
attachment divided by the total usable space on a pole, is used to
calculate the percentage of usable space that the attachment occupies
on an average pole. The Commission's rules define usable space as the
space on a utility pole above the minimum grade level that can be used
for the attachment of wires, cables and associated equipment. As
discussed, for cable television system attachments, the Commission's
Petition to Adopt Rules Concerning Usable Space on Utility Poles
assigned one foot of usable space per pole to cable systems.
27. The second component of the overall formula is the net cost of
a bare pole. The component is derived from the gross investment in
poles less accumulated depreciation and accumulated deferred income
taxes. An adjustment is made to a utility's net pole investment to
eliminate the investment in crossarms and other non-pole related items.
To accomplish this, the Commission decided to reduce net pole
investment by 15% for electric utilities and 5% for telephone
companies. The two factors reflect the differences between telephone
companies' and electric utilities' investment in crossarms and other
non-pole investment that is recorded in the pole accounts. Electric
utilities typically have more investment in crossarms than telephone
companies. The 0.85 factor for electric utilities recognizes this
difference. To arrive at the net cost of a bare pole, a factor, 0.85
for electric utilities or 0.95 for telephone companies, is multiplied
by the net investment per pole, as shown in the following formula:
[GRAPHIC] [TIFF OMITTED] TP18AU97.002
This formula rearranges the Pole Attachment Order's net cost of a
bare pole formula for presentation purposes. Net pole investment is
defined as the gross investment in poles less accumulated depreciation
and accumulated deferred income taxes with respect to pole investment.
We seek comment on the use of these factors for arriving at the net
cost of bare pole.
28. The final component of the overall pole attachment formula is
the carrying charge rate. Carrying charges are the costs incurred by
the utility in owning and maintaining poles regardless of the presence
of pole attachments. The carrying charges include the utility's
administrative, maintenance, and depreciation expenses, a return on
investment, and taxes. To help calculate the carrying charge rate, we
developed a formula that relates each of these components to the
utility's net investment.
29. Section 224(e)(3) states that: ``[A] utility shall apportion
the cost of providing usable space among all entities according to the
percentage of usable space required for each entity.'' This is the
allocation methodology developed by the Commission as applicable to
cable systems--except that under the Commission's method the allocation
rate is applied to the full cost of the pole. As noted, in the Pole
Attachment NPRM, we are seeking comment on various aspects of the
current formula including the current space presumptions. We propose to
continue using our current rate methodology, modified to reflect only
the cost associated with the usable space, because we believe this
methodology to be as applicable to telecommunications carriers as to
cable systems. Thus, we would apply the following formula:
[[Page 43968]]
[GRAPHIC] [TIFF OMITTED] TP18AU97.003
30. Alternatively, as we did in the Pole Attachment NPRM, we seek
additional comment in the context of this proceeding on calculating a
telecommunications carrier pole attachment rate using gross book costs
instead of net book costs. Under this approach the cost of a bare pole
and most carrying charges are computed using gross book costs. The rate
of return and the income tax carrying charges must continue to be
computed using net book costs because utility prices are generally set
to allow them to earn an authorized rate of return on their net book
costs. We currently compute the carrying charge elements for
maintenance, depreciation and administrative expenses, as well as for
return on investment and taxes, using net book costs. Under the
proposed alternative, the carrying charge elements for maintenance,
depreciation and administrative expenses would be calculated using
gross book costs for both total plant investment and pole investment.
For example, the administrative expense element is currently calculated
by dividing total administrative and general expenses by net book cost.
This yields a percentage that is applied to the net book cost of a bare
pole. In contrast, a gross book cost approach to allocation would
divide total administrative and general expenses by gross book costs.
The resulting percentage would then be applied to the gross book cost
of the bare pole. Prior to the Pole Attachment Order, the Commission
had decided certain cases using gross book costs to calculate maximum
reasonable pole attachment rates. In addition, the Commission has
stated that if both parties to a pole attachment complaint agree, the
pole attachment rates may be computed using gross book costs. The use
of gross book costs appears consistent with the legislative history
supporting section 224, which indicates that the Commission has
significant discretion in selecting a methodology for determining just
and reasonable pole attachment rates. We seek comment on this
alternative to ensure a complete record in order to create a reasonable
telecommunications carrier pole attachment rate methodology. We note,
however, that because of the way administrative costs are allocated,
the application of gross book costs may produce a slightly higher rate.
We seek comment on whether this assumption is true and if so what the
impact of this change would be.
31. We also seek comment on the applicability of the above formula
when an entity either has overlashed to an existing attachment or is
using dark fiber within the initial attachment of another entity.
Should we still continue to apply the presumptive one foot of space
occupied by the attacher when allocating the cost of the usable space
or should the entity overlashing or using dark fiber be considered a
separate attacher, with each using one foot of usable space? As noted
previously, if the presumptive one foot is not appropriate, we inquire
as to what presumption should be used?
