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In Implementation of the Local Competition Provisions in the  S& - xTelecommunications Act of 1996  ("Local Competition Provisions Order")V\& 0# {O- xԍ 11 FCC Rcd. 15499, paras. 11191248 (1996). See Iowa Utilities Board v. Federal Communications  {O- xCommission, Docket 963321 (September 27, 1996)(the court ordered a hearing and imposed a temporary stay of the Commission's Interconnection Order).V the Commission implemented the access provisions of the 1996 Act, Sections 224(c)(1), (f) and (h).  S - ` x8. ` ` Under Section 224(d)(3) the Commission's existing rules are applicable to both cable  S - xtelevision systems and to telecommunications carriers until such time as the new rules become effective.C T # yO|-ԍ 47 U.S.C.  224(d)(3).C  S`- xOn March 14, 1997, the Commission released a Notice of Proposed Rulemaking, Amendment of Rules and  S:- xPolicies Governing Pole Attachments, CS Docket No. 9798 ("Pole Attachment Notice"): )Y {O- xԍ Notice of Proposed Rulemaking, Amendment of Rules and Policies Governing Pole Attachments, CS Docket No. 9798, FCC No. 9794 (March 14, 1997). relating to the  xexisting formula for pole attachments. Parties need not file duplicate comments to address issues raised  x/in that proceeding. We have determined that, to the extent such comments are relevant in the instant  xproceeding, they will be incorporated by reference within this proceeding. That proceeding specifically  xseeks comment on the Commission's use of the current presumptions, on carrying charge and rate of return  xelements of the formula, on the use of gross versus net data, and on a new conduit methodology.  SL- xCommenters to the Pole Attachment Notice are encouraged to distinguish their comments in that  S&- xproceeding if they vary from those filed in response to this Notice, as well as providing comment on the  S- xnew and different issues raised in this Notice as a result of 1996 Act. We invite further comment in this  xLproceeding to establish a full record for attachments made by cable systems offering telecommunications services and by telecommunications carriers under the 1996 Act.  Sb- ` x9. ` ` Most significantly for purposes of this Notice, the 1996 Act added the following provisions of Section 224(e):"<> ,`(`(88"Ԍ ԙXx(e)(1) The Commission shall, no later than 2 years after the date of enactment of the  PTelecommunications 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.   `Xx(e)(2) A utility shall apportion the cost of providing space on a pole, duct, conduit, or  orightofway other than usable space among entities so that such apportionment equals  twothirds 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.   S -  Xx(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.   Xx(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  S-effective date of such regulations.  x  S- `  x 10. ` ` This Notice considers the portion of the costs of a bare pole to be included in the pole  xjattachment rate. Currently, a portion of the total annual cost of a pole is included in the pole attachment  xrate based on the portion of the usable space occupied by the attaching entity. This formula will continue  xto be applicable to cable systems providing only cable service. However, for cable systems and  xtelecommunications carriers providing telecommunications services, the portion of the total annual cost  xincluded in the pole attachment rate will be determined under a more delineated method. This method  xdifferentially allocates the costs of the portion of the total pole cost associated with the usable portion of  xthe pole and the portion of the total pole cost associated with the unusable portion of the pole. Generally,  xthis is expected to result, at least initially, in the inclusion of greater portions of the carrying charge  xcomponents in the rate. As the number of attaching entities increases, however, smaller portions of the  S-carrying charge will be included in each entity's rate.# yOj- xԍ 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. x  S- ` ~x11. ` ` Section 224(e) requires two discrete steps. First, twothirds of the costs relating to the  x.other than usable space on the pole, duct, conduit or rightofway will be apportioned equally among all  Sb- xattaching telecommunications carriers.Cb # yO"#-ԍ 47 U.S.C.  224(e)(2).C Second, telecommunications carriers will also be apportioned the  S:-cost of usable space, according to the amount of usable space the entity requires.C:# yO%-ԍ 47 U.S.C.  224(e)(3).C  S - III.x  PREFERENCE FOR NEGOTIATED AGREEMENTS " @,`(`(88t""Ԍ S- ` #ԙx12. ` ` In proposing a methodology to implement Section 224(e), we note that the Commission's  S- xrole is limited to circumstances "when the parties fail to resolve a dispute over such charges."B# yO@-ԍ 47 U.S.C.  224(e)(1)B Thus,  xnegotiations between a utility and an attacher should continue to be the primary means by which pole  x>attachment issues are resolved. We believe that an attacher must attempt to negotiate and resolve its  x.dispute with a utility before filing a complaint with the Commission. However, we also note that in the  xy1996 Act, Congress recognized the importance of access in enhancing competition in telecommunications  xmarkets and that parties in a pole attachment negotiation do not have equal bargaining positions.  xCongress also recognized that the potential for significant barriers to competition emanating from the lack  xkof access or unreasonable rates is significant. Accordingly, we propose to use our current rule, which  xrequires a complainant to include a brief summary of all steps taken to resolve its dispute before filing  Sp- xa complaint.= XpX# yOh - xԍ 47 C.F.R.  1.1404(i). "The complaint shall include a brief summary of all steps taken to resolve the problem  xZprior 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.  S - IV. ATTACHMENT SPACE USE  S - ` 2x13. ` ` Attachment space use must conform to the standards of Section 224(f)(2) with respect to  xsafety, reliability and generally applicable engineering standards. When an attaching entity conforms to  xthese standards, the issue remaining is whether a utility may impose additional limits on the use of the  xjspace. We note, for example, in the context of a pole attachment by a cable television system which also  xprovides nonvideo communication, the Commission has determined that a utility may not charge different  S- xpole attachment rates depending on the type of service provided by the cable operator.)!x# {O- xԍ See Heritage Cablevision Assocs. of Dallas, L.P. v. Texas Utils. Elec. Co., 6 FCC Rcd. 7099 (1991), recon.  {O-dismissed, 7 FCC Rcd. 4192, aff'd sub nom. Texas Utils. Elec. Co. v. FCC, 997 F.2d 925 (D.C. Cir. 1993).) The Commission  x=found that "Section 224 protects TCI's pole attachments within its franchise service area which support  x{equipment employed to provide nonvideo services in addition to video and other traditional cable  xtelevision services" and that the "imposition of a separate charge for TCI's cable system pole attachments  xNfor nontraditional services violates Section 224's prohibition against unjust and unreasonable pole  S- x.attachment rates, terms and conditions."8"# yO-ԍ Id. at 7107 8 We seek comment on whether our holding in Heritage should  x\be extended to other circumstances where utilities attempt to condition or limit the use of attachment space.  Sx- ` x14. ` ` Notably, in January 1995, the Common Carrier Bureau issued a Public Notice to Owners  x\of Utility Poles concerning the "serious anticompetitive effects from preventing cable operators from  S(- xadding fiber to their systems."#(d # {O,%-ԍ Common Carrier Bureau Cautions Owners of Utility Poles, Public Notice, DA 9535 (January 11, 1995). At the time, we became aware of the constraints being placed on cable  xsystems that sought to overlash fiber optic lines to their existing coaxial cable lines in order to build out  xtheir facilities. We indicated that while there may be legitimate safety concerns, we affirmed our" #,`(`(88L"  xcommitment to ensure that the growth and development of cable system facilities not be hindered by an  xunreasonable denial of overlashing by a utility owner. Parties were encouraged to seek Commission relief in situations involving unreasonable conduct by pole owners.  S`- ` Dx15. ` ` Given the pro-competitive intent of the 1996 Act, we tentatively conclude that  xtelecommunications carriers should be permitted to overlash their existing lines with additional fiber when  xbuilding out their system. If a telecommunications carrier is allowed to overlash its own lines, should it  x.be permitted to allow third parties to use the overlashed facility? Moreover, we seek comment whether  xa cable system or telecommunications carrier may allow a third party to use dark fiber in its original lines.  xWhere an attaching entity has overlashed with fiber, should it be permitted to allow third parties to use  xdark fiber within its overlashed line? We inquire whether a third party should be permitted to overlash  xto an existing cable system or telecommunications carriers' attachment. We also seek information whether  xthere are inherent differences between the lines of cable systems and those of telecommunications carriers  x>that warrant a difference in treatment between overlashing by cable systems and telecommunications  xcarriers. Similarly, we request that commenters discuss whether, and to what extent, overlashing facilitates  xkthe provision of services other than cable service by cable operators, such as Internet access and local  x\telephone service. We seek information on how these situations should be treated for the purpose of  xcounting entities in the process of establishing a just and reasonable rate. We seek comment on the  xcontractual obligations that utilities should be permitted to require of attaching entities who lease excess  xdark fiber or allow overlashing. We inquire how best to promote the rapid deployment of competitive telecommunications services in light of these issues.  