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unique section of plant must be identified with information that will determine the proportion in which revenues and costs are shared. An identifying section number will be assigned to each facility whenever there is a change in size, year of placement, structure, or ownership. Miscellaneous items associated with the section, minor variations within the section, or minor changes made to the section after it is originally established need not be a consideration in the identification of sections. For example, if in 1999 a span of 36 fiber cable placed in 1985 is damaged by a truck and that one span of fiber optic cable is replaced with a piece of 72 fiber cable that was on hand, the appropriate footage, year of placement, method of placement, size, etc. for the replacing facility will be recorded in the plant location records, but it will not be necessary to re -sectionalize the plant to account for the one span that is different. If, however, changes of a significant nature are made to a section of plant, it may be advantageous to re -sectionalize the plant. For example, if a new, large office complex is being established midway in one of the sections of plant and two thousand five hundred feet (2,500') of the pole line supporting the fiber optic cable will have to be replaced closer to the property line, and it is determined that one of the customers in the complex will be leasing fiber so the size of the fiber is increased from thirty-six (36) to seventy-two (72), then a new section of plant should be established and the old section of plant that has now been divided will be adjusted appropriately. The purpose of the sectionalization process is for planning, routing, and cost/revenue sharing; it is not meant to be an accounting tool for property records or tax purposes. A list of parameters for the establishing of a section of plant is included as Appendix Iwo B. Revenue Sharing As optical fibers or services of the NETWORK are licensed to third parties, the revenue must be dispersed in a logical and fair manner. This will be possible using the data associated with the sections of plant through which the leased fiber or service travels. As revenues are collected, they will be credited to the Holding Account of the CONSORTIUM. The funds in this account will be used to pay for the maintenance and, if sufficient, expansion of the NETWORK as discussed in the Cost Sharing section of the Agreement. Revenues will be credited to the Holding Account based on the proportionate contribution by each CONSORTIUM member toward the facility. The distance measurement to be used will be Fiber KiloFeet (FKF). The apportionment of ownership to each member of the CONSORTIUM of the sheath will be based on the percentage of the original fiber cable cost initially borne by each respective member - generally determined by the number of fibers allotted to each member in the particular section. An analysis of the material costs of various sizes of fiber optic cable reveals that they can be adequately represented by the expression y = ax + b where "y" is the installed cost of the fiber cable, "a" is the incremental cost of the fiber (slope), "x" is the number of fibers in the sheath, and "b" is the basic cost of the sheath (y -intercept). Joint Fiber Optics Project - Interlocal Agreement Page 6 of 18