[Federal Register Volume 75, Number 135 (Thursday, July 15, 2010)]
[Proposed Rules]
[Pages 41337-41363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17048]



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Part IV





Federal Communications Commission





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47 CFR Part 1



Implementation of Section 224 of the Act; A National Broadband Plan for 
Our Future; Proposed Rule

Federal Register / Vol. 75, No. 135 / Thursday, July 15, 2010 / 
Proposed Rules

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[WC Docket No. 07-245, GN Docket No. 09-51; FCC 10-84]


Implementation of Section 224 of the Act; A National Broadband 
Plan for Our Future

AGENCY: Federal Communications Commission.

ACTION: Proposed rules.

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SUMMARY: In this Further Notice of Proposed Rulemaking (FNPRM), the 
Commission proposes rules to expedite access by telecommunications 
carriers and cable operators to utility poles. Proposed measures 
include adoption of a specific timeline for poles survey and make-ready 
work, use of outside contractors, and improving the availability of 
data. The FNPRM also proposes to improve the pole attachments 
enforcement process, and proposes ways to make attachment rates as low 
and uniform as possible consistent with section 224 of the 
Communications Act. These steps should lower both the cost of gaining 
access to utility poles and pole attachment rates. These actions are 
intended to remove impediments to the deployment of facilities and to 
increase delivery of broadband services.

DATES: Comments are due on or before August 16, 2010 and reply comments 
are due on or before September 13, 2010. Written comments on the 
Paperwork Reduction Act proposed information collection requirements 
must be submitted by the public, Office of Management and Budget (OMB), 
and other interested parties on or before September 13, 2010.

ADDRESSES: You may submit comments, identified by WC Docket No. 07-245; 
GN Docket No. 09-51, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web Site: http://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for submitting 
comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format documents, sign language 
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.
    In addition to filing comments with the Secretary, a copy of any 
comments on the Paperwork Reduction Act information collection 
requirements contained herein should be submitted to the Federal 
Communications Commission via e-mail to [email protected] and to Nicholas A. 
Fraser, Office of Management and Budget, via e-mail to [email protected] or via fax at 202-395-5167.

FOR FURTHER INFORMATION CONTACT: Jonathan Reel, Wireline Competition 
Bureau, Competition Policy Division, 202-418-1580. For additional 
information concerning the Paperwork Reduction Act information 
collection requirements contained in this document, send an e-mail to 
[email protected] or contact [email protected].

SUPPLEMENTARY INFORMATION: Pursuant to sections 1.415 and 1.419 of the 
Commission's rules, 47 CFR 1.415, 1.419, interested parties may file 
comments on or before August 16, 2010 and reply comments on or before 
September 13, 2010. Comments may be filed using: (1) The Commission's 
Electronic Comment Filing System (ECFS), (2) the Federal Government's 
eRulemaking Portal, or (3) by filing paper copies. See Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: http://www.regulations.gov.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW., Room TW-A325, Washington, DC 20554. All hand 
deliveries must be held together with rubber bands or fasteners. Any 
envelopes must be disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an e-mail to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    Filings and comments are also available for public inspection and 
copying during regular business hours at the FCC Reference Information 
Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 
20554. They may also be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, 
SW., Room CY-B402, Washington, DC 20554, telephone: (202) 488-5300, 
fax: (202) 488-5563, or via e-mail http://www.bcpiweb.com.
    This document contains proposed information collection 
requirements. The Commission, as part of its continuing effort to 
reduce paperwork burdens, invites the general public and the Office of 
Management and Budget (OMB) to comment on the information collection 
requirements contained in this document, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. Public and agency comments 
are due September 13, 2010.
    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. In 
addition, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment 
on how we might further reduce the information collection burden for 
small business concerns with fewer than 25 employees.
    OMB Control Number: 3060-XXXX.
    Title: Pole attachment Access Requirements.

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    Form Number: N/A.
    Type of Review: New collection.
    Respondents: Business or other for-profit.
    Number of Respondents and Responses: 2,961 respondents; 20,427 
responses.
    Estimated Time per Response: 6-300 hours.
    Frequency of Response: On occasion and annual reporting and 
recordkeeping requirements and third party disclosure requirement.
    Obligation to Respond: Mandatory.
    Total Annual Burden: 965,202 hours.
    Total Annual Cost: No cost.
    Privacy Act Impact Assessment: No impacts.
    Nature and Extent of Confidentiality: No need for confidentiality.
    Needs and Uses: Delivery of telecommunications, information, and 
video services depends on the ability of wireline and wireless 
providers of these services to attach their facilities (e.g., cable and 
fiber) to existing utility infrastructure. The Commission proposes a 
comprehensive regulatory scheme to ensure that the terms and conditions 
of attachment are just and reasonable under section 224 of the 
Communications Act. These proposals largely formalize existing 
practices, such as contract negotiations, applications to attach, 
surveys and engineering analyses, coordinated repositioning of existing 
attachments. But the proposals also impose some new paperwork 
requirements, including web postings of information, and letters of 
notification among the affected parties. Both existing practices and 
new proposals are incorporated in the paperwork burden estimates. Most 
of these responsibilities fall on the pole-owning utility, but some 
paperwork is required of prospective attaching entities. Normal course-
of-business practices, including preparation, review, and payment of 
invoices, are not included.
    Below is a synopsis of the Commission's Further Notice of Proposed 
Rulemaking in WC Docket No. 07-245, GN Docket No. 09-51, adopted May 
20, 2010, and released May 20, 2010.

Synopsis of Further Notice of Proposed Rulemaking

    1. In this FNPRM, the Commission seeks comment on how to improve 
access to essential infrastructure, and expedite the build-out of 
affordable broadband services as well as telecommunications and cable 
services. The Commission proposes a specific timeline for all wired 
pole attachment requests (including fiber or other wired attachments by 
wireless carriers), and seeks comment on the timeline and exceptions or 
refinements, as well as the development of a timeline for the 
attachment of wireless facilities. The Commission also proposes rules 
allowing the use of contract workers in certain circumstances, and 
proposes reforming its access dispute-resolution process consistent 
with the aims of the National Broadband Plan. The Commission seeks to 
establish rental rates for pole attachments that are as low and close 
to uniform as possible, consistent with section 224 of the Act, and the 
Commission seeks comment on proposals to accomplish this goal.

A. Expediting Access to Utility Poles

    2. A Comprehensive Timeline for Section 224 Access. The Commission 
proposes a comprehensive timeline for the make-ready process, as 
recommended in the National Broadband Plan. The Commission begins the 
process of establishing a Federal timeline that covers each step of the 
pole attachment process, from application to issuance of the final 
permit. The Commission believes that the Federal timeline should be 
comprehensive and applicable to all forms of communications 
attachments. The Commission proposes that it should adopt a timeline 
covering the process of certifying wireless equipment for attachment. 
The record before the Commission includes many examples of delay in 
make-ready work in states without make-ready timelines, in contrast to 
evidence of more expedited deployment in those states that have adopted 
timelines. Section 224 imposes a responsibility on utilities to provide 
just and reasonable access to any pole, duct, conduit, or right-of-way 
owned or controlled by it, in addition to preserving their ability to 
deliver their traditional services. The Commission is skeptical of the 
`zero-sum' view that some commenters seem to take with respect to the 
resources devoted to pole attachments and regular maintenance. To the 
extent utilities or other commenters assert that they are unable to 
satisfy these requirements, commenters are asked to provide further 
detail. Are utilities unable to hire enough workers to perform timely 
surveys and make-ready, and to ramp up their operations to meet demand? 
Inasmuch as they are unable to perform pole attachments as needed 
without impeding their provision of electric service, why is this so? 
Are these issues really a claim of insufficient cost recovery, rather 
than inability to provide make-ready work in a timely fashion?
    3. A Proposed Five-Stage Timeline for Wired Pole Attachment. The 
Commission proposes adopting a specific five-stage timeline to govern 
the pole attachment process for wired attachments consisting of the 
following five stages: (1) Survey; (2) estimate; (3) attacher 
acceptance; (4) performance; and, if needed, (5) multiparty 
coordination. Depending how long the applicant reviews the estimate, 
and whether the existing attachers complete their work in a timely 
manner, make-ready should be complete within a 105 to 149 day window 
after the utility receives a complete application for access. The 
Commission does not propose at this time to apply this timeline to 
make-ready for wireless equipment or pole replacement.
    4. Stage 1--Survey: 45 Days. As current rules dictate, a request 
for access continues to trigger a 45 day period for the utility to 
respond. The Commission proposes that, as the first stage of the 
timeline, the Commission should retain existing Commission rule Sec.  
1.1403(b). A ``request for access'' is a complete application that 
provides the utility with the information necessary to begin to survey 
the poles. The current rule gives utilities 45 days to provide a 
written explanation of evidence and information for denying the request 
for reasons of lack of capacity, safety, reliability or engineering 
standards. The rule is functionally identical to a requirement for a 
survey and engineering analysis when applied to wired facilities, and 
is generally understood by utilities as such. The rule remains 
applicable to wireless facilities, but could apply in a somewhat 
different manner. A 45-day survey limit accords with the time allowed 
for surveys in New York, Connecticut, and the Coalition Proposal, as 
well as the current rule.
    5. The Commission proposes that all requests for attachment be 
included in the timeframe for the survey stage, even where the request 
ultimately indicates a lack of capacity. Any right the owner has to 
refuse to install a new pole, and other questions about timing, 
however, do not affect the applicant's right to know whether the owner 
considers pole replacement necessary. The Commission seeks comment on 
whether to clarify what constitutes a sufficient request to trigger the 
timeline. Utilities state that application errors cause them to miss 
deadlines, and New York has adopted specific rules governing the 
application process. The Commission asks whether it should adopt 
similar regulations, or leave the details of the application process in 
the hands of individual parties. The Commission also

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seeks comment on whether timing should be adjusted when an application 
that appears complete includes errors that delay the survey. Should 
significant errors justify stopping the clock? Should it matter whether 
the errors reflect lack of due care by the applicant, or lack of 
information that the utility could have provided?
    6. Stage 2--Estimate: 14 Days. The Commission proposes that, as the 
second stage in the pole access timeline, a utility must tender an 
estimate of its charges to perform any make-ready work within 14 days 
after completing the survey. Both the New York timeline and the 
Coalition Proposal include a similar deadline, and the Commission 
proposes that such a timeframe is reasonable. Although utilities 
commonly provide an estimate with the survey and engineering analysis, 
an estimate of charges is not clearly required under the current 45-day 
response rule. The Commission proposes a deadline for estimates that is 
separate from the survey in order to permit a utility to separate the 
engineering analysis from its estimation of charges, and to permit the 
attacher time to examine and consider the engineering assessment before 
it reviews an invoice.
    7. Stage 3--Acceptance: 14 Days. The Commission proposes that, as 
the third stage in the timeline, the applicant should have 14 days to 
accept the tendered estimate, consistent with New York's practice. The 
Commission considers it unreasonable to require a utility to commit 
indefinitely to its make-ready proposal and estimate of charges, and 
believes that imposing this time limit on prospective attachers will 
provide additional certainty. Limiting review also meets the intention 
that the timeline should be comprehensive, and address each phase of 
the process. The applicant may accept the estimate sooner, and need not 
wait 14 days before accepting or rejecting it.
    8. Stage 4--Performance: 45 Days. The Commission proposes that, as 
the fourth stage in the timeline, payment by the applicant should 
trigger a 45-day period for the completion of make-ready work, 
consistent with the approach in New York and Connecticut. Given the 
experience in New York and Connecticut, the Commission finds 45 days to 
be a reasonable time period for the actual performance of make-ready 
work. To implement this approach, the Commission proposes that, when it 
receives payment, a utility must notify immediately all entities whose 
existing attachments may be affected by the project. The Commission 
further proposes that notification must include a reminder that those 
attachers have 45 days to move, rearrange, or remove any facilities as 
needed to perform the make-ready work and that, if they fail to do so, 
the utility or its agents, or the new attacher, using authorized 
contractors, may move or remove any facilities that impede performance. 
Moreover, the Commission proposes that the obligation to complete make-
ready work in this timeframe extend not only to the utility, but also 
to existing attachers. Utilities contend that existing attachers cause 
delays and have little incentive to cooperate, especially if the 
applicant will be a competitor, and this constrains their ability to 
provide timely pole access to new attachers. The Commission seeks 
comment with regard to this assertion, as well as the incentive and 
ability of other attachers on a pole to discriminate against a new 
attacher. The Commission invites comment on alternative or additional 
policies that could ensure the cooperation needed as part of the make-
ready process. By contrast, the Commission notes that the Coalition 
Proposal would not adopt a specific number of days for completion of 
relevant make-ready work, instead proposing to perform such work ``in a 
manner that does not discriminate in favor of the utility's own needs 
or customer work.'' The Commission seeks comment on what metrics and 
data would be needed to evaluate compliance with such an approach, and 
how it would be reported or otherwise made available. The Commission 
also seeks comment on the balance reflected in the Coalition Proposal 
in this regard between attachers' interests in timely, predictable pole 
access and pole owners' interests in ensuring safety, reliability, and 
sound engineering.
    9. Stage 5--Multiparty Coordination: 30 Days. The Commission 
proposes that the fifth stage of the timeline--if needed--will provide 
time for any coordination and make-ready work required in the event 
that some existing attachers fail to move their facilities as directed 
by the utility. The Commission notes that incumbent LECs typically 
occupy more space on a pole than other communications attachers and, 
due to their location on a pole, often must be the first to move their 
communications attachments as part of the make-ready process. And while 
current Commission rules provide that attachments by a cable operator 
or non-incumbent LEC telecommunications carrier may not be moved by the 
utility until 60 days have passed, that rule does not govern 
attachments by incumbent LECs. Thus, after 45 days, the utility or its 
agent may move incumbent LEC attachments as needed and, after 60 days, 
may act independently of other existing attachers to finish the 
project.
    10. Consequently, it is reasonable to allow extra time for the 
utility or its agent to complete the make-ready with a free hand. Given 
that the utility will have surveyed the poles and coordinated 
rearrangement, and, after 60 days, may act independently of other 
existing attachers, the Commission considers 30 days after the 45th day 
a reasonable extension of time to undertake any coordination or 
planning required to finish the project. The Commission seeks comment 
on this proposal. In addition to defining a default timeline, the 
Commission recognizes the need to define certain exceptions or 
limitations in appropriate circumstances.
    11. Adjustments to the Timeline for the Number of Pole Attachment 
Requests. In addition, the Commission recognizes the potential need to 
address utilities' concerns about possible operational or logistical 
challenges or the need to respond to factors outside their control. 
Thus, the Commission seeks comment on any necessary adjustments or 
exclusions from the timeline proposed above.
    12. Size of Request. The Commission seeks comment on whether 
requests for access to a particularly large number of poles should be 
excepted from the timeline, or subject to an alternative timeline. 
Requests for access vary widely, and the Commission seeks comment on 
how best to incorporate the size or complexity of requests into the 
rules. Utah and Vermont adjust the duration of the survey and 
performance deadlines for both the size of the job and size of the 
utility. Utah divides requests for attachment into four categories: (1) 
Up to 20 poles; (2) 21 to 300 poles, or up to .5 percent of the owner's 
poles in Utah; (3) 300 to 3,000 poles, or 5 percent of the owner's 
poles in Utah, up to 3,000 poles; and (4) requests that exceed 3,000 
poles or 5 percent of the owner's poles in Utah, which are negotiated 
individually. At each step, the lower outcome of the absolute number or 
percentage test applies. Vermont staggers the timeline solely according 
to the percentage of the owner's poles where attachment is requested, 
which it divides at .5 percent, 3 percent, and 5 percent; any request 
that exceeds 5% of the owner's poles must be negotiated individually. 
Similarly, New York requires applicants to give advance notice of 
``significant'' attachment requests.
    13. Comment is sought on the merits and effectiveness of the 
states' timeline adjustments or notice requirements as