VI. Conduit Attachment Issues
A. Application of the Pole Attachment Formula to Conduits
32. Conduit systems are structures that provide physical protection
for cables and also allow new cables to be added inexpensively along a
route, over a long period of time, without having to dig up the streets
each time a new cable is placed. Conduit systems are usually multiple-
duct structures with standardized duct diameters. The duct diameter is
the principle factor for determining the maximum number of cables that
can be placed in a duct. We seek additional comment on the differences
between conduit owned and/or used by cable operators and
telecommunications carriers and conduit owned and or used by electric
or other utilities. We understand that there are inherent differences
in the safety aspects of the latter conduits and ducts, and we seek
comment on physical limitations that would affect the rate for such
facilities. Where such conduit is shared, we seek information on the
mechanism for establishing a just and reasonable rate. We seek comment
on the distribution of usable and unusable space within the conduit or
duct and how the determination for such space is made. In this NPRM we
are not addressing the access or safety provisions, as those issues are
more appropriately addressed in the context of the Local Competition
Provisions Order. Rather, we are interested in the application of our
formula for the purpose of setting just and reasonable rates. Our
present formula does not appear to take such differences into
consideration, and our experience in resolving disputes relating to
electric or other utility conduit has been limited.
33. Usable space is based on the number of ducts and the diameter
of the ducts. Section 224(e)(3) states that the cost of providing
usable space shall be apportioned according to the percentage of usable
space required for the entity using the conduit. In the Pole Attachment
NPRM, the Commission has sought comment on a proposed conduit
methodology. Moreover, we propose a half-duct methodology as the amount
of space used by a cable system or telecommunications carrier that is,
the space occupied by a cable system was generally a half-duct.
34. The proposed usable space formula for users of conduits would
thus be represented as follows:
[GRAPHIC] [TIFF OMITTED] TP18AU97.004
We seek comment on this presumption's applicability in determining
usable space and allocating cost to the telecommunications carrier.
35. As discussed above, section 224(e)(2) requires that two-thirds
of the cost of the unusable space be apportioned equally among all
attaching entities. The unusable space formula would then be
represented as follows:
[[Page 43969]]
[GRAPHIC] [TIFF OMITTED] TP18AU97.005
We seek comment on what portions of duct or conduit are
``unusable'' within the terms of the 1996 Act. We propose that a
presumptive ratio of usable ducts to maintenance ducts be adopted to
establish the amount of unusable space. We seek comment on how this
proposal impacts determining an appropriate ratio of usable to unusable
space within a duct or conduit.
36. As with poles, defining what an attaching entity is and
establishing how to calculate the number of attaching entities is
critical. We also seek comment on the use an attaching entity may make
of its assigned space, including allowing others to use its dark fiber.
Consistent with the half-duct convention proposed in the Pole
Attachment NPRM, we believe that each entity using one half-duct be
counted as a separate attaching entity. We seek comment on this method
of counting attaching entities for the purpose of allocating the cost
of the unusable space consistent with section 224(e).
VII. Rights-of-Way Issues
37. The access and reasonable rate provisions of section 224 are
applicable where a cable operator or telecommunications carrier seeks
to install facilities in a right-of-way but does not make a physical
attachment to any pole, duct or conduit. The Commission's proceedings
and cases generally have addressed issues involving physical
attachments to poles, ducts, or conduits. Our experience relating to
solely rights-of-way circumstances is limited. We seek information
regarding the degree rights-of-way access issues will arise and the
range of circumstances that will be involved. We ask whether the
Commission should adopt rules reflecting a methodology and/or formula
to determine a just and reasonable rate, or whether rights-of-way
complaints should be addressed on a case-by-case basis. We seek comment
on whether rights-of-way cases will be of such number that a
methodology is necessary, and whether the range of circumstances
involving rights-of-way can be discerned into a generic methodology. If
a methodology is appropriate, we seek comment on the elements,
including any presumptions, that will calculate the costs relating to
usable and unusable space. We also seek information regarding whether
information necessary for any formula is available through a utility's
accounting structure, as costs relating to rights-of-way may be
different than poles, ducts and conduit.
VIII. Implementation
38. Section 224(e)(4) requires the Commission to implement the
telecommunications carrier rate methodology on February 8, 2001.
Section 224(e)(4) states that ``The regulations required under
paragraph one shall become effective five years after enactment of the
Telecommunications Act of 1996. Any increase in the rates for pole
attachments that result from the adoption of the regulations required
by this subsection shall be phased in equal annual increments over a
period of five years beginning on the effective date of such
regulations.'' The statutory language of section 224(e)(4) requires
that any rate increase be phased in over five years in equal annual
increments beginning on that date. We propose that the amount of
increase should be phased in at the beginning of the five years and
one-fifth of that amount should be added to the rate in each of the
subsequent five years. We seek comment on this proposed five year phase
in of the telecommunications carrier rate. We also seek comment on any
other proposals that would equitably phase in the telecommunication
carrier rate within the five years allotted by section 224(e)(4).
