Telecommunications Services Inside Wiring; Cable Home Wiring

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 95-184; MM Docket No. 92-260; FCC 97-304]

Telecommunications Services Inside Wiring; Cable Home Wiring

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission invites comments on proposed procedures for the

disposition of cable inside wiring (including both the cable home

wiring within the premises of the individual subscriber and the home

run wiring dedicated to an individual subscriber's

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unit) upon termination of service in multiple dwelling unit (``MDU'')

buildings. This Further Notice of Proposed Rulemaking (``Further

NPRM'') contains proposed or modified information collections subject

to the Paperwork Reduction Act of 1995 (``PRA''), Public Law 104-13. It

has been submitted to the Office of Management and Budget (``OMB'') for

review under section 3507(d) of the PRA. OMB, the general public, and

other Federal agencies are invited to comment on the proposed or

modified information collections contained in this proceeding.

DATES: Comments must be submitted on or before September 25, 1997 and

reply comments must be submitted on or before October 2, 1997. Written

comments by the public on the proposed and/or modified information

collections are due September 25, 1997. Written comments must be

submitted by OMB on the proposed and/or modified information

collections on or before November 3, 1997.

ADDRESSES: Comments and reply comments should be sent to Office of the

Secretary, Federal Communications Commission, 1919 M Street, NW,

Washington, DC 20554. Comments and reply comments will be available for

public inspection during regular business hours in the FCC Reference

Center, Room 239, Federal Communications Commission, 1919 M Street

N.W., Washington D.C. 20554.

In addition to filing comments with the Secretary, a copy of any

comments on the information collections contained herein should be

submitted to Judy Boley, Federal Communications Commission, Room 234,

1919 M Street, NW, Washington, DC 20554, or via the Internet to

[email protected], and to Timothy Fain, OMB Desk Officer, 10236 NEOB,

725--17th Street, N.W., Washington, DC 20503 or via the Internet to

[email protected].

FOR FURTHER INFORMATION CONTACT: Rick Chessen, Cable Services Bureau,

(202) 418-7200. For additional information concerning the information

collections contained in this Further NPRM, contact Judy Boley at 202-

418-0214, or via the Internet at [email protected].

Paperwork Reduction Act: This Further NPRM contains either a

proposed or modified information collection. The Commission, as part of

its continuing effort to reduce paperwork burdens, invites the general

public and the Office of Management and Budget (``OMB'') to comment on

the information collections contained in this Further NPRM, as required

by the Paperwork Reduction Act of 1995, Pub. L. 104-13. Public and

agency comments are due at the same time as other comments on this

Further NPRM; OMB comments are due November 3, 1997. Comments should

address: (1) Whether the proposed collection of information is

necessary for the proper performance of the functions of the

Commission, including whether the information shall have practical

utility; (2) the accuracy of the Commission's burden estimates; (3)

ways to enhance the quality, utility, and clarity of the information

collected; and (4) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

OMB Approval Number: 3060-0692.

Title: Home Wiring Provisions.

Type of Review: Revision of an existing collection.

Respondents: Individuals; Business and other for-profit entities.

Number of Respondents: 30,000 (20,000 MVPDs and 10,000 MDU owners).

Estimated Time Per Response: 5 minutes to 30 minutes.

Total Annual Burden to Respondents: 33,928 hours, calculated as

follows: This collection (3060-0692) previously only contained

information collection requirements concerning the disposition of cable

home wiring. In addition to those requirements, it now addresses

proposed notification and election requirements between MDU owners and

all multichannel video programming distributors (``MVPDs''). Pursuant

to the Paperwork Reduction Act, when modifying or proposing additional

information collection requirements in an existing collection, agencies

are obligated to put forth the entire collection for public comment. 47

CFR Sec. 76.802 Disposition of Cable Home Wiring. In calculating hour

burdens for the disposition of home wiring, we make the following

estimates: There are approximately 20,000 MVPDs serving approximately

72 million subscribers in the United States. The average rate of churn

(subscriber termination) for all MVPDs is estimated to be 1% per month,

or 12% per year. MVPDs own the home wiring in 50% of the occurrences of

voluntary subscriber termination and subscribers already own the wiring

in the other 50% of occurrences (e.g., where the MVPD has charged the

subscriber for the wiring upon installation, has treated the wiring as

belonging to the subscriber for tax purposes, or where state and/or

local law treats cable home wiring as a fixture). Where MVPDs own the

wiring, we estimate that they intend to actually remove the wiring 5%

of the time, thus initiating the disclosure requirement. We believe in

most cases that MVPDs will choose to abandon the home wiring because

the cost and effort required to remove the wiring generally outweigh

its value. The burden to disclose the information at the time of

termination will vary depending on the manner of disclosure, i.e., by

telephone, customer visit or registered mail. Virtually all voluntary

service terminations are done by telephone. The estimated average time

consumed in the process of the MVPD's disclosure and subscriber's

election is 5 minutes (.083 hours). Estimated annual number of

occurrences is 72,000,000 x 12% x 50% x 5%=216,000. Estimated annual

burden for MVPDs is 216,000 x .083 hours=17,928 hours. 47 CFR

Sec. 76.802 also states that to inform subscribers of per-foot

replacement costs, MVPDs may develop schedules based on readily

available information; if the MVPD chooses to develop such schedules,

it must place them in a public file and make them available for public

inspection during regular business hours. We estimate that 50% of MVPDs

will develop cost schedules to place in their public files. Virtually

all subscribers terminate service via telephone, with few subscribers

anticipated to review cost schedules on public file. The annual

recordkeeping burden for cost schedules is estimated to be 0.5 hours

per MVPD. Estimated annual recordkeeping burden is 20,000 x 50% x 0.5

hours=5,000 hours. 47 CFR Sec. 76.804 Disposition of Home Run Wiring.

We estimate the burden for notification and election requirements for

building-by-building and unit-by-unit disposition of home run wiring as

described below. Note that these requirements apply only when an MVPD

owns the home run wiring in a MDU and does not (or will not at the

conclusion of the notice period) have a legally enforceable right to

remain on the premises against the wishes of the entity that owns the

common areas of the MDU or have a legally enforceable right to maintain

any particular home run wire dedicated to a particular unit on the

premises against the MDU owner's wishes. For building-by-building

disposition of home run wiring, the MDU owner gives the MVPD a minimum

of 90 days' notice that its access to the entire building will be

terminated. The MVPD then has 30 days to elect what it will do with the

home run wiring. Where parties negotiate a price for the wiring and are

unable to agree on a price, the incumbent MVPD must make another

election between abandonment or removal of the wiring.

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For unit-by-unit disposition of home run wiring, an MDU owner must

notify the incumbent MVPD of its decision to permit multiple MVPDs to

compete for the right to use the individual home run wires dedicated to

each unit. The incumbent MVPD then has 30 days to elect what it will do

with all of its home run wires dedicated to a subscriber who chooses an

alternative provider's service. According to the Statistical Abstracts

of the United States, 1995 at 733 Table No. 1224, over 28 million

people resided in MDUs with three or more units in 1993. We therefore

estimate there are currently 30 million MDU residents and that MDUs

house an average of 50 residents, and so we estimate that there are

approximately 600,000 MDUs in the United States. In many instances,

MVPDs may no longer own the home run wiring or may continue to have a

legally enforceable right to remain on the premises. Also, MDU owners

may choose not to undergo the notice and election process. The

Commission therefore estimates that there will be 10,000 notices and

12,000 elections made on an annual basis. The larger amount of

elections accounts for instances when parties are unable to agree on a

price for the sale of home run wiring, therefore necessitating an

additional election. We assume all notifications and elections will be

in writing and take an average burden of 30 minutes (0.5 hours) to

prepare. 22,000 notifications and elections x 0.5 hours=11,000 hours.

Total Annual Cost to Respondents: $32,000 estimated as follows: For

operation and maintenance costs, we estimate that 50% of the 20,000

MVPDSs will annually develop cost schedules. Recordkeeping expenses for

these schedules is estimated to be $1 per MVPD.

20,000 x 50% x $1=$10,000. Also, annual stationery and postage costs

for home run wiring disposition notifications and elections are

estimated to be $1 per occurrence. 22,000 notifications and

elections x $1=$22,000. There are no estimated capital and start-up

costs.

Needs and Uses: The various notification and election requirements

in this collection (3060-0692) are set forth in order to promote

competition and consumer choice by minimizing any potential disruption

in service to a subscriber switching video providers.

SUPPLEMENTARY INFORMATION: The following is a synopsis of the

Commission's Further NPRM in CS Docket No 95-184 and MM Docket No. 92-

260, adopted August 27, 1997 and released August 28, 1997. The full

text of this document is available for inspection and copying during

normal business hours in the FCC Reference Center (Room 239), 1919 M

Street, NW, Washington, DC 20554, and may be purchased from the

Commission's copy contractor, International Transcription Service,

(202) 857-3800, 2100 M Street, NW, Washington, DC 20037.

Synopsis

A. Introduction

1. This Further Notice of Proposed Rulemaking (``Further NPRM'')

sets forth specific proposals for addressing certain issues raised in

the Notice of Proposed Rulemaking in CS Docket No. 95-184 (``Inside

Wiring NPRM'') and the First Order on Reconsideration and Further

Notice of Proposed Rulemaking in MM Docket 92-260 (``Cable Home Wiring

Further NPRM'') regarding potential changes in our telephone and cable

inside wiring rules. The issues raised in this Further NPRM are

intended to supplement the issues already discussed in the Inside

Wiring NPRM and the Cable Home Wiring Further NPRM.

2. We believe that our inside wiring rules could more effectively

promote competition and consumer choice, but we believe that the record

would benefit from additional comment on our specific proposals. We

stress that the Commission intends to act quickly on these proposals.