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modifications to the proposed Federal timeline described above. Utah 
and Vermont's approach has the virtue of calibrating the timeline to 
fit both the size of the request and the size of the utility, but 
implementation depends upon access to data that may not currently be 
readily available for utilities nationally. Should utilities below a 
certain size have the option of sorting attachment requests into 
categories determined by a percentage of the utility's in-State poles, 
and adjusting the timeline accordingly? If so, how should the 
Commission define a large, medium, and small request, and what 
timeframe would be appropriate for each level? Should small utilities 
negotiate all timelines individually? Alternatively, should the 
timeline apply to small utilities for requests up to a certain size, 
with any larger requests subject to individual negotiation?
    14. Providing access on a rolling basis, or capping the number of 
attachments in a given time period, might provide an alternative 
approach to modifying the proposed timeline to accommodate larger jobs. 
The Coalition Proposal would limit any individual request to 250 poles, 
with pole access requests limited to 600 attachments in any one month. 
Utah considers a request to attach to more than 300 poles a large 
request, and counts all requests from any particular prospective 
attacher within a calendar month as one application. Regarding surveys, 
UTC reports that, on average, approximately 19 percent of all requests 
take longer than 45 days to process and, of that number, the reason for 
30 percent of missed deadlines was the size of the project. Comment is 
sought regarding whether, and if so, how, the reasonable size of a 
request would fit the timeline that the Commission proposes. The 
Commission also asks whether that size should be adjusted for small 
utilities, and, if so, what thresholds are appropriate.
    15. Just as some requests might prove too large for the timeline to 
accommodate, some attachers might seek faster action on smaller 
requests. Connecticut accelerates the deadline when an applicant 
requests access to four or fewer attachments. Utah distinguishes access 
requests for 20 poles or less. Should the Commission adopt an 
alternative timeline for small requests, and, if so, how many poles 
should count as a small request and what deadlines should apply? 
Commenters should consider whether some deadlines may be easier to 
scale back than others, and address the concern that a utility that can 
act quickly alone may not be able to induce other attachers to act 
quickly in concert. Section 224 requires that the utility give existing 
attachers a ``reasonable opportunity'' to modify their attachments. 
What notice would be appropriate in the context of particular small 
jobs?
    16. Stopping the Clock. The Commission acknowledges that 
circumstances beyond a utility's control may require prioritization, or 
otherwise warrant interrupting the timeline. In New York, 
``circumstances beyond the owner's control, other than resource 
problems, will excuse meeting the timetable. Non-payment of charges 
will also stop the clock for meeting timetables.'' In Vermont, the 
clock stops for extraordinary circumstances or reasons beyond the pole 
owner's control. Comment is sought with regard to stopping and 
restarting the clock. Are guidelines necessary or helpful? What type of 
communication or notice between parties is expected? If so, what 
potential disputes would guidelines resolve, and should guidelines be 
specific or general? The Commission would expect the utility to return 
to the timeline as soon as circumstances permit, which will generally 
be the same point that the utility resumes normal operation, and to 
keep all interested parties reasonably informed.
    17. Wireless Attachment Timeline Issues. The Commission also 
solicits comment on developing timelines for section 224 access other 
than wired pole attachments. First, the Commission seeks comment on 
whether the wired pole attachment timeline is appropriate for wireless 
equipment. Utilities assert that wireless attachment presents different 
safety, reliability, and engineering concerns because wireless 
equipment varies widely; is often placed in or near the electric lines; 
and requires a power source. The current rule requiring a response to 
pole access requests within 45 days applies in full to utilities that 
receive requests by wireless carriers, however. Where a utility has no 
master agreement with a carrier for wireless attachments requested, 
such as pole top attachments, the utility may satisfy the requirement 
to respond with a written explanation of its concerns with regard to 
capacity, safety, reliability, or engineering standards. The Commission 
seeks comment on whether it should require that the response be 
sufficiently detailed to serve as a basis for negotiating a master 
agreement, which would dictate a timely process for future attachments.
    18. The Commission seeks comment on considerations that would 
affect a timeline tailored to suit requests for attachment of wireless 
equipment after a utility and the carrier have reached a master 
agreement. Attachment of wireless equipment may complicate engineering 
analyses, but may also avoid the multiparty notice and coordination 
issues that characterize rearrangement of wired facilities. Also, 
wireless carriers using a distributed antenna system (DAS) attach to 
relatively few poles compared to cable operators and wireline carriers 
that attach to every pole that their network passes. Should a timeline 
for requests for wireless equipment reflect these circumstances, and if 
so how? The Commission particularly asks utilities that have permitted 
wireless equipment to be installed on their poles to report their 
experience, and to describe their typical timeframes for meeting 
wireless attachment requests. The goal is to bring regularity and 
predictability to attachment of wireless facilities while acknowledging 
that the attachment of wireless telecommunications equipment in or near 
the electric space may raise different safety, reliability, and 
engineering concerns.
    19. Other Section 224 Timeline Issues. Section 224 provides that, 
when an owner intends to modify a pole, the owner shall provide both 
written notification to ``any entity that has obtained an attachment'' 
and a ``reasonable opportunity to add to or modify its existing 
attachment.'' The record suggests that modification may be required 
during make-ready when, for example, a pole that has been grandfathered 
to a prior standard must be brought into compliance with current 
standards when a new attachment is added. Similarly, a utility may have 
been unaware of a safety violation until make-ready is performed. Does 
the proposed timeline provide adequate time for utilities to implement 
this obligation? The definition of ``pole attachment'' in section 
224(a)(4) includes attachments to a pole, duct, conduit, or right-of-
way. The record compiled in this proceeding almost exclusively 
addresses issues of attachments to poles. Beyond timeline issues for 
access to poles, comment is sought on whether to implement this 
timeline for access to section 224 ducts, conduits, and rights-of-way 
owned or controlled by a utility. Has delayed access to infrastructure 
other than poles impeded the deployment of broadband or other services? 
If so, should the proposed pole attachment timeline set forth above be 
applied to requests for access to other infrastructure, or are 
modifications or other considerations needed?
    20. Use of Outside Contractors. Attachers frequently seek the 
ability to

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use independent contractors to deploy their facilities when the utility 
fails to perform survey and make-ready work in a timely manner. The 
National Broadband Plan recommends rules that allow attachers to use 
independent, utility-approved and certified contractors to perform 
engineering assessments and communications make-ready work, as well as 
independent surveys. In defining how and when attachers may employ 
contractors in response to that recommendation, the Commission first 
delineates between: (a) Survey and make-ready work; and (b) the actual 
attachment of facilities. As a general matter, the Commission believes 
it is appropriate to allow greater utility control over the former by 
permitting utilities to require the use of pre-approved contractors for 
this work, but continuing a less restrictive approach, originally 
established in 1996, for the latter. The Commission also distinguishes 
between electric utilities and incumbent LECs regarding the level of 
control that each may exercise over an attacher's use of independent 
contractors.
    21. Basic Right to Use Contractors. The Local Competition Order 
established a general principle that attachers may rely upon 
independent contractors; that order did not differentiate between two 
different types of work: (a) Surveys and make-ready; and (b) post-make-
ready attachment of lines. As a result, there have been ongoing 
disagreements regarding the ability of attachers to use contractors to 
perform survey and make-ready work under existing law. As discussed 
below, addressing these issues in greater detail here the Commission 
proposes to clarify and revise this approach in several respects in the 
context of surveys and make-ready to reflect utilities' concerns 
regarding safety, reliability, and sound engineering. The Commission 
also finds differing approaches warranted for incumbent LEC pole owners 
as compared to other pole owners.
    22. In particular, with respect to surveys and communications make-
ready work, the Commission proposes that: Attachers may use contractors 
to perform surveys and make-ready work if a utility has failed to 
perform its obligations within the timeline, or as otherwise agreed to 
by the utility. As discussed above, the Commission proposes a pole 
access timeline based in significant part on the approach taken in New 
York. Within that regulatory framework, the New York Commission gives 
utilities the option of using their own workers to do the requested 
work, or to hire outside contractors themselves, or to allow attachers 
to hire approved outside contractors. Under the proposed approach, 
utilities likewise would be entitled to rely on their own personnel 
unless they are unable to complete work within the timeline. If the 
utility decides to deploy its workforce on other projects or otherwise 
is unable to meet a deadline, the prospective attacher would be free to 
use contractors that are approved and certified by the utility. Comment 
is sought on this general approach, including the relative benefits of 
preserving greater control for utilities as compared to potential time- 
or cost-savings that attachers might obtain if they have appropriate 
contractors available and ready to do make-ready work.
    23. With respect to actual attachment of facilities to poles, the 
Commission proposes to retain the existing rules. The make-ready 
process is designed to address the utilities' safety, reliability and 
engineering concerns prior to a new attachment. So when that process is 
complete and facilities are ready to be attached, the utility's 
concerns are less pressing, and an attacher's interest in rolling out 
properly permitted facilities is proportionately larger. Therefore, for 
the post-make-ready attachment of facilities, the Commission retains 
the existing standard of ``same qualifications, in terms of training, 
as the utilities' own workers,'' and continues to deny utilities the 
right to predesignate or co-direct an attacher's chosen contractor. The 
Commission seeks comment on this proposal, as well as other 
alternatives.
    24. Approval and certification of contract workers. With respect to 
electric utilities and other non-incumbent LEC pole owners, the 
Commission proposes that: To perform surveys or make-ready work 
attachers may use contractors that a utility has approved and certified 
for purposes of performing such work. This is consistent with the 
approach of the New York Commission--cited approvingly by some 
attachers--which entitles applicants for attachment to hire contractors 
from a utility-approved list if the utility cannot or will not meet 
survey and make-ready deadlines. A number of utilities express concern 
that the safety and reliability of their poles may be jeopardized by 
independent contractors. Crucial judgments about safety, capacity, and 
engineering are made during surveys and make-ready, and the Commission 
finds the utilities' concerns reasonable. Permitting such utilities to 
decide which contractors it will approve and certify for surveys and 
make-ready addresses the need that utilities maintain control over 
safety and engineering standards, although the Commission seeks comment 
on alternative approaches, as well.
    25. Although the Commission proposes to allow electric utilities 
and other non-incumbent LEC pole owners to pre-approve the contractors 
they will permit to perform surveys and make-ready, their discretion 
should not be unbounded, and the Commission proposes the following 
requirements. First, the Commission proposes to require such utilities 
to post or otherwise share with attachers a list of approved- and 
certified contractors, including any contractors that the utility 
itself uses. Second, the Commission proposes to require each such 
utility to post or otherwise share with attachers the standards it uses 
to evaluate contractors for approval and certification and require the 
nondiscriminatory application of those standards. Under the proposal, 
these utilities may design their requirements as they see fit, by, for 
example, setting training standards, approving training manuals, or 
otherwise clarifying their requirements.
    26. These requirements are minimally burdensome and are sufficient 
to prevent a utility from artificially limiting the list of approved 
contractors. The Commission is unpersuaded by contentions from certain 
utilities that the decisions on outside contractors will lead to 
resource diversion of non-employee ``resources,'' undercutting their 
ability to deliver traditional services. Nothing in this proposal 
affects a utility's control of its employees. The Commission is aware 
of the need to balance the work of infrastructure personnel, but also 
mindful that section 224 imposes obligations on utilities that may 
require accommodations and adjustments. The Commission seeks further 
comment on the staffing issues, especially regarding the utilities' 
rights to the time and attention of contractors. The Commission invites 
comment concerning whether the proposed requirements are necessary, 
appropriate, and sufficient for their purpose.
    27. The Commission seeks comment on this proposal, including 
whether it strikes the right balance of rights and burdens of attachers 
and utilities, and any implementation issues the Commission should 
address. For example, if no list is provided, or if one is not 
available when the application is filed, should the existing ``same 
qualifications'' standard apply by default? The Commission also seeks 
comment on whether any additional criteria are warranted. For example, 
should this list contain a minimum number of contractors to ensure 
ready

[[Page 41343]]

availability of contractors if make-ready work is needed? Should the 
list automatically include any contractors previously used by the 
utility for its own purposes? Should there be a presumption that 
contractors that are approved and certified by a utility (or multiple 
utilities) other than the pole owner be acceptable for make-ready work?
    28. With respect to incumbent LECs, the Commission proposes that: 
to perform surveys or make-ready work attachers may use any contractor 
that has the ``same qualifications, in terms of training, as the 
utilities own workers.'' As discussed above, in the Local Competition 
Order, the Commission reasoned that ``[a]llowing a utility to dictate 
that only specific employees or contractors be used would impede the 
access that Congress sought to bestow on telecommunications providers 
and cable operators * * *.'' These risks are heightened in the context 
of incumbent LEC utility poles, where the new attacher typically will 
be a competitor of the incumbent LEC. Thus, the balancing of safety 
concerns and protection for attachers differs from the context of 
electric utility-owned poles, and leads us to propose an approach that 
grants greater flexibility to attachers.
    29. Direction and Supervision of Outside Contractors. The 
Commission proposes that, for surveys and make-ready work, utilities 
and prospective attachers may jointly direct and supervise contractors. 
As with approval and certification of contract workers, the Commission 
proposes a differing approach for incumbent LEC pole owners and other 
pole owners. And in the context of actual attachment of facilities to 
poles, the Commission does not propose any affirmative right for 
utilities to jointly direct and supervise contractors.
    30. For electric utilities and other non-incumbent LEC pole owners, 
the Commission proposes that: attachers performing surveys and make-
ready work using contractors shall invite representatives of the 
utility to accompany the contract workers, and should mutually agree 
regarding the amount of notice to the utility. The Commission further 
proposes that, whenever possible, both parties' engineers should seek 
to find mutually satisfactory solutions to conflicting opinions, but 
when differences are irreconcilable, the pole owners' representative 
may exercise final authority to make all judgments that relate directly 
to insufficient capacity or safety, reliability, and sound engineering, 
subject to any otherwise-applicable dispute resolution process. The 
Commission sees no conflict between the use of contractors as outlined 
above and the electric utilities' safety and engineering concerns. Nor 
does the Commission see a conflict with the attachers' desire to use 
independent contractors. Use of contractors is an appropriate tool to 
facilitate timely deployment of facilities only when it does not 
circumvent or diminish the electric utilities' vital role in 
maintaining the safety, reliability, and sound engineering of the pole 
infrastructure.
    31. In the case of incumbent LEC-owned poles: attachers performing 
surveys and make-ready work using contractors shall invite a 
representative of the incumbent LEC to accompany and observe the 
contractor, but the incumbent LEC shall not have final decision-making 
power. In the majority of cases, electric power companies and other 
non-incumbent LECs are typically disinterested parties with only the 
best interest of the infrastructure at heart; incumbent LECs may make 
no such claim. In contrast to the vast majority of electric utilities 
or similar pole owners, as discussed above, incumbent LECs are usually 
in direct competition with at least one of the new attacher's services, 
and the incumbent LEC may have strong incentives to frustrate and delay 
attachment. To allow an incumbent LEC a veto over contractors would 
provide them with an undue ability to act on that incentive. The 
Commission seeks comment on whether incumbent LECs have other legal 
responsibilities or obligations under joint use agreements that could 
counsel in favor of a different approach.
    32. Working Among the Electrical Lines. The Commission further 
proposes that all utilities may deny access by contractors to work 
among the electric lines, except where the contractor has special 
communications-equipment related training or skills that the utility 
cannot duplicate. In so doing, the Commission clarifies that 
``proximity of electric lines'' extends into the safety space between 
the communications and electrical wires but, not among the lines 
themselves. The Commission concluded in the Local Competition Order 
that ``[a] utility may require that individuals who will work in the 
proximity of electric lines have the same qualifications, in terms of 
training, as the utility's own workers, but the party seeking access 
will be able to use any individual workers who meet these criteria.'' 
Safety, reliability, and engineering concerns are strongest regarding 
work among energized power lines, and the National Broadband Plan calls 
for the use of independent contractors to perform ``engineering 
assessments and communications make-ready work.'' In any event, the 
word ``proximity'' is ambiguous, and could mean either ``up to the 
electric lines'' or ``among the electric lines.'' The former is the 
more reasonable choice and the Commission believes it is appropriate to 
remove this ambiguity from the rules. Thus, the Commission proposes 
that, generally, attachers and their contractors may be limited to the 
communications space and safety space below the electric space on a 
pole. However, utilities must permit contract personnel with 
specialized communications-equipment training or skills that the 
utility cannot duplicate to work among the power lines, such as work 
with wireless antennae equipment. Because of the heightened safety 
considerations, any such work shall be performed in concert with the 
utility's workforce and when the utility deems it safe.
Other Options To Expedite Pole Access
    33. Payment for Make-ready Work. In addition to adopting a formal 
pole access timeline, the Commission seeks to correctly align the 
incentives to perform make-ready work on schedule. Accordingly, the 
Commission proposes to adopt the Utah rule that applicants pay for 
make-ready work in stages, and may withhold a portion of the payment 
until the work is complete. In Utah, applicants trigger initiation of 
performance by paying one half the estimated cost; pay one quarter of 
the estimated cost midway through performance; and pay the remainder 
upon completion. What schedule of payment is normal in comparable 
circumstances in other commercial contexts? Alternatively, should the 
Commission adopt a general rule permitting payment for make-ready work 
in stages, and leave the details of the specific payment schedule to 
negotiation?
    34. Schedule of Charges. The Commission proposes that utilities 
shall make available to attaching entities a schedule of common make-
ready charges. The National Broadband Plan recommended that the 
Commission ``[e]stablish a schedule of charges for the most common 
categories of work (such as engineering assessments and pole 
construction)'' as an additional way to lower the cost and increase the 
speed of the pole attachment process. Such a schedule could provide 
transparency to attachers seeking to deploy their networks and could 
fortify the ``just and reasonable'' access standard for pole 
attachments. The Commission seeks comment generally on the benefits and 
any limitations associated with

[[Page 41344]]