IX. Initial Regulatory Flexibility Act Analyses
39. As required by the Regulatory Flexibility Act (RFA), the
Commission has prepared an Initial Regulatory Flexibility Analysis
(IRFA) of the expected significant economic impact on small entities by
the policies and rules proposed in this Notice of Proposed Rulemaking
(NPRM). Written public comments are requested on the IRFA. Comments
must be identified as responses to the IRFA and must be filed by the
deadlines established in paragraph 76 of this NPRM. The Secretary shall
send a copy of this NPRM, including the IRFA, to the Chief Counsel for
Advocacy of the Small Business Administration (SBA) in accordance with
the RFA.
40. Need for Action and Objectives of the Proposed Rule. In 1987,
the Commission adopted its current pole attachment formula for
calculating the maximum just and reasonable rates utilities may charge
cable systems for pole attachments. In this NPRM, we seek comment as to
whether the current pole attachment formula should be modified or
adjusted to eliminate certain anomalies and rate instabilities
particular parties assert have occurred. We have also tentatively
proposed such possible modifications to the formula, should altering
the formula become necessary, that would improve the accuracy of the
formula. In addition, we propose changes to the formula to reflect the
present part 32 accounting system that replaced the former part 31
rules in 1988. Finally, we propose a new conduit methodology that will
determine the maximum just and reasonable rates utilities may charge
cable systems and telecommunications carriers for their attachments to
conduit systems.
41. Legal Basis. The authority for the action proposed for this
rulemaking is contained in sections 1, 4(i), 4(j), 224, 303 and 403 of
the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i),
154(j), 224, 303 and 403.
42. Description and Estimate of the Number of Small Entities
Impacted. The RFA generally defines a ``small entity'' as having the
same meaning as the terms ``small business,'' ``small organization,''
``small governmental jurisdiction.'' In addition, the term ``small
business'' has the same meaning as the term small business concern
under the Small Business Act. A ``small business concern'' is one that:
(1) Is independently owned and operated; (2) is not dominant in its
field of operation; and (3) satisfies any additional criteria
established by the Small Business Administration (SBA). For many of the
entities described below, the SBA has defined small business categories
through Standard Industrial Classification (SIC) codes.
43. Total Number of Utilities Affected. Many of the decisions and
rules proposed herein may have a significant effect on a substantial
number of utility companies. Section 224 of the Statue defines a
``utility'' as ``any person who is a local exchange carrier or an
electric, gas, water, steam, or other public utility, and who owns or
controls poles, ducts, conduits, or rights-of-way used, in whole or in
part, for any wire communications. Such term does not include any
railroad, any person who is cooperatively organized, or any person
owned by the Federal Government or any State.'' The SBA has provided
the
[[Page 43970]]
Commission with a list of utility firms which may be affected by this
rulemaking. Based upon the SBA's list, the Commission seeks comment as
to whether all of the following utility firms are relevant to section
224.
44. Electric Services (SIC 4911). The SBA has developed a
definition for small electric utility firms. The Census Bureau reported
that 447 of the 1,379 firms listed had total revenues below five
million dollars. The Census Bureau reports that a total of 1,379
electric utilities were in operation for at least one year at the end
of 1992. According to SBA, a small electric utility is an entity whose
gross revenues did not exceed five million dollars in 1992. Electric
and Other Services Combined (SIC 4931). The SBA has classified this
entity as a utility whose business is less than 95% electric in
combination with some other type of service. The Census Bureau reports
that a total of 135 such firms were in operation for at least one year
at the end of 1992. The SBA's definition of a small electric and other
services combined utility is a firm whose gross revenues did not exceed
five million dollars in 1992. The Census Bureau reported that 45 of the
135 firms listed had total revenues below five million dollars.
Combination Utilities, Not Elsewhere Classified (SIC 4939). The SBA
defines this utility as providing a combination of electric, gas, and
other services which are not otherwise classified. The Census Bureau
reports that a total of 79 such utilities were in operation for at
least one year at the end of 1992. According to SBA's definition, a
small combination utility is a firm whose gross revenues did not exceed
five million dollars in 1992. The Census Bureau reported that 63 of the
79 firms listed had total revenues below five million dollars.
45. Natural Gas Transmission (SIC 4922). The SBA's definition of a
natural gas transmitter is an entity that is engaged in the
transmission and storage of natural gas. The Census Bureau reports that
a total of 144 such firms were in operation for at least one year at
the end of 1992. According to SBA's definition, a small natural gas
transmitter is an entity whose gross revenues did not exceed five
million dollars in 1992. The Census Bureau reported that 70 of the 144
firms listed had total revenues below five million dollars. Natural Gas
Transmission and Distribution (SIC 4923). The SBA has classified this
entity as a utility that transmits and distributes natural gas for
sale. The Census Bureau reports that a total of 126 such entities were
in operation for at least one year at the end of 1992. The SBA's
definition of a small natural gas transmitter and distributer is a firm
whose gross revenues did not exceed five million dollars. The Census
Bureau reported that 43 of the 126 firms listed had total revenues
below five million dollars. Natural Gas Distribution (SIC 4924). The
SBA defines a natural gas distributor as an entity that distributes
natural gas for sale. The Census Bureau reports that a total of 478
such firms were in operation for at least one year at the end of 1992.