S- V. CHARGES FOR ATTACHING  S@-x A.` ` Presumptions  S- ` x16. ` ` In the First Report and Order,@$# yOX-ԍ 68 FCC 2d 1585 (1978).@ the Commission sought comment regarding the amount  xof usable space for various size poles in different service areas. The total usable space is the space on  xthe utility pole above the minimum grade level that is usable for the attachment of wires, cables, and  Sz- x=related equipment.t%zX# {Or-ԍ See Second Report and Order, 72 FCC at 69, 47 C.F.R.  1.1402(c).t The Commission's determinations were based upon the outcome of survey results,  xconsideration for the National Electric Safety Code ("NESC"), and practical engineering standards used  x=in the construction of utility poles. The Commission found that "the most commonly used poles are 35  S- xand 40 feet high, with usable spaces of 11 to 16 feet, respectively.":&# {O -ԍ Id. at 69.: The Commission recognized the  S- d(#NESC guideline that 18 feet of the pole space must be reserved for ground clearance^'|# {O"-ԍ Second Report and Order, 72 FCC 2d at 68 n.21.^ and that six feet  S- d(#of pole space is for setting the depth of the pole.3(# {O`%-ԍ Id.3 To avoid a pole by pole rate calculation, the  d(#=Commission adopted rebuttable presumptions of an average pole height of 37.5 feet, an average amount  d(#of usable space of 13.5 feet, and an average amount of 24 feet of unusable space on a pole. In addition,"b(,`(`(88"  d(#the Commission created a rebuttable presumption of one foot as the amount of space a cable television attachment occupies.  S- 17. ` ` A group of electrical utilities recently filed a Whitepaper ("Whitepaper") in anticipation  S`- d(#of this Notice.)`# {O- xԍ See Whitepaper filed by the law firm of McDermott, Will and Emery on August 28, 1996. The Whitepaper  xwas filed on behalf of the American Electric Power Service Corporation, Commonwealth Edison Company, Duke  x;Power Company, Entergy Services, Inc., Florida Power and Light Company, Northern States Power Company, The  xSouthern Company and Washington Water Power Company. The Whitepaper is available in the Commission's public reference room under the docket in this proceeding and has been placed on the Commission's web site. The Whitepaper suggests that an increase in the current presumptive pole height is  d(#[appropriate. The Whitepaper asserts that over time, and with increased demand, the average pole height  d(#.has increased to an average of 40 feet. At the same time, the Whitepaper contends that the usable space  S- d(#|presumption should also be changed from 13.5 feet to 11 feet.:*z# {O -ԍ Id. at 11.: We sought comment on these  S- d(#kpresumptions in the Pole Attachment Notice, however, we seek further comment in this proceeding to establish a full record for attachments made by telecommunications carriers under the 1996 Act.  SL - 18. ` ` We also seek comment on an issue raised by Duquesne Light Company ("Duquesne") in  S$ - d(#its reconsideration petition of the Commission's decision in the Local Competition ProvisionsU+$ # yO-ԍ 11 FCC Rcd. 15499, paras. 11191248 (1996).U  S - d(#=proceeding.x,\ # {O:- xԍ See Comments of Duquesne Light in the Local Competition Provisions Proceeding, CC Docket No. 9698, at  xw1718, filed on Sept. 30, 1996. Duquesne Light's comments are available in the Commission's public reference room  {O-under the Local Competition Provisions docket.x Specifically, Duquesne advocates that the number of physical attachments of an attaching  S - d(#Mentity is not necessarily reflective of the burden, and therefore the costs, relating to the attachment.3- # {O6-ԍ Id.3  d(#>Duquesne states that varying attachments place different burdens on the pole and proposes that any  S -presumption include factors addressing weight and wind loads.3. R # {Ox-ԍ Id.3  S6- 19. ` ` The presumptions were established because developing a data base for each utility is  d(#.impractical. The costs relating to such an undertaking outweigh any benefit accruing to either the utility  d(#Nor the attaching entity. The Commission has affirmed the basis of these presumptions on several  S- d(#occasions./# {OB"- xԍ See Second Report and Order, 72 FCC 2d at 69; Third Report and Order, 77 FCC 2d at 192; Usable Space  {O #-Order, slip op. at para. 12. We note, however, that our experience has been limited to cable system operator attachments.  d(#We seek comment on the need for presumptions and whether attachments by telecommunications carriers  d(#>are sufficiently different or unique to cause us to reevaluate our presumptions. Specifically, we seek  d(#kcomment 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. " @/,`(`(88C"Ԍ S- 20. ` ` We also propose that the Commission's approach to the safety space required to be  d(# maintained between power lines and communications lines should also apply to telecommunications  S- xzcarriers.B0# {O-ԍ Id. at para. 7. B The Commission has always recognized the NESC requirement that a 40 inch safety space  S- xmust exist between electric lines and communication lines.1Z# {O- xԍ See Second Report and Order, 72 FCC 2d at 6970; Third Report and Order, 77 FCC 2d at 190; Usable Space  {OL-Order, slip op. at para. 7. The NESC requires a 40 inch safety space  xto minimize the possibility of physical contact by employees working on cable television or  S8- xtelecommunications attachments with the potentially lethal electric power lines.\28# {O -ԍ Second Report and Order, 72 FCC 2d at 6970.\ We tentatively conclude  xthat 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. x  S-x B.` ` Allocating the Cost of Other Than Usable Space  SH -x21. ` ` Section 224(e)(2) states that:   XxA utility shall apportion the cost of providing space on a pole, duct, conduit, or rightofway other  S -  {than the usable space among entities so that such apportionment equals twothirds of the costs of  S -  1providing 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: x` ` hh@Net Cost of  S-2/3xX` ` Unusable SpacehhX@a Bare PoleppX  Carrying  S-x` ` Pole Heighthh@Number ofpp  Charges x` ` hh@Attachers  S- ` nx22. ` ` Under section 224(e)(2), the number of entities with pole attachments on each pole affects  xdirectly the rate charged. Defining what an attacher is and establishing how to calculate the number of  xattachers is critical to formulating a proper cost allocation method pursuant to Section 224(e)(2). The  xymore attaching entities there are, the more widely the costs relating to the unusable space are spread. We  xpropose, consistent with the statutory language, requiring equal apportionment of two-thirds of the costs  xzof providing unusable space among all attaching entities, that any telecommunications carrier, or cable  xoperator or LEC attaching to a pole be counted as a separate entity for the purposes of the apportionment  xof two-thirds of the costs of the unusable space. We also propose that such costs will be apportioned  xkequally to all such attaching entities. We seek comment on these tentative conclusions. We also note  xthat Section 224(g) requires that a utility providing telecommunications services impute to its costs of  xyproviding service an amount equal to the rate for which such company would be liable under this section.  xyWe tentatively conclude that where a utility is providing telecommunications services, such entity would  xalso 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. " H2,`(`(88t""Ԍ S- ` x23. ` ` We also tentatively conclude that an incumbent LEC with attachments on a pole should  xbe counted for the purposes of apportionment of the costs of unusable space. We note that the definition  xof telecommunications carrier excludes incumbent LECs and a pole attachment is defined as any  S- xattachment by a cable television system or a provider of telecommunications service,H3# yO-ԍ 47 U.S.C.  224(a)(4), (5).H and seek comment  xLon how these definitions impact our tentative conclusion. We also seek comment on the general premise  xthat counts any telecommunications carrier as a separate attaching entity for each foot, or partial increment  xof a foot, it occupies on the pole and on such a methodology's consistency with the statutory requirement  xin 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.  Sp- ` x24. ` ` Similarly, we propose that attachments made by a government agency be included. A  xutility may be required under its franchise or statutory authorization to provide certain attachments for  xpublic use. These include traffic signals, festoon lighting, or specific pedestrian lighting. Often, the  xagency does not directly pay for the attachment. Since the government agency is using space on the pole,  xwe propose that its attachments be counted for purposes of allocating the cost of the unusable space. This  xcost 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.  S0- ` ox25. ` ` We seek comment on how entities that have either overlashed to an existing attachment  xor are using dark fiber within the initial attachment of another entity should be counted for the purpose  xyof allocation of costs of unusable space. Should they be considered as separate attachers for purposes of counting the number of entities on a pole?  