The proposals herein are set forth in great detail and generally are

limited to a single issue: the disposition of cable inside wiring in

multiple dwelling unit buildings (``MDUs'') upon termination of

service. In addition, our proposals herein are similar to a proposal

first made by the Independent Cable & Telecommunications Association

(``ICTA'') in its initial comments in this proceeding, described more

fully by ICTA in an ex parte letter to the Commission, and discussed by

interested parties in ex parte letters. Accordingly, and in light of

the extensive comments and ex parte meetings and comments received in

response to the Inside Wiring NPRM and the Cable Home Wiring Further

NPRM, we have set shorter deadlines than usual for interested parties

to file comments and reply comments. We ask parties to refrain from

filing comments that are repetitive of their comments filed in response

to the Inside Wiring NPRM and the Cable Home Wiring Further NPRM. All

such comments will be considered as part of the record filed in

response to this Further NPRM to the extent they remain relevant.

3. Section 16(d) of the Cable Television Consumer Protection and

Competition Act of 1992 (the ``1992 Cable Act''), codified at section

624(i) of the Communications Act, requires the Commission to

``prescribe rules concerning the disposition, after a subscriber to a

cable system terminates service, of any cable installed by the cable

operator within the premises of such subscriber.'' In February 1993,

the Commission issued a Report and Order implementing section 624(i)

(the ``Cable Wiring Order''). The Cable Wiring Order provided that when

a subscriber voluntarily terminates cable service, the operator is

required, if it proposes to remove the wiring, to inform the

subscriber: (1) That he or she may purchase the wire; and (2) what the

per-foot charge is. If the subscriber declined to purchase the home

wiring, the operator was required to remove it within 30 days or make

no subsequent attempt to remove it or to restrict its use.

4. We further provided that the subscriber may purchase the cable

home wiring inside his or her premises up to the demarcation point. As

in the telephone context, a demarcation point generally is the point at

which a service provider's system wiring ends and the customer-

controlled wiring begins. From the customer's point of view, this point

is significant because it defines the wiring that he or she may own or

control. For purposes of competition, the demarcation point is

significant because it defines the point where an alternative service

provider may attach its wiring to the customer's wiring in order to

provide service.

5. For MDUs with non-``loop-through'' wiring, the cable demarcation

point was set at (or about) 12 inches outside of where the cable wire

enters the subscriber's individual dwelling unit. Generally, in a non-

loop-through configuration, each subscriber in an MDU has a dedicated

line (often called a ``home run'') running to his or her premises from

a common ``feeder line'' or ``riser cable'' that serves as the source

of video programming signals for the entire MDU. The riser cable

typically runs vertically in a multi-story building (e.g., up a

stairwell) and connects to the dedicated home run wiring at a ``tap''

or ``multi-tap,'' which extracts portions of the signal strength from

the riser and distributes individual signals to subscribers. Depending

on the size of the building, the taps are usually located in a security

box (often called a ``lockbox'') or utility closet located on each

floor, or at a single point in the basement. Each time the riser cable

encounters a tap, its signal strength decreases. In addition, the

strength of a signal diminishes as the signal passes through the

coaxial cable. As a result,

[[Page 46456]]

cable wiring often requires periodic amplification within an MDU to

maintain picture quality. Amplifiers are installed at periodic

intervals along the riser based upon the number of taps and the length

of coaxial cable within the MDU. Non-cable video service providers

typically employ a similar inside wiring scheme, except that many of

them (e.g., multichannel multipoint distribution services (``MMDS''),

satellite master antenna services (``SMATV'') and direct broadcast

satellite (``DBS'') providers) use wireless technologies to deliver

their signal to an antenna on the roof of an MDU, and then run their

riser cable down from the roof to the taps and dedicated home run

wires.

6. In January 1996, the Commission issued the Cable Home Wiring

Further NPRM and the Inside Wiring NPRM. In the Cable Home Wiring

Further NPRM, among other things, the Commission clarified that, during

the initial telephone call in which a subscriber voluntarily terminates

cable service, if the operator owns and intends to remove the home

wiring, it must inform the subscriber: (1) That the cable operator owns

the home wiring; (2) that it intends to remove the home wiring; (3)

that the subscriber has a right to purchase the home wiring; and (4)

what the per-foot replacement cost and total charge for the wiring

would be, including the replacement cost for any passive splitters

attached to the wiring on the subscriber's side of the demarcation

point. Where an operator fails to adhere to these procedures, it is

deemed to have relinquished immediately any and all ownership interests

in the home wiring, and thus, is not entitled to compensation for the

wiring and may make no subsequent attempt to remove it or restrict its

use. If the cable operator informs the subscriber of his or her rights

and the subscriber agrees to purchase the wiring, constructive

ownership over the home wiring will transfer immediately to the

subscriber, who may authorize a competing service provider to connect

with and use the home wiring. If, on the other hand, the subscriber

declines to purchase the home wiring, the operator has seven business

days to remove the wiring or make no subsequent attempt to remove it or

restrict its use.

7. In the Inside Wiring NPRM, we sought comment on ``whether and

how our wiring rules can be structured to promote competition both in

the markets for multichannel video programming delivery and in the

market for telephony and advanced telecommunications services.'' In

particular, we requested comment on whether and where the Commission

should establish a common demarcation point for wireline communications

networks, whether we should continue to establish demarcation points

based on the services provided over facilities, or whether we should

create demarcation points based upon the nature of the facilities

ultimately used to deliver the service (i.e., narrowband termination

facilities or broadband termination facilities). We noted that we

``recognize that numerous other factors may affect the proper location

of the cable network's demarcation point, as well as one's control over

cable inside wiring and cable service generally.'' We also sought

comment on the ``legal and practical impediments faced by

telecommunications service providers in gaining access to

subscribers.''

B. The Competitive Landscape

8. The evidence in this proceeding leads us to conclude that more

is needed to foster the ability of subscribers who live in MDUs to

choose among competing service providers. Based on the record evidence,

we believe that one of the primary competitive problems in MDUs is the

difficulty for some service providers to obtain access to the property

for the purpose of running additional home run wires to subscribers'

units. The record indicates that MDU property owners often object to

the installation of multiple home run wires in the hallways of their

properties, for reasons including aesthetics, space limitations, the

avoidance of disruption and inconvenience, and the potential for

property damage.

9. We believe that property owners' resistance to the installation

of multiple sets of home run wiring in their buildings may deny MDU

residents the ability to choose among competing service providers,

thereby contravening the purposes of the Communications Act, and

particularly section 624(i), which was intended to promote consumer

choice and competition by permitting subscribers to avoid the

disruption of having their home wiring removed upon voluntary

termination and to subsequently utilize that wiring for an alternative

service. We believe that the impact is substantial. As of 1990, there

were almost 31.5 million MDUs in the United States, comprising

approximately 28% of the nationwide housing market. Moreover, the trend

between 1980 and 1990 indicates that the number of MDUs is growing at a

much faster rate than the number of single family dwellings. Data also

shows that MDUs make up between 32% and 84% of the housing market in

cities with the greatest numbers of households receiving cable service.

10. The record does not demonstrate that the current cable home

wiring rules, having been in place for four years, provide adequate

incentives for MDU property owners to permit the installation of

multiple home run wires. We believe that disagreement over ownership

and control of the home run wire substantially tempers competition. The

record indicates that, where the property owner or subscriber seeks

another video service provider, instead of responding to competition

through varied and improved service offerings, the incumbent provider

often invokes its alleged ownership interest in the home run wiring.

Incumbents invoke written agreements providing for continued service,

perpetual contracts entered into by the incumbent and previous owner,

easements emanating from the incumbent's installation of the wiring,

assertions that the wiring has not become a fixture and remains the

personal property of the incumbent, or that the incumbent's investment

in the wiring has not been recouped, and oral understandings regarding

the ownership and continued provision of services. Written agreements

are frequently unclear, often having been consummated in an era of an

accepted monopoly, and state and local law as to their meaning is

vague. Invoking any of these reasons, incumbents often refuse to sell

the home run wiring to the new provider or to cooperate in any

transition. The property owner or subscriber is frequently left with an

unclear understanding of why another provider cannot commence service.

The litigation alternative, an option rarely conducive to generating

competition, while typically not pursued by the property owner or

subscriber, can be employed aggressively by the incumbent. The result

is to chill the competitive environment.

C. Disposition of Home Run Wiring

11. We propose to establish procedures for building-by-building

disposition of the home run wiring (where the MDU owner decides to

convert the entire building to a new video service provider) and for

unit-by-unit disposition of the home run wiring (where an MDU owner is

willing to permit two or more video service providers to compete for

subscribers on a unit-by-unit basis) where the MDU owner wants the

alternative provider to be able to use the existing home run wiring. We

believe that these procedural mechanisms will not create or destroy any

property rights, but will promote competition and consumer choice by

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bringing order and certainty to the disposition of the MDU home run

wiring upon termination of service.

12. In today's marketplace, alternative video service providers

have no timely and reliable way of ascertaining whether they will be

able to use the existing home run wiring upon a change in service. MDU

owners are similarly unsure of their legal rights. Because of this

uncertainty, an MDU owner seeking to change providers may be confronted

with choosing among: (1) Allowing the alternative provider to install

duplicative home run wiring before it knows whether the incumbent will

abandon the existing home run wiring when it leaves; (2) waiting to see

what the incumbent does with the home run wiring when it leaves the

building, risking a potential disruption in service to its residents;

(3) staying with the incumbent provider; or (4) allowing the

alternative provider to use the home run wiring and risking litigation.