According to the SBA, a small natural gas distributor is an entity
whose gross revenues did not exceed five million dollars in 1992. The
Census Bureau reported that 267 of the 478 firms listed had total
revenues below five million dollars. Mixed, Manufactured, or Liquefied
Petroleum Gas Production and/or Distribution (SIC 4925). The SBA has
classified this entity as a utility that engages in the manufacturing
and/or distribution of the sale of gas. These mixtures may include
natural gas. The Census Bureau reports that a total of 43 such firms
were in operation for at least one year at the end of 1992. The SBA's
definition of a small mixed, manufactured or liquefied petroleum gas
producer or distributor is a firm whose gross revenues did not exceed
five million dollars in 1992. The Census Bureau reported that 31 of the
43 firms listed had total revenues below five million dollars. Gas and
Other Services Combined (SIC 4932). The SBA has classified this entity
as a gas company whose business is less than 95% gas, in combination
with other services. The Census Bureau reports that a total of 43 such
firms were in operation for at least one year at the end of 1992.
According to the SBA, a small gas and other services combined utility
is a firm whose gross revenues did not exceed five million dollars in
1992. The Census Bureau reported that 24 of the 43 firms listed had
total revenues below five million dollars.
46. Water Supply (SIC 4941). The SBA defines a water utility as a
firm who distributes and sells water for domestic, commercial and
industrial use. The Census Bureau reports that a total of 3,169 water
utilities were in operation for at least one year at the end of 1992.
According to SBA's definition, a small water utility is a firm whose
gross revenues did not exceed five million dollars in 1992. The Census
Bureau reported that 3,065 of the 3,169 firms listed had total revenues
below five million dollars.
47. Sewage Systems (SIC 4952). The SBA defines a sewage firm as a
utility whose business is the collection and disposal of waste using
sewage systems. The Census Bureau reports that a total of 410 such
firms were in operation for at least one year at the end of 1992.
According to SBA's definition, a small sewerage system is a firm whose
gross revenues did not exceed five million dollars. The Census Bureau
reported that 369 of the 410 firms listed had total revenues below five
million dollars. Refuse Systems (SIC 4953). The SBA defines a firm in
the business of refuse as an establishment whose business is the
collection and disposal of refuse ``by processing or destruction or in
the operation of incinerators, waste treatment plants, landfills, or
other sites for disposal of such materials.'' The Census Bureau reports
that a total of 2,287 such firms were in operation for at least one
year at the end of 1992. According to SBA's definition, a small refuse
system is a firm whose gross revenues did not exceed six million
dollars. The Census Bureau reported that 1,908 of the 2,287 firms
listed had total revenues below six million dollars. Sanitary Services,
Not Elsewhere Classified (SIC 4959). The SBA defines these firms as
engaged in sanitary services. The Census Bureau reports that a total of
1,214 such firms were in operation for at least one year at the end of
1992. According to SBA's definition, a small sanitary service firms
gross revenues did not exceed five million dollars. The Census Bureau
reported that 1,173 of the 1,214 firms listed had total revenues below
five million dollars.
48. Steam and Air Conditioning Supply (SIC 4961). The SBA defines a
steam and air conditioning supply utility as a firm who produces and/or
sells steam and heated or cooled air. The Census Bureau reports that a
total of 55 such firms were in operation for at least one year at the
end of 1992. According to SBA's definition, a steam and air
conditioning supply utility is a firm whose gross revenues did not
exceed nine million dollars. The Census Bureau reported that 30 of the
55 firms listed had total revenues below nine million dollars.
49. Irrigation Systems (SIC 4971). The SBA defines irrigation
systems as firms who operate water supply systems for the purpose of
irrigation. The Census Bureau reports that a total of 297 firms were in
operation for at least one year at the end of 1992. According to SBA's
definition, an irrigation service is a firm whose gross revenues did
not exceed five million dollars. The Census Bureau reported that 286 of
the 297 firms listed had total revenues below five million dollars.