Sh- ` x26. ` ` We believe a polebypole inventory of the number of entities on each pole would be too  xcostly. We propose that each utility develop, through the information it possesses, a presumptive average  xnumber of attachers on one of its poles. We also propose that telecommunications carriers be provided  xthe methodology and information by which a utility's presumption was determined. We seek comment  xon this proposal and whether any parameters should be established for a utility to develop its presumptive  x=average. We also seek comment on whether a utility should develop averages for areas that share similar  xcharacteristics relating to pole attachments and whether different presumptions should exist for urban,  xsuburban, and rural areas. We seek comment on the criteria to develop and evaluate any presumption.  S- ` x27. ` ` As an alternative to a pole by pole inventory by the facility owner, we seek comment on  xwhether the Commission should determine the average number of attachments. We inquire whether the  xCommission should initiate a survey to gain the necessary data to develop a rebuttable presumption  xregarding the number of attachments. We seek comment on the difficulties of administrating a survey,  xany additional data required, and parameters of accuracy and reliability required for fair rate determination. x  S!- ` x28. ` ` Where a presumptive number of attachers is developed by the Commission and used to  xdetermine attachment rates, we believe that a utility, telecommunications carrier or cable operator may  xzchallenge the presumption. The challenging party must initially establish that the presumption is not  xproper under the circumstances by identifying and calculating the number of attachments on the poles and  xNsubmitting what it believes to be an appropriate average. Where the number of poles is large, and" % X3,`(`(88&"  xcomplete inspection impractical, a statistically sound survey should be submitted. Where a presumption  xis challenged, the challenged party will be afforded an opportunity to justify the presumption. Where a  xpresumption is overcome either by submission of actual data or by survey, the resulting figures would be  xused as the factor (number of attachers) within the formula to calculate the rate. We seek comment on these issues.  S-x C.` ` Allocating the Cost of Usable Space x  S- ` ox29. ` ` The Commission has adopted the following generally applicable formula for calculating  S-the maximum rate:4^# {O - xԍ See Second Report and Order, 72 FCC 2d at 6775, Teleprompter of Fairmont, Inc. v. Chesapeake and  {O - xPotomac Telephone Co. of West Virginia, PA 790029, 79 FCC 2d 232 (1980); Continental Cablevision of New  {O -Hampshire, Inc. v. Concord Electric Co., Mimeo No. 5536 (Com Car. Bur., July 3, 1985).   SH - Maximum Rate = Space Occupied by Attachment  X Net Cost of a X Carrying  S - ` ` Total Usable Space Bare Pole Charge Rate   S - ` ~x30. ` ` The first component of the formula, space occupied by attachment divided by the total  xusable space on a pole, is used to calculate the percentage of usable space that the attachment occupies  xon an average pole. The Commission's rules define usable space as the space on a utility pole above the  SX- xMminimum grade level that can be used for the attachment of wires, cables and associated equipment.C5X# yO-ԍ 47 C.F.R.  1.1402(c).C  S0- xAs discussed, for cable television system attachments, the Commission's Petition to Adopt Rules  S - x=Concerning Usable Space on Utility Poles assigned one foot of usable space per pole to cable systems.Z6 ~# {O(-ԍ Usable Space Order, slip op. at para. 10. Z  S-   S- `  x31. ` ` The second component of the overall formula is the net cost of a bare pole. The  x=component is derived from the gross investment in poles less accumulated depreciation and accumulated  xdeferred income taxes. An adjustment is made to a utility's net pole investment to eliminate the  x.investment in crossarms and other nonpole related items. To accomplish this, the Commission decided  S- xto reduce net pole investment by 15% for electric utilities and 5% for telephone companies.7"# yO- xԍ The two factors reflect the differences between telephone companies' and electric utilities' investment in  xcrossarms and other nonpole investment that is recorded in the pole accounts. Electric utilities typically have more  xJinvestment in crossarms than telephone companies. The 0.85 factor for electric utilities recognizes this difference.  {O -See Pole Attachment Order, 2 FCC Rcd at 4390.  To arrive  xat 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:  ST-  Net Cost of a = Factor X Net Pole Investment"T 7,`(`(88"Ԍ S- Bare Pole8$# {Oh- xxԍ See Pole Attachment Order, 2 FCC Rcd at 4402, Appendix A. This formula rearranges the Pole Attachment  {O2- xOrder's net cost of a bare pole formula for presentation purposes. Net pole investment is defined as the gross  xinvestment in poles less accumulated depreciation and accumulated deferred income taxes with respect to pole  yO-investment.  Number of Poles T TPWe seek comment on the use of these factors for arriving at the net cost of bare pole.  S`- ` Bx32. ` ` The final component of the overall pole attachment formula is the carrying charge rate.  xCarrying charges are the costs incurred by the utility in owning and maintaining poles regardless of the  xjpresence of pole attachments. The carrying charges include the utility's administrative, maintenance, and  xdepreciation expenses, a return on investment, and taxes. To help calculate the carrying charge rate, we  S-developed a formula that relate each of these components to the utility's net investment.9# {O - xԍ Pole Attachment Order, 2 FCC Rcd at 440203, Appendix A. We discuss the carrying charge rate formula  yO -below.  Sp- ` x33. ` ` Section 224(e)(3) states that: "[A] utility shall apportion the cost of providing usable space  SH - x among all entities according to the percentage of usable space required for each entity."C:H # yO-ԍ 47 U.S.C.  224(e)(3).C This is the  xallocation methodology developed by the Commission as applicable to cable systems except that under  S - xLthe Commission's method the allocation rate is applied to the full cost of the pole. As noted, in the Pole  S - x Attachment Notice,; # {O- xwԍ Notice of Proposed Rulemaking, Amendment of Rules and Policies Governing Pole Attachment, CS Docket No. 9798, FCC No. 9794 (March 14, 1997). we are seeking comment on various aspects of the current formula including the  xcurrent space presumptions. We propose to continue using our current rate methodology, modified to  xreflect only the cost associated with the usable space, because we believe this methodology to be as  S\- xapplicable to telecommunications carriers as to cable systems.G<\ # {O-ԍ See supra paras. 1519.G Thus, we would apply the following formula:  S -x` `  hh@hpp Net Cost  S- Space Occupied by Attachment hhX@Usable SpaceppX of a  XxxCarrying  S- xTotal Usable Spacehh@Pole Heightpp Bare Pole  xxCharges  Sl- ` x34. ` ` Alternatively, as we did in the Pole Attachment Notice, we seek additional comment in  xthe context of this proceeding on calculating a telecommunications carrier pole attachment rate using gross  S- xbook costs instead of net book costs.= # yOH#- xԍ Gross book cost is the original cost of the poles. Net book cost is the original cost of the poles less accumulated depreciation. Under this approach the cost of a bare pole and most carrying" =,`(`(88D"  S- xcharges are computed using gross book costs. ># yOh- xԍ The rate of return and the income tax carrying charges must continue to be computed using net book costs  xibecause utility prices are generally set to allow them to earn an authorized rate of return on their net book costs.  xWe currently compute the carrying charge elements for maintenance, depreciation and administrative expenses, as  xwell as for return on investment and taxes, using net book costs. Under the proposed alternative, the carrying charge  xelements for maintenance, depreciation and administrative expenses would be calculated using gross book costs for  xKboth total plant investment and pole investment. For example, the administrative expense element is currently  xcalculated by dividing total administrative and general expenses by net book cost. This yields a percentage that is  x;applied to the net book cost of a bare pole. In contrast, a gross book cost approach to allocation would divide total  xadministrative 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,9?` # yO -ԍ 2 FCC Rcd 4387.9 the Commission had decided  S- xcertain cases using gross book costs to calculate maximum reasonable pole attachment rates.@^ # {OB- xԍ See, e.g., Capital Cities Cable, Inc. v. Southwestern Public Service Co., Mimeo No. 5431 (June 28, 1985);  {O - xBooth American Co. v. Duke Power Co., Mimeo 3064 (Com. Car. Bur., Mar. 22, 1984); Teleprompter of  {O-Greenwood, Inc. v. Duke Power Co., Mimeo 001866 (Com. Car. Bur., July 6, 1981). In addition,  xjthe Commission has stated that if both parties to a pole attachment complaint agree, the pole attachment  Sb- xrates may be computed using gross book costs.Ab# {O- xԍ TeleCable of Piedmont, Inc. et al. v. Duke Power Company, Hearing Designation Order, DA 951362, (Com. Car. Bur., June 15, 1995). The use of gross book costs appears consistent with the  xlegislative history supporting Section 224, which indicates that the Commission has significant discretion  S- xin selecting a methodology for determining just and reasonable pole attachment rates.IBp# {O"-ԍ 1977 Senate Report at 9. I We seek comment  xon this alternative to ensure a complete record in order to create a reasonable telecommunications carrier  xpole attachment rate methodology. We note, however, that because of the way administrative costs are  xallocated, the application of gross book costs may produce a slightly higher rate. We seek comment on  Sr-whether this assumption is true and if so what the impact of this change would be.  x  S" - ` 3x35. ` ` We also seek comment on the applicability of the above formula when an entity either  xMhas overlashed to an existing attachment or is using dark fiber within the initial attachment of another  x<entity. Should we still continue to apply the presumptive one foot of space occupied by the attacher when  xallocating the cost of the usable space or should the entity overlashing or using dark fiber be considered  xa separate attacher, with each using one foot of usable space? As noted previously, if the presumptive  SZ-one foot is not appropriate, we inquire as to what presumption should be used?9CZ# yO!