The proposed procedures are intended to provide all parties sufficient

notice and certainty of whether and how the existing home run wiring

will be made available to the alternative video service provider so

that a change in service can occur efficiently. We tentatively conclude

that establishing rules governing the disposition of the MDU home run

wiring will represent a substantial step toward increased competition

in the MDU video programming service marketplace.

13. We propose that the procedural mechanisms described below would

apply only where the incumbent provider no longer has an enforceable

legal right to remain on the premises against the will of the MDU

owner. In other words, these procedures would not apply where the

incumbent provider has a contractual, statutory or common law right to

maintain its home run wiring on the property. In the building-by-

building context, the procedures below would not apply where the

incumbent provider has a legally enforceable right to maintain its home

run wiring on the premises against the MDU owner's wishes and prevent

any third party from using the wiring; in the unit-by-unit context, the

procedures below would not apply where the incumbent provider has a

legally enforceable right to keep a particular home run wire dedicated

to a particular unit (not including the wiring on the subscriber's side

of the demarcation point) on the premises against the property owner's

wishes. We are not proposing to preempt an incumbent's ability to rely

upon any rights it may have under state law. We seek comment on the

impact of this condition on the efficacy of our proposal, and how any

adverse effects should be addressed. In particular, we seek comment on

whether the Commission can and should create any presumptions or other

mechanisms regarding the relative rights of the parties if the

incumbent's right to maintain its home run wiring on the premises is

disputed. For example, we seek comment on a presumption that the

incumbent does not possess an enforceable legal right to maintain its

home wiring on the premises (and therefore that our proposed procedures

would apply), unless the incumbent can adduce a clear contractual or

statutory right to remain.

i. Building-by-Building Disposition of Home Run Wiring

14. We seek comment on the following proposal: where the incumbent

service provider owns the home run wiring in an MDU and does not (or

will not at the conclusion of the notice period) have a legally

enforceable right to remain on the premises, and the MDU owner wants to

be able to use the existing home run wiring for service from another

provider, the MDU owner may give the incumbent service provider a

minimum of 90 days' notice that the provider's access to the entire

building will be terminated. The incumbent provider would then have 30

days to notify the MDU owner in writing of its election to do one of

the following for all the home run wiring inside the MDU: (1) To remove

the wiring and restore the MDU to its prior condition by the end of the

90-day notice period; (2) to abandon and not disable the wiring at the

end of the 90-day notice period; or (3) to sell the wiring to the MDU

owner. If the incumbent provider elects to remove or abandon the

wiring, and it intends to terminate service before the end of the 90-

day notice period, the incumbent provider would be required to notify

the MDU owner at the time of this election of the date on which it

intends to terminate service. If the MDU owner refuses to purchase the

home run wiring, the alternative video service provider may purchase

it.

15. We are concerned that an incumbent provider may initially elect

to remove its home run wiring and then decide to abandon it. Such

conduct could put the alternative service provider to the unnecessary

burden and expense of installing a second set of home run wires when

the incumbent has no intention of removing the existing wiring. We seek

comment on whether to adopt penalties for incumbent providers that

elect to remove their home run wiring and then fail to do so.

16. Where the incumbent provider elects to sell the home run

wiring, our preference is to let the parties negotiate the price of the

wiring. We seek comment on whether market forces would provide adequate

incentives for the parties to reach a reasonable price. If market

forces are insufficient, we seek comment on how a reasonable price

should be established. For instance, we seek comment on whether: (1)

The Commission should establish broad guidelines within which

negotiations would occur (e.g., a reasonable price should be more than

a nominal amount but should not include the incumbent provider's lost

opportunity costs); (2) the price should be left to negotiations

between the parties but the Commission should establish a default price

if the parties cannot reach an agreement; or (3) the Commission should

establish a general rule or formula for determining a reasonable price.

If parties believe that the Commission should establish guidelines, a

default price, a general rule or formula, we seek comment on the type

of guidelines, default price, general rule or formula that should be

established.

17. We propose that, if the parties negotiate a price, they would

have 30 days from the date of election to negotiate a price for the

home run wiring. The parties could also negotiate to purchase

additional wiring (e.g., riser cables) at their option. If the parties

are unable to agree on a price, the incumbent would be required to

elect to either abandon or remove the wiring and notify the MDU owner

at the time of this election if and when it intends to terminate

service before the end of the 90-day notice period. If the incumbent

service provider elects to abandon its wiring at this point, the

abandonment would become effective at the end of the 90-day notice

period or upon service termination, whichever occurs first. Similarly,

if the incumbent elects to remove its wiring and restore the building

to its prior condition, it would have to do so by the end of the 90-day

notice period. If the incumbent failed to comply with any of the

deadlines established herein, it would be deemed to have elected to

abandon its home run wiring at the end of the 90-day notice period.

ii. Unit-by-Unit Disposition of Home Run Wiring

18. We also seek comment on the following proposal for unit-by-unit

disposition of home run wiring. Where the incumbent video service

provider owns the home run wiring in an MDU

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and does not (or will not at the conclusion of the notice period) have

a legally enforceable right to maintain its home run wiring on the

premises, the MDU owner may permit multiple service providers to

compete head-to-head in the building for the right to use the

individual home run wires dedicated to each unit. We propose that,

where an MDU owner wishes to permit such head-to-head competition, the

MDU owner must provide at least 60 days' notice to the incumbent

provider of the owner's intention to invoke the following procedure.

The incumbent service provider would then have 30 days to provide the

MDU owner with a written election as to whether, for all of the

incumbent's home run wires dedicated to individual subscribers who may

later choose the alternative provider's service, it will: (1) remove

the wiring and restore the MDU to its prior condition; (2) abandon the

wiring without disabling it; or (3) sell the wiring to the MDU owner.

In other words, the incumbent service provider would be required to

make a single election for how it will handle the disposition of

individual home run wires whenever a subscriber wishes to switch video

service providers; that election would then be implemented each time an

individual subscriber switches service providers. The alternative

service provider would be required to make a similar election within

this same 30-day period for any home run wiring that the alternative

provider subsequently owns (i.e., after the alternative provider has

purchased the wiring from the current incumbent provider) and that is

solely dedicated to a subscriber who switches back from the alternative

provider to the incumbent. We also tentatively conclude that it would

streamline and expedite the process to permit the alternative service

provider or the MDU owner to act as the subscriber's agent in providing

notice of a subscriber's desire to change services. We tentatively

conclude that unauthorized changes in service (i.e., ``slamming'') are

unlikely to occur in this context; if slamming does occur, however, we

would propose to take additional steps to protect consumers, such as

requiring proof of agency.

19. As with the proposed building-by-building procedures, we would

prefer to let the parties negotiate for the sale of the home run wiring

and seek comment on whether market forces will produce a reasonable

price. If market forces are not adequate, we seek comment on the

appropriate mechanism for establishing a reasonable price for the home

run wiring. We propose that, if one or both of the video service

providers elects to negotiate for the sale of the home run wiring, the

parties have 30 days from the date of such election to reach an

agreement. During this 30-day negotiation period, the incumbent, the

MDU owner and/or the new provider could also work out arrangements for

an up-front lump sum payment in lieu of a unit-by-unit payment. An up-

front lump sum payment would permit either service provider to use the

home run wiring to provide service to a subscriber without the

administrative burden of paying separately for each home run wire every

time a subscriber changes providers. We also propose that, if the

parties cannot agree on a price, the incumbent provider would be

required to elect one of the other two options (i.e., abandonment or

removal). If the incumbent fails to comply with any of the deadlines

established herein, we propose to treat the home run wiring as

abandoned and permit the alternative provider to use the home run

wiring immediately to provide service.

20. We propose that, after completion of this initial process, a

provider's election would be carried out if and when the provider is

notified either orally or in writing that a subscriber wishes to

terminate service and that an alternative service provider intends to

use the existing home run wire to provide service to that particular

subscriber. At that point, a provider that has elected to remove its

home run wiring would have seven days to do so and to restore the

building to its prior condition. We tentatively conclude that seven

days is adequate for removal because we believe that, unlike in the

building-by-building context, the provider would only be required to

remove a single home run wire. If the current service provider has

elected to abandon or sell the wiring, the abandonment or sale would

become effective seven days from the date it receives a request for

service termination or upon actual service termination, whichever

occurs first. We would propose that, if the incumbent provider intends

to terminate service prior to the end of the seven-day period, the

incumbent would be required to inform the subscriber or the

subscriber's agent (whichever is notifying the incumbent that the

subscriber wishes to terminate service) at the time of the request for

service termination of the date on which service will be terminated. In

addition, we would propose to require the incumbent provider to

disconnect the home run wiring from its lockbox and to leave it

accessible for the new provider by the end of the seven-day period or

within 24 hours of actual service termination, whichever occurs first.

21. We base the above procedures on the assumption that the

alternative service provider will have an incentive to ensure that the

incumbent is notified that the alternative service provider intends to

use the existing home run wire to provide service. To the extent this

assumption is inaccurate, we seek comment on how the incumbent's

election regarding the home run wiring in the unit-by-unit context

should be triggered efficiently and so as to minimize disruption of

service. If the subscriber's service is simply terminated without any

indication that a competing service provider wishes to use the home run

wiring, the incumbent service provider would not be required to carry

out its election to sell, remove or abandon the home run wiring. This

might occur, for instance, where an MDU tenant is moving out of the

building. In such cases, we do not believe that it would be appropriate

to require the incumbent to sell, remove or abandon the home run wiring

when it might have every reasonable expectation that the next tenant

will request its service. We would propose, however, that the incumbent

provider would be required to carry out its election with regard to the

home run wiring if and when it receives notice from a subsequent tenant

(either directly or through an alternative provider) that the tenant

wishes to use the home run wiring to receive a competing service.