50. Total Number of Telephone Companies Affected (SIC 4813). Many
of the decisions and rules proposed herein
[[Page 43971]]
may have a significant effect on a substantial number of small
telephone companies. The SBA has defined a small business for Standard
Industrial Classification (SIC) category 4813 (Telephone
Communications, except Radiotelephone) to be a small entity when it has
no more than 1500 employees. The Census Bureau reports that, at the end
of 1992, there were 3,497 firms engaged in providing telephone
services, as defined therein, for at least one year. This number
contains a variety of different categories of carriers, including local
exchange carriers (LECs), interexchange carriers, competitive access
providers, cellular carriers, mobile service carriers, operator service
providers, pay telephone operators, PCS providers, covered SMR
providers, and resellers. It seems certain that some of those 3,497
telephone service firms may not qualify as small entities or small
incumbent LECs because they are not ``independently owned and
operated.'' It seems reasonable to conclude, therefore, that fewer than
3,497 telephone service firms are small entity telephone service firms
or small incumbent LECs that may be affected by this NPRM. Below, we
estimate the potential number of small entity telephone service firms
or small incumbent LEC's that may be affected by this service category.
51. Wireline Carriers and Service Providers. The SBA has developed
a definition of small entities for telephone communications companies
other than radiotelephone (wireless) companies. The Census Bureau
reports that, there were 2,321 such telephone companies in operation
for at least one year at the end of 1992. According to SBA's
definition, a small business telephone company other than a
radiotelephone company is one employing no more than 1,500 persons. Of
the 2,321 non-radiotelephone companies listed by the Census Bureau
2,295 were reported to have fewer than 1,000 employees. Thus, at least
2,295 non-radiotelephone companies that might qualify as small entities
or small incumbent LECs, or small entities based on these employment
statistics. Although it seems certain that some of these carriers are
not independently owned and operated, we are unable at this time to
estimate with greater precision the number of wireline carriers and
service providers that would qualify as small business concerns under
SBA's definition. Consequently, we estimate that there are fewer than
2,295 small entity telephone communications companies other than
radiotelephone companies that may be affected by the decisions or rules
that come about from this NPRM.
52. Local Exchange Carriers. Neither the Commission nor SBA has
developed a definition of small providers of local exchange services
(LECs). The closest applicable definition under SBA rules is for
telephone communications companies other than radiotelephone (wireless)
companies. The most reliable source of information regarding the number
of LECs nationwide of which we are aware appears to be the data that we
collect annually in connection with the Telecommunications Relay
Service (TRS Worksheet). According to our most recent data, 1,347
companies reported that they were engaged in the provision of local
exchange services. Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of LECs that would qualify as small business
concerns under SBA's definition. Consequently, we estimate that there
are fewer than 1,347 small incumbent LECs that may be affected by this
NPRM.
53. Interexchange Carriers. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to
providers of interexchange services (IXCs). The closest applicable
definition under SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies (SIC 4813). The most
reliable source of information regarding the number of IXCs nationwide
of which we are aware appears to be the data that we collect annually
in connection with TRS. According to our most recent data, 130
companies reported that they were engaged in the provision of
interexchange services. Although it seems certain that some of these
carriers are not independently owned and operated, or have more than
1,500 employees, we are unable at this time to estimate with greater
precision the number of IXCs that would qualify as small business
concerns under SBA's definition. Consequently, we estimate that there
are fewer than 130 small entity IXCs that may be affected by the
decisions and rules proposed in this NPRM.
54. Competitive Access Providers. Neither the Commission nor SBA
has developed a definition of small entities specifically applicable to
providers of competitive access services (CAPs). The closest applicable
definition under SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies (SIC 4813). The most
reliable source of information regarding the number of CAPs nationwide
of which we are aware appears to be the data that we collect annually
in connection with the TRS Worksheet. According to our most recent
data, 57 companies reported that they were engaged in the provision of
competitive access services. Although it seems certain that some of
these carriers are not independently owned and operated, or have more
than 1,500 employees, we are unable at this time to estimate with
greater precision the number of CAPs that would qualify as small
business concerns under SBA's definition. Consequently, we estimate
that there are fewer than 57 small entity CAPs that may be affected by
the decisions and rules proposed in this NPRM.
55. Wireless (Radiotelephone) Carriers. Although wireless carriers
have not historically affixed their equipment to utility poles,
pursuant to the terms of the 1996 Act, such entities are entitled to do
so with rates consistent with the Commission's rules discussed herein.
SBA has developed a definition of small entities for radiotelephone
(wireless) companies. The Census Bureau reports that there were 1,176
such companies in operation for at least one year at the end of 1992.
According to SBA's definition, a small business radiotelephone company
is one employing no more than 1,500 persons. The Census Bureau also
reported that 1,164 of those radiotelephone companies had fewer than
1,000 employees. Thus, even if all of the remaining 12 companies had
more than 1,500 employees, there would still be 1,164 radiotelephone
companies that might qualify as small entities if they are
independently owned and operated. Although it seems certain that some
of these carriers are not independently owned and operated, we are
unable at this time to estimate with greater precision the number of
radiotelephone carriers and service providers that would qualify as
small business concerns under SBA's definition. Consequently, we
estimate that there are fewer than 1,164 small entity radiotelephone
companies that may be affected by this NPRM.