requiring utilities to prepare such a schedule. Further, the Commission 
asks whether and how schedules of common make-ready charges are used 
and implemented by utilities today. The Commission also seeks comment 
on any comparable State requirements. For example, the Commission notes 
that the New York Commission's rules require that make-ready charges be 
in each pole owner's operating agreement, be posted on its Web site, 
with supporting documentation available to attachers on request, and 
can only be changed annually with notice. The Commission also asks if 
there are other mechanisms currently in use, such as standardized 
contract terms, that provide the necessary information and transparency 
to the make-ready process, without additional government mandate. 
Finally, the Commission seeks comment on whether particular make-ready 
jobs and charges are the most common, and thus would most easily be 
applied to a generalized schedule of charges.
    35. Administering Pole Attachments. The Commission seeks comment on 
ways to simplify the relationship between prospective attachers and 
utilities when there is joint ownership. The record suggests that, when 
a pole is jointly owned, a prospective attacher may sometimes be 
required to obtain permission to attach from both owners. Consolidating 
administrative authority in one managing utility would simplify a 
prospective attacher's request for access, and clarify which utility 
will interact with the requesting entity and existing attachers during 
the make-ready process. The Commission therefore proposes that, when 
more than one utility owns a pole, the owners must determine which of 
them is the managing utility for any jointly-owned pole. Also, 
requesting entities need only deal with the managing utility, and not 
both utilities. The Commission also proposes that both utilities should 
make publicly available the identity of the managing utility for any 
given pole, and the Commission seeks comments on these proposals. The 
Commission invites comment on whether the proposed regulations are 
sufficient to clarify joint owners' rights and responsibilities with 
regard to the right of access. In addition, the Commission seeks 
comment on joint use agreements, and whether they may inhibit the 
managing owner from administering the entire pole. If the joint user is 
an incumbent LEC, how should the Commission address concerns that it 
might not be inclined to devote its resources to providing access for a 
competitor? Do joint use agreements sometimes give that user a degree 
of ``control'' over access to the pole to the point that the user may 
have a specific duty to provide access under section 224?
    36. The Commission also seeks comment regarding the managing 
utility's responsibility to administer the pole during the make-ready 
process. In particular, under section 224, an existing attacher may not 
be required to bear any of the costs of rearranging its attachment to 
make room for a new attacher. As a practical matter, only the utility 
has privity with both the requesting entity and the existing attachers, 
and it appears reasonable for the utility to manage the transfer of 
funds. The Commission is reluctant, however, to entrust this 
responsibility to the managing utility without standards or guidance. 
Therefore, it proposes to require the utility to collect from existing 
attachers statements of any costs that are attributable to 
rearrangement; to bill the new attacher for these costs, plus any 
expenses the utility incurs in its role as clearinghouse, and to 
disburse compensatory payment to the existing attachers. The Commission 
seeks comment on this proposal, and any alternatives for managing this 
process. The Commission also asks whether utilities require any further 
clarification of their role in managing the pole during the make-ready 
process. For example, should the managing utility schedule the sequence 
for attaching entities to move their facilities during make-ready?
    37. Attachment Techniques. In the Order, the Commission clarified 
that the Act requires a utility to allow cable operators and 
telecommunications carriers to use the same pole attachment techniques 
that the utility itself uses or allows. Some commenters state, however, 
that even if a utility has employed such practices in the past, it 
should be able to prohibit boxing and bracketing for both itself and 
other attachers going forward. If a utility changes its practices over 
time to exclude attachment techniques such as boxing, to what extent 
would the nondiscrimination standard in the statute automatically 
address this, or are rules necessary? The Commission also seeks comment 
on how standards should apply when a pole is jointly used or owned, and 
on whether utilities' decisions regarding the use of boxing and 
bracketing should be made publicly available.
    38. Improving the Availability of Data. The Commission seeks 
comment on how to improve the collection and availability of 
information regarding the location and availability of poles, ducts, 
conduits, and rights-of-way. As the National Broadband Plan points out, 
there are hundreds of entities that own and use this infrastructure, 
and accurate information about it is important for the efficient and 
timely deployment of advanced and competitive communications networks. 
Initially, the Commission asks what data would be beneficial to 
maintain, such as the ownership of, location of, and attachments on a 
pole. Should the Commission collect these data itself, or might 
industry, including third-party entities, be better suited for the 
task? If the latter, what is the appropriate role for the Commission 
regarding the establishment of common standards and oversight? Could or 
should this information, if collected and maintained by separate 
entities, be aggregated into a national database?
    39. To gain perspective on the scope of this task, the Commission 
seeks comment on the number of poles for which data would need to be 
gathered, how long it would take to inventory them, and the cost of 
such an inventory. The Commission also asks what existing methods 
utilities currently use, such as the National Joint Utilities 
Notification System (NJUNS) or Alden Systems' Joint Use services. How 
can the Commission ensure participation by all relevant parties, 
including timely updates of information? For example, is it reasonable 
for a utility to require all attachers to actively use or populate a 
system it uses, such as NJUNS, to inventory pole attachments, perhaps 
as a term of the master agreement? How can the Commission ensure that 
the costs are shared equitably by pole owners and other users of the 
data? The Commission also seeks comment on the challenges to creating 
and maintaining such a database, including security issues, access for 
prospective attachers, and the potential burden to small utilities, as 
well as on any additional benefits such data would have for maintaining 
safe and reliable infrastructure.
    40. The Commission also expects that the timeline and related rules 
proposed above will help expedite pole access, and proposes that it 
monitor whether those rules, if adopted, achieve the intended results. 
The Commission seeks comment on the most appropriate method for it to 
use in this regard. Would the other possible improvements to the 
collection and availability discussed above provide a source of such 
information? If not, should the Commission otherwise collect such 
information, either formally, or through a periodic Public Notice or 
Notice of Inquiry? Similarly, is there other

[[Page 41345]]

information that the Commission should collect to monitor the 
effectiveness of any other pole access, enforcement, or pricing rules 
it might adopt?

B. Improving the Enforcement Process

    41. Revising Pole Attachment Dispute Resolution Procedures. In 
response to the Pole Attachment Notice, the Commission received several 
comments suggesting that the Commission modify its procedures for 
resolving pole attachment complaints. In addition, the National 
Broadband Plan included recommendations that the Commission implement 
institutional changes, such as the creation of specialized forums and 
processes for attachment disputes, and adopt process changes to 
expedite dispute resolution.
    42. The Commission asks whether it should modify its existing 
procedural rules governing pole attachment complaints. Should the 
Commission adopt additional rules or procedures to address specific 
issues that arise with wireline or wireless attachments? Do any of the 
Commission's other procedural rules, such as the rules governing formal 
complaints under section 208 of the Act, or the rules governing 
complaints related to cable service, provide a suitable model in 
developing new procedural rules for pole attachment complaints? What 
other issues concerning dispute resolution processes should the 
Commission consider?
    43. If the Commission were to establish specialized forums to 
handle pole attachment disputes, what form and structure should these 
forums take? Under what legal authority could the Commission authorize 
the formation of such forums? How would the forums be formed, managed, 
and funded? How should forum participants be selected? What specific 
expertise should staff of these forums have? What role should the 
Commission or Commission staff play with regard to the forums? What 
specific role should such forums play in the resolution of pole 
attachment disputes? Should the forums engage in mediation or other 
alternative dispute resolution mechanisms? Should the use of the forums 
for dispute resolution be mandatory or voluntary? Should these 
specialized forums issue decisions in specific cases? How could the 
decisions of the forums be challenged, and pursuant to what standard? 
Should such decisions be appealable to the Commission? What kinds of 
rules or procedures should govern the work of the specialized forums? 
How would the forum participants avoid conflicts of interest when 
engaging in dispute resolution processes with industry participants? Do 
the Transition Administrator procedures established in the 800 MHz 
Report and Order provide a suitable model in developing these forums? 
The Commission invites comment.
    44. Efficient Informal Dispute Resolution Process. In the Pole 
Attachment Notice, the Commission noted that the Commission has 
encouraged parties to participate in staff-supervised, informal dispute 
resolution processes and that these processes have been successful in 
resolving pole attachment matters. If parties are able informally to 
agree to a resolution of their problems, they can avoid the time and 
expense attendant to formal litigation. Some attachment disputes may be 
more quickly or cost-effectively resolved by the companies involved 
themselves or through other local dispute resolution processes outside 
the Commission's auspices. The Commission seeks comment on whether the 
Commission should attempt to encourage this type of local dispute 
resolution with a set of ``best practices,'' or in other ways. If the 
Commission were to develop a set of best practices, what would the 
likely impact be on the process compared with how disputes are resolved 
today? Should the best practices or local processes apply to all 
attachment disputes, safety and engineering issues only, or have some 
other scope? The New York Commission, for instance, requires some 
resolution at the company level before a formal complaint can be filed. 
Should the Commission encourage similar efforts, suggest that parties 
seek mediation or arbitration before filing a complaint, or are there 
other processes that parties have found helpful and can recommend? Are 
there other ways that the Commission should encourage this type of 
dispute resolution?
    45. The Pole Attachment Notice questioned whether Sec.  1.1404(m) 
has had the unintended consequence of discouraging informal resolution 
of disputes. For that reason, the Commission sought comment on whether 
the rule should be amended or eliminated. The Commission received no 
substantive comment concerning Sec.  1.1404(m), which provides that 
potential attachers who are denied access to a pole, duct, or conduit 
must file a complaint ``within 30 days of such denial.'' The experience 
of handling pole attachment complaints, however, leads us to believe 
that the rule hinders informal resolution of disputes. Specifically, 
the existence of the rule deters attachers from pursuing pre-complaint 
mediation and has prompted the premature filing of complaints. Indeed, 
several complainants have indicated to Commission staff that, although 
they would be interested in mediation, they felt they had no choice but 
to file a complaint first, because of Sec.  1.1404(m). Thus, the 
Commission believes the rule unnecessarily pushes some parties into 
formal litigation at a stage when informal resolution still is 
possible. Accordingly, the Commission proposes that the 30-day 
requirement in Sec.  1.1404(m) be eliminated.
    46. Remedies. Under section 224 of the Act, the Commission is 
charged with a duty to ``regulate the rates, terms, and conditions for 
pole attachments'' and to ``adopt procedures necessary and appropriate 
to hear and resolve complaints concerning such rates, terms, and 
conditions.'' The Commission has broad authority to ``enforc[e] any 
determinations resulting from complaint procedures'' and to ``take such 
action as it deems appropriate and necessary, including issuing cease 
and desist orders * * *.'' In furtherance of these statutory duties, 
the Commission has adopted procedural rules governing complaints 
alleging both unreasonable rates, terms, and conditions for pole 
attachment, and the unlawful denial of pole access.
    47. Section 1.1410 of the pole attachment rules lists the remedies 
available in a complaint proceeding where the Commission determines 
that a challenged rate, term, or condition is not just and reasonable. 
In such cases, the Commission may terminate the unjust and unreasonable 
rate, term, or condition, or substitute a just and reasonable rate, 
term, or condition established by the Commission. Moreover, Sec.  
1.1410(c) also permits a monetary award in the form of a ``refund, or 
payment,'' which will ``normally be the difference between the amount 
paid under the unjust and/or unreasonable rate, term, or condition and 
the amount that would have been paid under the rate, term, or condition 
established by the Commission from the date that the complaint, as 
acceptable, was filed, plus interest.'' Although the Commission 
occasionally has departed from the notion that the filing of a pole 
attachment complaint marks the beginning of a refund period, it usually 
has used the complaint filing date as the starting point for 
determining refunds.
    48. The Commission's rules do not expressly set forth the remedies 
available where the Commission determines that a utility has wrongfully 
denied or delayed access to poles in violation of section 224(f) of the 
Act. In addition, the rules do not provide for an award of compensatory 
damages in cases where either an unlawful denial or

[[Page 41346]]

delay of access is established, or a rate, term, or condition is found 
to be unjust or unreasonable. The Commission proposes that Sec.  1.1410 
of the Commission's pole attachment complaint rules be amended to 
enumerate the remedies available to an attacher that proves a utility 
has unlawfully delayed or denied access to its poles. The Commission 
proposes that the rule specify that one remedy available for an 
unlawful denial or delay of access is a Commission order directing that 
access be granted within a specified time frame, and/or under specific 
rates, terms, and conditions. Because the Commission already has 
authority to issue such orders, and has done so in the past, this rule 
change would simply codify existing precedent.
    49. The Commission further proposes amending Sec.  1.1410 to 
specify that compensatory damages may be awarded where an unlawful 
denial or delay of access is established, or a rate, term, or condition 
is found to be unjust or unreasonable. Because the current rule 
provides no monetary remedy for a delay or denial of access, utilities 
have little disincentive to refrain from conduct that obstructs or 
delays access. Under the current rule, the only consequence a utility 
engaging in such conduct is likely to face in a complaint proceeding is 
a Commission order requiring the utility to provide the access it was 
obligated to grant in the first place. Currently, a utility that 
competes with the attacher may calculate that the cost of defending an 
access complaint before the Commission, even if it receives an adverse 
ruling, may be justified by the advantage the pole owner has gained by 
delaying a rival's build-out plans. Allowing an award of compensatory 
damages for unlawful delays or denials of access would provide an 
important disincentive to pole owners to obstruct access. It would also 
give the Commission the ability to ensure that the attacher is ``made 
whole'' for the delay it has suffered.
    50. Should Sec.  1.1410 be amended to provide for an award of 
compensatory damages where a rate, term, or condition is found to be 
unjust or unreasonable? Under the current rule, the only monetary 
remedy specified in such cases is a refund. Although the refund remedy 
may adequately compensate an attacher who has been charged excessive 
rental rates or make-ready fees, it does not compensate the attacher 
for unreasonable terms and conditions of attachment that do not involve 
payments to the pole owner. For example, a pole owner that unlawfully 
bars an attacher from using the boxing technique on poles may increase 
the charges an attacher must pay third parties to attach its facilities 
to poles. Just compensation in such a case would not involve a refund 
by the pole owner, but might require it to reimburse the attacher for 
costs the attacher would not have incurred but for the owner's 
unreasonable ban on boxing.
    51. Finally, as noted above, Sec.  1.1410(c) also permits a 
monetary award in the form of a ``refund, or payment,'' measured ``from 
the date that the complaint, as acceptable, was filed, plus interest.'' 
The Commission adopted Sec.  1.1410(c) in 1978 to ``avoid abuse and 
encourage early filing when rates are considered objectionable by the 
CATV operator.'' But the experience in handling pole attachment 
complaints leads us to believe that Sec.  1.1410(c) fails to make 
injured attachers whole. Generally speaking, a plaintiff is entitled to 
recompense going back as far as the applicable statute of limitations 
allows. There does not appear to be a justification for treating pole 
attachment disputes differently. Moreover, the Commission finds that 
Sec.  1.1410(c) discourages private negotiations between parties about 
the reasonableness of terms and conditions of attachment and instead 
encourages an attacher first to file a complaint and then to negotiate 
with the utility. For these reasons, the Commission proposes that Sec.  
1.1410(c) be modified by deleting the phrase ``from the date that the 
complaint, as acceptable, was filed.'' Additionally, the Commission 
proposes that the phrase ``consistent with the applicable statute of 
limitations'' be added to emphasize that any relief sought is governed 
by the relevant limitations period.
    52. Unauthorized Attachments. In the Pole Attachment Notice, the 
Commission sought comment on the prevalence of attachments installed on 
poles without a lawful agreement with the pole owner (so-called 
``unauthorized attachments''). In response, several utilities claim 
that a significant number of pole attachments on their poles are 
unauthorized and violate relevant safety codes. For example, Florida 
Power and Light reports finding 33,350 unauthorized attachments in an 
audit conducted in 2006. EEI and UTC maintain that, for some utilities, 
unauthorized attachments meet or exceed 30 percent of attachments. AEP 
submits the results of surveys conducted by five utilities indicating 
that unauthorized attachment rates in the double-digits are common. In 
contrast, other utilities report percentages that are significantly 
lower. For instance, Progress Energy, Xcel Energy, and Wheeling Power 
report unauthorized attachment rates of 6.18 percent, 4.79 percent, and 
2 percent, respectively.
    53. Attachers maintain that utilities' allegations of unauthorized 
attachments are ``overblown.'' Time Warner Cable, for instance, 
contends that such assertions often are based on poor recordkeeping 
(including incorrect system maps), changes in pole ownership (e.g., a 
utility considers a once-authorized attachment on a pole to be 
unauthorized after ownership is transferred to the utility), use of 
novel and inappropriate definitions of attachment that deviate from the 
parties' past practices and industry standards, and utilities' offering 
of financial incentives to their contractors to find unauthorized 
attachments. Other attachers are of a similar mind.
    54. Based on the current record, the Commission is unable to gauge 
with certainty the extent of the problem of unauthorized attachments. 
Indeed, the data suggest that the number of unauthorized attachments 
can vary dramatically from one pole system to another. Nevertheless, 
the Commission believes the dangers presented by unauthorized 
attachments transcend the theoretical. True unauthorized attachments 
can compromise safety because they bypass even the most routine 
safeguards, such as verifying that the new attachment will not 
interfere with existing facilities, that adequate clearances are 
maintained, that the pole can safely bear the additional load, and that 
the attachment meets the appropriate safety requirements of the utility 
and the NESC. The question becomes, then, how best to address the 
problem of unauthorized attachments.
    55. The Commission sought comment in the Pole Attachment Notice on 
whether existing enforcement mechanisms adequately address alleged 
unlawful practices by attachers and ensure the safety and reliability 
of critical electric infrastructure. Under current precedent, 
unauthorized attachment fees imposed by utilities are not ``per se 
unreasonable,'' and the ``penalty may exceed the annual pole attachment 
rate.'' A ``reasonable penalty,'' however, cannot ``exceed an amount 
approximately equal to the annual pole attachment fee for the number of 
years since the most recent inventory or five years, whichever is less, 
plus interest * * *.''
    56. Pole owners complain that this precedent results in penalties 
that are not steep enough to deter attachers from mounting facilities 
for which they have no permit or that fail to comply with relevant 
safety and engineering

[[Page 41347]]