22. Moreover, we propose that, even where the incumbent receives a

request for service termination but does not receive notice that an

alternative provider wishes to use the home run wiring, the incumbent

must follow the procedures set forth in our cable home wiring rules--

e.g., to offer to sell to the subscriber any cable home wiring that the

incumbent provider otherwise intends to remove. First, the required

notice in the unit-by-unit context may be effected in two stages (i.e.,

the subscriber may call to terminate service and the alternative

provider may separately notify the incumbent that it wishes to use the

home run wiring). We believe that, in order for the home run wiring and

the home wiring to be disposed of in a coordinated manner, our cable

home wiring rules must apply upon any termination of service. In

addition, we believe that subscribers should have the right to purchase

their home wiring to protect themselves from unnecessary disruption

associated with removal of home wiring, regardless of whether they

intend to subscribe to an alternative service.

[[Page 46459]]

iii. Ownership of Home Run Wiring

23. In both the building-by-building and unit-by-unit approaches,

we propose to give the MDU owner the initial option to negotiate for

ownership and control of the home run wiring because the property owner

is responsible for the common areas of a building, including safety and

security concerns, compliance with building and electrical codes,

maintaining the aesthetics of the building and balancing the concerns

of all of the residents. Moreover, vesting ownership of the home run

wiring in the MDU owner, as opposed to the alternative service

provider, will reduce future transaction costs since the procedures

proposed herein would not need to be repeated if service is

subsequently switched again. Nevertheless, we recognize that some MDU

owners may not want to own the home run wiring in their buildings; we

propose that in such cases the alternative service provider should be

permitted to purchase the wiring.

24. We do not believe that individual subscribers would be

disadvantaged by having the MDU owner own the home run wiring. If a

subscriber has the ability to choose between multiple service providers

in the unit-by-unit context, the MDU owner has already concluded that

it is willing to permit multiple service providers on the premises in

order to compete for subscribers. Given that the MDU owner would have

voluntarily opened its building to multiple competitors, we do not

believe that the MDU owner would deny a resident the ability to use the

home run wiring for the resident's provider of choice. Furthermore, we

believe that, if the alternative service provider purchases the home

run wiring, that provider would not be able to act as a bottleneck and

the individual subscriber would continue to be protected because, as

described herein, the alternative service provider would also be

subject to these same procedures if and when the alternative provider's

service is terminated.

iv. Impact on Incumbent Video Service Providers

25. We tentatively conclude that cable operators' argument that the

loss of their home run wiring eliminates their ability to provide other

telecommunications services is misplaced. Cable operators' ability to

compete in the telephony market should be largely unaffected. The

procedures proposed herein apply where the incumbent has no legally

enforceable right to remain on the premises and the MDU owner and/or

the individual subscriber has selected another provider's package--

notwithstanding the incumbent's other telecommunications services.

Given MDU owners' resistance to the installation of multiple home run

wires, we tentatively conclude that affording consumers a choice among

various packages offered by multiple service providers is better than

the current situation, in which MDU residents often have no choice at

all. Under our proposal, MDU owners would remain free to implement the

type of multiple-wire model advocated by the cable industry by

requiring all service providers to install their own home run wires.

26. Cable operators also complain that property owners often act as

``gatekeepers'' in selecting a service provider and pursue their own

interests rather than the interests of their residents. While we

acknowledge how these circumstances can exist, we tentatively conclude

that where the real estate market is competitive, it will discourage

MDU owners from ignoring their residents' interests. In addition, the

rules we propose do not grant MDU owners any additional rights, but

simply establish a procedural mechanism for MDU owners to enforce

rights they already have. Moreover, in the unit-by-unit context, the

MDU owner would be expanding its residents' choices, not restricting

them.

v. Application of Procedural Framework

27. In both the building-by-building and unit-by-unit contexts, one

of our goals is to promote competition and consumer choice by

minimizing any potential disruption in service to a subscriber

switching video service providers. To that end, we have proposed

certain rules herein designed to give the subscriber reasonable notice

if and when his or her service will be terminated prior to the end of

the applicable notice period. In addition, we would propose to adopt a

general rule requiring the parties to cooperate to ensure as seamless a

transition as possible. We seek comment on whether it is necessary to

promulgate such a rule, or whether a provider's desire to win the

subscriber back will compel the provider to cooperate during the

transition period.

28. We also propose that the above procedural mechanisms would

apply regardless of the identity of the incumbent video service

provider involved. While initially this incumbent would commonly be a

cable operator, it could also be a SMATV provider, an MMDS provider, a

DBS provider or others.

vi. Statutory Authority

29. We believe that the Commission has authority under sections

4(i) and 303(r) of the Communications Act to establish procedures for

the disposition of MDU home run wiring upon termination of service.

Section 4(i) permits the Commission to ``perform any and all acts, make

such rules and regulations, and issue such orders, not inconsistent

with this Act, as may be necessary in the execution of its functions.''

The Commission may properly take action under section 4(i) even if such

action is not expressly authorized by the Communications Act, as long

as the action is not expressly prohibited by the Act and is necessary

to the effective performance of the Commission's functions. We propose

to invoke section 4(i) here because the law does not expressly prohibit

the Commission from adopting procedures regarding the disposition of

home run wiring and because affording the widest range of competitive

opportunities is necessary to effectuate the purposes of the

Communications Act.

30. Section 4(i) has been held to justify various Commission

regulations that were not within explicit grants of authority. In these

cases, the courts found that the Commission's regulations were not

inconsistent with the Communications Act because they did not

contravene an express prohibition or requirement of the Act, and were

reasonably ``necessary and proper'' for the execution of the agency's

enumerated powers. Most recently, in Mobile Communications Corp. v.

FCC, the United States Court of Appeals for the District of Columbia

Circuit acknowledged the Commission's authority under section 4(i) to

regulate even where the Communications Act does not explicitly

authorize such action. In that case, the D.C. Circuit held that the

Commission had authority under 4(i) to require Mtel, which held a

pioneer's preference, to pay for a narrowband personal communications

service (``PCS'') license, despite the fact that the Act did not

specifically authorize the Commission to charge a price for a license

granted to a pioneer's preference holder. The court denied Mtel's

argument that the Commission's action was inconsistent with the

Communications Act and therefore not within the Commission's section

4(i) power. Mtel argued that Congress' explicit grant of authority to

the Commission to collect certain fees and to conduct auctions for

specified types of licenses denied the Commission authority to impose

other fees. The court found Mtel's reliance on the

[[Page 46460]]

expressio unius maxim--that the expression of one is the exclusion of

other--misplaced. According to the court, ``[t]he maxim `has little

force in the administrative setting,' where we defer to an agency's

interpretation of a statute unless Congress has `directly spoken to the

precise question at issue.' '' The court also denied Mtel's argument

that, in the absence of an affirmative statutory mandate to support the

payment requirement, the Commission's action was not ``necessary in the

execution of [the Commission's] functions,'' as required by section

4(i).

31. Applying these principles here, we conclude that the Commission

is authorized under section 4(i) to establish procedures regarding the

disposition of MDU home run wiring upon termination of service. First,

establishing rules regarding the disposition of the home run wiring

upon termination is necessary to the execution of the Commission's

functions. As noted above, section 624(i) directs the Commission to

prescribe rules regarding the disposition of wiring within a

subscriber's premises in order to promote consumer choice and

competition by permitting subscribers to avoid the disruption of having

their home wiring removed upon voluntary termination and to

subsequently utilize that wiring for an alternative service. We believe

that, under our current rules, we cannot fully meet those objectives in

the MDU context because, as described above, MDU owners often will not

permit multiple home run wires to be installed in their buildings. In

order to promote consumer choice and competition, we therefore propose

to prescribe additional rules regarding the disposition of the existing

home run wiring upon termination of service.

32. Further, we propose to premise our decision to establish

procedures regarding the disposition of home run wiring in MDUs on the

Communications Act's fundamental purpose of ``regulating interstate and

foreign commerce in communication by wire and radio so as to make

available, so far as possible, to all people of the United States * * *

a rapid, efficient, Nation-wide, and world-wide wire and radio

communications service * * *.'' Moreover, we propose to premise our

decision on the pervasive regulatory structure Congress established

regarding cable communications, the goal of which is to replicate or

encourage competitive conditions. Section 601 of the Communications Act

states that one of the purposes of Title VI is to promote competition

in cable communications. Due to the lack of competitive alternatives in

multichannel video programming services, Congress has authorized the

Commission to ensure that basic cable services, including equipment,

are available at reasonable rates, to ensure that cable programming

service rates are not unreasonable, and to establish standards whereby

cable operators fulfill customer service requirements.

33. We believe that establishing procedures regarding the

disposition of MDU home run wiring will assist the Commission in

discharging its statutory obligations under section 623(b) and its

overall responsibility to pursue Congress' preference for competition

stated in the 1992 Cable Act. Section 623(b) of the Communications Act

requires the Commission to prescribe rules to ensure that rates for

basic cable service are ``reasonable'' and that such regulations

``shall include standards to establish, on the basis of actual cost,

the price or rate for * * * installation and lease of equipment used by

subscribers * * *.'' The regulations authorized by section 623(b) cover

``equipment used by subscribers to receive the basic cable service

tier, including * * * equipment as is required to access programming *

* *.'' The term ``equipment'' under section 623(b) includes cable

inside wiring. This extensive authority seeks to foster enhanced

services to the subscriber at reasonable prices.

34. We believe that establishing the above procedures regarding the

disposition of MDU home run wiring is necessary to fulfill section

623(b)'s mandate of reasonable basic cable rates. We believe that these

procedures will provide advance certainty for property owners,

alternative video service providers and subscribers regarding the

disposition of the home run wiring when the existing service is

terminated, thereby alleviating current circumstances that deter the

property owner from considering alternative service providers and

fostering competition among service providers. We believe that such

competitive choice will exert a restraining influence on rates as

service providers compete for the opportunity to serve the entire

building or individual subscribers.