56. Cellular Service Carriers. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to
providers of cellular services. The closest applicable definition under
SBA rules is for telephone communications companies other than
radiotelephone (wireless) companies (SIC 4812). The most reliable
source of information regarding the number of cellular service carriers
[[Page 43972]]
nationwide of which we are aware appears to be the data that we collect
annually in connection with the TRS Worksheet. According to our most
recent data, 792 companies reported that they were engaged in the
provision of cellular services. Although it seems certain that some of
these carriers are not independently owned and operated, or have more
than 1,500 employees, we are unable at this time to estimate with
greater precision the number of cellular service carriers that would
qualify as small business concerns under SBA's definition.
Consequently, we estimate that there are fewer than 792 small entity
cellular service carriers that may be affected by the decisions and
rules proposed in this NPRM.
57. Mobile Service Carriers. Neither the Commission nor SBA has
developed a definition of small entities specifically applicable to
mobile service carriers, such as paging companies. The closest
applicable definition under SBA rules is for telephone communications
companies other than radiotelephone (wireless) companies. The most
reliable source of information regarding the number of mobile service
carriers nationwide of which we are aware appears to be the data that
we collect annually in connection with the TRS Worksheet. According to
our most recent data, 117 companies reported that they were engaged in
the provision of mobile services. Although it seems certain that some
of these carriers are not independently owned and operated, or have
more than 1,500 employees, we are unable at this time to estimate with
greater precision the number of mobile service carriers that would
qualify under SBA's definition. Consequently, we estimate that there
are fewer than 117 small entity mobile service carriers that may be
affected by the decisions and rules proposed in this NPRM.
58. Broadband Personal Communications Services (PCS) Licensees. The
broadband PCS spectrum is divided into six frequency blocks designated
A through F and the Commission has held auctions for each block. The
Commission has defined ``small entity'' for Blocks C and F as an entity
that has average gross revenues of less than $40 million in the three
previous calendar years. For Block F, an additional classification for
``very small business'' was added and is defined as an entity that,
together with their affiliates, has average gross revenues of not more
than $15 million for the preceding three calendar years. These
regulations defining ``small entity'' in the context of broadband PCS
auctions has been approved by the SBA. No small businesses within the
SBA-approved definition bid successfully for licenses in Blocks A and
B. There were 90 winning bidders that qualified as small entities in
the Block C auction. A total of 93 small and very small business
bidders won approximately 40% of the 1,479 licenses for Blocks D, E,
and F. However, licenses for blocks C through F have not been awarded
fully, therefore there are few, if any, small businesses currently
providing PCS services. Based on this information, we conclude that the
number of broadband PCS licensees will include the 90 winning C Block
bidders and the 93 qualifying bidders in the D, E, and F blocks, for a
total of 183 small PCS providers as defined by the SBA and the
Commission's auction rules.
59. Specialized Mobile Radio (SMR) Licensees. Pursuant to 47 CFR
90.814(b)(1), the Commission has defined ``small entity'' in auctions
for geographic area 800 MHz and 900 MHz SMR licenses as a firm that had
average annual gross revenues of less than $15 million in the three
previous calendar years. This definition of a ``small entity'' in the
context of 800 MHz and 900 MHz SMR has been approved by the SBA. The
rules adopted in this NPRM may apply to SMR providers in the 800 MHz
and 900 MHz bands that either hold geographic area licenses or have
obtained extended implementation authorizations. We do not know how
many firms provide 800 MHz or 900 MHz geographic area SMR service
pursuant to extended implementation authorizations, nor how many of
these providers have annual revenues of less than $15 million. We
assume, for purposes of this FRFA, that all of the extended
implementation authorizations may be held by small entities, which may
be affected by the decisions and rules adopted in this NPRM.
60. The Commission recently held auctions for geographic area
licenses in the 900 MHz SMR band. There were 60 winning bidders who
qualified as small entities in the 900 MHz auction. Based on this
information, we conclude that the number of geographic area SMR
licensees affected by the rule adopted in this Order includes these 60
small entities. No auctions have been held for 800 MHz geographic area
SMR licenses. Therefore, no small entities currently hold these
licenses. A total of 525 licenses will be awarded for the upper 200
channels in the 800 MHz geographic area SMR auction. However, the
Commission has not yet determined how many licenses will be awarded for
the lower 230 channels in the 800 MHz geographic area SMR auction.
There is no basis, moreover, on which to estimate how many small
entities will win these licenses. Given that nearly all radiotelephone
companies have fewer than 1,000 employees and that no reliable estimate
of the number of prospective 800 MHz licensees can be made, we assume,
for purposes of this IRFA, that all of the licenses may be awarded to
small entities who, thus, may be affected by the decisions proposed in
this NPRM.