-ԍ See para 22. 9  S2- "2C,`(`(88"Ԍ S- VI.xCONDUIT ATTACHMENT ISSUES  S-xA.` ` Application of the Pole Attachment Formula to ConduitsD i yO- xԍ Conduit systems are structures that provide physical protection for cables and also allow new cables to be  xadded inexpensively along a route, over a long period of time, without having to dig up the streets each time a new  xcable is placed. Conduit systems are usually multipleduct 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.  1. 1. 1. a.(1)(a) i) a) 1. a. i.(1)(a)(i) 1) a)       S`- ` `x36. ` ` We seek additional comment on the differences between conduit owned and/or used by  xcable operators and telecommunications carriers and conduit owned and or used by electric or other  x utilities. We understand that there are inherent differences in the safety aspects of the latter conduits and  x=ducts, and we seek comment on physical limitations that would affect the rate for such facilities. Where  xLsuch conduit is shared, we seek information on the mechanism for establishing a just and reasonable rate.  xWe seek comment on the distribution of usable and unusable space within the conduit or duct and how  Sp- xthe determination for such space is made. In this Notice we are not addressing the access or safety  SJ - x>provisions, as those issues are more appropriately addressed in the context of the Local Competition  S$ - xProvisions Order.NE$ )Y yOt-ԍ 11 FCC Rcd 15499, paras. 11191248.N Rather, we are interested in the application of our formula for the purpose of setting  xjust 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.  S - ` px37. ` ` As with pole attachments, the 1996 Act requires that the maximum conduit rate for  xtelecommunications carriers be established through separate allocations relating to usable space and  S6-unusable space.  S- ` x38. ` ` Usable space is based on the number of ducts and the diameter of the ducts. Section  x.224(e)(3) states that the cost of providing usable space shall be apportioned according to the percentage  S- xof usable space required for the entity using the conduit. In the Pole Attachment Notice,VF@# {Ov-ԍ Pole Attachment Notice at paras 1820.V the Commission  Sp- x-has sought comment on a proposed conduit methodology. Moreover, we propose a halfduct methodology  x.as the amount of space used by a cable system or telecommunications carrier that is, the space occupied  S -by a cable system was generally a halfduct.G # {O- xԍ See Id. (citing Greater Media, Inc. v. New England Telephone and Telegraph, Massachusetts D.P.U. 91218 (1992)).  S- ` `x39. ` ` The proposed usable space formula for users of conduits would thus be represented as follows:     SX-x` ` 1 Duct hhX@1hXppNet Linear  XxxCarrying  S0-x` ` Average Number hh@2hppCost of Usable xxCharges (#(#X  S-x` ` of Ducts less hh@hppConduit Space x` ` Adjustments for x` ` maintenance ducts", G,`(`(88"Ԍ S- xԙWe seek comment on this presumption's applicability in determining usable space and allocating cost to the telecommunications carrier.  S- ` 2x40. ` ` As discussed above, Section 224(e)(2) requires that twothirds of the cost of the unusable  xspace be apportioned equally among all attaching entities. The unusable space formula would then be represented as follows: x` `   Net Linear Cost x` `   of Unusable  S-x` ` 2/3 X  Conduit Space hXppCarrying  Sp-x` `   Number of@hppCharges  SH -x` `   Attachers x` `  A?  x.We seek comment on what portions of duct or conduit are "unusable" within the terms of the 1996 Act.  S - xWe propose that a presumptive ratio of usable ducts to maintenance ducts be adopted to establish the  xLamount of unusable space. We seek comment on how this proposal impacts determining an appropriate  S -ratio of usable to unusable space within a duct or conduit. pp  S0- ` x41. ` ` As with poles, defining what an attaching entity is and establishing how to calculate the  S- xnumber of attaching entities is critical. We also seek comment on the use an attaching entity may make  x{of its assigned space, including allowing others to use its dark fiber. Consistent with the halfduct  S- xconvention proposed in the Pole Attachment Notice,3H# {O -ԍ Id.3 we believe that each entity using one halfduct be  S- xcounted 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). x  S- VII.xRIGHTSOFWAY ISSUES  S- ` x42. ` ` The access and reasonable rate provisions of Section 224 are applicable where a cable  xkoperator or telecommunications carrier seeks to install facilities in a rightofway but does not make a  xphysical attachment to any pole, duct or conduit. The Commission's proceedings and cases generally have  xaddressed issues involving physical attachments to poles, ducts, or conduits. Our experience relating to  xsolely rightsofway circumstances is limited. We seek information regarding the degree rightsofway access issues will arise and the range of circumstances that will be involved.  S- ` x43. ` ` We ask whether the Commission should adopt rules reflecting a methodology and/or  xformula to determine a just and reasonable rate, or whether rightsofway complaints should be addressed  xon a casebycase basis. We seek comment on whether rightsofway cases will be of such number that  xa methodology is necessary, and whether the range of circumstances involving rightsofway can be  x!discerned into a generic methodology. If a methodology is appropriate, we seek comment on the  xLelements, including any presumptions, that will calculate the costs relating to usable and unusable space.  xWe also seek information regarding whether information necessary for any formula is available through  xa utility's accounting structure, as costs relating to rightsofway may be different than poles, ducts and conduit.  SJ$- "J$ZH,`(`(88%"Ԍ S-x VIII.xIMPLEMENTATION  S- ` x44. ` ` Section 224(e)(4) requires the Commission to implement the telecommunications carrier  S- xrate methodology on February 8, 2001.6I# yO-ԍ Section 224(e)(4) states that: Xx(#    XxThe 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  nfrom 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. 6 The statutory language of Section 224(e)(4) requires that any  x[x rate increase be phased in over five years in equal annual increments beginning on that date. We propose  xthat the amount of increase should be phased in at the beginning of the five years and onefifth of that  xamount should be added to the rate in each of the subsequent five years. We seek comment on this  x=proposed five year phase in of the telecommunications carrier rate. We also seek comment on any other  xLproposals that would equitably phase in the telecommunication carrier rate within the five years allotted by Section 224(e)(4). x  SH - IX.xINITIAL REGULATORY FLEXIBILITY ACT ANALYSES  S -  S - ` x45. ` ` As required by the Regulatory Flexibility Act (RFA),tJZ @# {O- xԍ See 5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et. seq. has been amended by the Contract with America  xAdvancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).t the Commission has prepared an  xInitial Regulatory Flexibility Analysis (IRFA) of the expected significant economic impact on small  x-entities by the policies and rules proposed in this Notice of Proposed Rulemaking (Notice). Written public  xjcomments are requested on the IRFA. Comments must be identified as responses to the IRFA and must  xbe filed by the deadlines established in paragraph 76 of this Notice. The Secretary shall send a copy of  xthis Notice, including the IRFA, to the Chief Counsel for Advocacy of the Small Business Administration  S-(SBA) in accordance with the RFA.BKb # yO -ԍ 5 U.S.C.  603(a). B  S- ` x46. ` ` Need for Action and Objectives of the Proposed Rule. In 1987, the Commission adopted  xits current pole attachment formula for calculating the maximum just and reasonable rates utilities may  Sj- xcharge cable systems for pole attachments. In this Notice, we seek comment as to whether the current  x|pole attachment formula should be modified or adjusted to eliminate certain anomalies and rate  x\instabilities particular parties assert have occurred. We have also tentatively proposed such possible  xmodifications to the formula, should altering the formula become necessary, that would improve the  xaccuracy of the formula. In addition, we propose changes to the formula to reflect the present Part 32  xzaccounting system that replaced the former Part 31 rules in 1988. Finally, we propose a new conduit  xmethodology that will determine the maximum just and reasonable rates utilities may charge   cable systems and telecommunications carriers for their attachments to conduit systems. ", K,`(`(88l"Ԍ S- ` 3x47. ` ` Legal Basis. The authority for the action proposed for this rulemaking is contained in  xSections 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.  