35. Moreover, in the 1992 Cable Act, Congress specifically embraced

a ``[p]reference for competition'' over regulation in setting rates for

cable services. Fostering competition among service providers through

the adoption of rules regarding the disposition of MDU home run wiring

is a fundamental means to ensure that cable service rates remain

``reasonable.'' The legislative history of section 623(b) states that

Congress agreed that ``[r]ather than requiring the Commission to adopt

a formula to establish the price for equipment, the Commission is given

the authority to choose the best method of accomplishing the goals of

this legislation.'' We therefore find that it is within our scope of

authority under the 1992 Cable Act to establish procedural mechanisms

that encourage reasonable rates through a competitive environment

rather than a regulatory one.

36. Finally, we believe that our proposed approach would help to

fulfill Congress' mandate in the 1996 Act to ``provide for a pro-

competitive, de-regulatory national policy framework designed to

accelerate rapidly private sector deployment of advanced

telecommunications and information technologies and services to all

Americans.'' We believe that adoption of the above procedural

mechanisms would enhance competition, fostering the deployment of

innovative technologies and expanded services.

37. We believe that the above provisions authorize the Commission

not only to establish regulations duplicating the behavior of a

competitive market, but to take actions that prompt the evolution of a

true competitive environment. Based on the record before us, we find

that failing to establish such procedures would continue existing

barriers to competitive choice for individuals residing in MDUs.

Individuals residing in MDUs often are currently limited to receiving

service from only one provider. Although we recognize that subscriber

choice would be enhanced by the use of multiple wires, we do not

believe that requiring MDU owners to permit multiple wires is a viable

option at this point in time. We believe that the inability of the MDU

owner to use the existing home run wiring deters consideration of

alternative providers, and that providing certainty with regard to the

disposition of the MDU home run wiring provides a reasonable means of

increasing choice and promoting competition.

38. We also conclude that, in accordance with the second part of

section 4(i), the procedural mechanisms we are proposing are not

inconsistent with any provision of the law. Nothing in the language of

section 624(i) prohibits the Commission from adopting rules concerning

wiring outside the subscriber's premises. This is not a circumstance

where the general canon of statutory construction, the ``specific

governs the general,'' applies. The courts have found this canon

applicable only where there ``is an `inescapable conflict' between the

specific provision

[[Page 46461]]

and the general provision.'' Section 624(i) does not expressly prohibit

the Commission from adopting rules affecting home run wiring. Thus, we

tentatively conclude that there is no ``inescapable conflict'' between

section 624(i) and the procedures discussed below. To the contrary, as

described above, we believe that the rules we are proposing will

further promote section 624(i)'s underlying purpose of promoting

consumer choice and competition by permitting subscribers to use their

existing home wiring to receive an alternative video programming

service. Finally, as the Mtel court found, the expressio unius maxim--

that the expression of one is the exclusion of other--`` `has little

force in the administrative setting,' where we defer to an agency's

interpretation of a statute unless Congress has `directly spoken to the

precise question at issue.' '' Indeed, the Mtel court stated: ``[W]e

think the nature of Congress's auction authorization more supports than

undermines the Commission's decision here.''

39. While the legislative history of section 624(i) indicates that

Congress was concerned about the potential for theft of service and

signal leakage, we believe that the rules we are proposing would not

have an adverse impact on those concerns. First, we do not believe that

the procedural mechanisms we are proposing will increase the frequency

of service theft; a provider's control over its network security is

unaffected by our rules. Our proposed rules do not give the MDU owner,

the alternative service provider or the subscriber access to the

incumbent's riser cable or lockbox. Second, our proposed rules would

not affect the service provider's signal leakage responsibilities. It

would remain the duty of the provider to protect against signal leakage

while it is providing service, regardless of who owns the home run

wiring in the building.

40. We also think that cable operator reliance on the ``Joint Use''

provision of the 1996 Act (codified at section 652(d)(2) of the

Communications Act) as evidence of Congress' intent that cable

operators retain ownership and control of the home run wiring is

misplaced. Section 652(d)(2) provides generally that a LEC may obtain

permission from the cable operator to use that part of the transmission

facilities extending from the last multi-user terminal to the premises

of the end user, and that such use must be reasonably limited in scope

and duration. Cable operators assert that this provision invests them

with ownership and control of all cable wiring outside the subscriber

demarcation point, including the home run wiring, even after a

subscriber terminates service, as Congress otherwise would not have

established rules allowing cable operators to set the terms and

conditions for a LEC's use of the facilities.

41. We disagree. Notably, section 652(d)(2) is entitled ``Joint

Use,'' indicating Congress'' intent for the provision to govern only

the joint use of the facilities by a cable operator and a local

exchange carrier. It is an exception to the general prohibition in

section 652(c) on joint ventures or partnerships between cable

operators and LECs that serve the same market area. We believe that

section 652(d)(2) does not constrain our authority to establish

procedures governing the disposition of the home run wiring because the

provision only addresses use of the wiring while the cable operator

continues to own or use the facilities. Here, the procedural mechanisms

would not apply until the cable operator has no legally enforceable

right to remain on the premises and the MDU owner and/or subscriber

terminates the operator's service.

42. Additionally, we believe that had Congress intended the ``Joint

Use'' provision to govern cable wiring, it would have placed the

provision in section 624, which sets forth the existing wiring

provisions, rather than in section 652, which concerns telephone

company-cable television cross-ownership restrictions. We also agree

with alternative video service providers that Congress would have

enumerated additional types of potential users of cable operators'

wiring, other than telephone companies, if it had intended this

provision to cover uses of the wiring other than the limited situation

of wiring being shared between a LEC and a cable operator.

43. We believe that we have authority to apply all our cable inside

wiring rules to all MVPDs, and not just to cable operators. Section

303(r) of the Communications Act authorizes the Commission, as required

by public convenience, interest, or necessity, to promulgate rules and

restrictions, not inconsistent with law, as may be necessary to carry

out the provisions of the Act. We believe that applying these rules to

over-the-air video service providers would be in the public interest.

The same competitive concerns described above exist regardless of

whether a cable operator or some other video service provider initially

installed a subscriber's or an MDU's inside wiring. In addition, we

believe that applying our cable home wiring rules to MVPDs that are

radio licensees would not be inconsistent with section 624(i) and would

further its purposes, since subscribers could use their existing inside

wiring to receive an alternative service. Further, for similar reasons

to those discussed above in proposing procedures for disposition of the

home run wiring in MDUs for cable operators, such procedures would not

be inconsistent with section 624(i) if applied to MVPDs that are radio

licensees.

44. In addition, we tentatively conclude that we have the authority

under sections 201 to 205 of the Communications Act to extend our cable

inside wiring rules to common carriers engaged in the transmission of

video programming. We tentatively conclude that section 4(i) also

invests the Commission with authority to expand our rules in this

manner with regard to MVPDs that are neither radio licensees nor common

carriers. Again, we tentatively conclude that the same competitive

concerns are present regardless of the type of service provider that

initially installs the broadband inside wiring. In addition, we

tentatively conclude that such an extension of our rules is necessary

in the execution of our functions and is not inconsistent with the

Communications Act, as described above. To promote parity among

broadband competitors and to fulfill the directives of the 1992 Cable

Act and the 1996 Act, we propose to apply our cable inside wiring rules

to all MVPDs.

vii. Constitutional Arguments

45. We tentatively conclude that the procedural mechanisms we have

proposed do not constitute an impermissible ``taking'' under the Fifth

Amendment. First, there is no forced taking of the incumbent's physical

property, since the incumbent has a reasonable opportunity to remove,

abandon, or sell the wiring. If the incumbent fails to act within the

reasonable periods set forth and its wiring is deemed abandoned, it is

the operator's failure to act, not the Commission's rule, that would

extinguish the cable operator's rights. The Fifth Amendment cannot be

construed to allow a service provider with no contractual or other

legal right to remain on a person's property to leave its wiring on the

property indefinitely and prohibit the property owner from using it. In

addition, there can be no taking of the incumbent's access rights

because the procedures expressly apply only where the incumbent does

not have a contractual, statutory or other legal right to maintain its

wiring on the premises. We seek

[[Page 46462]]

comment on these tentative conclusions.

D. Disposition of Cable Home Wiring

46. We believe that fostering competitive choice in MDUs requires

the coordinated disposition of two segments of cable wiring: (1) The

home run wiring from the point where the wiring becomes devoted to an

individual unit to the cable demarcation point; and (2) the cable home

wiring from the demarcation point to the subscriber's television set or

other customer premises equipment. Without clear and predictable rules

for the disposition of each of these segments, an alternative

provider's ability to convince an MDU owner or individual subscriber to

switch services could be significantly compromised. The procedural

framework proposed above addressed the disposition of MDU home run

wiring. Here, we set forth a specific proposal on how to address

certain issues regarding the disposition of MDU cable home wiring. We

believe that these rules will promote competition and consumer choice

by providing a comprehensive and workable framework for the disposition

of MDU cable wiring.

47. As in the context of home run wiring, we propose that these

home wiring procedural mechanisms apply regardless of the identity of

the incumbent video service provider involved. While initially this

incumbent would commonly be a cable operator, it could also be a SMATV

provider, an MMDS provider, a DBS provider or others. We tentatively

conclude that we have the authority to apply these home wiring rules to

other video service providers. We request comment on this proposal.

i. Building-by-Building Disposition of Home Wiring

48. In the Cable Home Wiring Further NPRM, we requested comment on,

among other issues, whether, in order to promote the goals of section

624(i) and our rules thereunder, the subscriber (on a non-loop-through

wiring configuration) or the building owner (with a loop-through wiring

configuration) should be given the opportunity to purchase the cable

home wiring when the MDU owner terminates cable service for the entire

building.