61. Resellers. Neither the Commission nor SBA has developed a
definition of small entities specifically applicable to resellers. The
closest applicable definition under SBA rules is for all telephone
communications companies (SIC 4812 and 4813). The most reliable source
of information regarding the number of resellers nationwide of which we
are aware appears to be the data that we collect annually in connection
with the TRS Worksheet. According to our most recent data, 260
companies reported that they were engaged in the resale of telephone
services. Although it seems certain that some of these carriers are not
independently owned and operated, or have more than 1,500 employees, we
are unable at this time to estimate with greater precision the number
of resellers that would qualify as small business concerns under SBA's
definition. Consequently, we estimate that there are fewer than 260
small entity resellers that may be affected by the decisions and rules
adopted in this NPRM.
62. Cable Systems (SIC 4841). The SBA has developed a definition of
small entities for cable and other pay television services, which
includes all such companies generating less than $11 million in revenue
annually. This definition includes cable systems operators, closed
circuit television services, direct broadcast satellite services,
multipoint distribution systems, satellite master antenna systems and
subscription television services. According to the Census Bureau, there
were 1,423 such cable and other pay television services generating less
than $11 million in revenue.
63. The Commission has developed its own definition of a small
cable system operator for the purposes of rate regulation. Under the
Commission's rules, a ``small cable company,'' is one serving fewer
than 400,000 subscribers nationwide. Based on our most recent
information, we estimate that there were 1,439 cable systems that
qualified as small cable system operators at the end of 1995. Since
then, some of those companies may have grown to serve over 400,000
subscribers, and others may have been involved in transactions that
caused them to be combined with
[[Page 43973]]
other cable systems. Consequently, we estimate that there are fewer
than 1,439 small entity cable system operators that may be affected by
the decisions and rules proposed in this NPRM.
64. The Communications Act also contains a definition of a small
cable system operator, which is ``a cable operator that, directly or
through an affiliate, serves in the aggregate fewer than 1 percent of
all subscribers in the United States and is not affiliated with any
entity or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' The Commission has determined that there are 61,700,000
subscribers in the United States. Therefore, we found that an operator
serving fewer than 617,000 subscribers shall be deemed a small
operator, if its annual revenues, when combined with the total annual
revenues of all of its affiliates, do not exceed $250 million in the
aggregate. Based on available data, we find that the number of cable
systems serving 617,000 subscribers or less totals 1,450. Although it
seems certain that some of these cable system operators are affiliated
with entities whose gross annual revenues exceed $250,000,000, we are
unable at this time to estimate with greater precision the number of
cable system operators that would qualify as small cable systems under
the definition in the Communications Act.
65. Municipalities: The term ``small governmental jurisdiction'' is
defined as ``governments of . . . districts, with a population of less
than fifty thousand.'' There are 85,006 governmental entities in the
United States. This number includes such entities as states, counties,
cities, utility districts and school districts. We note that section
224 of the Act specifically excludes any utility which is cooperatively
organized, or any person owned by the Federal Government or any State.
For this reason, we believe that section 224 will have minimal if any
affect upon small municipalities. Further, there are 18 States and the
District of Columbia that regulate pole attachments pursuant to section
224(c)(1). Of the 85,006 governmental entities, 38,978 are counties,
cities and towns. The remainder are primarily utility districts, school
districts, and states. Of the 38,978 counties, cities and towns, 37,566
or 96%, have populations of fewer than 50,000.
66. Reporting, Recordkeeping, and other Compliance Requirements:
The rules proposed in this NPRM will require a change in certain record
keeping requirements. A pole owner will now have to maintain specific
records relating to the number of attachers for purposes of computing
the usable and unusable space calculation for the telecommunications
carrier rate formula. We seek comment on whether small entities may be
required to hire additional staff and expend additional time and money
to comply with the proposals set forth in this NPRM. In addition, we
seek comment as to whether there will be a disproportionate burden
placed on small entities in complying with the proposals set forth in
this NPRM.
67. Significant Alternatives Which Minimize the Impact on Small
Entities and Which Are Consistent With State Objectives: The 1996 Act
requires the Commission to propose a telecommunications carrier
methodology within two years of the enactment of the 1996 Act. We seek
comment on various alternative ways of implementing the statutory
requirements and any other potential impact of these proposals on small
business entities. We seek comment on the implementation of a
methodology to ensure just, reasonable and nondiscriminatory pole
attachment and conduit rates for telecommunications carriers. We also
seek comment on how to develop a rights-of-way rate methodology for
telecommunications carriers.
68. Federal Rules which Overlap, Duplicate, or Conflict with the
Commission's Proposal: None.
X. Initial Paperwork Reduction Act of 1995 Analysis
69. This NPRM contains either proposed or modified information
collections. The Commission, as part of its continuing effort to reduce
paperwork burdens and to obtain regular Office of Management and Budget
(``OMB'') approval of the information collections, invites the general
public and OMB to comment on the information collections contained in
this rulemaking, as required by the Paperwork Reduction Act of 1995.