Sb- ` x48. ` ` Description and Estimate of the Number of Small Entities Impacted. The RFA generally  xdefines a "small entity" as having the same meaning as the terms "small business," "small organization,"  S- x"small governmental jurisdiction."?L# yO|-ԍ 5 U.S.C.  601(6).? In addition, the term "small business" has the same meaning as the  S- x=term small business concern under the Small Business Act.pMX# yO - xԍ 5 U.S.C.  601(3)(incorporating by reference the definitions of "small business concern" in 15 U.S.C.  632).  xkPursuant to 5 U.S.C.  601(3), the statutory definition of a small business applies "unless an agency, after  x-consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public  xcomment, establishes one or more "definitions" of such term which are appropriate to the activities of the agency and publishes such definitions in the Federal Register."p A "small business concern" is one that: (1)  xis independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any  S- xadditional criteria established by the Small Business Administration (SBA).YN# yOD-ԍ Small Business Act, 15 U.S.C.  632. Y For many of the entities  xdescribed below, the SBA has defined small business categories through Standard Industrial Classification (SIC) codes.  S -x A.` ` Utilities  S - ` x49. ` ` Total Number of Utilities Affected. Many of the decisions and rules proposed herein may  xhave a significant effect on a substantial number of utility companies. Section 224 of the Statue defines  x.a "utility" as "any person who is a local exchange carrier or an electric, gas, water, steam, or other public  xutility, and who owns or controls poles, ducts, conduits, or rightsofway used, in whole or in part, for  xkany wire communications. Such term does not include any railroad, any person who is cooperatively  xorganized, or any person owned by the Federal Government or any State." The SBA has provided the  xCommission with a list of utility firms which may be effected by this rulemaking. Based upon the SBA's  xlist, the Commission seeks comment as to whether all of the following utility firms are relevant to Section 224.  S-x` ` 1. Electric Utilities (SIC 4911, 4931 & 4939) " S- ` P"x50. ` ` Electric Services (SIC 4911). The SBA has developed a definition for small electric utility  S- x\firms.4O# {O!-ԍ Id. 4 The Census Bureau reported that 447 of the 1,379 firms listed had total revenues below five  S- x=million dollars. The Census Bureau reports that a total of 1,379 electric utilities were in operation for at  x/least one year at the end of 1992. According to SBA, a small electric utility is an entity whose gross  S0- xyrevenues did not exceed five million dollars in 1992.P0* # {O%- xԍ 1992 Economic Census Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841 (U.S. Bureau of Census data under contract to the office of Advocacy of the U.S. Small Business Administration). Electric and Other Services Combined (SIC 4931). "0 P,`(`(88{"  xThe SBA has classified this entity as a utility whose business is less than 95% electric in combination  xwith some other type of service. The Census Bureau reports that a total of 135 such firms were in  xoperation for at least one year at the end of 1992. The SBA's definition of a small electric and other  S- x/services combined utility is a firm whose gross revenues did not exceed five million dollars in 1992.3Q# {O-ԍ Id.3  x[The Census Bureau reported that 45 of the 135 firms listed had total revenues below five million dollars.  S8- xCombination Utilities, Not Elsewhere Classified (SIC 4939). The SBA defines this utility as providing  x.a combination of electric, gas, and other services which are not otherwise classified. The Census Bureau  xreports that a total of 79 such utilities were in operation for at least one year at the end of 1992.  x.According to SBA's definition, a small combination utility is a firm whose gross revenues did not exceed  S- xlfive million dollars in 1992.3RZ# {O -ԍ Id.3 The Census Bureau reported that 63 of the 79 firms listed had total  Sr-revenues below five million dollars.   S" -x` ` 2. Gas Production and Distribution (SIC 4922, 4923, 4924, 4925 & 4932)  S - ` x51. ` ` Natural Gas Transmission (SIC 4922). The SBA's definition of a natural gas transmitter  S - xis an entity that is engaged in the transmission and storage of natural gas.vS # yO8-ԍ 13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812. v The Census Bureau reports  xkthat a total of 144 such firms were in operation for at least one year at the end of 1992. According to  x\SBA's definition, a small natural gas transmitter is an entity whose gross revenues did not exceed five  xmillion dollars in 1992. The Census Bureau reported that 70 of the 144 firms listed had total revenues  S - xbelow five million dollars.BT |# {O(-ԍ See supra note 78.B Natural Gas Transmission and Distribution (SIC 4923). The SBA has  xclassified this entity as a utility that transmits and distributes natural gas for sale. The Census Bureau  xreports that a total of 126 such entities were in operation for at least one year at the end of 1992. The  xSBA's definition of a small natural gas transmitter and distributer is a firm whose gross revenues did not  xexceed five million dollars. The Census Bureau reported that 43 of the 126 firms listed had total revenues  SF- xlbelow five million dollars.3UF# {O-ԍ  Id.3 Natural Gas Distribution (SIC 4924). The SBA defines a natural gas  xdistributor as an entity that distributes natural gas for sale. The Census Bureau reports that a total of 478  xsuch firms were in operation for at least one year at the end of 1992. According to the SBA, a small  x=natural gas distributor is an entity whose gross revenues did not exceed five million dollars in 1992. The  S- xCensus Bureau reported that 267 of the 478 firms listed had total revenues below five million dollars.3V# {O!-ԍ Id.3  S- xyMixed, Manufactured, or Liquefied Petroleum Gas Production and/or Distribution (SIC 4925). The SBA  xhas classified this entity as a utility that engages in the manufacturing and/or distribution of the sale of  xgas. These mixtures may include natural gas. The Census Bureau reports that a total of 43 such firms  x?were in operation for at least one year at the end of 1992. The SBA's definition of a small mixed,  xmanufactured or liquefied petroleum gas producer or distributor is a firm whose gross revenues did not"2 V,`(`(88["  S- xjexceed five million dollars in 1992.3W# {Oh-ԍ Id.3 The Census Bureau reported that 31 of the 43 firms listed had total  S- xrevenues below five million dollars. Gas and Other Services Combined (SIC 4932). The SBA has  xclassified this entity as a gas company whose business is less than 95% gas, in combination with other  xLservices. The Census Bureau reports that a total of 43 such firms were in operation for at least one year  xat the end of 1992. According to the SBA, a small gas and other services combined utility is a firm  S:- x.whose gross revenues did not exceed five million dollars in 1992.3X:Z# {O4-ԍ Id.3 The Census Bureau reported that 24 of the 43 firms listed had total revenues below five million dollars.  S-x` ` 3. Water Supply (SIC 4941)  Sr- ` x52. ` ` Water Supply. The SBA defines a water utility as a firm who distributes and sells water  SL - x\for domestic, commercial and industrial use.BYL # {O-ԍ See supra note 81.B The Census Bureau reports that a total of 3,169 water  xyutilities were in operation for at least one year at the end of 1992. According to SBA's definition, a small  S - xkwater utility is a firm whose gross revenues did not exceed five million dollars in 1992.BZ ~# {O-ԍ See supra note 78.B The Census Bureau reported that 3,065 of the 3,169 firms listed had total revenues below five million dollars.  S -x` ` 4. Sanitary Systems (SIC 4952, 4953 & 4959) x  S4- ` nx53. ` ` Sewerage Systems (SIC 4952). The SBA defines a sewage firm as a utility whose business  S- xis the collection and disposal of waste using sewage systems.B[# {O-ԍ See supra note 81.B The Census Bureau reports that a total  x!of 410 such firms were in operation for at least one year at the end of 1992. According to SBA's  S- xdefinition, a small sewerage system is a firm whose gross revenues did not exceed five million dollars.B\# {O-ԍ See supra note 78.B  xThe Census Bureau reported that 369 of the 410 firms listed had total revenues below five million dollars.  Sn- x=Refuse Systems (SIC 4953). The SBA defines a firm in the business of refuse as an establishment whose  xbusiness is the collection and disposal of refuse "by processing or destruction or in the operation of  xLincinerators, waste treatment plants, landfills, or other sites for disposal of such materials." The Census  x[Bureau reports that a total of 2,287 such firms were in operation for at least one year at the end of 1992.  xAccording to SBA's definition, a small refuse system is a firm whose gross revenues did not exceed six  S- xMmillion dollars.3]4 # {O|#-ԍ Id.3 The Census Bureau reported that 1,908 of the 2,287 firms listed had total revenues  S- x below six million dollars. Sanitary Services, Not Elsewhere Classified (SIC 4959). The SBA defines  xthese firms as engaged in sanitary services. The Census Bureau reports that a total of 1,214 such firms  xwere in operation for at least one year at the end of 1992. According to SBA's definition, a small sanitary"2 ],`(`(88"  S- xservice firms gross revenues did not exceed five million dollars.3^# {Oh-ԍ Id.3 The Census Bureau reported that 1,173 of the 1,214 firms listed had total revenues below five million dollars.  