OAR 860-034-0350: Forced Conversion of Communication Facilities for Small Telecommunications Utilities and Type 2 Cooperatives

(1) As used in this rule: (a) "Convert," "converting," or "conversion" means the removal of overhead communication facilities and the replacement of those facilities with underground communication facilities at the same or different locations. (b) "Conversion cost" means the difference in cost between constructing an underground system and retaining the existing overhead system. This difference is equal to the cost of all necessary excavating, road crossings, trenching, backfilling, raceways, ducts, vaults, transformer pads, other devices peculiar to underground service, and "overhead retirement costs." However, if the conversion is required in conjunction with a public project which would necessitate the relocation of the company’s facilities at the company’s expense, "conversion costs" shall not include any "overhead retirement costs." (c) "Communication facilities" means any works or improvements used or useful in providing communication service, including but not limited to poles, supports, tunnels, manholes, vaults, conduits, pipes, wires, conductors, guys, stubs, platforms, crossarms, braces, transformers, insulators, cutouts, switches, capacitors, meters, communication circuits, appliances, attachments and appurtenances, and all related facilities required for the acceptance of communication services. However, "Communication facilities" excludes facilities used or intended to be used for the transmission of intelligence by microwave or radio, apparatus cabinets or outdoor public telephones; or facilities owned or used by or provided for a railroad or pipeline and located upon or above the right-of-way of the railroad or pipeline. (d) "Company," as used in this rule, means a small telecommunications utility or Type 2 cooperative, as defined in OAR 860-034-0010. (e) "Local government" includes cities; counties; authorities and agencies created pursuant to ORS Chapters 456 and 457; special districts of the type described in ORS 198.010 and 198.180; and all other political subdivisions of Oregon. (f) "Overhead communication facilities" means communication facilities located above the surface of the ground. (g) "Overhead retirement cost" means the original cost, less depreciation, less salvage value, plus removal costs, of existing overhead distribution facilities no longer used or useful by reason of the conversion. (h) "Underground communication facilities" means communication facilities located below the surface of the ground exclusive of those facilities such as service terminals, pedestal terminals, splice closures, apparatus cabinets and similar facilities which normally are above the surface in areas where company facilities are underground in accordance with standard underground practices. (2) This rule does not apply if the total conversion cost incurred by the company during one calendar year does not exceed five-one hundredths of 1 percent (.05 percent) of the company’s annual revenues derived from customers residing within the boundaries of the local government. (3) When a local government requires a company to convert communications facilities at the company’s expense: (a) A small telecommunications utility shall collect the conversion costs from customers located within the boundaries of the local government. (b) A Type 2 cooperative may not collect the conversion costs from customer located outside the boundaries of the local government for purposes of joint rates and through services. (4) The local government may direct the company to collect conversion costs from only a portion of the customers located within the boundaries of the local government. (5) Conversion costs incurred by the small telecommunications utility shall be accumulated in a separate account in the small telecommunications utility’s books. Interest shall accrue from the date the small telecommunications utility incurs the cost. The rate of such interest shall be equal to the effective cost of the senior security issue which most recently preceded the incurrence of the cost. (6) The small telecommunications utility shall collect the conversion costs and interest over a reasonable period of time subject to approval by the Commission. However, the pay-back period shall not exceed the depreciable life of the new facilities. Collection shall begin as soon as practical after the end of the year in which the conversion costs are incurred. (7) The conversion cost to be recovered from each customer of a small telecommunications utility shall be calculated by applying a uniform percentage to each customer’s total monthly bill for service rendered within the boundaries of the local government. The amount collected shall be separately stated and identified on each bill. (8) This rule applies to conversions upon which construction is commenced on or after August 13, 1984.