The Puerto Rico Telecommunications Regulatory Board (the Board ) has issued a public notice requesting comments on how to regulate the access of telecommunications companies to the infrastructure, the real estate property, and the rights-of-way over the private property of: the Puerto Rico Telephone Company ( PRTC ), public service companies (or utilities), and government agencies. The notice was sent to all government agencies and to a wide range of private entities expected to be affected or interested in this subject. The period for comment was extended several times, and now expires on November 14, 2000.

The Board proposes adopting regulations regarding the following points:

Tariffs for Access. The Board acknowledges that the establishment of reasonable and nondiscriminatory tariffs for access to the facilities, easements and rights-of-ways of government agencies, utilities, and PRTC will be a complex matter, and seeks comments as to possible standards for the imposition of tariffs and as to whether the tariffs should be imposed equally to all affected parties. This point has been the source of extensive debate.

Regulation of Existing Easements or Rights-of-Way. The Puerto Rico Telecommunications Act of 1996 (the Act ) requires that the Board regulate the creation of new telecommunications easements. To encourage growth and competition in the local market, the Board intends to regulate both newly created easements and access to existing easements, as well as the rights of the owners of the real property affected by the telecommunications easements or rights-of-way. The Board takes notice of the fact that PRTC presently owns or controls 100% of the telecommunications easements and rights-of-way in Puerto Rico and that, in order to compete in the telecommunications market effectively, telecommunication companies need to obtain physical access to these easements and rights-of-way.

Access to Easements and Rights-of-Way in Private Multitenant Buildings. Currently, the wirelines in multi-tenant buildings are owned or controlled by PRTC. Many telecommunication companies have been denied access to these facilities (or authorization to install new ones) by the building owners. The Board proposes requiring that: (i) PRTC provide access to wirelines that it owns or controls installed on private property, and (ii) regulations be adopted to prevent building owners from obstructing competition by imposingunreasonableordiscriminatory conditions or tariffs on access by telecommunication companies. Building owners have generally opposed the imposition of any restriction on their capacity to negotiate compensation individually for access to their real property.

Access to Government Property and Public Easements. Because the Act requires that government property be made available for the development of telecommunications networks, the Board intends to regulate (i) the compensation to be paid for the use of governmental property, and (ii) the process to be followed by the agencies to address requests for access. The Board requests comments as to whether the regulation should provide specific tariffs applicable to all government and municipal agencies, whether certain public corporations should be excluded from those standard rates, or whether each agency should be allowed to negotiate tariffs individually for the use of its real property. The Board also proposes that any compensation for use of public easements be directly related to the cost of maintaining and improving the easement, not generating additional income. This latter limitation has been viewed by many as an unconstitutional taking that will affect not only the rights of the government agency enjoying the easement but also the rights of the real estate owner affected by the easement.

Access to the Property of Public Utilities. Federal law mandates non-discriminatory access in favor of telecommunications companies to any right-of-way or infrastructure element owned or controlled by a public utility, and that the utility make any necessary modifications to its infrastructure to allow access. The Board requests comments on whether utilities may charge for the modifications made to its easements or infrastructure and on whether utilities may deny access to reserve space for future growth. The Board proposes to exclude PRTC temporarily or permanently, as the local incumbent local exchange carrier, from the right to obtain access to the property of utilities for the expansion of its telecommunications network.

Creation of New Telecommunications Easements. PRTC also controls all newly created telecommunications connections because it is in the practice of: (i) providing the materials used by real estate developers for telecommunications lines, and (ii) inspecting and certifying the construction and installation of all telecommunications lines. The Board believes that PRTC should not become the owner of all newly created telecommunications easements or rights-of-way and requests comments as to who should own them. This issue translates directly into a controversy over who should assume the economic burden of installing the ducts and conduits necessary to develop a telecommunications-infrastructure-in-new construction sites. The Board proposes that developers absorb the cost of telecommunications wirelines able to support the distribution of telecommunications services by several providers.

Facilities of Other Telecommunications Companies. Because the Act requires that telecommunications companies grant other telecommunications companies access to their networks, the Board proposes the adoption of regulatory deadlines for PRTC s grant of access to its network and requiring affirmative proof of any PRTC claim of lack of space or capacity, as well as limiting PRTC s right to preserve network elements for its own future growth.

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