S-x` ` 5. Steam and Air Conditioning Supply (SIC 4961)  S8- ` x54.  ` ` Steam and Air Conditioning Supply.B_8Z# {O2-ԍ See supra note 81.B The SBA defines a steam and air conditioning  xsupply utility as a firm who produces and/or sells steam and heated or cooled air. The Census Bureau  xreports that a total of 55 such firms were in operation for at least one year at the end of 1992. According  xto SBA's definition, a steam and air conditioning supply utility is a firm whose gross revenues did not  S- x?exceed nine million dollars.B`# {O& -ԍ See supra note 78.B The Census Bureau reported that 30 of the 55 firms listed had total  Sr-revenues below nine million dollars.   S" -x` ` 6. Irrigation Systems (SIC 4971)  S - ` x55.  ` ` Irrigation Systems.Ba ~# {O-ԍ See supra note 81.B The SBA defines irrigation systems as firms who operate water  x=supply systems for the purpose of irrigation. The Census Bureau reports that a total of 297 firms were  x.in operation for at least one year at the end of 1992. According to SBA's definition, an irrigation service  S\- xzis a firm whose gross revenues did not exceed five million dollars.Bb\# {O -ԍ See supra note 78.B The Census Bureau reported that 286 of the 297 firms listed had total revenues below five million dollars.  S - x  S- xB.` ` Telephone Companies (SIC 4813)  S- ` x56. ` ` Total Number of Telephone Companies Affected. Many of the decisions and rules  xproposed herein may have a significant effect on a substantial number of small telephone companies. The  xSBA has defined a small business for Standard Industrial Classification (SIC) category 4813 (Telephone  S- xCommunications, except Radiotelephone) to be a small entity when it has no more than 1500 employees.uc# yO`-ԍ 13 C.F.R.  121.201, Standard Industrial Classification (SIC) Code 4812.u  xThe Census Bureau reports that, at the end of 1992, there were 3,497 firms engaged in providing  S- xtelephone services, as defined therein, for at least one year.d2 # {O"- x0ԍ United States Department of Commerce, Bureau of the Census, 1992 Census of Transportation,  {Oj#-Communications, and Utilities: Establishment and Firm Size, at Firm Size 1123 (1995)("1992 Census").  This number contains a variety of different  xcategories of carriers, including local exchange carriers (LECs), interexchange carriers, competitive access  xproviders, cellular carriers, mobile service carriers, operator service providers, pay telephone operators,  xPCS providers, covered SMR providers, and resellers. It seems certain that some of those 3,497 telephone  xservice firms may not qualify as small entities or small incumbent LECs because they are not". d,`(`(88"  S- x"independently owned and operated."Ce# yOh-ԍ 15 U.S.C.  632(a)(1).C It seems reasonable to conclude, therefore, that fewer than 3,497  xztelephone service firms are small entity telephone service firms or small incumbent LECs that may be  xyaffected by this Notice. 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.  S8- ` ~x57. ` ` Wireline Carriers and Service Providers. The SBA has developed a definition of small  xentities for telephone communications companies other than radiotelephone (wireless) companies. The  xCensus Bureau reports that, there were 2,321 such telephone companies in operation for at least one year  S- xat the end of 1992.PfX# yO -ԍ 1992 Census, supra at Firm size 1123.P According to SBA's definition, a small business telephone company other than a  S- x1radiotelephone company is one employing no more than 1,500 persons.Pg# yO" -ԍ 13 C.F.R.  121.201, SIC Code 4812.P Of the 2,321 non xkradiotelephone companies listed by the Census Bureau 2,295 were reported to have fewer than 1,000  xemployees. Thus, at least 2,295 nonradiotelephone companies that might qualify as small entities or  xsmall incumbent LECs, or small entities based on these employment statistics. Although it seems certain  xthat some of these carriers are not independently owned and operated, we are unable at this time to  xestimate with greater precision the number of wireline carriers and service providers that would qualify  x.as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than  x.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 Notice.  S2-  S - ` x58. ` ` Local Exchange Carriers. Neither the Commission nor SBA has developed a definition  xof small providers of local exchange services (LECs). The closest applicable definition under SBA rules  S- xis for telephone communications companies other than radiotelephone (wireless) companies.3hx# {O-ԍ Id.3 The most  xreliable source of information regarding the number of LECs nationwide of which we are aware appears  Sl- xto be the data that we collect annually in connection with the Telecommunications Relay Service (TRS  SF- x[Worksheet). According to our most recent data, 1,347 companies reported that they were engaged in the  S - xprovision of local exchange services.ei^  # {O- xԍ Federal Communications Commission, CCB, Industry Analysis Division, Telecommunications Industry  {O- xiRevenue: TRS Fund Worksheet Data, Tbl. 1 (Average Total Telecommunications Revenue Reported by Class of  {O^-Carrier) (Dec.1996) (TRS Worksheet). e Although it seems certain that some of these carriers are not  xindependently owned and operated, or have more than 1,500 employees, we are unable at this time to  x=estimate with greater precision the number of LECs that would qualify as small business concerns under  x[SBA's definition. Consequently, we estimate that there are fewer than 1,347 small incumbent LECs that may be affected by this Notice.  S0- ` x59. ` ` Interexchange Carriers. Neither the Commission nor SBA has developed a definition of  xsmall entities specifically applicable to providers of interexchange services (IXCs). The closest applicable  x]definition under SBA rules is for telephone communications companies other than radiotelephone  xL(wireless) companies (SIC 4813). The most reliable source of information regarding the number of IXCs"0 i,`(`(88-"  xnationwide of which we are aware appears to be the data that we collect annually in connection with TRS.  xAccording to our most recent data, 130 companies reported that they were engaged in the provision of  S- x\interexchange services.>j# {O-ԍ TRS Worksheet.> Although it seems certain that some of these carriers are not independently  xMowned and operated, or have more than 1,500 employees, we are unable at this time to estimate with  x!greater precision the number of IXCs that would qualify as small business concerns under SBA's  xdefinition. Consequently, we estimate that there are fewer than 130 small entity IXCs that may be affected by the decisions and rules proposed in this Notice.   S- ` x60. ` ` Competitive Access Providers. Neither the Commission nor SBA has developed a  xdefinition of small entities specifically applicable to providers of competitive access services (CAPs). The  x/closest applicable definition under SBA rules is for telephone communications companies other than  xradiotelephone (wireless) companies (SIC 4813). The most reliable source of information regarding the  xknumber of CAPs nationwide of which we are aware appears to be the data that we collect annually in  S - xconnection with the TRS Worksheet. According to our most recent data, 57 companies reported that they  S - xwere engaged in the provision of competitive access services.3k Z# {O-ԍ Id.3 Although it seems certain that some of  xkthese carriers are not independently owned and operated, or have more than 1,500 employees, we are  xzunable at this time to estimate with greater precision the number of CAPs that would qualify as small  xLbusiness 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 Notice.  S- ` x61. ` ` Wireless (Radiotelephone) Carriers. Although wireless carriers have not historically  xaffixed their equipment to utility poles, pursuant to the terms of the 1996 Act, such entities are entitled  xto do so with rates consistent with the Commission's rules discussed herein. SBA has developed a  xdefinition of small entities for radiotelephone (wireless) companies. The Census Bureau reports that there  SF- xwere 1,176 such companies in operation for at least one year at the end of 1992.YlF# {O-ԍ See 1992 Census supra at note 102. Y According to SBA's  S- xdefinition, a small business radiotelephone company is one employing no more than 1,500 persons.Cm~# {O<-ԍ See supra note 81. C The  x0Census Bureau also reported that 1,164 of those radiotelephone companies had fewer than 1,000  xemployees. Thus, even if all of the remaining 12 companies had more than 1,500 employees, there would  x>still be 1,164 radiotelephone companies that might qualify as small entities if they are independently  xLowned and operated. Although it seems certain that some of these carriers are not independently owned  xand operated, we are unable at this time to estimate with greater precision the number of radiotelephone  xcarriers and service providers that would qualify as small business concerns under SBA's definition.  xConsequently, we estimate that there are fewer than 1,164 small entity radiotelephone companies that may be affected by this Notice.  S- ` x62. ` ` Cellular Service Carriers. Neither the Commission nor SBA has developed a definition  xof small entities specifically applicable to providers of cellular services. The closest applicable definition  xlunder SBA rules is for telephone communications companies other than radiotelephone (wireless)  xcompanies (SIC 4812). The most reliable source of information regarding the number of cellular service" m,`(`(88!"  