standards. In one utility's words, the unauthorized attachment penalty 
approved by the Commission is ``not a penalty at all in most cases,'' 
because the attacher ends up having to pay only what it would have owed 
had it followed appropriate permitting procedures in the first place. 
In contrast, some attachers insist that the current regime is 
sufficient, while others assert that allowing the imposition of 
penalties would contravene principles of contract law.
    57. Although the Commission makes no specific findings today as to 
whether the Commission should allow stricter penalties for unauthorized 
attachments, it appears that penalties amounting to little more than 
back rent may not discourage non-compliance with authorization 
processes. In other words, competitive pressure to bring services to 
market may overwhelm the deterrent effect of modest penalties. And so 
the Commission seeks additional comment on practical and lawful means 
of increasing compliance through the use of more substantial penalties.
    58. One potential alternative to the Commission's present penalty 
regime is a system akin to the one adopted by the Oregon Public 
Utilities Commission (Oregon Commission). The Oregon Commission 
specifies penalties of $500 per pole, per year, for attachment of 
facilities without an agreement, and, for attachments without a permit, 
$100 per pole plus five times the current annual rental fee per pole. 
The Oregon system further includes, among other things, a provision for 
attacher notification, opportunity for an attacher to correct 
violations or submit a plan for correction, and a mechanism for 
resolution of factual disputes. The Oregon penalties have been tested 
and refined with assistance from the Oregon Joint Use Association.
    59. The Commission seeks comment on whether the system of penalties 
instituted by the Oregon Commission has been effective in reducing the 
incidence of unauthorized attachments in that State. What are the 
benefits and shortcomings of the Oregon system? Should the Commission 
adopt the Oregon standards as presumptively reasonable penalties for 
unauthorized attachments? Would the Commission need to modify the 
Oregon standards before adopting them as national standards? If so, in 
what ways? Should there be a threshold number of unauthorized 
attachments necessary before penalties apply? Should exceptions be made 
for violations caused or contributed to by the pole owner (e.g., a 
utility that assumes ownership of a pole formerly owned by another 
entity, creates a hazard by adding facilities, changes its safety 
standards, renegotiates an attachment agreement, or otherwise causes a 
formerly permitted and safe attachment to lose that status)?
    60. How could the Oregon standards be enforced--through provisions 
in pole attachment agreements, through the complaint resolution 
mechanism in section 224 of the Act, or through both? Would changes to 
the Commission's pole attachment rules (47 CFR 1.1401-1.1418) be 
necessary to enable utilities to bring unauthorized attachment 
complaints?
    61. If the Oregon system is not adopted, what are alternative 
penalty systems that would deter unauthorized attachments? Are there 
other models the Commission should consider? What are the contours of 
such alternatives, including notice to attachers, safe harbors, 
opportunities for correction, exceptions for safety violations caused/
contributed to by pole owners, and means of dispute resolution?
    62. The ``Sign and Sue'' Rule. Under current Commission rules and 
precedent, an attacher may execute a pole attachment agreement with a 
utility, and then later file a complaint challenging the lawfulness of 
a provision of that agreement. This process, sometimes called ``the 
sign and sue rule,'' allows an attacher to seek relief where it claims 
that a utility has coerced it to accept unreasonable or discriminatory 
contract terms to gain access to utility poles. In the Pole Attachment 
Notice, the Commission sought comment on the ``sign and sue'' rule, and 
asked whether the Commission should adopt some contours to the rule, 
such as time-frames for raising written concerns about a provision of a 
pole attachment agreement. As discussed below, the Commission proposes 
that the sign and sue ``rule'' should be retained, but also proposes 
that it be modified through an amendment to the Commission's rules that 
would require an attacher to provide a pole owner with notice, during 
contract negotiations, of the terms it considers unreasonable or 
discriminatory.
    63. In response to the Pole Attachment Notice, a number of 
attachers filed comments supporting retention of the sign and sue rule 
in its present form. The attachers assert that, because utilities have 
inherently superior bargaining power in negotiating pole attachment 
agreements, attachers may be forced to accept unreasonable rates, 
terms, and conditions in order to gain the prompt access to poles that 
is vital to their business plans. One commenter observes that ``cable 
operators or telecom providers may need to sign an unreasonable pole 
attachment agreement while they are undergoing time-sensitive build-
outs or plant upgrades and cannot afford to be delayed by protracted 
negotiations or litigation before the Commission.'' The Commission's 
willingness to review the reasonableness of contract provisions, in the 
view of some attachers, has served to check the utilities' abuse of 
their superior bargaining and encourage them to negotiate in good 
faith, thus reducing the incidence of disputes.
    64. Attachers oppose amending the Commission's rules to impose time 
limits on the right to challenge the provisions in a pole attachment 
agreement. They argue that such time limits are inappropriate because a 
given term in a pole attachment agreement may not be unreasonable on 
its face, but may only become so through a utility's later 
interpretation or application. They predict that imposing time limits 
on challenges to the reasonableness of terms would lead to unnecessary 
pole attachment litigation because attachers would be forced 
immediately to challenge terms that may, hypothetically, be 
unreasonably applied or interpreted in the future.
    65. Several utilities filed comments opposing the sign and sue rule 
and suggesting that it be modified or eliminated. They contend that the 
rule has engendered distrust between pole-owning utilities and 
attaching entities. According to these utilities, attachers are willing 
to sign virtually any pole attachment agreement as a matter of 
expediency, knowing they can use the Commission's complaint process 
``to forestall or upset the utility's ability to enforce the 
agreement.'' The Commission's willingness to entertain pole attachment 
complaints at any time, they argue, undermines a pole owner's 
confidence ``that it will realize the bargain it has struck with an 
attaching entity.'' As one commenter put it, the sign and sue rule 
``allows attachers to `cherry pick' contractual provisions that they 
would like to disavow, while not extending the same privilege to 
utilities.''
    66. Utilities have proposed a number of fixes to these perceived 
problems with the sign and sue rule. One commenter urged the Commission 
to adopt a presumption that an executed pole attachment agreement is 
just and reasonable. Similarly, another commenter asked the Commission 
to make explicit that both parties to a pole attachment agreement are 
subject to a duty to negotiate in good faith, and bar

[[Page 41348]]

complaints as to the reasonableness of executed pole attachment 
agreements, absent extrinsic evidence of coercion or undue influence as 
would be sufficient to make the agreement void or voidable under the 
common law. Another utility asked the Commission to require that any 
challenges to pole attachment agreements be brought in State court 
under well-defined State law standards of unconscionability.
    67. The Commission adopted the sign and sue rule in recognition 
that utilities have monopoly power over pole access. The Commission was 
concerned that a utility could nullify the statutory rights of a cable 
system or a telecommunications carrier by making ``take it or leave it 
demand[s]'' that it relinquish valuable rights under section 224 
``without any quid pro quo other than the ability to attach its wires 
on unreasonable or discriminatory terms.'' The record does not 
demonstrate that the potential for utilities to exert such coercive 
pressure in pole attachment agreement negotiations is less significant 
today than when the Commission first adopted the sign and sue rule. 
Because there remains a real possibility that utilities may abuse their 
monopoly power during the negotiating process, the Commission proposes 
that the sign and sue rule should be retained in some form. For similar 
reasons, the Commission proposes that the record does not support 
adoption of a presumption that executed pole attachment agreements are 
just and reasonable.
    68. To be sure, utilities have raised valid concerns about the need 
to ensure that both parties to a pole attachment agreement negotiate in 
good faith. Their suggestion, however, that the Commission's review of 
pole attachment agreements be limited to determining whether the 
agreement would be deemed unconscionable or voidable under State 
contract law appears inconsistent with the Commission's statutory 
mandate under section 224. Section 224 grants cable systems and 
telecommunications carriers rights to pole access, and to reasonable 
rates, terms, and conditions for pole attachment, that are independent 
and distinct from rights granted under contract law. The Commission has 
a duty under section 224 to ``adopt procedures necessary and 
appropriate to hear and resolve complaints concerning * * * rates, 
terms, and conditions'' of pole attachment pursuant to the requirements 
of section 224. The Commission would not be fulfilling that duty if it 
were to substitute the requirements of contract law for the dictates of 
section 224.
    69. It is important to note, however, that section 224 does not 
grant attachers an unfettered right to ``cherry pick'' contractual 
terms they wish to disavow, while retaining the benefits of more 
favorable terms. An attacher is entitled to relief under the sign and 
sue rule only if it can show that a rate, term, or condition is 
unlawful under section 224, not merely unfavorable to the attacher. 
Further, the Commission has recognized that in some circumstances, a 
utility ``may give a valuable concession in exchange for the provision 
the attacher subsequently challenges as unreasonable.'' Where such a 
quid pro quo is established, the Commission will not disturb the 
bargained-for package of provisions.
    70. As the Commission has previously stated, the Commission 
encourages, supports and fully expects that mutually beneficial 
exchanges will take place between the utility and the attaching entity. 
The Commission wants to promote efforts by attachers and utilities to 
negotiate innovative and mutually beneficial solutions to contested 
contract issues. In furtherance of that goal, the Commission proposes 
that the Commission amend Sec.  1.1404(d) of the rules to add a 
requirement that an attacher provide a utility with written notice of 
objections to a provision in a proposed pole attachment agreement, 
during contract negotiations, as a prerequisite for later bringing a 
complaint challenging that provision.
    71. Should the amended rule include an exception addressing 
attachers' concerns that a given contract provision may not be 
unreasonable on its face, but only become so through a utility's later 
interpretation or application? The Commission thus proposes to include 
language in amended Sec.  1.1404(d) allowing the attacher to challenge 
the lawfulness of a rate, term, or condition in an executed agreement, 
without prior notice to the utility during contract negotiations, where 
the attacher establishes that the rate, term, or condition was not 
unjust and unreasonable on its face, but only as later applied by the 
utility, and the attacher could not reasonably have anticipated that 
the utility would apply the challenged rate, term, or condition in such 
an unjust and unreasonable manner. The Commission believes that this 
amendment to Sec.  1.1404(d) will prevent utilities from being blind-
sided by an attacher's post-execution challenge to the lawfulness of 
contract provisions, and will encourage the parties to reach mutually 
acceptable compromises on disputed terms, before the agreement is 
executed.
    72. Finally, the Commission asks for comment on when an attacher's 
cause of action challenging a rate, term, or condition in a pole 
attachment agreement accrues for purposes of applying the appropriate 
statute of limitations. The Commission proposes that the cause of 
action be deemed to accrue at the time the challenged contract 
provision is first applied against the attacher in an unlawful manner--
regardless of whether the provision is facially invalid--because that 
is the point in time when the attacher suffers an injury. By contrast, 
if the cause of action were instead deemed to accrue at the time the 
agreement was executed, attachers might feel compelled to bring a 
complaint challenging a contract provision that may never be applied 
against them, merely to avoid having their claims extinguished by the 
statute of limitations. The Commission seeks comment on this proposed 
rule of accrual. Further, with respect to other claims involving pole 
attachments, the Commission seeks comment on whether the Commission 
should continue to follow common law principles in determining the time 
of accrual, or adopt other, alternative approaches.

C. Pole Rental Rates

    73. Telecommunications carriers and cable operators generally pay 
for access to utility poles in two separate ways. First, as noted 
above, attachers pay nonrecurring charges to cover the costs of ``make-
ready'' work--that is, rearranging existing pole attachments or 
installing new poles as needed to enable the provider to attach to the 
pole. Second, attachers generally also pay an annual pole rental fee, 
which currently is designed to recover a portion of the utility's 
operating and capital costs attributable to the pole. Both of these 
costs can impact communications service providers' investment 
decisions. In a prior section, this FNPRM seeks comment on ways to 
reduce make-ready costs. Below, the Commission seeks comment on ways to 
minimize the distortionary effects arising from the differences in 
current pole rental rates, consistent with the objectives of the 
National Broadband Plan and the existing statutory framework.
    74. By virtue of the 1996 Act revisions, section 224 of the Act now 
sets forth two separate formulas to determine the maximum rates for 
pole attachments--one applies to pole attachments used by providers of 
telecommunications services (the telecom rate formula), and the other 
to pole attachments used ``solely to provide cable service'' (the cable 
rate formula).

[[Page 41349]]

As the Commission has implemented these statutory formulas, the telecom 
rate formula generally results in higher pole rental rates than the 
cable rate formula. The difference between the two formulas under 
current Commission rules is the manner in which they allocate the costs 
associated with the unusable portion of the pole--that is, the space on 
the pole that cannot be used for attachments. The cable rate formula 
and the telecom rate formula both allocate the costs of usable space on 
a pole based on the fraction of the usable space that an attachment 
occupies. Under the cable rate formula, the costs of unusable space on 
a pole are allocated in the same way, i.e., based on the portion of 
usable space an attachment occupies. Under the telecom rate formula, 
however, two-thirds of the costs of the unusable space is allocated 
equally among the number of attachers, including the owner, and the 
remaining one third of these costs is allocated solely to the pole 
owner.
    75. At the same time that the Commission adopted a rule 
implementing the telecom rate formula, it addressed the issues of cable 
attachments used to offer commingled cable and Internet access 
services. In particular, the Commission held that cable television 
systems that offer commingled cable and Internet access service should 
continue to pay the cable rate. In 2000, the Supreme Court upheld this 
decision, finding that section 224(b) gives the Commission authority to 
adopt just and reasonable rates for attachments within the general 
scope of section 224 of the Act, but outside the ``self-described 
scope'' of the telecom rate formula or cable rate formula as specified 
under sections 224(d) and (e).
    76. Effects of Current Pole Rental Rates. The National Broadband 
Plan recommends that the Commission ``establish rental rates for pole 
attachments that are as low and close to uniform as possible, 
consistent with [s]ection 224 of the [Act], to promote broadband 
deployment.'' In particular, the Plan observes that ``[a]pplying 
different rates based on whether the attacher is classified as a 
`cable' or a `telecommunications' company distorts attachers' 
deployment decisions.'' There have been many disputes about the 
applicability of ``cable'' or ``telecommunications'' rates to 
broadband, voice over Internet protocol and wireless services, among 
others. The Plan found that ``[t]his uncertainty may be deterring 
broadband providers that pay lower pole rates from extending their 
networks or adding capabilities (such as high-capacity links to 
wireless towers),'' based on the risk that, by doing so, a higher pole 
rental rate might be applied for their entire network.
    77. The record here likewise bears out these concerns. A number of 
cable operators confirm that they have been deterred from offering new, 
advanced services, such as to anchor institutions or wireless towers, 
based on the possible financial impact if, as a result, they were 
required to pay the current telecom rate for all their poles. The 
National Broadband Plan estimated an average annual difference between 
the telecom rate and cable rate of approximately $3 today. Although 
that difference in rates might not seem significant in isolation, it 
could amount to approximately $90 million to $120 million annually, 
given the estimated 30-40 million poles subject to Commission-regulated 
rates used by the cable industry. Cable commenters estimate an even 
greater difference between the two rates of $208 million to $672 
million for the cable industry as a whole. Moreover, the Commission 
anticipated that rate differences could deter cable operators from 
offering new services when it applied the cable rate to cable 
operators' attachments used for both video and Internet services, 
concluding that: In specifying [the cable] rate, the Commission intends 
to encourage cable operators to make Internet services available to 
their customers. The Commission believes that specifying a higher rate 
might deter an operator from providing non-traditional services. Such a 
result would not serve the public interest. Rather, the Commission 
believes that specifying the [cable rate] will encourage greater 
competition in the provision of Internet service and greater benefits 
to consumers.
    78. Previously, the Pole Attachment Notice sought comment on, among 
other things, the difference in pole attachment rates paid by cable 
systems, incumbent LECs, and competing telecommunications carriers that 
provide the same or similar services. The Commission likewise 
recognized ``the importance of promoting broadband deployment and the 
importance of technological neutrality,'' and thus ``tentatively 
conclude[d] that all categories of providers should pay the same pole 
attachment rate for all attachments used for broadband Internet access 
service.'' The Pole Attachment Notice went on to tentatively conclude, 
however, that ``the [uniform] rate should be higher than the current 
cable rate, yet no greater than the telecommunications rate.''
    79. The Commission declines to pursue the approach proposed by the 
Pole Attachment Notice for several reasons. The Commission believes 
that pursuing uniformity by increasing cable operators' pole rental 
rates--potentially up to the level yielded by the current telecom 
formula--would come at the cost of increased broadband prices and 
reduced incentives for deployment. Instead, by seeking to limit the 
distortions present in the current pole rental rates by reinterpreting 
the telecom rate to a lower level consistent with the Act, the 
Commission expects to increase the availability of, and competition 
for, advanced services to anchor institutions and as middle-mile inputs 
to wireless services and other broadband services.
    80. USTelecom and AT&T/Verizon Broadband Rate Proposals. As an 
initial matter, the Commission seeks comment on two alternatives, filed 
after the comment cycle closed in the Pole Attachment Notice, to 
establish a uniform rate for all pole attachments used to provide 
broadband Internet access services, including those by 
telecommunications carriers. As described below, both the USTelecom and 
AT&T/Verizon proposals would allocate costs among attachers differently 
than they are allocated today based on different assumptions about 
numbers of attachers and the space each occupies on a pole. Presently, 
under the cable rate formula, attachers (other than a pole owner) pay 
an average of 7.4 percent of the annual costs of a pole. Under the 
current telecom rate formula, each attacher (other than a pole owner), 
pays an average of 11.2 percent of the annual costs of a pole in urban 
areas and 16.89 percent in non-urban areas. Under USTelecom's rate 
proposal, by contrast, any attacher (other than a pole owner) would pay 
11 percent of the annual cost of a pole, regardless of the number of 
attachers or amount of space each attacher uses. Under the AT&T/Verizon 
proposal, it appears that each attacher (other than the pole owner) 
would pay 18.67 percent of the annual costs of the pole.
    81. Both rate proposals consist of formulas that are different from 
those prescribed in section 224 of the Act. USTelecom and AT&T/Verizon 
argue that the Commission ``is not limited to the particular rate 
formulas incorporating factors such as usable space set forth in 
[s]ection 224(d) and (e) for pole attachments of non-incumbent 
telecommunications carriers and cable television systems.'' Thus, 
USTelecom asserts that the Commission ``has broad authority, within the 
bounds of reasonableness, `to derive its own view of just and 
reasonable rates' * * * regardless of conventional considerations such 
as usable space.''

[[Page 41350]]

