Report No. CS 97-21     CABLE SERVICES ACTION           August 12, 1997

     COMMISSION SEEKS COMMENT ON POLE ATTACHMENT RULES AND RATES
                        (CS Docket No. 97-151)


     The Commission has adopted a Notice of Proposed Rulemaking (FCC 97-234)
establishing a new methodology for pole attachment rates for various providers of
telecommunications services.  The 1996 Telecommunications Act created a distinction between
pole attachments used by cable systems solely to provide cable service and pole attachments used
by cable systems or by telecommunications carriers to provide any telecommunications service. 
Section 703(e) of the 1996 Act prescribed a new methodology for determining pole attachment
rates for telecommunication carriers.  The Commission must prescribe the new methodology for
telecommunications carriers within two years of enactment of the 1996 Act, with these rules
becoming effective five years from enactment.  This Notice  seeks comment regarding
implementation of a methodology to ensure just, reasonable, and nondiscriminatory pole
attachment and conduit rates for telecommunication carriers.  

     Key elements of this Notice include:

     The new methodology differs from the existing pole attachment formula by allocating the
     cost of the pole, duct, conduit or right-of-way on the basis of both usable and unusable
     space.  This allocation is accomplished in two steps.  First, two-thirds of the costs relating
     to the other than usable space ("unusable space") will be apportioned equally among all
     attaching entities.  Second, telecommunications carriers will also be apportioned the cost
     of usable space, according to the amount of usable space the entity's attachment requires.

     The proposal also provides that, in allocating the cost of unusable space among
     telecommunications carriers, any telecommunications carrier, cable operator, or local
     exchange carrier ("LEC") attaching to a pole be counted as a separate entity for the
     purpose of the allocation of cost.  In allocating the cost of the usable space, the cost of
     providing the usable space is apportioned among all entities according to the percentage
     of usable space required for each.  Comment is sought on the Commission's approach for
     the allocation of costs for usable and unusable space on the pole.  Further, comment is
     sought on situations where a third party may lease dark fiber within an existing attacher's
     lines or alternatively seeks to overlash its lines to that of an existing attacher.   

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     The use of the current pole attachment formula is the foundation for the new formula. 
     The current pole attachment formula has been developed and refined by the Commission
     over the past 18 years.  To the extent that certain elements of the formula need
     modification, the Commission has already sought comment on those changes in the
     Notice of Proposed Rulemaking, Amendment of Rules and Policies Governing Pole
     Attachments, CS Docket No. 97-98 ("Pole Attachment Notice") addressing the current
     pole attachment formula. The Commission believes that the formula can be modified for
     the purposes of the 1996 Act, and that use of this formula provides the best means of
     incorporating the new provisions of the 1996 Act.

     The Commission is required to implement the telecommunications carrier rate
methodology on February 8, 2001.  The statutory language of Section 224(e)(4) requires that any
rate increase be phased in over five years beginning on that date.  The Commission proposes that
the amount of increase should be phased in at the beginning of the five years and one-fifth of that
amount should be added to the rate in each of the subsequent five years.  Comment is sought on
this proposed five year phase-in of the telecommunications carrier rate.

     Action by the Commission July 1, 1997, by Notice of Proposed Rulemaking (FCC 97-
234).  Chairman Hundt, Commissioners Quello, Ness and Chong.

                                -FCC-

News Media Contact: Morgan Broman at (202) 418-2358
Cable Services Bureau Contact: Larry Walke at (202) 418-7200