BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


Proposed Rulemaking to Adopt a Methodology the Determination of Just and 
Reasonable Rates for Attachments to Transmission Facilities	)
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	)	DOCKET NO.  UT-970723
		
		COMMENTS OF U S WEST COMMUNICATIONS, INC.

 U S WEST Communications, Inc. (“U S WEST”), hereby responds to the Washington 
Utilities and Transportation Commission’s (the "Commission") Preproposal 
Statement of Inquiry, dated September 15, 1997, seeking comments regarding the 
determination of just and reasonable rates for attachments to transmission 
facilities.
I. BACKGROUND AND SUMMARY
 On September 15, 1997, the Commission solicited comments to assist it in 
implementing an efficient and effective methodology for determining fair, 
consistent and effective rates for attachments to transmission facilities. In 
some portions of the Commission's Statement of Inquiry, the Commission utilizes 
the term "pole attachments." It is assumed that the Commission is utilizing the 
term "pole attachment" as it is defined in 47 U.S.C. § 224(a)(4).  The 
Commission also indicated that it is considering adopting the methodology 
currently employed by the FCC, codified at 47 C.F.R. §1404(g).
 Prior to the Commission’s solicitation of comments, the FCC issued a Notice of 
Proposed Rule Making, dated March 14, 1997.  In the Matter of Amendment of 
Rules and Policies Governing Pole Attachments, CS Docket No. 97-98, Notice of 
Proposed Rule Making, FCC 97-94, rel. Mar. 14, 1997 (“NPRM”). The FCC 
subsequently sought further comments regarding pole attachment issues in a 
second Notice of Proposed Rule Making.  In the Matter of Implementation of 
Section 703(e) of the Telecommunications Act of 1996, FCC 97-151, rel. August 
12, 1997.  Insofar as this subsequent notice concerns rules to be effective in 
2001, U S WEST does not believe the Commission is seeking comments on such 
notice at this time.  Should the Commission desire comments on this second 
notice, U S WEST stands ready to accommodate the Commission.  In response to 
the FCC’s NPRM, U S WEST submitted its comments, which favored the retention of 
the FCC’s current rate formula for pole attachments, with one caveat and one 
slight modification.  First, U S WEST urged the FCC to continue its policy 
favoring private contracts for the basis of pole rental arrangements.  Second, 
U S WEST urged the FCC to modify its formula to eliminate the possibility of 
using a negative value for the net cost of a bare pole (which could result in 
negative pole attachment rates).
 U S WEST believes that attachment rates should primarily be set by the 
interested parties, with the Commission adopting a methodology only to be used 
when such negotiations fail.  In this vein, U S WEST agrees with the Commission 
that the FCC’s current rate formula for pole attachments is a sound one, once 
modified to eliminate the possibility of using a negative net pole value.  This 
modified formula, coupled with an expressed preference for the private 
negotiation of pole attachment rates, would provide the Commission with the 
methodology it seeks for determining fair, consistent and effective rates, 
while also granting any concerned parties the opportunity to reach their own 
arrangements without burdening the Commission with the job of adjudicating 
unnecessary disputes.
II. PRIVATE CONTRACTS SHOULD CONTINUE TO BE THE BASIS FOR DETERMINING POLE 
RENTAL ARRANGEMENTS.

 At the outset, U S WEST wishes to advise the Commission of its plain 
preference for the private negotiation of attachment rates.  Traditionally, 
pole attachment rates have been negotiated between the affected parties (i.e., 
telephone companies, cable companies and electric utilities) and governed by 
individual contracts.  Under the 1978 Pole Attachment Act, 47 U.S.C. § 224, 
cable companies could file complaints with the FCC if they believed that they 
were being charged unreasonable rates or were being subjected to unreasonable 
terms and conditions. The 1978 Pole Attachment Act only gave the FCC authority 
over pole attachment disputes in those states which had not adopted their own 
pole attachment regulations.  47 U.S.C. § 224(c)(1).  The FCC became involved 
only if the parties could not agree on pole attachment rates, terms and 
conditions and the disagreement resulted in a complaint.  The FCC also retained 
authority to adjudicate pole attachment disputes between contracting parties.
 The Commission would do well to follow the FCC’s lead in favoring the fixing 
of pole attachment rates by private negotiation.  Such an approach would 
alleviate any potential burden upon the Commission in refereeing an 
unanticipated number of disputes.  In the circumstances where the parties are 
unable to resolve a dispute among themselves, the Commission would retain the 
authority to mandate a fair, consistent and effective deal.
III. THE COMMISSION SHOULD ADOPT THE FCC’s CURRENT RATE FORMULA AND 
ASSUMPTIONS, MODIFIED TO REMOVE THE EFFECTS OF NEGATIVE RATE SALVAGE.