The Commission seeks comment on this view of the Commission's 
authority. Although the Supreme Court has confirmed that the Commission 
can rely on its general section 224(b) authority to ensure ``just and 
reasonable rates'' to regulate pole rental rates, under that holding 
the Commission would appear to be bound by the statutory rate formulas 
within their ``self-described scope.'' To the extent that Congress 
intended a particular rate formula to apply only when a provider was 
exclusively providing a particular type of service, it clearly knew how 
to do so. Thus, the statute provides that the section 224(d) cable rate 
formula applies to ``any pole attachment used by a cable television 
system solely to provide cable service.'' The section 224(e) telecom 
rate formula is not limited in this manner, and thus the ``self-
described scope'' of that formula would seem to encompass any 
attachments by telecommunications carriers so long as they are being 
used to provide telecommunications services--whether exclusively or in 
combination with other services. However, the Commission seeks comment 
on whether alternative interpretations of the statute would be 
reasonable. Alternatively, is there a way in which the USTelecom or 
AT&T/Verizon proposals could be reconciled with the pole rental rate 
formulas specified in sections 224(d) and (e) of the Act?
    82. The Commission also seeks comment on whether the USTelecom or 
AT&T/Verizon proposals are in the public interest. In particular, the 
Commission notes that, under the USTelecom proposal, the rates paid by 
telecom attachers generally would be lower than those rates are today, 
but the rates paid by cable attachers would be higher. With respect to 
the AT&T/Verizon proposal, the Commission notes that it appears that 
both telecommunications carriers and cable operators generally would 
pay higher pole rental rates than yielded by the current telecom rate 
formula. While those outcomes would provide uniformity of rates, would 
they undermine investment incentives or otherwise increase the cost of 
or reduce competition for communications services?
    83. Reinterpreting the Telecom Rate. Rather than deviating from the 
statutory telecom rate formula, the Commission seeks comment on ways to 
reinterpret the section 224(e) telecom rate formula so as to yield pole 
rental rates that reduce disputes and investment disincentives which 
can arise from the disparate rates yielded by the Commission's current 
rules. As the National Broadband Plan recognizes, this disparity 
largely results from the existing statutory framework, as implemented 
by the Commission. Although the National Broadband Plan recommended 
that Congress ``consider amending [s]ection 224 of the Act to establish 
a harmonized access policy for all poles, ducts, conduits and rights-
of-way,'' it also recommended that the Commission take what actions it 
can to address these rate disparities within the existing statutory 
framework. The Commission seeks comment below on alternatives for 
reinterpreting the telecom rate formula, the proposal based in part on 
one of those alternatives, as well as other alternative approaches to 
reinterpreting the telecom rate formula within the existing statutory 
framework.
    84. TWTC Proposal. TWTC submitted a proposal to revise the 
interpretation of the telecom rate formula to ``eliminate or 
dramatically reduce the differential in pole attachment rates.'' The 
Commission sought comment on this proposal in the Pole Attachment 
Notice in the context of the somewhat different focus and proposals 
considered there. The Commission revisits this proposal in light of the 
pole rate recommendation of the National Broadband Plan. In addition to 
the specific comment sought below, the Commission asks commenters to 
refresh the record regarding the questions raised about the TWTC 
proposal in the Pole Attachment Notice in the context of the issues 
under consideration here.
    85. Specifically, TWTC asserts that, despite the textual 
differences between section 224(d) and section 224(e) regarding the 
costs to be included in the cable rate formula and the telecom rate 
formula, ``the FCC currently includes the same cost categories in its 
implementing regulations'' reflected in the two formulas. In 
particular, TWTC contends that the telecom rate includes costs not 
mentioned in section 224(e), citing: (1) Rate of return; (2) 
depreciation; and (3) taxes. TWTC alleges that such costs ``bear no 
relation'' to the cost of providing space for an attachment and are not 
necessitated by the language of section 224(e). In particular, TWTC 
contends that ``none of these `costs' has anything to do with actually 
providing `space' on a pole for pole attachments because a utility 
would incur these costs `regardless of the presence of pole 
attachments.''' Thus, TWTC proposes that those costs should be 
eliminated from the telecom rate.
    86. TWTC suggests instead that utilities should determine ``how 
much extra a utility must incur to provide non-usable and usable space 
on poles for pole attachments (in both construction and maintenance 
costs) and then fully allocate those costs based on the cost-
apportionment formulas under Section 224(e)(2) and (3).'' The 
underlying economic or analytical theory for TWTC's proposal is not 
entirely clear, however.
    87. To the extent that TWTC is arguing for ``costs'' to be defined 
as marginal or incremental costs for purposes of section 224(e), the 
Commission is skeptical of that theory. Marginal cost can be defined 
either as the rate of change in total cost when output changes by an 
infinitesimal unit or as the change in total cost when output changes 
by a single unit. The term incremental cost refers to a discrete change 
in total cost when output changes by any non-infinitesimal amount, 
which might range from a single unit to a large increment representing 
a firm's entire output. The Eleventh Circuit, in addressing a takings 
challenge, has held that a pole attachment rate above marginal cost can 
provide just compensation, and marginal or incremental cost pricing can 
be an appropriate approach to setting regulated rates. Indeed, section 
224(d) establishes such an approach as the low end of permissible rates 
under the cable rate formula. However, the section 224(e) formulas 
allocate the relevant costs in such a way that simply defining ``cost'' 
as equal to incremental cost would result in pole rental rates below 
incremental cost. In particular, section 224(e) allocates portions of 
the relevant ``cost'' to both the pole owner and the attachers. Thus, 
if the Commission precisely calculated the relevant incremental costs, 
and then applied the section 224(e) cost allocation formulas, the 
resulting pole rental rate would recover less than the utility's 
incremental cost, effectively resulting in a subsidy to the attacher. 
In other words, the pole owner would bear more costs than if there were 
no third party attachments on the pole at all. The Commission thus 
believes that defining the ``cost of providing space'' as incremental 
cost in the manner TWTC seems to suggest would be inconsistent with the 
section 224(e) framework, given the manner in which the statutory 
provision allocates the relevant ``costs.'' Nevertheless, the 
Commission seeks comment on whether any party believes that, to the 
contrary, such an interpretation is permissible.
    88. The Commission also seeks comment on whether there are other 
rationales that, consistent with the existing statutory framework, 
could support TWTC's proposed approach, possibly in a modified form. 
For example, what standard could the

[[Page 41351]]

Commission use to determine whether particular costs `bear any 
relation' to the cost of providing space on a pole within the meaning 
of TWTC's proposal? To what extent would such an approach be consistent 
with the section 224 framework? As a practical matter, how would the 
particular costs be calculated, and what sources of data could be used 
to implement TWTC's proposal? In this regard, the Commission believes 
that the proposal below draws on some of the underlying elements of 
TWTC's proposal, but is more consistent with the statutory framework 
and readily administrable. However, the Commission also seeks comment 
on other possible approaches as well, to the extent that they have 
advantages over that proposal.
    89. Commission Rate Proposal. The Commission proposes an 
alternative approach which would recognize that the Commission has 
substantial--but not unlimited--discretion under the statutory 
framework to interpret the term ``cost'' for purposes of section 
224(e). This proposal would view the range of possible interpretations 
of ``cost'' under section 224(e) as yielding a range of permissible 
rates, from the current application of the telecom rate formula at the 
higher end of the range, to an alternative application of the telecom 
rate formula based on cost causation principles at the lower end. Under 
this approach, the Commission would select a particular rate from 
within that range as the appropriate telecom rate.
    90. Interpretation of the Statutory Framework. The existing 
statutory framework consists of several key provisions, and any revised 
telecom rate formula must be consistent with those provisions. For one, 
section 224(b) imposes an over-arching duty that the Commission ensure 
that rates are ``just and reasonable.'' As the Commission has 
recognized, ``[r]ather than insisting upon a single regulatory method 
for determining whether rates are just and reasonable, courts and other 
Federal agencies with rate authority similar to the own evaluate 
whether an established regulatory scheme produces rates that fall 
within a ``zone of reasonableness.'' For rates to fall within the zone 
of reasonableness, the agency rate order must undertake a `reasonable 
balancing' of the `investor interest in maintaining financial integrity 
and access to capital markets and the consumer interest in being 
charged non-exploitative rates.' '' With respect to each of the 
alternatives for interpreting the telecom rate formula discussed below, 
as well as any others raised by commenters, the Commission seeks 
comment on how well the proposal ensures ``just and reasonable'' rates. 
In particular, the Commission seeks comment from pole owners, in 
addition to attachers and other interested persons. The Commission 
notes that pole owners' perspective regarding the costs and other 
characteristics of their infrastructure might give them unique insight 
into ways the Commission could reinterpret the section 224(e) telecom 
rate formula to yield pole rental rates ``that are as low and close to 
uniform as possible, consistent with [s]ection 224 of the [Act], to 
promote broadband deployment.''
    91. In addition, sections 224(d) and (e) specify cable and telecom 
rate formulas. As discussed above, the Commission's rate rules already 
take account of one difference between those frameworks--namely, the 
treatment of unusable space. Other differences in those statutory 
provisions are not currently reflected in the Commission's rules, 
however. Although section 224(e) specifies how the pole space costs are 
to be allocated between the owner and attacher, it does not specify a 
cost methodology. In particular, section 224(e) describes how ``[a] 
utility shall apportion the cost of providing space'' on a pole--
whether usable or unusable--but does not define ``the cost of providing 
space.'' This is in contrast with the upper bound for the cable rate 
under section 224(d), which does identify particular costs to be 
included. The Commission initially implemented section 224(e) by 
interpreting ``cost'' to include the same cost categories that it was 
using in the cable rate formula, relying on a fully-distributed cost 
approach. This initial approach was not inherently unreasonable, as 
noted above, but it has resulted in rate disparities and disputes over 
which formula applies and impacted communications service providers' 
investment decisions.
    92. This statutory framework bounds the ways in which the 
Commission can interpret and apply the telecom rate formula in section 
224(e). The Commission agrees with commenters that the Commission has 
discretion to reinterpret the ambiguous term ``cost'' in section 224(e) 
and modify the cost methodology underlying the telecom rate formula to 
yield a different rate. Depending upon the relative magnitude of costs 
included, the telecom rate formula will yield relatively higher or 
lower rates. Identifying the upper- and lower-bound interpretations of 
``cost'' that are consistent with the statute thus provides an upper 
and lower limit on the possible telecom rates that would be consistent 
with section 224(e). Any of the resulting rates within that range 
potentially could be adopted by the Commission as the ``just and 
reasonable'' rate for purposes of section 224(e).
    93. Upper Bound Rate. To begin identifying the range of reasonable 
rates that could result from the telecom rate formula, the Commission 
first identifies the present telecom rate as a reasonable upper bound. 
The Commission's current telecom rate formula is based on a fully 
distributed cost methodology, which recovers costs that the pole owner 
incurs regardless of the presence of attachments. It includes a full 
range of costs, some of which, as TWTC argues, do not directly relate 
to or vary with the presence of pole attachments. For this reason, this 
interpretation of the statutory telecom rate formula could be 
considered at the higher end of the range of reasonable rates. In light 
of the National Broadband Plan's recommendation that the Commission 
seeks to achieve pole rental rates ``that are as low and close to 
uniform as possible, consistent with [s]ection 224 of the [Act],'' 
under this alternative the Commission ultimately would select a rate 
closer to the lower end of the range. Thus, within the context of this 
alternative, the Commission does not believe it is necessary to define 
the high end of the range more precisely, although the Commission seeks 
comment on that conclusion. The Commission also seeks comment on 
whether there is a cost methodology, other than a fully-distributed 
cost methodology, that could be considered as part of an upper-bound 
formula in addition, or instead.
    94. Lower Bound Rate. In identifying the lower bound of reasonable 
rates under section 224(e), the Commission proposes that a rate that 
covers the pole owners' incremental cost associated with attachment 
would, in principle, provide a reasonable lower limit. For the reasons 
described above in the context of TWTC's proposal, however, to remain 
consistent with the statutory framework, this outcome cannot be 
achieved simply by defining costs as a precise calculation of 
incremental cost. Thus, the statutory framework makes it more difficult 
to identify a lower-bound rate that recovers a utility's marginal 
costs. Instead, some definition of ``costs'' somewhat above incremental 
cost would need to be used so that when those costs are allocated 
pursuant to the 224(e) formula, the resulting pole rental rate would 
allow the utility to recover the incremental cost associated with 
attachment.
    95. For purposes of identifying such a lower-bound rate, the 
Commission continues to rely on the basic principles

[[Page 41352]]

of cost causation that would underlie a marginal cost rate. Under cost 
causation principles, if a customer is causally responsible for the 
incurrence of a cost, then that customer, the cost causer, pays a rate 
that covers this cost. This is consistent with the Commission's 
existing approach in the make-ready context where, for example, a pole 
owner recovers the entire capital cost of a new pole through make-ready 
charges from the new attacher when a new pole is needed to enable the 
attachment. Under this proposed approach, cost causation principles 
could be applied separately to each category of a pole owner's costs--
broadly consisting of capital and operating costs--for purposes of the 
pole rental rate, as well.
    96. The Commission recognizes that, under traditional ratemaking 
principles, rates may recover both operating expenses and capital 
costs, including a rate of return. Under the proposal, however, capital 
costs would be excluded for purposes of identifying a lower bound for 
the telecom pole rental rate. As an initial matter, the Commission 
notes that if capital costs arise from the make-ready process, the 
existing rules are designed to require attachers to bear the entire 
amount of those costs. With respect to other capital costs, the 
Commission believes it is likely that the attacher is the ``cost 
causer'' for, at most, a de minimis portion of these costs. It is 
likely that most, if not all, of the past investment in an existing 
pole would have been incurred regardless of the demand for attachments 
other than the owner's attachments. As a result, under a cost causation 
theory, where there is space available on a pole, an attacher would be 
required to pay for none, or at most a de minimis portion, of the 
capital costs of that pole. Given Congress' intention that the 
Commission not ``embark upon a large-scale ratemaking proceeding in 
each case brought before it, or by general order'' to establish pole 
rental rates, this alternative would simply exclude capital costs from 
the pole rental rate rather than perform a detailed cost analysis to 
identify the likely de minimis, if any, capital costs to include in the 
lower bound telecom rate. This is consistent with TWTC's argument, 
discussed above, that section 224(e) does not require the inclusion of 
these costs.
    97. The Commission seeks comment on whether the exclusion of 
capital costs from the lower bound telecom rate under this approach is 
consistent both with principles of cost causation and the existing 
section 224 framework. To the extent that pole owners contend that they 
do, in fact, incur significant capital costs outside the make-ready 
context solely to accommodate third party attachers, the Commission 
seeks comment on the nature and extent of those costs. For example, the 
Coalition of Concerned Utilities argues that: (a) Communications 
attachers are responsible for incremental capital costs for the extra 
space on taller poles; and (b) those costs exceed the attachers' share 
of the capital costs for an entire pole that the attachers bear under 
the fully distributed cost methodology reflected in the Commission's 
existing rate formulas. In particular, the Coalition argues that 
utilities install taller poles routinely throughout their networks to 
satisfy their own needs and anticipated third-party attachment demand, 
and that they do not receive sufficient compensation for this option. 
For the reasons discussed above, the Commission questions how 
frequently such situations would arise. The Commission nevertheless 
invites parties to submit studies that isolate and quantify the effect 
of third-party attachment demand on pole height and therefore pole 
investment.
    98. In addition, under the proposal, taxes would be treated as part 
of the capital costs that are excluded from the lower-bound telecom 
rate, based on cost-causation principles. The Commission seeks comment 
on the proposal to treat taxes as capital costs. The Commission also 
seeks comment more generally regarding the availability of space on 
poles today and in the future.
    99. By contrast, this approach would continue to include certain 
operating expenses--namely maintenance and administrative expenses--in 
the definition of ``cost'' for purposes of the lower bound telecom rate 
formula. This is generally consistent with cost causation principles 
because it is likely that an attacher is causally responsible for some 
of the ongoing maintenance and administrative expenses relating to use 
of the pole. Although the attacher might not be the cost causer with 
respect to all the operating costs that would be included in the lower 
bound telecom rate under this approach, as noted above, Congress' 
intention was that the Commission not ``embark upon a large-scale 
ratemaking proceeding in each case brought before it, or by general 
order'' to establish pole rental rates, which the Commission believes 
counsels in favor of including the costs in the context of maintenance 
and administrative expenses. The Commission seeks comment on the 
reasonableness of including these operating costs, as well as the 
mechanics of such an approach. Is it appropriate to develop average per 
pole maintenance and administrative expenses from ARMIS or FERC 1 data 
and to allocate these per pole expenses between the owner and the 
attacher using the factors in section 224(e)? Would such an approach 
over- or under-allocate these expenses relative to the amount actually 
caused by the attacher? The Commission notes that the Coalition of 
Concerned Utilities argues that the incremental operating costs for 
attachments, which utilities contend are caused by communications 
attachers, exceed the attachers' share of the operating costs for a 
pole that the attachers bear under the fully distributed cost 
methodology reflected in the Commission's existing rate formulas. The 
Commission is skeptical of this claim because the Commission would 
expect that a significant portion of the pole-related maintenance and 
administrative expenses would be incurred for routine activities 
unrelated to the number of attachments. The Commission nevertheless 
invites parties to submit studies that isolate and quantify the effect 
of third-party attachment demand on operating expenses.
    100. The Commission seeks comment on alternative proposals for 
determining a lower bound telecom rate. For example, should the 
Commission instead require a more precise identification of the costs 
to be included under such an approach? If so, would this be consistent 
with Congress' goal that the Commission's rate formulas be 
administrable? Commenters advocating such an approach should provide 
data calculating these costs consistent with their proposals, and 
identify how such data could be obtained for purposes of implementing 
their recommended alternative.
    101. Specific Rate Proposal. Having proposed upper- and lower-bound 
telecom rates, the Commission considers the particular rate within that 
range that utilities may charge as the ``just and reasonable'' telecom 
rate. The Commission notes that it appears likely that, in most cases, 
the rates yielded by the current cable rate formula would fall within 
that range. The Commission seeks comment on whether these findings hold 
for pole attachments more generally. How likely is it that the cable 
rate will be higher than the telecom rate calculated using only 
maintenance and administrative expenses?
    102. In particular, under this proposal, utilities would calculate 
the low-end telecom rate and the rate yielded by the current cable 
formula, and charge whichever is higher. Significantly, the cable rate 
formula has