49. We tentatively conclude that, if the MDU owner has the legal

right, either by law or by contract, to terminate the subscriber's

cable service, the owner terminating service for the entire building is

effectively voluntarily terminating service on the subscribers' behalf.

We therefore tentatively conclude that our home wiring rules would be

triggered when an MDU owner terminates service for the entire building.

We tentatively conclude that providing the cable operator a single

point of contact (i.e., the MDU owner) would further the statutory

purposes of minimizing disruption and facilitating the transfer of

service to a competing video service provider. Because we believe that

it would be impractical and inefficient for the incumbent provider to

deal with each individual subscriber regarding the disposition of his

or her cable home wiring when the entire MDU is switching providers, we

propose to deem the MDU owner to be acting as the terminating

``subscriber'' for purposes of the disposition of the cable home wiring

within the individual dwelling unit where the cable home wiring is not

already owned by a resident. We request comment on this proposal.

Similarly, with regard to bulk service contracts, we tentatively

conclude that it is logical for the landlord to be deemed the

subscriber, and thus for the landlord to have the right to purchase the

wiring as provided in our general rules. We tentatively conclude,

however, that this rule should not override a bulk service contract

that specifically provides for the disposition of the wiring upon

termination of the contract.

50. We propose that, when an MDU owner provides an incumbent

provider with its minimum of 90 days notice that the incumbent

provider's access to the entire building will be terminated and that

the MDU owner seeks to use the home run wiring for another service, the

incumbent provider must, in accordance with our current home wiring

rules, (1) offer to sell to the MDU owner any home wiring within the

individual dwelling units which the incumbent provider owns and intends

to remove, and (2) provide the MDU owner with the total per-foot

replacement cost of such home wiring. As with the home run wiring, if

the MDU owner declines to purchase the cable home wiring not already

owned by a resident, the alternative service provider could elect to

purchase it upon service termination under our rules.

51. We propose to require that the MDU owner decide whether it or

the alternative provider will purchase the cable home wiring and so

notify the incumbent provider no later than 30 days before the

termination of access to the building will become effective. We propose

to modify our current home wiring rules to allow the incumbent provider

30 days, rather than the current seven, to remove all of the cable home

wiring for the entire building. We believe this is appropriate given

the amount of home wiring that may need to be removed from an entire

building. We propose that, if the MDU owner and the alternative service

provider decline to purchase the home wiring, the incumbent provider

would not be permitted to remove the home wiring until the date of

actual service termination, i.e., likely 90 days after the building

owner notified the incumbent that its access to the entire building

will be terminated. Under these circumstances, we would propose that if

the incumbent provider fails to remove the home wiring within 30 days

of actual service termination, it could make no subsequent attempt to

remove the wiring or restrict its use. We request comment on this

proposal.

ii. Unit-by-Unit Disposition of Home Wiring

52. In the unit-by-unit context, we propose to continue to apply

our rules permitting terminating subscribers (or their agents) to

purchase the cable home wiring up to a point approximately 12 inches

outside their individual units. We continue to believe that this is

consistent with the purposes of section 624(i) to promote consumer

choice and competition by permitting subscribers to avoid the

disruption of having their home wiring removed upon voluntary

termination and to subsequently utilize that wiring for an alternative

service. We do, however, propose to modify our rules in two ways.

First, as discussed below, we propose to permit the MDU owner or the

alternative service provider to purchase the cable home wiring within

each unit if the subscriber declines, provided that the building owner

timely notifies the incumbent provider that it or the alternative

provider wants to purchase the home wiring whenever a subscriber

declines. Second, we propose to change the time in which an incumbent

provider must remove the home wiring or make no further effort to use

it or restrict its use from seven business days to seven calendar days

after the individual subscriber terminates service. We believe that

this minor change is sufficient time for removal of a single unit's

cable home wiring, and will avoid customer confusion by having the time

permitted for the provider to remove the home wiring within the

individual unit run concurrently with the time permitted for the

provider to remove, sell or abandon the home run wiring outside the

unit.

53. In the Cable Home Wiring Further NPRM, we requested comment on

whether the premises owner should have the right to purchase the cable

[[Page 46463]]

home wiring when a subscriber who voluntarily terminates cable service

does not own the premises and elects not to purchase the wiring. We

tentatively conclude that an MDU owner should be permitted to purchase

the wiring within an individual dwelling unit based on the per-foot

replacement cost if the individual subscriber declines to do so. This

approach would preserve the current subscriber's rights, and still

allow the building owner to act on behalf of future tenants, thus

promoting competition and consumer choice. As with the home run wiring,

if the MDU owner declines to purchase the cable home wiring, the

alternative service provider would be permitted to purchase it. Except

with respect to the building-by-building procedure described above, we

would not require that the building owner or the alternative provider

have the opportunity to purchase the wiring before the subscriber has

the opportunity to do so because we believe that Congress intended for

section 624(i) to promote individual subscriber choice whenever

possible. Our preference is therefore for the subscriber to control its

own home wiring, and only when that is not reasonable or efficient, for

the building owner or alternative provider to control it.

54. We propose that the MDU owner should notify the incumbent

provider of its election to purchase or to allow the alternative

provider to purchase the home wiring at the same time as the MDU owner

provides the incumbent provider with 60 days notice that it intends to

allow head-to-head competition within its building. Thus, the MDU owner

would be required to inform the incumbent provider one time for the

entire building. If the MDU owner fails to provide the incumbent with

such notice, the incumbent would be under no obligation to sell the

home wiring to the MDU owner or the alternative provider when an

individual subscriber terminates and declines to purchase the wiring.

We request comment on this proposal.

E. Alternatives to Procedural Framework

55. In some cases, there may be room in the molding or conduit for

an alternative service provider to install its home run wiring without

interfering with the incumbent's wiring. We propose to permit the

alternative service provider to install its wiring within the existing

molding or conduit, even over the incumbent provider's objection, where

there is room in the molding or conduit and the MDU owner does not

object. We seek comment on whether and how to allow compensation for

the alternative service provider's use of the molding or conduit. We

tentatively conclude that such a rule would promote competition and

consumer choice and would not constitute a taking of the incumbent

provider's private property without just compensation under the Fifth

Amendment. We seek comment on these tentative conclusions. We also seek

comment on whether and how this rule would apply in the situation where

an incumbent provider has an exclusive contractual right to occupy the

molding or conduit.

56. Several commenters also point out that the current cable

demarcation point can be physically inaccessible. We tentatively

conclude that where the cable demarcation point is truly physically

inaccessible to an alternative service provider (e.g., embedded in

brick, metal conduit or cinder blocks, not simply within hallway

molding), the demarcation point should be moved back to the point at

which it first becomes physically accessible. We seek comment on this

tentative conclusion and on how to define ``physically inaccessible.''

We also seek comment on the percentage of installations in which the

demarcation point would be deemed physically inaccessible. Finally, we

seek comment on our authority to adopt, and any other legal

implications of, this proposed modification.

57. We also seek comment on whether we should adopt a rule

requiring video service providers to transfer to the MDU owner upon

installation ownership of the home wiring and home run wiring installed

in MDUs under contracts entered into on or after the effective date of

any rules we may adopt. Such a rule might increase competition and

consumer choice in future installations by permitting MDU owners to

control access to the home run wiring from the start. We seek comment

on the appropriate mechanism for effecting such a transfer, whether the

price for the wiring should be regulated or left to private

negotiations, and whether and how our rules should address the issue of

an MDU owner that does not want to own the home run wiring in its

building. In addition, we seek comment on our authority to adopt, and

any other legal implications of, such a rule.

58. Finally, we seek comment on any other proposals to promote MVPD

competition and consumer choice in MDUs that have not already been

previously raised and commented on in the Inside Wiring NPRM and the

Cable Home Wiring Further NPRM. In particular, we ask commenters to

address the legal, policy and practical implications of any such

proposals.

Initial Regulatory Flexibility Act Analysis

59. As required by section 603 of the Regulatory Flexibility Act, 5

U.S.C. Sec. 603, (``RFA''), the Commission has prepared an Initial

Regulatory Flexibility Analysis (``IRFA'') of the expected significant

impact on small entities by the policies and rules proposed in this

Further NPRM. Written public comments are requested on the IRFA. These

comments must be filed in accordance with the same filing procedures as

other comments in this proceeding, but they must have a separate and

distinct heading designating them as responses to the IRFA. The

Secretary shall send a copy of the Further NPRM, including the IRFA to

the Chief Counsel for Advocacy of the Small Business Administration in

accordance with section 603(a) of the RFA.

Need for Action and Objectives of the Proposed Rules

60. This Further NPRM proposes to supplement the cable home wiring

rules with new procedural mechanisms to provide certainty regarding the

use of MDU home run wiring upon termination of existing service. In

addition, we propose to expand our cable inside wiring rules to apply

to all MVPDs in order to promote parity among competitors.

Legal Basis

61. This Further NPRM is adopted pursuant to sections 1, 4(i), 201-

205, 303, 623, 624, and 632 of the Communications Act of 1934, as

amended, 47 U.S.C. Secs. 151, 154(i), 201-205, 303, 543, 544 and 552.

Description and Estimate of the Number of Small Entities Impacted

62. The RFA directs the Commission to provide a description of and,

where feasible, an estimate of the number of small entities that will

be affected by the proposed rules. The RFA defines the term ``small

entity'' as having the same meaning as the terms ``small business,''

``small organization,'' and ``small governmental jurisdiction,'' and

the same meaning as the term ``small business concern'' under section 3

of the Small Business Act. Under the Small Business Act, a ``small

business concern'' is one which: (1) Is independently owned and

operated; (2) is not dominant in its field of operation; and (3)

satisfies any additional criteria established by the Small Business

Administration (``SBA''). The rules we

[[Page 46464]]

propose in this Further NPRM will affect MVPDs and MDU owners.