 In the event interested parties were unable to come to an agreement and, thus, 
invoke the aid of the Commission in settling their impasse, U S WEST submits 
that the FCC’s current formula for determining pole attachment rates is an 
appropriate methodology (once modified as more fully explained below).  
Currently, the FCC uses the following formula to determine the maximum cable 
attachment rate for poles:
Maximum     = Space Occupied Buy Attachment    x Net Cost of x  Carrying
Rate  Total Usable Space   A Bare Pole  Charge Rate
 
 The FCC applies the following formula to determine the net cost of a bare pole 
owned by a telecommunications company:
 Net Cost of = .95 x Net Pole Investment
 a Bare Pole  Number of Poles
 
 In applying these formulas, the FCC has adopted a rebuttable presumption of an 
average pole height of 37.5 feet, an average amount of usable space of 13.5 
feet, and an average amount of 24 feet of unusable feet of space on a pole.  In 
general, U S WEST has found the FCC’s rebuttable presumptions to be an fairly 
accurate assessment of the poles currently used by it.  In the event that the 
Commission should decide to adopt the FCC’s formula, U S WEST submits that the 
Commission should also employ the presumptions currently used by the FCC as to 
pole height and usable and unusable space. In response to the FCC’s NPRM, 
several commentors urged that the FCC to increase its presumptions pertaining 
to pole size and usable space.  In that proceeding, U S WEST vigorously opposed 
any such increase.  Insofar as this current proceeding merely contemplates the 
adoption of the FCC’s methodology as it is now used, U S WEST does not deem it 
appropriate to address this issue here.  If and when this issue should arise in 
this proceeding, U S WEST reserves its right to submit factual data pertaining 
to the poles it currently has in service.
 U S WEST notes, however, that the FCC recently has been asked to modify its 
pole attachment formula to eliminate the possibility of using a negative value 
for the net cost of a bare pole (which, under the formula, could result in 
negative pole attachment rates).  See, NPRM, pp. 8-10.  This anomaly arises 
when the cost to remove a pole exceeds the pole’s salvage value (i.e., negative 
net salvage) and when, under certain circumstances, the depreciation reserve 
exceeds gross pole investment.  Generally, the removal costs for a pole are 
included in the original cost of a pole.  These original costs of a pole are 
depreciated over time.  Eventually, the accumulated depreciation exceeds the 
pole's original cost, resulting in negative net pole investment.  When these 
figures are plugged into the FCC's formula, a negative or unusually low pole 
attachment rate results.
 This possibility is not merely theoretical.  Indeed, U S WEST’s accumulated 
depreciation reserve exceeds its gross pole investment in five states which it 
serves — Iowa, Nebraska, Minnesota, North Dakota and South Dakota.  In three 
other U S WEST states, the net cost of a bare pole is very close to zero and is 
expected to turn negative in the very near future.  These states are Idaho, 
Wyoming and Montana.  Admittedly, negative net salvage is not yet a problem for 
U S WEST in Washington, however, the possibility plainly exists that it may 
become so.  Clearly, the negative net salvage problem is a continuing problem 
looming on the horizon and one which should be dealt with by the Commission in 
this proceeding.
 U S WEST does not believe that it is appropriate to have negative pole 
attachment rates, even if the accumulated depreciation exceeds gross pole 
investment.  Furthermore, U S West believes that the cost of pole removal is a 
bona fide cost associated with providing poles and that all pole users should 
share in covering this cost.
 The FCC has proposed to resolve this problem by removing the net salvage value 
of a pole from the accumulated depreciation balance when the net value of poles 
becomes negative.  Removal of the net salvage value would, for the purposes of 
pole attachment rate calculations, restate the accumulated depreciation account 
to reflect only the depreciation of the pole investment, restoring the net pole 
investment to a positive balance.  In its comments in response to the FCC’s 
NPRM, U S WEST supported the FCC’s approach as a reasonable middle ground, 
despite the fact rates may unexpectedly fluctuate in the year that the 
accumulated depreciation reserve exceeds gross plant investment in poles.  U S 
WEST still believes that this is the most efficacious way of addressing this 
problem and submits that the Commission  should adopt the FCC’s current formula 
for pole attachment rates, with this one modification.
IV. CONCLUSION
 For the foregoing reasons, U S WEST supports the Commission’s proposed 
adoption of the FCC’s methodology, provided:
1. the Commission acknowledges its preference to have pole attachment rates 
negotiated between parties (when possible); and
2. the formula is modified to eliminate the possibility that negative net pole 
salvage value would be used to determine maximum attachment rates.
 Respectfully submitted this ___ day of November, 1997.
      U S WEST Communications, Inc.

 ________________________________
 Lisa A. Anderl, WSBA #13236
 Peter J. Butler, Attorney at Law