[[Page 41353]]

been upheld by the courts as just, reasonable, and fully compensatory, 
and would result in greater rate parity between telecommunications and 
cable attachers. This approach would seem to further goals of the Act--
to promote communications competition and the deployment of ``advanced 
telecommunications capability.'' Moreover, as commenters point out, to 
the extent that attachers are, to the greatest extent possible, paying 
the same rates, this should minimize disputes that have resulted from 
the Commission's current rate formulas. This proposed alternative also 
appears to be readily administrable, consistent with Congress' 
instruction to develop a regulatory framework that may be applied in a 
``simple and expeditious'' manner with ``a minimum of staff, paperwork 
and procedures consistent with fair and efficient regulation.'' The 
Commission seeks comment on whether this proposal is consistent with 
other Commission policies, as well as whether it is consistent with the 
statutory mandate of section 224 to ensure ``just and reasonable'' pole 
rental rates, consistent with the statutory formulas.
    103. Other Alternatives and Overarching Considerations. In addition 
to the specific alternatives for reinterpreting the telecom rate 
formula discussed above, the Commission seeks comment on any other 
possible approaches, including any approaches used by states that 
regulate pole attachments that commenters would recommend. For the 
approaches to reinterpreting the telecom rate formula discussed above, 
or other approaches identified by commenters, the Commission seeks 
comment on whether the proposal would be consistent with the 
Commission's obligations under the Act and whether it would further the 
public interest. How administrable is the proposed approach? To what 
extent would the proposed telecom rate be compensatory, and, when 
considered in conjunction with other revenues earned by the utility, 
would it both lead to adequate cost recovery and protect against 
double-recovery? Is the proposed approach consistent with the 
Commission's current rules governing make-ready charges--the other way 
in which attachers compensate pole owners for access to poles today? If 
not, how would the Commission's approach to make-ready payments need to 
be modified? Would it be possible for the Commission to forbear from 
applying the section 224(e) telecom rate, and adopt a different rate--
such as the cable rate--pursuant to section 224(b), as some commenters 
have suggested?
    104. Incumbent LEC Rate Issues. As part of their proposals 
discussed above, AT&T/Verizon and USTelecom assert that incumbent LECs 
should be subject to the just and reasonable rates provision in section 
224(b) in the same manner as it applies to other providers. The issues 
related to incumbent LEC attachment rates, however, raise complex 
questions, and although the National Broadband Plan noted the possible 
effects of these rate disparities, the Plan did not include a 
recommendation specifically addressing this matter. As with the TWTC 
proposal discussed above, the Commission sought comment on the 
possibility of regulating the rates incumbent LECs pay for attachments 
in the Pole Attachment Notice in the context of the issues under 
consideration there. In contrast to the rate regulation proposals 
discussed above, the Commission does not propose specific rules in this 
FNPRM that would alter the Commission's current approach to the 
regulation of pole attachments by incumbent LECs. Rather, given the 
statutory and policy complexities, the Commission revisits the issue of 
regulation of rates paid by incumbent LEC attachers both in light of 
the specific telecom rate proposals, as well as the factual findings of 
the National Broadband Plan. In addition to the questions below, 
commenters should refresh the record regarding the questions raised 
regarding regulation of rates paid by incumbent LECs in the Pole 
Attachment Notice in the context of the issues under consideration 
here.
    105. As an initial matter, the Commission seeks comment on the 
relationship between incumbent LEC pole attachments rates and 
deployment of broadband networks and affordability of broadband 
services. USTelecom asserts that pole attachment rates ``can 
disproportionately affect the cost of delivering broadband in [rural] 
areas because the typically longer loops in rural areas often require 
more pole attachments per end user.'' Windstream, for example, argues 
that ``[g]iven the importance of pole attachments in deploying advanced 
networks to rural consumers, any Commission action that reduces 
excessive pole attachment rates would promote, rather than stifle, a 
competitive marketplace for advanced communications networks,'' 
including broadband. Windstream thus urges the Commission to extend a 
lower uniform attachment rate that it may adopt to incumbent LECs 
because it relies heavily on pole attachments to deploy broadband 
service to rural consumers. Do commenters agree that uniform rates 
between incumbent LECs and other providers are necessary or helpful to 
promote broadband deployment in unserved or underserved areas of the 
country?
    106. The Commission also seeks comment on the relationship between 
the pole rental rates paid by incumbent LECs and any other rights and 
responsibilities they have by virtue of their pole access agreements 
with utilities. For instance, incumbent LECs generally asserted in 
response to the Pole Attachment Notice that they presently are forced 
to pay rates for pole attachments that are unreasonably higher than 
those available to other attachers and that they need the protection of 
just and reasonable rates under section 224 to preclude being placed at 
a competitive disadvantage. Unlike other attachers, however, incumbent 
LECs generally attach to poles pursuant to joint use or joint ownership 
agreements. These arrangements between incumbent LECs and electric 
companies historically provide more favorable terms and conditions to 
attaching incumbent LECs than competitive LECs and cable operators 
receive from electric companies under license agreements. Electric 
utilities, cable operators, and competitive LECs thus argue that 
incumbent LECs have negotiated terms and conditions that give them 
advantages over cable operators and competitive LECs and, therefore, 
reducing attachment rates for incumbent LECs or allowing them to pay 
the same rate would provide them with an unfair competitive advantage. 
The Commission seeks further comment on how to reconcile these 
assessments and how the Commission should best pursue competitively 
neutral policies in these circumstances.
    107. To the extent that section 224(b)'s ``just and reasonable'' 
rate regulation could apply to attachments by incumbent LECs, how would 
those rates be regulated to ensure that they are ``just and 
reasonable,'' and how might they affect joint use or joint ownership 
agreements? Should the rate be the same as other attachers pay, 
notwithstanding the possible differences in pole access and 
utilization, as discussed above? And how should any approach be 
implemented? For instance, AT&T argues that, if incumbent LECs are 
entitled to attachments at regulated ``just and reasonable'' rates 
under section 224, any rate assessed by an electric company in excess 
of the statutory maximum rate should be unenforceable ``because it 
would, by definition, be unjust and unreasonable'' even if contained in 
an existing joint use agreement.

[[Page 41354]]

    108. NCTA proposes an alternative plan whereby any attaching 
entity, including incumbent LECs, would be permitted to ``opt in'' to 
existing pole agreements. Under this proposal, each pole owner would 
make each pole attachment, joint ownership, or joint use agreement 
publicly available, and attachers could opt in to those agreements, 
accepting all the terms and conditions of the agreement. NCTA presumes 
``that pole owners will not be harmed by allowing third parties to 
attach to their poles at rates, terms, and conditions that the pole 
owner already has made available to at least one other attaching party 
in its service area.'' NCTA anticipates that ``many ILECs may be 
reluctant to give up the favorable attachment rights that they 
typically possess under most joint use agreements,'' but provides them 
an alternative in cases where they believe a pole owner's rates are 
unreasonable. The Commission seeks input on the viability of these 
approaches, or other possible approaches. Could a remedy providing the 
ability for incumbent LECs unilaterally to opt out of joint use or 
joint ownership agreements in certain circumstances affect more than 
rate issues, such as safety and emergency response obligations, or 
negate other benefits that other utilities realize through joint use 
agreements? To what extent would any approach be readily administrable?
    109. In addition to requesting the right to pay a uniform rate for 
pole attachments, incumbent LECs also generally assert that they should 
have ``the same right as competitive LECs, wireless providers, and 
cable television systems to file complaints before the Commission to 
enforce their right to reasonable pole attachment rates, terms, and 
conditions for poles in which they lack an ownership interest.'' Some 
incumbent LECs assert they are left without any or sufficient recourse 
if electric utilities impose unreasonable rates, terms, and conditions 
and that this conflicts with the Commission's goals of promoting 
competition and broadband deployment. Electric utilities argue that 
incumbent LECs may seek recourse at the State level if they believe 
rates are unreasonable. The Commission seeks comment on what remedies 
incumbent LECs presently have to challenge any rates, terms, and 
conditions for pole attachments. Are those remedies sufficient? How, if 
at all, would the ability to file complaints with the Commission affect 
any State or local laws governing dispute resolution?

Procedural Matters

A. Paperwork Reduction Act Analysis

    110. This document contains new information collection requirements 
subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-
13. It will be submitted to the Office of Management and Budget (OMB) 
for review under section 3507(d) of the PRA. OMB, the general public, 
and other Federal agencies are invited to comment on the new or 
modified information collection requirements adopted in this Order.

B. Regulatory Flexibility Analysis

    111. As required by the Regulatory Flexibility Act of 1980, as 
amended, the Commission has prepared an Initial Regulatory Flexibility 
Analysis (IRFA) for this further notice of proposed rulemaking, of the 
possible significant economic impact on a substantial number of small 
entities by the policies and rules proposed in this further notice of 
proposed rulemaking. The IRFA is in Appendix C. Written public comments 
are requested on this IRFA. Comments must be identified as responses to 
the IRFA and must be filed by the deadlines for comments on the further 
notice of proposed rulemaking. The Commission will send a copy of the 
notice of proposed rulemaking, including this IRFA, to the Chief 
Counsel for Advocacy of the SBA. In addition, the notice of proposed 
rulemaking and IRFA (or summaries thereof) will be published in the 
Federal Register.

C. Ex Parte Presentations

    112. This proceeding shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules. Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentations must contain summaries of the substance 
of the presentations and not merely a listing of the subjects 
discussed. More than a one or two sentence description of the views and 
arguments presented is generally required. Other requirements 
pertaining to oral and written presentations are set forth in Sec.  
1.1206(b) of the Commission's rules.

D. Initial Regulatory Flexibility Analysis

    113. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), the Commission has prepared this present Initial 
Regulatory Flexibility Analysis (IRFA) of the possible significant 
economic impact on a substantial number of small entities by the 
policies and rules proposed in this Further Notice of Proposed 
Rulemaking (FNPRM). Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the FNPRM provided on the first page 
of the FNPRM. The Commission will send a copy of the FNPRM, including 
this IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (SBA). In addition, the FNPRM and IRFA (or summaries 
thereof) will be published in the Federal Register.
1. Need for, and Objectives of, the Proposed Rules
    114. The FNPRM seeks comment on a variety of issues relating to 
implementation of section 224 pole attachment rules in light of 
increasing intermodal competition since the Commission began to 
implement the 1996 Act. Specifically, the FNPRM seeks comment on the 
adoption of a specific timeline regarding the pole attachment request, 
survey, and make-ready time period in order to provide greater 
certainty for the timely deployment of telecommunications, cable, and 
broadband services. Additionally, the FNPRM seeks comment on the 
adoption of several proposals regarding the ability of new attachers to 
use contractors to perform pole attachment make-ready work. The FNPRM 
also proposes improvements to the existing enforcement process. 
Finally, the FNPRM seeks comment on existing rules governing pole 
attachment rates for telecommunications carriers and incumbent local 
exchange carriers (LECs) in pursuit of a low, compensatory rate that 
will improve incentives for network deployment.
2. Legal Basis
    115. The legal basis for any action that may be taken pursuant to 
the FNPRM is contained in sections 1, 4(i), 4(j), 224, 251(b)(4), and 
303 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i)-(j), 224, 251(b)(4), 303.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules May Apply
    116. The RFA directs agencies to provide a description of, and 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business

[[Page 41355]]

concern'' under the Small Business Act. A ``small business concern'' is 
one which: (1) Is independently owned and operated; (2) is not dominant 
in its field of operation; and (3) satisfies any additional criteria 
established by the SBA.
    117. Small Businesses. Nationwide, there are a total of 
approximately 29.6 million small businesses, according to the SBA.
    118. Small Organizations. Nationwide, as of 2002, there are 
approximately 1.6 million small organizations. A ``small organization'' 
is generally ``any not-for-profit enterprise which is independently 
owned and operated and is not dominant in its field.''
    119. Small Governmental Jurisdictions. The term ``small 
governmental jurisdiction'' is defined generally as ``governments of 
cities, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' Census 
Bureau data for 2002 indicate that there were 87,525 local governmental 
jurisdictions in the United States. The Commission estimates that, of 
this total, 84,377 entities were ``small governmental jurisdictions.'' 
Thus, the Commission estimates that most governmental jurisdictions are 
small.
    120. The Commission has included small incumbent local exchange 
carriers in this present RFA analysis. As noted above, a ``small 
business'' under the RFA is one that, inter alia, meets the pertinent 
small business size standard (e.g., a telephone communications business 
having 1,500 or fewer employees), and ``is not dominant in its field of 
operation.'' The SBA's Office of Advocacy contends that, for RFA 
purposes, small incumbent local exchange carriers are not dominant in 
their field of operation because any such dominance is not ``national'' 
in scope. The Commission has therefore included small incumbent local 
exchange carriers in this RFA analysis, although the Commission 
emphasizes that this RFA action has no effect on Commission analyses 
and determinations in other, non-RFA contexts.
    121. Incumbent Local Exchange Carriers (``ILECs''). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. According to Commission 
data, 1,311 carriers have reported that they are engaged in the 
provision of incumbent local exchange services. Of these 1,311 
carriers, an estimated 1,024 have 1,500 or fewer employees and 287 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small businesses 
that may be affected by the proposed action.
    122. Competitive Local Exchange Carriers (``CLECs''), Competitive 
Access Providers (``CAPs''), ``Shared-Tenant Service Providers,'' and 
``Other Local Service Providers.'' Neither the Commission nor the SBA 
has developed a small business size standard specifically for these 
service providers. The appropriate size standard under SBA rules is for 
the category Wired Telecommunications Carriers. Under that size 
standard, such a business is small if it has 1,500 or fewer employees. 
According to Commission data, 1005 carriers have reported that they are 
engaged in the provision of either competitive access provider services 
or competitive local exchange carrier services. Of these 1005 carriers, 
an estimated 918 have 1,500 or fewer employees and 87 have more than 
1,500 employees. In addition, 16 carriers have reported that they are 
``Shared-Tenant Service Providers,'' and all 16 are estimated to have 
1,500 or fewer employees. In addition, 89 carriers have reported that 
they are ``Other Local Service Providers.'' Of the 89, all have 1,500 
or fewer employees. Consequently, the Commission estimates that most 
providers of competitive local exchange service, competitive access 
providers, ``Shared-Tenant Service Providers,'' and ``Other Local 
Service Providers'' are small entities that may be affected by the 
proposed action.
    123. Interexchange Carriers (``IXCs''). Neither the Commission nor 
the SBA has developed a small business size standard specifically for 
providers of interexchange services. The appropriate size standard 
under SBA rules is for the category Wired Telecommunications Carriers. 
Under that size standard, such a business is small if it has 1,500 or 
fewer employees. According to Commission data, 300 carriers have 
reported that they are engaged in the provision of interexchange 
service. Of these, an estimated 268 have 1,500 or fewer employees and 
32 have more than 1,500 employees. Consequently, the Commission 
estimates that the majority of IXCs are small entities that may be 
affected by the proposed action.
    124. Satellite Telecommunications and All Other Telecommunications. 
These two economic census categories address the satellite industry. 
The first category has a small business size standard of $15 million or 
less in average annual receipts, under SBA rules. The second has a size 
standard of $25 million or less in annual receipts. The most current 
Census Bureau data in this context, however, are from the (last) 
economic census of 2002, and the Commission will use those figures to 
gauge the prevalence of small businesses in these categories.
    125. The category of Satellite Telecommunications ``comprises 
establishments primarily engaged in providing telecommunications 
services to other establishments in the telecommunications and 
broadcasting industries by forwarding and receiving communications 
signals via a system of satellites or reselling satellite 
telecommunications.'' For this category, Census Bureau data for 2002 
show that there were a total of 371 firms that operated for the entire 
year. Of this total, 307 firms had annual receipts of under $10 
million, and 26 firms had receipts of $10 million to $24,999,999. 
Consequently, the Commission estimates that the majority of Satellite 
Telecommunications firms are small entities that might be affected by 
the action.
    126. The second category of All Other Telecommunications comprises, 
inter alia, ``establishments primarily engaged in providing specialized 
telecommunications services, such as satellite tracking, communications 
telemetry, and radar station operation. This industry also includes 
establishments primarily engaged in providing satellite terminal 
stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems.'' For this 
category, Census Bureau data for 2002 show that there were a total of 
332 firms that operated for the entire year. Of this total, 303 firms 
had annual receipts of under $10 million and 15 firms had annual 
receipts of $10 million to $24,999,999. Consequently, the Commission 
estimates that the majority of All Other Telecommunications firms are 
small entities that might be affected by the action.
    127. Wireless Telecommunications Carriers (except Satellite). Since 
2007, the Census Bureau has placed wireless firms within this new, 
broad, economic census category. Prior to that time, such firms were 
within the now-superseded categories of ``Paging'' and ``Cellular and 
Other Wireless Telecommunications.'' Under the present and prior 
categories, the SBA has deemed a wireless business

[[Page 41356]]

to be small if it has 1,500 or fewer employees. Because Census Bureau 
data are not yet available for the new category, the Commission will 
estimate small business prevalence using the prior categories and 
associated data. For the category of Paging, data for 2002 show that 
there were 807 firms that operated for the entire year. Of this total, 
804 firms had employment of 999 or fewer employees, and three firms had 
employment of 1,000 employees or more. For the category of Cellular and 
Other Wireless Telecommunications, data for 2002 show that there were 
1,397 firms that operated for the entire year. Of this total, 1,378 
firms had employment of 999 or fewer employees, and 19 firms had 
employment of 1,000 employees or more. Thus, the Commission estimates 
that the majority of wireless firms are small.
    128. Common Carrier Paging. As noted, since 2007 the Census Bureau 
has placed paging providers within the broad economic census category 
of Wireless Telecommunications Carriers (except Satellite). Prior to 
that time, such firms were within the now-superseded category of 
``Paging.'' Under the present and prior categories, the SBA has deemed 
a wireless business to be small if it has 1,500 or fewer employees. 
Because Census Bureau data are not yet available for the new category, 
the Commission will estimate small business prevalence using the prior 
category and associated data. The data for 2002 show that there were 
807 firms that operated for the entire year. Of this total, 804 firms 
had employment of 999 or fewer employees, and three firms had 
employment of 1,000 employees or more. Thus, the Commission estimates 
that the majority of paging firms are small.
    129. In addition, in the Paging Second Report and Order, the 
Commission adopted a size standard for ``small businesses'' for 
purposes of determining their eligibility for special provisions such 
as bidding credits and installment payments. A small business is an 
entity that, together with its affiliates and controlling principals, 
has average gross revenues not exceeding $15 million for the preceding 
three years. The SBA has approved this definition. An initial auction 
of Metropolitan Economic Area (``MEA'') licenses was conducted in the 
year 2000. Of the 2,499 licenses auctioned, 985 were sold. Fifty-seven 
companies claiming small business status won 440 licenses. A subsequent 
auction of MEA and Economic Area (``EA'') licenses was held in the year 
2001. Of the 15,514 licenses auctioned, 5,323 were sold. One hundred 
thirty-two companies claiming small business status purchased 3,724 
licenses. A third auction, consisting of 8,874 licenses in each of 175 
EAs and 1,328 licenses in all but three of the 51 MEAs, was held in 
2003. Seventy-seven bidders claiming small or very small business 
status won 2,093 licenses.
    130. Currently, there are approximately 74,000 Common Carrier 
Paging licenses. According to the most recent Trends in Telephone 
Service, 281 carriers reported that they were engaged in the provision 
of ``paging and messaging'' services. Of these, an estimated 279 have 
1,500 or fewer employees and two have more than 1,500 employees. The 
Commission estimates that the majority of common carrier paging 
providers would qualify as small entities under the SBA definition.
    131. Wireless Telephony. Wireless telephony includes cellular, 
personal communications services, and specialized mobile radio 
telephony carriers. As noted, the SBA has developed a small business 
size standard for Wireless Telecommunications Carriers (except 
Satellite). Under the SBA small business size standard, a business is 
small if it has 1,500 or fewer employees. According to Trends in 
Telephone Service data, 434 carriers reported that they were engaged in 
wireless telephony. Of these, an estimated 222 have 1,500 or fewer 
employees and 212 have more than 1,500 employees. The Commission has 
estimated that 222 of these are small under the SBA small business size 
standard.
    132. Broadband Personal Communications Service. The broadband 
personal communications services (``PCS'') spectrum is divided into six 
frequency blocks designated A through F, and the Commission has held 
auctions for each block. The Commission has created a small business 
size standard 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 small business size standard for ``very 
small business'' was added and is defined as an entity that, together 
with its affiliates, has average gross revenues of not more than $15 
million for the preceding three calendar years. These small business 
size standards, in the context of broadband PCS auctions, have been 
approved by the SBA. No small businesses within the SBA-approved small 
business size standards bid successfully for licenses in Blocks A and 
B. There were 90 winning bidders that qualified as small entities in 
the Block C auctions. A total of 93 ``small'' and ``very small'' 
business bidders won approximately 40 percent of the 1,479 licenses for 
Blocks D, E, and F. In 1999, the Commission reauctioned 155 C, D, E, 
and F Block licenses; there were 113 small business winning bidders.
    133. In 2001, the Commission completed the auction of 422 C and F 
Broadband PCS licenses in Auction 35. Of the 35 winning bidders in this 
auction, 29 qualified as ``small'' or ``very small'' businesses. 
Subsequent events, concerning Auction 35, including judicial and agency 
determinations, resulted in a total of 163 C and F Block licenses being 
available for grant. In 2005, the Commission completed an auction of 
188 C block licenses and 21 F block licenses in Auction 58. There were 
24 winning bidders for 217 licenses. Of the 24 winning bidders, 16 
claimed small business status and won 156 licenses. In 2007, the 
Commission completed an auction of 33 licenses in the A, C, and F 
Blocks in Auction 71. Of the 14 winning bidders, six were designated 
entities. In 2008, the Commission completed an auction of 20 Broadband 
PCS licenses in the C, D, E and F block licenses in Auction 78.
    134. Advanced Wireless Services. In 2008, the Commission conducted 
the auction of Advanced Wireless Services (``AWS'') licenses. This 
auction, which as designated as Auction 78, offered 35 licenses in the 
AWS 1710-1755 MHz and 2110-2155 MHz bands (``AWS-1''). The AWS-1 
licenses were licenses for which there were no winning bids in Auction 
66. That same year, the Commission completed Auction 78. A bidder with 
attributed average annual gross revenues that exceeded $15 million and 
did not exceed $40 million for the preceding three years (``small 
business'') received a 15 percent discount on its winning bid. A bidder 
with attributed average annual gross revenues that did not exceed $15 
million for the preceding three years (``very small business'') 
received a 25 percent discount on its winning bid. A bidder that had 
combined total assets of less than $500 million and combined gross 
revenues of less than $125 million in each of the last two years 
qualified for entrepreneur status. Four winning bidders that identified 
themselves as very small businesses won 17 licenses. Three of the 
winning bidders that identified themselves as a small business won five 
licenses. Additionally, one other winning bidder that qualified for 
entrepreneur status won 2 licenses.
    135. Narrowband Personal Communications Services. In 1994, the 
Commission conducted an auction for Narrowband PCS licenses. A second