63. Small MVPDs: SBA has developed a definition of a small entity

for cable and other pay television services, which includes all such

companies generating $11 million or less in annual receipts. This

definition includes cable system operators, closed circuit television

services, direct broadcast satellite services, multipoint distribution

systems, satellite master antenna systems and subscription television

services. According to the Bureau of the Census, there were 1423 such

cable and other pay television services generating less than $11

million in revenue that were in operation for at least one year at the

end of 1992. We will address each service individually to provide a

more succinct estimate of small entities.

64. Cable Systems: The Commission has developed its own definition

of a small cable company for the purposes of rate regulation. Under the

Commission's rules, a ``small cable company'' is one serving fewer than

400,000 subscribers nationwide. Based on our most recent information,

we estimate that there were 1439 cable operators that qualified as

small cable companies at the end of 1995. Since then, some of those

companies may have grown to serve over 400,000 subscribers, and others

may have been involved in transactions that caused them to be combined

with other cable operators. Consequently, we estimate that there are

fewer than 1439 small entity cable system operators that may be

affected by the decisions and rules proposed in this Further NPRM.

65. The Communications Act also contains a definition of a small

cable system operator, which is ``a cable operator that, directly or

through an affiliate, serves in the aggregate fewer than 1% of all

subscribers in the United States and is not affiliated with any entity

or entities whose gross annual revenues in the aggregate exceed

$250,000,000.'' The Commission has determined that there are 61,700,000

subscribers in the United States. Therefore, we found that an operator

serving fewer than 617,000 subscribers shall be deemed a small operator

if its annual revenues, when combined with the total annual revenues of

all of its affiliates, do not exceed $250 million in the aggregate.

Based on available data, we find that the number of cable operators

serving 617,000 subscribers or less totals 1450. Although it seems

certain that some of these cable system operators are affiliated with

entities whose gross annual revenues exceed $250,000,000, we are unable

at this time to estimate with greater precision the number of cable

system operators that would qualify as small cable operators under the

definition in the Communications Act.

66. MMDS: The Commission refined the definition of ``small entity''

for the auction of MMDS as an entity that together with its affiliates

has average gross annual revenues that are not more than $40 million

for the preceding three calendar years. This definition of a small

entity in the context of the Commission's Report and Order concerning

MMDS auctions has been approved by the SBA.

67. The Commission completed its MMDS auction in March 1996 for

authorizations in 493 basic trading areas (``BTAs''). Of 67 winning

bidders, 61 qualified as small entities. Five bidders indicated that

they were minority-owned and four winners indicated that they were

women-owned businesses. MMDS is an especially competitive service, with

approximately 1573 previously authorized and proposed MMDS facilities.

Information available to us indicates that no MMDS facility generates

revenue in excess of $11 million annually. We tentatively conclude that

there are approximately 1634 small MMDS providers as defined by the SBA

and the Commission's auction rules.

68. ITFS: There are presently 1,989 licensed educational ITFS

stations and 97 licensed commercial ITFS stations. Educational

institutions are included in the definition of a small business.

However, we do not collect annual revenue data for ITFS licensees and

are unable to ascertain how many of the 97 commercial stations would be

categorized as small under the SBA definition. Thus, we tentatively

conclude that at least 1,989 ITFS licensees are small businesses.

69. DBS: There are presently nine DBS licensees, some of which are

not currently in operation. The Commission does not collect annual

revenue data for DBS and, therefore, is unable to ascertain the number

of small DBS licensees that could be impacted by these proposed rules.

Although DBS service requires a great investment of capital for

operation, we acknowledge that there are several new entrants in this

field that may not yet have generated $11 million in annual receipts,

and therefore may be categorized as a small business, if independently

owned and operated.

70. HSD: The market for HSD service is difficult to quantify.

Indeed, the service itself bears little resemblance to other

multichannel video service providers. HSD owners have access to more

than 265 channels of programming placed on C-band satellites by

programmers for receipt and distribution by video service providers, of

which 115 channels are scrambled and approximately 150 are unscrambled.

HSD owners can watch unscrambled channels without paying a subscription

fee. To receive scrambled channels, however, an HSD owner must purchase

an integrated receiver-decoder from an equipment dealer and pay a

subscription fee to an HSD programming packager. Thus, HSD users

include: (1) Viewers who subscribe to a packaged programming service,

which affords them access to most of the same programming provided to

subscribers of other video service providers; (2) viewers who receive

only non-subscription programming; and (3) viewers who receive

satellite programming services illegally without subscribing. Because

scrambled packages of programming are most specifically intended for

retail consumers, these are the services most relevant to this

discussion.

71. According to the most recently available information, there are

approximately 30 program packagers nationwide offering packages of

scrambled programming to retail consumers. These program packagers

provide subscriptions to approximately 2,314,900 subscribers

nationwide. This is an average of about 77,163 subscribers per program

packager. This is substantially smaller than the 400,000 subscribers

used in the Commission's definition of a small MSO. Furthermore,

because this an average, it is likely that some program packagers may

be substantially smaller.

72. OVS: The Commission has certified nine open video system

(``OVS'') operators. Because these services were introduced so recently

and only one operator is currently offering programming to our

knowledge, little financial information is available. Bell Atlantic

(certified for operation in Dover) and Metropolitan Fiber Systems

(``MFS,'' certified for operation in Boston and New York) have

sufficient revenues to assure us that they do not qualify as small

business entities. Two other operators, Residential Communications

Network (``RCN,'' certified for operation in New York) and RCN/BETG

(certified for operation in Boston), are MFS affiliates and thus also

fail to qualify as small business concerns. However, Digital

Broadcasting Open Video Systems (a general partnership certified for

operation in southern California), Urban Communications Transport Corp.

(a corporation certified for operation in New York and Westchester),

and Microwave Satellite Technologies, Inc.

[[Page 46465]]

(a corporation owned solely by Frank T. Matarazzo and certified for

operation in New York) are either just beginning or have not yet

started operations. Accordingly, we tentatively conclude that three OVS

licensees may qualify as small business concerns.

73. SMATVs: Industry sources estimate that approximately 5200 SMATV

operators were providing service as of December 1995. Other estimates

indicate that SMATV operators serve approximately 1.05 million

residential subscribers as of September 1996. The ten largest SMATV

operators together pass 815,740 units. If we assume that these SMATV

operators serve 50% of the units passed, the ten largest SMATV

operators serve approximately 40% of the total number of SMATV

subscribers. Because these operators are not rate regulated, they are

not required to file financial data with the Commission. Furthermore,

we are not aware of any privately published financial information

regarding these operators. Based on the estimated number of operators

and the estimated number of units served by the largest ten SMATVs, we

tentatively conclude that a substantial number of SMATV operators

qualify as small entities.

74. LMDS: Unlike the above pay television services, LMDS technology

and spectrum allocation will allow licensees to provide wireless

telephony, data, and/or video services. An LMDS provider is not limited

in the number of potential applications that will be available for this

service. Therefore, the definition of a small LMDS entity may be

applicable to both cable and other pay television (SIC 4841) and/or

radiotelephone communications companies (SIC 4812). The SBA definition

for cable and other pay services is defined above. A small

radiotelephone entity is one with 1500 employees or less. For the

purposes of this proceeding, we include only an estimate of LMDS video

service providers. The vast majority of LMDS entities providing video

distribution could be small businesses under the SBA's definition of

cable and pay television (SIC 4841). However, in the LMDS Second Report

and Order, we defined a small LMDS provider as an entity that, together

with affiliates and attributable investors, has average gross revenues

for the three preceding calendar years of less than $40 million. We

have not yet received approval by the SBA for this definition.

75. There is only one company, CellularVision, that is currently

providing LMDS video services. Although the Commission does not collect

data on annual receipts, we assume that CellularVision is a small

business under both the SBA definition and our proposed auction rules.

We tentatively conclude that a majority of the potential LMDS licensees

will be small entities, as that term is defined by the SBA.

76. MDU Operators: The SBA has developed definitions of small

entities for operators of nonresidential buildings, apartment buildings

and dwellings other than apartment buildings, which include all such

companies generating $5 million or less in revenue annually. According

to the Census Bureau, there were 26,960 operators of nonresidential

buildings generating less than $5 million in revenue that were in

operation for at least one year at the end of 1992. Also according to

the Census Bureau, there were 39,903 operators of apartment dwellings

generating less than $5 million in revenue that were in operation for

at least one year at the end of 1992. The Census Bureau provides no

separate data regarding operators of dwellings other than apartment

buildings, and we are unable at this time to estimate the number of

such operators that would qualify as small entities.

Reporting, Recordkeeping, and Other Compliance Requirements

77. The Further NPRM proposes rules to require that, upon

termination of existing service, the MDU operator must provide the

incumbent service provider with notice of termination of the

incumbent's access to the building or of the owner's wish to permit

head-to-head competition for individual home run wires. The MDU

operator would have the option of either purchasing the wiring or

allowing the alternative provider to purchase it. The incumbent service

provider would be required to elect to sell, remove or abandon its home

run wiring and would have to complete its sales negotiations or remove

its wiring within the time schedule provided herein or be deemed to

have abandoned its wiring. The Commission's inside wiring rules would

also be expanded to apply to all MVPDs.

78. The Further NPRM requests comment on the adoption of penalties

for incumbent MVPDs that elect to remove their MDU home run wiring upon

termination of service and then fail to do so. Incumbent providers may

choose to maintain records to prove their compliance with the rules

regarding disposition of home run wiring, but we do not believe that

they will need additional professional skills to maintain such records

and we propose no requirement for such recordkeeping.