Public and agency comments are due at the same time as other comments
relating to this NPRM; OMB notification of action is due 60 days from
date of publication of this NPRM in the Federal Register. Comments
should address: (a) Whether the proposed collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
XI. Procedural Provisions
70. Ex parte Rules--Non-Restricted Proceeding. This is a non-
restricted notice and comment rulemaking proceeding. Ex parte
presentations are permitted, except during the Sunshine Agenda period,
provided that they are disclosed as provided in Commission's rules. See
generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
71. Pursuant to applicable procedures set forth in Secs. 1.415 and
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested
parties may file comments on or before September 26, 1997 and reply
comments on or before October 14, 1997. To file formally in this
proceeding, you must file an original and six copies of all comments,
reply comments, and supporting comments. Parties are also asked to
submit, if possible, draft rules that reflect their positions. If you
want each Commissioner to receive a personal copy of your comments, you
must file an original and eleven copies. Comments and reply comments
should be sent to Office of the Secretary, Federal Communications
Commission, 1919 M Street, NW., Room 222, Washington, DC 20554, with a
copy to Larry Walke of the Cable Services Bureau, 2033 M Street, NW.,
Room 408A, Washington, DC 20554. Parties should also file one copy of
any documents filed in this docket with the Commission's copy
contractor, International Transcription Services, Inc., 2100 M Street,
NW., Suite 140, Washington, DC 20037. Comments and reply comments will
be available for public inspection during regular business hours in the
FCC Reference Center, 1919 M Street, NW., Room 239, Washington, DC
20554.
72. Parties are also asked to submit comments and reply comments on
diskette, where possible. Such diskette submissions would be in
addition to and not a substitute for the formal filing requirements
addressed above. Parties submitting diskettes should submit them to
Larry Walke of the Cable Services Bureau, 2033 M Street, NW., Room
408A, Washington, DC 20554. Such a submission must be on a 3.5 inch
diskette formatted in an IBM compatible form using MS DOS 5.0 and
WordPerfect 5.1 software. The diskette should be submitted in ``read
only'' mode. The diskette should be clearly labelled with the party's
name, proceeding, type of pleading (comment or reply comments) and date
of
[[Page 43974]]
submission. The diskette should be accompanied by a cover letter.
73. Written comments by the public must be submitted at the same
time as those of the Office of Management and Budget (OMB) on the
proposed and/or modified information collections on or before 60 days
after publication of the NPRM in the Federal Register. In addition to
filing comments with the Secretary, a copy of any comments on the
information collections contained herein should be submitted to Judy
Boley, Federal Communications Commission, Room 234, 1919 M Street, NW.,
Washington, DC 20554, or via the Internet to jboley@fcc.gov, and to
Timothy Fain, OMB Desk Officer, 10236 NEOB, 725-17th Street, NW.,
Washington, DC 20503 or via the Internet to fain__t@al.eop.gov.
XII. Ordering Clauses
74. It is ordered that pursuant to sections 1, 4(i), 4(j), 224, 303
and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151,
154(i), 154(j), 224, 303 and 403, notice is hereby given of the
proposals described in this Notice of Proposed Rulemaking.
75. It is further ordered that the Secretary shall send a copy of
this NPRM, including the IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration in accordance with the Regulatory
Flexibility Act, 5 U.S.C. 603 (2).
76. For additional information regarding this proceeding, contact
Larry Walke, Policy and Rules Division, Cable Services Bureau (202)
418-7200.
List of Subjects in 47 CFR Part 76
Cable television.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Note: This attachment will not be published in the Code of
Federal Regulations.
Attachment--Pole Attachment Formulas (Modified as Proposed)
Telecommunications Companies:
Maximum Rate = (Space Occupied by Attachment x Carrying Charge Rate
x Net Pole Investment x .95) Total # of Poles
Total Carrying Charge Rate = Administrative + Maintenance +
Depreciation + Taxes + Return
Administrative Carrying Charge Rate = (Total Administrative and General
(Accounts 6710+6720 + 6110+6120 + 6534+6535)) (Gross Plant
Investment - Accum. Depreciation, Account 3100 - Accum. Deferred Taxes,
Plant)
Maintenance Carrying Charge Rate = (Account 6411 - Rental Expense,
Poles) Net Pole Investment
Depreciation Carrying Charge Rate = Depreciation Rate, Poles
Tax Carrying Charge Rate = Operating Taxes, Account 7200
(Gross Plant Investment - Accum. Depreciation, Account 3100 - Accum.
Deferred Taxes, Plant)
Return Carrying Charge Rate = Applicable Rate of Return
Space Occupied by Attachment = 1 foot
Total Usable Space = 13.5 feet (Subject to Rebuttal)
Gross Plan Investment = Account 2001
Gross Pole Investment = Account 2411
Net Pole Investment = Account 2411 - Accum. Depreciation, Poles -
Accum. Deferred Income Taxes, Poles
[FR Doc. 97-21818 Filed 8-15-97; 8:45 am]
BILLING CODE 6712-01-P