[[Page 41357]]

auction was also conducted later in 1994. For purposes of the first two 
Narrowband PCS auctions, ``small businesses'' were entities with 
average gross revenues for the prior three calendar years of $40 
million or less. Through these auctions, the Commission awarded a total 
of 41 licenses, 11 of which were obtained by four small businesses. To 
ensure meaningful participation by small business entities in future 
auctions, the Commission adopted a two-tiered small business size 
standard in the Narrowband PCS Second Report and Order. A ``small 
business'' is an entity that, together with affiliates and controlling 
interests, has average gross revenues for the three preceding years of 
not more than $40 million. A ``very small business'' is an entity that, 
together with affiliates and controlling interests, has average gross 
revenues for the three preceding years of not more than $15 million. 
The SBA has approved these small business size standards. A third 
auction was conducted in 2001. Here, five bidders won 317 (Metropolitan 
Trading Areas and nationwide) licenses. Three of these claimed status 
as a small or very small entity and won 311 licenses.
    136. Cellular Radiotelephone Service. Auction 77 was held to 
resolve one group of mutually exclusive applications for Cellular 
Radiotelephone Service licenses for unserved areas in New Mexico. 
Bidding credits for designated entities were not available in Auction 
77. In 2008, the Commission completed the closed auction of one 
unserved service area in the Cellular Radiotelephone Service, 
designated as Auction 77. Auction 77 concluded with one provisionally 
winning bid for the unserved area totaling $25,002.
    137. Private Land Mobile Radio (``PLMR''). PLMR systems serve an 
essential role in a range of industrial, business, land transportation, 
and public safety activities. These radios are used by companies of all 
sizes operating in all U.S. business categories, and are often used in 
support of the licensee's primary (non-telecommunications) business 
operations. For the purpose of determining whether a licensee of a PLMR 
system is a small business as defined by the SBA, the Commission uses 
the broad census category, Wireless Telecommunications Carriers (except 
Satellite). This definition provides that a small entity is any such 
entity employing no more than 1,500 persons. The Commission does not 
require PLMR licensees to disclose information about number of 
employees, so the Commission does not have information that could be 
used to determine how many PLMR licensees constitute small entities 
under this definition. The Commission notes that PLMR licensees 
generally use the licensed facilities in support of other business 
activities, and therefore, it would also be helpful to assess PLMR 
licensees under the standards applied to the particular industry 
subsector to which the licensee belongs.
    138. As of March 2010, there were 424,162 PLMR licensees operating 
921,909 transmitters in the PLMR bands below 512 MHz. The Commission 
notes that any entity engaged in a commercial activity is eligible to 
hold a PLMR license, and that any revised rules in this context could 
therefore potentially impact small entities covering a great variety of 
industries.
    139. Fixed Microwave Services. Fixed microwave services include 
common carrier, private operational-fixed, and broadcast auxiliary 
radio services. At present, there are approximately 22,015 common 
carrier fixed licensees and 61,670 private operational-fixed licensees 
and broadcast auxiliary radio licensees in the microwave services. The 
Commission has not created a size standard for a small business 
specifically with respect to fixed microwave services. For purposes of 
this analysis, the Commission uses the SBA small business size standard 
for the category Wireless Telecommunications Carriers (except 
Satellite), which is 1,500 or fewer employees. The Commission does not 
have data specifying the number of these licensees that have no more 
than 1,500 employees, and thus are unable at this time to estimate with 
greater precision the number of fixed microwave service licensees that 
would qualify as small business concerns under the SBA's small business 
size standard. Consequently, the Commission estimates that there are 
22,015 or fewer common carrier fixed licensees and 61,670 or fewer 
private operational-fixed licensees and broadcast auxiliary radio 
licensees in the microwave services that may be small and may be 
affected by the rules and policies proposed herein. The Commission 
notes, however, that the common carrier microwave fixed licensee 
category includes some large entities.
    140. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (``LMDS'') is a fixed broadband point-to-
multipoint microwave service that provides for two-way video 
telecommunications. The auction of the 986 LMDS licenses began and 
closed in 1998. The Commission established a small business size 
standard for LMDS licenses as an entity that has average gross revenues 
of less than $40 million in the three previous calendar years. An 
additional small business size standard for ``very small business'' was 
added as an entity that, together with its affiliates, has average 
gross revenues of not more than $15 million for the preceding three 
calendar years. The SBA has approved these small business size 
standards in the context of LMDS auctions. There were 93 winning 
bidders that qualified as small entities in the LMDS auctions. A total 
of 93 small and very small business bidders won approximately 277 A 
Block licenses and 387 B Block licenses. In 1999, the Commission re-
auctioned 161 licenses; there were 32 small and very small businesses 
winning that won 119 licenses.
    141. Rural Radiotelephone Service. The Commission has not adopted a 
size standard for small businesses specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio System (``BETRS''). In the present 
context, the Commission will use the SBA's small business size standard 
applicable to Wireless Telecommunications Carriers (except Satellite), 
i.e., an entity employing no more than 1,500 persons. There are 
approximately 1,000 licensees in the Rural Radiotelephone Service, and 
the Commission estimates that there are 1,000 or fewer small entity 
licensees in the Rural Radiotelephone Service that may be affected by 
the rules and policies proposed herein.
    142. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (``MDS'') and Multichannel Multipoint Distribution 
Service (``MMDS'') systems, and ``wireless cable,'' transmit video 
programming to subscribers and provide two-way high speed data 
operations using the microwave frequencies of the Broadband Radio 
Service (``BRS'') and Educational Broadband Service (``EBS'') 
(previously referred to as the Instructional Television Fixed Service 
(``ITFS'')). In connection with the 1996 BRS auction, the Commission 
established a small business size standard as an entity that had annual 
average gross revenues of no more than $40 million in the previous 
three calendar years. The BRS auctions resulted in 67 successful 
bidders obtaining licensing opportunities for 493 Basic Trading Areas 
(``BTAs''). Of the 67 auction winners, 61 met the definition of a small 
business. BRS also includes licensees of stations authorized prior to 
the auction. At this time, the Commission estimates that of the 61

[[Page 41358]]

small business BRS auction winners, 48 remain small business licensees. 
In addition to the 48 small businesses that hold BTA authorizations, 
there are approximately 392 incumbent BRS licensees that are considered 
small entities. After adding the number of small business auction 
licensees to the number of incumbent licensees not already counted, the 
Commission finds that there are currently approximately 440 BRS 
licensees that are defined as small businesses under either the SBA or 
the Commission's rules. In 2009, the Commission conducted Auction 86, 
the sale of 78 licenses in the BRS areas. The Commission offered three 
levels of bidding credits: (i) A bidder with attributed average annual 
gross revenues that exceed $15 million and do not exceed $40 million 
for the preceding three years (small business) will receive a 15 
percent discount on its winning bid; (ii) a bidder with attributed 
average annual gross revenues that exceed $3 million and do not exceed 
$15 million for the preceding three years (very small business) will 
receive a 25 percent discount on its winning bid; and (iii) a bidder 
with attributed average annual gross revenues that do not exceed $3 
million for the preceding three years (entrepreneur) will receive a 35 
percent discount on its winning bid. Auction 86 concluded in 2009 with 
the sale of 61 licenses. Of the ten winning bidders, two bidders that 
claimed small business status won 4 licenses; one bidder that claimed 
very small business status won three licenses; and two bidders that 
claimed entrepreneur status won six licenses.
    143. In addition, the SBA's Cable Television Distribution Services 
small business size standard is applicable to EBS. There are presently 
2,032 EBS licensees. All but 100 of these licenses are held by 
educational institutions. Educational institutions are included in this 
analysis as small entities. Thus, the Commission estimates that at 
least 1,932 licensees are small businesses. Since 2007, Cable 
Television Distribution Services have been defined within the broad 
economic census category of Wired Telecommunications Carriers; that 
category is defined as follows: ``This industry comprises 
establishments primarily engaged in operating and/or providing access 
to transmission facilities and infrastructure that they own and/or 
lease for the transmission of voice, data, text, sound, and video using 
wired telecommunications networks. Transmission facilities may be based 
on a single technology or a combination of technologies.'' The SBA has 
developed a small business size standard for this category, which is: 
All such firms having 1,500 or fewer employees. To gauge small business 
prevalence for these cable services the Commission must, however, use 
current census data that are based on the previous category of Cable 
and Other Program Distribution and its associated size standard; that 
size standard was: All such firms having $13.5 million or less in 
annual receipts. According to Census Bureau data for 2002, there were a 
total of 1,191 firms in this previous category that operated for the 
entire year. Of this total, 1,087 firms had annual receipts of under 
$10 million, and 43 firms had receipts of $10 million or more but less 
than $25 million. Thus, the majority of these firms can be considered 
small.
    144. Cable Television Distribution Services. Since 2007, these 
services have been defined within the broad economic census category of 
Wired Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' The SBA has developed a small business size standard 
for this category, which is: All such firms having 1,500 or fewer 
employees. To gauge small business prevalence for these cable services 
the Commission must, however, use current census data that are based on 
the previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: all such firms having 
$13.5 million or less in annual receipts. According to Census Bureau 
data for 2002, there were a total of 1,191 firms in this previous 
category that operated for the entire year. Of this total, 1,087 firms 
had annual receipts of under $10 million, and 43 firms had receipts of 
$10 million or more but less than $25 million. Thus, the majority of 
these firms can be considered small.
    145. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide. Industry data 
indicate that, of 1,076 cable operators nationwide, all but eleven are 
small under this size standard. In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers. Industry data indicate that, of 6,635 systems nationwide, 
5,802 systems have under 10,000 subscribers, and an additional 302 
systems have 10,000-19,999 subscribers. Thus, under this second size 
standard, most cable systems are small.
    146. Cable System Operators. The Communications Act of 1934, as 
amended, also contains a size standard for small cable system 
operators, 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 an operator serving 
fewer than 677,000 subscribers shall be deemed a small operator, if its 
annual revenues, when combined with the total annual revenues of all 
its affiliates, do not exceed $250 million in the aggregate. Industry 
data indicate that, of 1,076 cable operators nationwide, all but ten 
are small under this size standard. The Commission notes that the 
Commission neither requests nor collects information on whether cable 
system operators are affiliated with entities whose gross annual 
revenues exceed $250 million, and therefore the Commission is unable to 
estimate more accurately the number of cable system operators that 
would qualify as small under this size standard.
    147. Open Video Systems. The open video system (``OVS'') framework 
was established in 1996, and is one of four statutorily recognized 
options for the provision of video programming services by local 
exchange carriers. The OVS framework provides opportunities for the 
distribution of video programming other than through cable systems. 
Because OVS operators provide subscription services, OVS falls within 
the SBA small business size standard covering cable services, which is 
``Wired Telecommunications Carriers.'' The SBA has developed a small 
business size standard for this category, which is: all such firms 
having 1,500 or fewer employees. To gauge small business prevalence for 
such services the Commission must, however, use current census data 
that are based on the previous category of Cable and Other Program 
Distribution and its associated size standard; that size standard was: 
all such firms having $13.5 million or less in annual receipts. 
According to Census Bureau data for 2002, there were a total of 1,191 
firms in this previous category that operated for the entire year. Of 
this total, 1,087 firms had annual receipts of under $10 million, and 
43 firms had receipts of $10 million or more but less

[[Page 41359]]

than $25 million. Thus, the majority of cable firms can be considered 
small. In addition, the Commission notes that the Commission has 
certified some OVS operators, with some now providing service. 
Broadband service providers (``BSPs'') are currently the only 
significant holders of OVS certifications or local OVS franchises. The 
Commission does not have financial or employment information regarding 
the entities authorized to provide OVS, some of which may not yet be 
operational. Thus, again, at least some of the OVS operators may 
qualify as small entities.
    148. Cable Television Relay Service. This service includes 
transmitters generally used to relay cable programming within cable 
television system distribution systems. This cable service is defined 
within the broad economic census category of Wired Telecommunications 
Carriers; that category is defined as follows: ``This industry 
comprises establishments primarily engaged in operating and/or 
providing access to transmission facilities and infrastructure that 
they own and/or lease for the transmission of voice, data, text, sound, 
and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' The SBA has developed a small business size standard 
for this category, which is: all such firms having 1,500 or fewer 
employees. To gauge small business prevalence for cable services the 
Commission must, however, use current census data that are based on the 
previous category of Cable and Other Program Distribution and its 
associated size standard; that size standard was: all such firms having 
$13.5 million or less in annual receipts. According to Census Bureau 
data for 2002, there were a total of 1,191 firms in this previous 
category that operated for the entire year. Of this total, 1,087 firms 
had annual receipts of under $10 million, and 43 firms had receipts of 
$10 million or more but less than $25 million. Thus, the majority of 
these firms can be considered small.
    149. Multichannel Video Distribution and Data Service. MVDDS is a 
terrestrial fixed microwave service operating in the 12.2-12.7 GHz 
band. The Commission adopted criteria for defining three groups of 
small businesses for purposes of determining their eligibility for 
special provisions such as bidding credits. It defined a very small 
business as an entity with average annual gross revenues not exceeding 
$3 million for the preceding three years; a small business as an entity 
with average annual gross revenues not exceeding $15 million for the 
preceding three years; and an entrepreneur as an entity with average 
annual gross revenues not exceeding $40 million for the preceding three 
years. These definitions were approved by the SBA. On January 27, 2004, 
the Commission completed an auction of 214 MVDDS licenses (Auction No. 
53). In this auction, ten winning bidders won a total of 192 MVDDS 
licenses. Eight of the ten winning bidders claimed small business 
status and won 144 of the licenses. The Commission also held an auction 
of MVDDS licenses on December 7, 2005 (Auction 63). Of the three 
winning bidders who won 22 licenses, two winning bidders, winning 21 of 
the licenses, claimed small business status.
    150. Internet Service Providers. The 2007 Economic Census places 
these firms, whose services might include voice over Internet protocol 
(VoIP), in either of two categories, depending on whether the service 
is provided over the provider's own telecommunications connections 
(e.g. cable and DSL, ISPs), or over client-supplied telecommunications 
connections (e.g. dial-up ISPs). The former are within the category of 
Wired Telecommunications Carriers, which has an SBA small business size 
standard of 1,500 or fewer employees. The latter are within the 
category of All Other Telecommunications, which has a size standard of 
annual receipts of $25 million or less. The most current Census Bureau 
data for all such firms, however, are the 2002 data for the previous 
census category called Internet Service Providers. That category had a 
small business size standard of $21 million or less in annual receipts, 
which was revised in late 2005 to $23 million. The 2002 data show that 
there were 2,529 such firms that operated for the entire year. Of 
those, 2,437 firms had annual receipts of under $10 million, and an 
additional 47 firms had receipts of between $10 million and 
$24,999,999. Consequently, the Commission estimates that the majority 
of ISP firms are small entities.
    151. Electric Power Generation, Transmission and Distribution. The 
Census Bureau defines this category as follows: ``This industry group 
comprises establishments primarily engaged in generating, transmitting, 
and/or distributing electric power. Establishments in this industry 
group may perform one or more of the following activities: (1) Operate 
generation facilities that produce electric energy; (2) operate 
transmission systems that convey the electricity from the generation 
facility to the distribution system; and (3) operate distribution 
systems that convey electric power received from the generation 
facility or the transmission system to the final consumer.'' This 
category includes Electric Power Distribution, Hydroelectric Power 
Generation, Fossil Fuel Power Generation, Nuclear Electric Power 
Generation, and Other Electric Power Generation. The SBA has developed 
a small business size standard for firms in this category: ``A firm is 
small if, including its affiliates, it is primarily engaged in the 
generation, transmission, and/or distribution of electric energy for 
sale and its total electric output for the preceding fiscal year did 
not exceed 4 million megawatt hours.'' According to Census Bureau data 
for 2002, there were 1,644 firms in this category that operated for the 
entire year. Census data do not track electric output and the 
Commission has not determined how many of these firms fit the SBA size 
standard for small, with no more than 4 million megawatt hours of 
electric output. Consequently, the Commission estimates that 1,644 or 
fewer firms may be considered small under the SBA small business size 
standard.
    152. Natural Gas Distribution. This economic census category 
comprises: ``(1) establishments primarily engaged in operating gas 
distribution systems (e.g., mains, meters); (2) establishments known as 
gas marketers that buy gas from the well and sell it to a distribution 
system; (3) establishments known as gas brokers or agents that arrange 
the sale of gas over gas distribution systems operated by others; and 
(4) establishments primarily engaged in transmitting and distributing 
gas to final consumers.'' The SBA has developed a small business size 
standard for this industry, which is: all such firms having 500 or 
fewer employees. According to Census Bureau data for 2002, there were 
468 firms in this category that operated for the entire year. Of this 
total, 424 firms had employment of fewer than 500 employees, and 18 
firms had employment of 500 to 999 employees. Thus, the majority of 
firms in this category can be considered small.
    153. Water Supply and Irrigation Systems. This economic census 
category ``comprises establishments primarily engaged in operating 
water treatment plants and/or operating water supply systems.'' The SBA 
has developed a small business size standard for this industry, which 
is: All such firms having $6.5 million or less in annual receipts. 
According to Census Bureau data for 2002, there were 3,830 firms in 
this category that operated for the entire year. Of this total, 3,757 
firms had annual sales of less than $5 million, and