xcarriers nationwide of which we are aware appears to be the data that we collect annually in connection  S- x\with the TRS Worksheet. According to our most recent data, 792 companies reported that they were  S- xengaged in the provision of cellular services.3n# {O-ԍ Id.3 Although it seems certain that some of these carriers are  xnot independently owned and operated, or have more than 1,500 employees, we are unable at this time  xto estimate with greater precision the number of cellular service carriers that would qualify as small  xbusiness 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 Notice.  S- ` Qx63. ` ` Mobile Service Carriers. Neither the Commission nor SBA has developed a definition  x[of small entities specifically applicable to mobile service carriers, such as paging companies. The closest  xapplicable definition under SBA rules is for telephone communications companies other than  xradiotelephone (wireless) companies. The most reliable source of information regarding the number of  x.mobile service carriers nationwide of which we are aware appears to be the data that we collect annually  S - xLin connection with the TRS Worksheet. According to our most recent data, 117 companies reported that  S - xthey were engaged in the provision of mobile services.3o Z# {O-ԍ Id.3 Although it seems certain that some of these  xcarriers are not independently owned and operated, or have more than 1,500 employees, we are unable  xat this time to estimate with greater precision the number of mobile service carriers that would qualify  x\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 Notice.  S- ` 3x64. ` ` Broadband Personal Communications Services (PCS) Licensees. The broadband PCS  xspectrum is divided into six frequency blocks designated A through F and the Commission has held  xyauctions for each block. The Commission has defined "small entity" for Blocks C and F as an entity that  xkhas average gross revenues of less than $40 million in the three previous calendar years. For Block F,  x.an additional classification for "very small business" was added and is defined as an entity that, together  xwith their affiliates, has average gross revenues of not more than $15 million for the preceding three  S- xjcalendar years.hp\# {O- xԍ  See Amendment of Parts 20 and 24 of the Commission's Rules Broadband PCS Competitive Bidding and  {ON- xthe Commercial Mobile Radio Service Spectrum Cap, Report and Order, FCC 96278, WT Docket No. 9659. para.  yO-60 (1996), 61 FR 33859 (July 1, 1996). h These regulations defining "small entity" in the context of broadband PCS auctions has  S- xbeen approved by the SBA.q# {O- x,ԍ See Implementation of Section 309(j) of the Communications Act Competitive Bidding, PP Docket No.93253, Fifth Report and Order, 9 FCC Rcd 5532, 558184 (1994). No small businesses within the SBAapproved definition bid successfully  x for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the  x\Block C auction. A total of 93 small and very small business bidders won approximately 40% of the  SX- x?1,479 licenses for Blocks D, E, and F.rXj # {Ob$-ԍ FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (released January 14, 1997). Ó However, licenses for blocks C through F have not been  x.awarded fully, therefore there are few, if any, small businesses currently providing PCS services. Based  xyon this information, we conclude that the number of broadband PCS licensees will include the 90 winning" r,`(`(88k"  xMC 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.   S- ` x65. ` ` Specialized Mobile Radio (SMR) Licensees. Pursuant to 47 C.F.R.  90.814(b)(1), the  xzCommission has defined "small entity" in auctions for geographic area 800 MHz and 900 MHz SMR  xklicenses as a firm that had average annual gross revenues of less than $15 million in the three previous  xcalendar years. This definition of a "small entity" in the context of 800 MHz and 900 MHz SMR has  S- xybeen approved by the SBA.!s# {OR- xԍ See Amendment of Parts 2 and 90 of the Commission's Rules to Provide for the Use of 200 Channels Outside  xxthe Designated Filing Areas in the 896901 MHz and the 935940 MHz Bands Allotted to the Specialized Mobile  {O - xRadio Pool, PR Docket No. 89583, Second Order on Reconsideration and Seventh Report and Order, 11 FCC Rcd  {O - x2639, 2693702 (1995); Amendment of Part 90 of the Commission's Rules to Facilitate Future Development of SMR  {Ox - xwSystems in the 800 MHz Frequency Band, PR Docket No. 93144, First Report and Order, Eighth Report and Order, and Second Further Notice of Proposed Rulemaking, 11 FCC Rcd 1463 (1995).! The rules adopted in this Notice may apply to SMR providers in the 800  x@MHz and 900 MHz bands that either hold geographic area licenses or have obtained extended  ximplementation authorizations. We do not know how many firms provide 800 MHz or 900 MHz  xgeographic area SMR service pursuant to extended implementation authorizations, nor how many of these  xyproviders have annual revenues of less than $15 million. We assume, for purposes of this FRFA, that all  xof the extended implementation authorizations may be held by small entities, which may be affected by the decisions and rules adopted in this Notice.   S - ` _x66. ` ` The Commission recently held auctions for geographic area licenses in the 900 MHz SMR  x=band. There were 60 winning bidders who qualified as small entities in the 900 MHz auction. Based on  x this information, we conclude that the number of geographic area SMR licensees affected by the rule  xadopted in this Order includes these 60 small entities. No auctions have been held for 800 MHz  x[geographic area SMR licenses. Therefore, no small entities currently hold these licenses. A total of 525  xlicenses will be awarded for the upper 200 channels in the 800 MHz geographic area SMR auction.  x=However, the Commission has not yet determined how many licenses will be awarded for the lower 230  x{channels in the 800 MHz geographic area SMR auction. There is no basis, moreover, on which to  xestimate how many small entities will win these licenses. Given that nearly all radiotelephone companies  xhave fewer than 1,000 employees and that no reliable estimate of the number of prospective 800 MHz  x.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 Notice.  S- ` x67. ` ` Resellers. Neither the Commission nor SBA has developed a definition of small entities  x[specifically applicable to resellers. The closest applicable definition under SBA rules is for all telephone  xcommunications companies (SIC 4812 and 4813). The most reliable source of information regarding the  xnumber of resellers nationwide of which we are aware appears to be the data that we collect annually in  S- xconnection with the TRS Worksheet. According to our most recent data, 260 companies reported that they  S- xwere engaged in the resale of telephone services.3tH# {O#-ԍ Id.3 Although it seems certain that some of these carriers  xare not independently owned and operated, or have more than 1,500 employees, we are unable at this time  xto estimate with greater precision the number of resellers that would qualify as small business concerns  xunder 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 Notice.">t,`(`(88 "Ԍ S-ԙx C.` ` Cable System Operators (SIC 4841)  S- ` x68. ` ` Cable Systems: The SBA has developed a definition of small entities for cable and other  x\pay television services, which includes all such companies generating less than $11 million in revenue  Sb- x\annually.Lub# yO-ԍ 13 C.F.R.  121.201, SIC 4841. L This definition includes cable systems operators, closed circuit television services, direct  x]broadcast satellite services, multipoint distribution systems, satellite master antenna systems and  xLsubscription television services. According to the Census Bureau, there were 1,423 such cable and other  S-pay television services generating less than $11 million in revenue. vX# yO - xԍ U.S. Department of Commerce, Bureau of Census, 1992 Economic Census Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841 (Bureau of the Census data under contract to the Office of Advocacy of the SBA).   S- ` `x69. ` ` The Commission has developed its own definition of a small cable system operator for  xthe purposes of rate regulation. Under the Commission's rules, a "small cable company," is one serving  SJ - xfewer than 400,000 subscribers nationwide.w$J # yO- x-ԍ 47 C.F.R.  76.901(e). The Commission developed this definition based on its determinations that a small  {Ob- xcable system operator is one with annual revenues of $100 million or less. Implementation of Sections of the 1992  {O,- xiCable Act: Rate Regulation, Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393.  Based on our most recent information, we estimate that  S$ - xthere were 1,439 cable systems that qualified as small cable system operators at the end of 1995.x$ # {O`-ԍ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures for Dec. 30, 1995). Since  x=then, some of those companies may have grown to serve over 400,000 subscribers, and others may have  x[been involved in transactions that caused them to be combined with other cable systems. Consequently,  x.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 Notice.  S4- ` x70. ` ` The Communications Act also contains a definition of a small cable system operator,  xwhich is "a cable operator that, directly or through an affiliate, serves in the aggregate fewer than 1  xpercent of all subscribers in the United States and is not affiliated with any entity or entities whose gross  S- xkannual revenues in the aggregate exceed $250,000,000."Cy. # yO-ԍ 47 U.S.C. 543(m)(2).C The Commission has determined that there  xare 61,700,000 subscribers in the United States. Therefore, we found that an operator serving fewer than  xk617,000 subscribers shall be deemed a small operator, if its annual revenues, when combined with the  SD- xtotal annual revenues of all of its affiliates, do not exceed $250 million in the aggregate.DzD # yO!