[[Page 41360]]

37 firms had sales of $5 million or more but less than $10 million. 
Thus, the majority of firms in this category can be considered small.
4. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements
    154. Should the Commission adopt the proposed regulations 
concerning access to poles, ducts, conduits, and rights-of-way, such 
action could result in increased, reduced, or otherwise altered 
reporting, recordkeeping or other compliance requirements for pole 
owners and attaching entities. In particular, if the Commission adopts 
rules governing the timing of pole attachment preparation (i.e., survey 
and make-ready), as opposed to resolution on a case-specific complaint 
basis, reporting, recordkeeping or other compliance requirements could 
change. Examples of specific topics where recordkeeping, reporting, or 
compliance requirements could change by virtue of Commission action 
include: (1) Searches and surveys of both poles and conduits, including 
information management; (2) performance of make-ready work, including 
timeliness, safety, capacity, and the use of boxing and extension arms; 
and (3) the use of qualified third-party contract workers.
    155. Should the Commission alter the enforcement process, such 
action could result in increased, reduced, or otherwise altered 
reporting, recordkeeping, or other compliance requirements for pole 
owners and attaching entities. In particular, if the Commission 
eliminates the 30-day requirement in rule 1.404(m), a cable television 
operator or telecommunications carrier would no longer be required to 
file a complaint that it was denied access to a pole, duct, conduit or 
right-of-way despite a request made pursuant to section 47 U.S.C. 
224(f) within 30 days of the denial. If the Commission adopts a penalty 
regime for unauthorized attachments similar to Oregon's, pole owners 
might be required to notify occupiers of alleged violations, and to 
allow the occupiers an opportunity to correct violations or submit a 
plan for correction, before pursuing relief under the Commission's 
rules. If the Commission modifies the ``sign and sue'' rule, such 
action might require attachers to provide notice during contact 
negotiations of terms they consider unreasonable or discriminatory.
    156. Should the Commission alter the pole attachment rate 
structure, such action could result in increased, reduced, or otherwise 
altered reporting, recordkeeping or other compliance requirements for 
pole owners and attaching entities. For example, if the Commission were 
to adopt a uniform rate for all pole attachments used for broadband 
Internet access service, providers of such services might be required 
to record and report where such service is offered. Changes to 
reporting, recordkeeping or other compliance requirements could either 
be new (e.g., if telecommunications carriers begins to record or report 
where they offer broadband Internet access service) or could 
reconfigure existing requirements (e.g., if cable television systems 
begin to record and report where they or their lessees offer broadband 
Internet access service, but cease to record and report where they or 
their lessees offer telecommunications services). If the Commission 
initiates regulation of the rates, terms, and conditions of pole 
attachment by incumbent LECs, such regulation could increase reporting, 
recordkeeping or other compliance requirements for pole owners and 
incumbent LECs where incumbent LECs attach to poles owned by other 
utilities.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    157. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include (among others) the following four alternatives: (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    158. The Commission proposes to adopt a specific timeline and 
several additional rules that provide a predictable, timely process for 
parties to seek and obtain pole attachments, while maintaining a 
utility's interest in preserving safety, reliability, and sound 
engineering. In the consideration of these proposals, the Commission 
seeks comment on whether adjustments based on the size of the utility 
to which the timeline applies are warranted. For instance, the 
Commission asks whether small utilities should negotiate all timelines 
individually or have the option of adjusting the timeline based on the 
size of the attachment request, and whether steps taken to improve the 
availability of pole data could potentially burden small pole owners. 
Further, the Commission does not have authority to regulate (and the 
proposed rules, thus, do not apply to) small utilities that are 
municipally or cooperatively owned.
    159. The Commission also proposes to modify its rules to ensure 
that its enforcement process is suited to resolving access-related 
complaints and is fair to all parties. In particular, the Commission 
proposes to remove the 30-day requirement to file a complaint from 
Sec.  1.404(m), amend Sec.  1.1410 to enumerate the remedies available 
to an attacher and provide for compensatory damages, and amend Sec.  
1.404(d) to require an attacher to object in writing, during contract 
negotiations, to provisions it considers unreasonable or 
discriminatory. These modifications aim to streamline the complaint 
process and remove barriers to informal dispute resolution, and they 
should have minimal, if any, economic impact on small entities.
    160. Finally, the Commission proposes to promote broadband 
deployment and competition by reinterpreting the section 224(e) telecom 
rate in a way that yields pole rental rates that are as low and close 
to uniform as possible. The Commission considered requiring all 
categories of providers to pay a uniform rate that would have been 
higher than the cable rate but lower than the telecom rate, but found 
that pursuing uniformity by increasing cable operators' pole rental 
rates would come at the cost of increased broadband prices and reduced 
incentives for deployment. The Commission also seeks comment on 
alternative proposals that would establish a uniform rate for all pole 
attachments used to provide broadband, and on whether the rates paid by 
incumbent LEC attachers should also be subject to the ``just and 
reasonable'' rates provision in section 224(b).
6. Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    161. None.

Ordering Clauses

    162. Accordingly, It is ordered that pursuant to sections 1, 4(i), 
4(j), 224, 251(b)(4), and 303 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 154(i)-(j), 224, 251(b)(4), 303, this Order and 
Further Notice of Proposed Rulemaking in WC Docket No. 07-245 is 
adopted.
    163. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of

[[Page 41361]]

this further notice, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects in 47 CFR Part 1

    Administrative practice and procedure, Cable television, 
Communications common carriers, Communications equipment, 
Telecommunications, Telephone, Television.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 1 as follows:

PART 1--PRACTICE AND PROCEDURE

Subpart J--Pole Attachment Procedures

    1. The heading of Part 1, subpart J is amended to read as set forth 
above.
    2. The authority citation for part 1, subpart J is added to read as 
follows:

    Authority:  47 U.S.C. 224, 154(i).

    3. Section 1.1402 is amended by adding paragraph (o) to read as 
follows:


Sec.  1.1402  Definitions.

* * * * *
    (o) The term authorized contractor means an independent contractor 
that is approved by a utility and is certified by the utility to 
perform field surveys, engineering analyses, or make-ready work, and 
includes any contractor that the utility itself employs to perform such 
work.
    4. Section 1.1403 is amended by revising paragraph (b) to read as 
follows:


Sec.  1.1403  Duty to provide access; modifications; notice of removal, 
increase or modification; petition for temporary stay; and cable 
operator notice.

* * * * *
    (b) Requests for access to a utility's poles, ducts, conduits, or 
rights-of-way by a telecommunications carrier or cable operator must be 
in writing. If access is not granted within 45 days of the request for 
access, the utility must explain the denial or grant of access 
conditioned on performance of make-ready in writing by the 45th day. 
The utility's explanation shall be specific, shall include all relevant 
evidence and information supporting its decision and shall explain how 
such evidence and information relate to a denial or conditional grant 
of access for reasons of lack of capacity, safety, reliability or 
engineering standards.
* * * * *
    5. Section 1.1404 is amended by revising paragraphs (d) and (m) to 
read as follows:


Sec.  1.1404  Complaint.

* * * * *
    (d) The complaint shall be accompanied by a copy of the pole 
attachment agreement, if any, between the cable system operator or 
telecommunications carrier and the utility. If the complainant contends 
that a rate, term, or condition in an executed pole attachment 
agreement is unjust and unreasonable, it shall attach to its complaint 
evidence documenting that the complainant provided written notice to 
the respondent, during negotiation of the agreement, that the 
complainant considered the rate, term, or condition unjust and 
unreasonable, and the basis for that conclusion. Proof of such notice 
to the respondent shall be a prerequisite to filing a complaint 
challenging a rate, term, or condition in an executed agreement, except 
where the complainant establishes that the rate, term, or condition was 
not unjust and unreasonable on its face, but only as applied by the 
respondent, and it could not reasonably have anticipated that the 
challenged rate, term, or condition would be applied or interpreted in 
such an unjust and unreasonable manner. If there is no present pole 
attachment agreement, the complaint shall contain:
    (1) A statement that the utility uses or controls poles, ducts, or 
conduits used or designated, in whole or in part, for wire 
communication; and
    (2) A statement that the cable television system operator or 
telecommunications carrier currently has attachments on the poles, 
ducts, conduits, or rights-of-way.
* * * * *
    (m) In a case where a cable television system operator or 
telecommunications carrier claims that it has been denied access to a 
pole, duct, conduit or right-of-way despite a request made pursuant to 
section 47 U.S.C. 224(f), the complaint, in addition to meeting the 
other requirements of this section, shall include the data and 
information necessary to support the claim, including:
    (1) The reasons given for the denial of access to the utility's 
poles, ducts, conduits and rights-of-way;
    (2) The basis for the complainant's claim that the denial of access 
is improper;
    (3) The remedy sought by the complainant;
    (4) A copy of the written request to the utility for access to its 
poles, ducts, conduits or rights-of-way; and
    (5) A copy of the utility's response to the written request 
including all information given by the utility to support its denial of 
access. A complaint alleging improper denial of access will not be 
dismissed if the complainant is unable to obtain a utility's written 
response, or if the utility denies the complainant any other 
information needed to establish a prima facie case.
    6. Section 1.1409 is amended by revising paragraph (e)(2) to read 
as follows:


Sec.  1.1409  Commission consideration of the complaint.

* * * * *
    (e) * * *
    (2) With respect to attachments to poles by any telecommunications 
carrier or cable operator providing telecommunications services, the 
maximum just and reasonable rate shall be the higher of:
    (i) The rate yielded by Sec.  1.1409(e)(1), or
    (ii) The rate yielded by the following formula:

Maximum Rate = Space Factor x Net Cost of a Bare Pole x [Carrying 
Charge Rate]


Where

Space Factor = [(Space Occupied) + [(\2/3\) x (Unusable Space/No. of 
Attaching Entities)]]/Pole Height
* * * * *
    7. Section 1.1410 is revised to read as follows:


Sec.  1.1410  Remedies.

    (a) If the Commission determines that the rate, term, or condition 
complained of is not just and reasonable, it may prescribe a just and 
reasonable rate, term, or condition and may:
    (1) Terminate the unjust and unreasonable rate, term, or condition;
    (2) Substitute in the pole attachment agreement the just and 
reasonable rate, term, or condition established by the Commission;
    (3) Order a refund, or payment, if appropriate. The refund or 
payment will normally be the difference between the amount paid under 
the unjust and/or unreasonable rate, term, or condition and the amount 
that would have been paid under the rate, term, or condition 
established by the Commission, plus interest, consistent with the 
applicable statute of limitations; and
    (4) Order an award of compensatory damages, consistent with the 
applicable statute of limitations.

[[Page 41362]]

    (b) If the Commission determines that access to a pole, duct, 
conduit, or right-of-way has been unlawfully denied or unreasonably 
delayed, it may:
    (1) Order that access be permitted within a specified time frame 
and in accordance with specified rates, terms and conditions; and
    (2) Order an award of compensatory damages, consistent with the 
applicable statute of limitations.
    8. Add Sec.  1.1420 to subpart J to read as follows:


Sec.  1.1420  Timeline for access to poles, ducts, conduits, and 
rights-of-way.

    (a) All time limits in this section are to be calculated according 
to Sec.  1.4.
    (b) A request for access triggers a requirement to perform the 
obligations in Sec.  1.1403(b) within 45 days, including a survey and 
engineering analysis used to support a utility's decision. If the 
utility fails to complete and deliver the survey to the requesting 
entity within 45 days after the request, the requesting entity may use 
a contractor to complete the survey and engineering analysis. The 
utility shall cooperate with the requesting entity in directing and 
supervising the authorized contractor.
    (1) For poles, ducts, conduits, and rights-of-way owned by an 
incumbent LEC utility, the requesting entity shall use a contractor 
that has at least the same qualifications and training as the incumbent 
LEC's own workers that perform the same tasks.
    (2) For poles, ducts, conduits, and rights-of-way owned by a non-
incumbent LEC utility, the requesting entity shall use an authorized 
contractor.
    (c) Within 14 days of providing a survey as required by Sec.  
1.1420(b), a utility shall tender an offer to perform all necessary 
make-ready work, including an estimate of its charges.
    (1) The requesting entity may accept a valid offer and make an 
initial payment upon receipt, or until the offer is withdrawn.
    (2) The utility may withdraw an outstanding offer to perform make-
ready work after 14 days.
    (d) Upon receipt of payment, a utility shall notify immediately all 
attaching entities that may be affected by the project, and shall 
specify the date after which the utility or its agents become entitled 
to move the facilities of the attaching entity.
    (1) The utility shall set a date for completion of make-ready no 
later than 45 days after the notice.
    (2) The utility shall direct and coordinate the sequence and timing 
of rearrangement of facilities to afford each attaching entity a 
reasonable opportunity to use its own personnel to move its facilities.
    (3) Completion of all make-ready work and final payment by the 
requesting entity shall complete the grant of requested access and all 
necessary authorization.
    (e) If make-ready work is not completed by any other attaching 
entities as required by paragraph (d) of this section, the utility or 
its agent shall complete all necessary make-ready work.
    (1) An incumbent local exchange carrier's facilities may be 
rearranged or replaced by the utility or its agents 45 days after the 
notice required in paragraph (d) of this section.
    (2) A cable system operator's or telecommunications carrier's 
remaining facilities may be rearranged or replaced by the utility or 
its agents 60 days after the notice required by paragraph (d) of this 
section.
    (f) If make-ready work is not completed in the time specified in 
paragraph (e)(2) of this section, the requesting entity may use a 
contractor to complete all necessary make-ready work. For poles owned 
by an incumbent LEC utility, the requesting entity shall use a 
contractor that has at least the same qualifications and training as 
the incumbent LEC's own workers that perform the same tasks. For poles 
owned by a non-incumbent LEC utility, the requesting entity shall use 
an authorized contractor.
    (1) The utility shall cooperate with the requesting entity in 
directing and supervising the contractor.
    (2) Upon completion of make-ready, the requesting entity shall pay 
the utility for any outstanding expenses charged by the utility for 
expenses incurred to complete the make-ready.
    (3) Upon receipt of payment or establishment that no further 
payment is due, the utility shall confirm that the request for access 
is granted.
    (4) Once all make-ready work is performed and the request for 
access is granted, the requesting entity may use any contractor to 
install its facilities that has the same qualifications, in terms of 
training, as the utility's own workers, whether or not the contractor 
is authorized by the utility.
    9. Add Sec.  1.1422 to subpart J to read as follows:


Sec.  1.1422  Contractors.

    (a) Utilities shall make available:
    (1) A list of authorized contractors; and
    (2) Criteria and procedures for becoming an authorized contractor.
    (b) If a contractor has been hired according to conditions 
specified in Sec.  1.1420, a utility may direct and supervise an 
authorized contractor in cooperation with the requesting entity.
    (1) The attaching entity shall invite a utility representative to 
accompany the contractor and the utility representative may consult 
with the authorized contractor and the entity requesting access.
    (2) The representative of a non-incumbent LEC utility may make 
final determinations on a nondiscriminatory basis that relate directly 
to insufficient capacity or the safety, reliability, and sound 
engineering of the infrastructure.
    10. Add Sec.  1.1424 to subpart J to read as follows:


Sec.  1.1424  Exclusion from work among the electric lines.

    (a) Utilities may exclude non-utility personnel from working among 
the electric lines on a utility pole, except workers with specialized 
communications-equipment skills or training that the utility cannot 
duplicate which are necessary to add or maintain a pole attachment.
    (b) Utilities shall permit workers with specialized skills or 
training concerning communications equipment to work among the electric 
lines:
    (1) In concert with the utility's workforce; and
    (2) When the utility deems it safe.
    11. Add Sec.  1.1426 to subpart J to read as follows:


Sec.  1.1426  Charges for access and make-ready.

    (a) Utilities shall make available to attaching entities a schedule 
of common make-ready charges.
    (b) Payment for make-ready charges is due in the following 
increments:
    (1) Payment of 50 percent of estimated charges requires the 
recipient utility to begin make-ready performance.
    (2) Payment of 25 percent of estimated charges is due 22 days after 
the first payment.
    (3) Payment of remaining make-ready charges is due when access is 
granted.
    12. Add Sec.  1.1428 to subpart J to read as follows:


Sec.  1.1428  Administration of pole attachment requests.

    (a) Where a pole is jointly owned by more than one utility:
    (1) The owners shall designate a single owner to manage requests 
for pole attachment; and
    (2) Each owner shall make publicly available the identity of the 
managing utility for its poles.
    (b) Requesting entities shall not be required to interact with an 
owner other than the single managing pole owner.
    (c) The managing pole owner shall:

[[Page 41363]]

    (1) Collect from each existing attacher a statement of any costs 
attributable to rearrangement of the existing attacher's facilities to 
accommodate a new attacher.
    (2) Bill the new attacher for these costs, plus any expenses the 
managing pole owner incurs in its role as clearinghouse; and
    (3) Disburse compensatory payment to the existing attachers.

[FR Doc. 2010-17048 Filed 7-14-10; 8:45 am]
BILLING CODE 6712-01-P