-ԍ 47 C.F.R.  76.1403(b).D Based on  xlavailable data, we find that the number of cable systems serving 617,000 subscribers or less totals  S- x1,450.C{N # {O $-ԍ See supra note 121.C Although it seems certain that some of these cable system operators are affiliated with entities  xkwhose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater  xprecision the number of cable system operators that would qualify as small cable systems under the definition in the Communications Act. "T{,`(`(88"Ԍ S- ` 3x71. ` ` Municipalities: The term "small governmental jurisdiction" is defined as "governments  S- xyof . . . districts, with a population of less than fifty thousand."?|# yOB-ԍ 5 U.S.C.  601(5).? There are 85,006 governmental entities  S- xLin the United States.}X# {O-ԍ United States Dept. of Commerce, Bureau of the Census, 1992 Census of Governments. This number includes such entities as states, counties, cities, utility districts and  xschool districts. We note that Section 224 of the Act specifically excludes any utility which is  xycooperatively organized, or any person owned by the Federal Government or any State. For this reason,  xwe believe that Section 224 will have minimal if any affect upon small municipalities. Further, there are  x.18 States and the District of Columbia that regulate pole attachments pursuant to Section 224(c)(1). Of  x>the 85,006 governmental entities, 38,978 are counties, cities and towns. The remainder are primarily  xutility districts, school districts, and states. Of the 38,978 counties, cities and towns, 37,566 or 96%, have populations of fewer than 50,000.  SJ - ` x72. ` ` Reporting, Recordkeeping, and other Compliance Requirements: The rules proposed in  S$ - x/this Notice will require a change in certain record keeping requirements. A pole owner will now have  xjto maintain specific records relating to the number of attachers for purposes of computing the usable and  xunusable space calculation for the telecommunications carrier rate formula. We seek comment on whether  xsmall entities may be required to hire additional staff and expend additional time and money to comply  xwith the proposals set forth in this Notice. In addition, we seek comment as to whether there will be a  xdisproportionate burden placed on small entities in complying with the proposals set forth in this Notice.  S- ` Cx73. ` ` Significant Alternatives Which Minimize the Impact on Small Entities and which are  S- xConsistent with State Objectives: The 1996 Act requires the Commission to propose a telecommunications  S- xycarrier methodology within two years of the enactment of the 1996 Act.K~# {O$-ԍ See supra paragraphs 1544.K We seek comment on various  xMalternative ways of implementing the statutory requirements and any other potential impact of these  x proposals on small business entities. We seek comment on the implementation of a methodology to  x=ensure just, reasonable and nondiscriminatory pole attachment and conduit rates for telecommunications  xcarriers. We also seek comment on how to develop a rightsofway rate methodology for telecommunications carriers.  S- ` x74. ` ` Federal Rules which Overlap, Duplicate, or Conflict with the Commission's Proposal: None. x  S - X.XxINITIAL PAPERWORK REDUCTION ACT OF 1995 ANALYSIS (#  S- ` &x75. ` ` This Notice contains either proposed or modified information collections. The  x[Commission, as part of its continuing effort to reduce paperwork burdens and to obtain regular Office of  xManagement and Budget ("OMB") approval of the information collections, invites the general public and  x0OMB to comment on the information collections contained in this rulemaking, as required by the  xPaperwork Reduction Act of 1995. Public and agency comments are due at the same time as other  x.comments relating to this Notice; OMB notification of action is due 60 days from date of publication of  xthis Notice in the Federal Register. Comments should address: (a) whether the proposed collection of"!|~,`(`(88U#"  xinformation is necessary for the proper performance of the functions of the Commission, including  x!whether the information shall have practical utility; (b) the accuracy of the Commission's burden  x=estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways  xto minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology.  S- XI.xPROCEDURAL PROVISIONS  S- ` x76. ` ` Ex parte Rules NonRestricted Proceeding. This is a nonrestricted notice and comment  x[rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period,  Sr- xprovided that they are disclosed as provided in Commission's rules. See generally 47 C.F.R.  1.1202, 1.1203, and 1.1206(a).  S - ` x77. ` ` Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the  xNCommission's rules, 47 C.F.R.  1.415, 1.419, interested parties may file comments on or before  x!September 26, 1997 and reply comments on or before October 14, 1997. To file formally in this  xzproceeding, you must file an original and six copies of all comments, reply comments, and supporting  xcomments. Parties are also asked to submit, if possible, draft rules that reflect their positions. If you want  xeach Commissioner to receive a personal copy of your comments, you must file an original and eleven  xAcopies. Comments and reply comments should be sent to Office of the Secretary, Federal  xCommunications Commission, 1919 M Street, N.W., Room 222, Washington, D.C. 20554, with a copy  xLto Larry Walke of the Cable Services Bureau, 2033 M Street, N.W., 4th Floor, Washington, D.C. 20554.  xParties should also file one copy of any documents filed in this docket with the Commission's copy  xjcontractor, International Transcription Services, Inc., 2100 M Street, N.W., Suite 140, Washington, D.C.  xz20037. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, 1919 M Street, N.W., Room 239, Washington, D.C. 20554.  S- ` %x78. ` ` Parties are also asked to submit comments and reply comments on diskette, where  xMpossible. Such diskette submissions would be in addition to and not a substitute for the formal filing  xrequirements addressed above. Parties submitting diskettes should submit them to Larry Walke of the  xCable Services Bureau, 2033 M Street, N.W., 4th Floor, Washington, D.C. 20554. Such a submission  xmust be on a 3.5 inch diskette formatted in an IBM compatible form using MS DOS 5.0 and WordPerfect  x/5.1 software. The diskette should be submitted in "read only" mode. The diskette should be clearly  xlabelled with the party's name, proceeding, type of pleading (comment or reply comments) and date of submission. The diskette should be accompanied by a cover letter.  Sd- ` }x79. ` ` Written comments by the public must be submitted at the same time as those of the Office  xof Management and Budget (OMB) on the proposed and/or modified information collections on or before  x60 days after publication of the Notice in the Federal Register. In addition to filing comments with the  xSecretary, a copy of any comments on the information collections contained herein should be submitted  xto Judy Boley, Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, D.C.  x205 #C0 54, or via the Internet to jboley@fcc.gov, and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 72517th Street, N.W., Washington, D.C. 20503 or via the Internet to fain_t@al.eop.gov.  SL$- "L$~,`(`(88%"  S-XII.xORDERING CLAUSES  S-  S- ` x80. ` ` IT IS ORDERED that pursuant to Sections 1, 4(i), 4(j), 224, 303 and 403 of the  xyCommunications 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.  S- ` x81. ` ` IT IS FURTHER ORDERED that the Secretary shall send a copy of this Notice, including  xthe IRFA, to the Chief Counsel for Advocacy of the Small Business Administration in accordance the Regulatory Flexibility Act, 5 U.S.C.  603 (2).  Sp- ` 3x82. ` ` For additional information regarding this proceeding, contact Larry Walke of the Cable Services Bureau (202) 4187200. x` ` hhFEDERAL COMMUNICATIONS COMMISSION x x` ` hhWilliam F. Caton  S0-x` ` hhActing Secretary "0~,`(`(88" APPENDIX A POLE ATTACHMENT FORMULAS z(Modified as Proposed)  aE` #6\  P6QwÐP#Telecommunications Companies :  aERMaximum ` ` =  (Space Occupied by Attachment X Carrying X Net Pole X .95 )  Total # of Poles  aERatex` `  Total Usable Space@ Charge Ratepp Investment  aETotal Carrying` ` =  Administrative + Maintenance + Depreciation + Taxes + Return Charge Rate  aE Administrative ` ` =  Total Administrative and General (Accounts 6710+6720+6110+6120+6534+6535)   aE( Carrying Charge ` `  Gross Plant Investment Accum. Depreciation, Account 3100 Accum. Deferred Taxes, Plant Rate  aE Maintenance` ` = Account 6411 Rental Expense, Poles   aEfCarrying Charge  Net Pole Investment Rate  aEDepreciation` ` = Depreciation Rate, Poles Carrying Charge Rate  aE<Taxx` ` =  Operating Taxes, Account 7200  aECarrying Charge  Gross Plant Investment Accum. Depreciation, Account 3100 Accum. Deferred Taxes, Plant Rate  aEzReturnx` ` =  Applicable Rate of Return   aE Carrying Charge  hh Rate  aESpace Occupied ` ` =  1 foot by Attachment  aEPTotal Usable ` ` =  13.5 feet (Subject to Rebuttal) Space  aEGross Plant` ` =  Account 2001 Investment  aE"Gross Pole ` ` =  Account 2411 Investment  aE%Net Polex` ` =  Account 2411 Accum. Depreciation, Poles Accum. Deferred Income Taxes, Poles Investment P  aE 'T#6\  P6QwÐP#