79. The Further NPRM proposes a rule requiring video service

providers to transfer ownership of MDU home run wiring to the MDU owner

upon installation. Video service providers may choose to maintain

records of the home run wiring subject to such a rule, but we do not

believe that they will need additional professional skills to maintain

such records and we propose no requirement for such recordkeeping.

Steps Taken to Minimize Significant Economic Impact on Small

Entities and Significant Alternatives Considered: None. However, any

significant alternatives presented in the comments will be considered.

Federal Rules That May Duplicate, Overlap, or Conflict with the

Proposed Rules: None.

Paperwork Reduction Act of 1995 Analysis

80. The requirements proposed in this Further NPRM have been

analyzed with respect to the Paperwork Reduction Act of 1995 (the

``1995 Act'') and would impose new and modified information collection

requirements on the public. The Commission, as part of its continuing

effort to reduce paperwork burdens, invites the general public to take

this opportunity to comment on the proposed information collection

requirements contained in this Further NPRM, as required by the 1995

Act. Public comments are due September 25, 1997. Comments should

address: (1) Whether the proposed collection of information is

necessary for the proper performance of the functions of the

Commission, including whether the information would have practical

utility; (2) the accuracy of the Commission's burden estimates; (3)

ways to enhance the quality, utility, and clarity of the information

collected; and (4) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

81. Written comments by the public on the proposed new and modified

information collection requirements are due September 25, 1997.

Comments should be submitted to Judy Boley, Federal Communications

Commission, Room 234, 1919 M Street, N.W., Washington, D.C. 20554, or

via the Internet to [email protected]. For additional information on the

proposed information collection requirements, contact Judy Boley at

202-418-0214 or via the Internet at the above address.

[[Page 46466]]

Procedural Provisions

82. Ex parte Rules--``Permit-but-Disclose'' Proceeding. This

proceeding will be treated as a ``permit-but-disclose'' proceeding

subject to the ``permit-but-disclose'' requirements under section

1.1206(b) of the rules. 47 CFR 1.1206(b), as revised. Ex parte

presentations are permissible if disclosed in accordance with

Commission rules, except during the Sunshine Agenda period when

presentations, ex parte or otherwise, are generally prohibited. Persons

making oral ex parte presentations are reminded that a memorandum

summarizing a presentation must contain a summary of the substance of

the presentation and not merely a listing of the subjects discussed.

More than a one or two sentence description of the views and arguments

presented is generally required. See 47 CFR 1.1206(b)(2), as revised.

Additional rules pertaining to oral and written presentations are set

forth in section 1.1206(b).

83. Filing of Comments and Reply Comments. Pursuant to applicable

procedures set forth in Sections 1.415 and 1.419 of the Commission's

Rules, 47 CFR 1.415 and 1.419, interested parties may file comments on

or before September 25, 1997 and reply comments on or before October 2,

1997. To file formally in this proceeding, you must file an original

plus four copies of all comments, reply comments, and supporting

comments. If you want each Commissioner to receive a personal copy of

your comments and reply comments, you must file an original plus nine

copies. You should send comments and reply comments to Office of the

Secretary, Federal Communications Commission, 1919 M Street, N.W.,

Washington, D.C. 20554. Comments and reply comments will be available

for public inspection during regular business hours in the FCC

Reference Center, Room 239, Federal Communications Commission, 1919 M

Street N.W., Washington D.C. 20554.

84. Written comments by the public on the proposed and/or modified

information collections are due September 25, 1997. Written comments

must be submitted by the Office of Management and Budget (``OMB'') on

the proposed and/or modified information collections on or before

November 3, 1997. In addition to filing comments with the Secretary, a

copy of any comments on the information collections contained herein

should be submitted to Judy Boley, Federal Communications Commission,

Room 234, 1919 M Street, N.W., Washington, DC 20554, or via the

Internet to [email protected] and to Timothy Fain, OMB Desk Officer, 10236

NEOB, 725--17th Street, N.W., Washington, DC 20503 or via the Internet

to [email protected].

Ordering Clauses

85. It is ordered that, pursuant to sections 1, 4(i), 201-205, 303,

623, 624 and 632 of the Communications Act of 1934, as amended, 47

U.S.C. Secs. 151, 154(i), 201-205, 303, 543, 544 and 552, notice is

hereby given of proposed amendments to Part 76, in accordance with the

proposals, discussions and statements of issues in this Further Notice

of Proposed Rulemaking, and that comment is sought regarding such

proposals, discussions and statements of issues.

86. It is further ordered that the Commission shall send a copy of

this Further Notice of Proposed Rulemaking, including the Initial

Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of

the Small Business Administration.

List of Subjects in 47 CFR Part 76

Cable television.

Federal Communications Commission

William F. Caton,

Acting Secretary.

Proposed Rule Changes

Part 76 of title 47 of the Code of Federal Regulations is proposed

to be amended as follows:

PART 76--CABLE TELEVISION SERVICE

1. The authority citation for Part 76 would continue to read as

follows:

Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,

307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533,

534, 535, 536, 537, 543, 544, 544a, 545, 548, 552, 554, 556, 558,

560, 561, 571, 572, 573.

2. Section 76.5 is proposed to be amended by revising paragraph

(mm)(2) to read as follows:

Sec. 76.5 Definitions.

* * * * *

(mm) * * *

(2) For new and existing multiple dwelling unit installations with

non-loop-through wiring configurations, the demarcation point shall be

a point at or about twelve inches outside of where the cable wire

enters the subscriber's dwelling unit, or, where the wire is physically

inaccessible at such point, as close as practicable thereto so as to

permit access to the cable home wiring.

* * * * *

3. Section 76.802 is proposed to be amended by revising paragraph

(a) and paragraph (g) by removing the word ``business'', and by adding

new paragraphs (l), (m) and (n) to read as follows:

Sec. 76.802 Disposition of cable home wiring.

(a) (1) Upon voluntary termination of cable service by a subscriber

in a single unit dwelling, a cable operator shall not remove the cable

home wiring unless it gives the subscriber the opportunity to purchase

the wiring at the replacement cost, and the subscriber declines. If the

subscriber declines to purchase the cable home wiring, the cable system

operator must then remove the cable home wiring within seven days of

the subscriber's decision, under normal operating conditions, or make

no subsequent attempt to remove it or to restrict its use.

(2) Upon voluntary termination of cable service by an individual

subscriber in a multiple dwelling unit building, a cable operator shall

not remove the cable home wiring unless it gives the subscriber the

opportunity to purchase the wiring at the replacement cost, the

subscriber declines, and the owner of the multiple dwelling unit

building's common areas (referred to herein as the ``MDU owner'') has

not previously elected to purchase or have the alternative MVPD

purchase the cable home wiring when a subscriber declines, as provided

in paragraph (l) hereof. If the subscriber declines to purchase the

cable home wiring, and, the MDU owner has not elected to purchase or

have the alternative MVPD purchase the cable home wiring, the cable

system operator must then remove the cable home wiring within seven

days of the subscriber's decision, under normal operating conditions,

or make no subsequent attempt to remove it or to restrict its use.

(3) Upon voluntary termination of cable service for an entire

multiple dwelling unit building by the MDU owner, a cable operator

shall not remove the cable home wiring unless it gives the MDU owner

the opportunity to purchase the wiring at the replacement cost, and the

MDU owner declines either to purchase the wiring or to allow the

alternative MVPD to purchase the wiring. If the MDU owner declines to

purchase or have the alternative MVPD purchase the cable home wiring,

the cable system operator must then remove the cable home wiring no

later than 30 days, under normal operating conditions, after it is

notified of the MDU owner's decision, or make no subsequent attempt to

remove it or to restrict its use.

(4) The cost of the cable home wiring is to be based on the

replacement cost

[[Page 46467]]

per foot of the wiring on the subscriber's side of the demarcation

point multiplied by the length in feet of such wiring, and the

replacement cost of any passive splitters located on the subscriber's

side of the demarcation point.

* * * * *

(l) If a subscriber who is not the owner of the premises terminates

service and declines to purchase the cable home wiring under this

section, the owner of the multiple dwelling unit building's common

areas (referred to herein as the ``MDU owner'') may purchase it under

the same terms and conditions provided in subsection (a) hereof,

provided that the MDU owner notified the cable system operator of its

desire to purchase the cable home wiring in the event the subscriber

declines. Such notification must occur no later than the time at which

the MDU owner provides the incumbent MVPD 60 days' notice of the MDU

owner's intention to invoke the procedure set forth in Section

76.804(b).

(m) Where an entire multiple dwelling unit building is switching

service providers, the MDU owner shall be permitted to exercise the

rights of individual subscribers for purposes of the disposition of the

cable home wiring under this section. If the MDU owner declines to

purchase the cable home wiring, the MDU owner may allow the alternative

provider to purchase it upon service termination under this section.

(n) This section shall apply to all multichannel video programming

distributors, as that term is defined in Section 602(13) of the

Communications Act, 47 U.S.C. Sec. 522(13), in the same manner as it

applies to cable operators.

4. Section 76.804 is proposed to be added to read as follows:

Sec. 76.804 Disposition of home run wiring.

(a) Building-by-building disposition of home run wiring: (1) Where

an MVPD owns the home run wiring in a multiple dwelling unit building

(``MDU'') and does not (or will not at the conclusion of the notice

period) have a legally enforceable right to remain on the premises

against the wishes of the entity that owns the common areas of the MDU

(``the MDU owner''), the MDU owner may give the MVPD a minimum of 90

days' notice that its access to the entire building will be terminated.

The MVPD will then have 30 days to elect, for all the home run wiring

inside the MDU building: (i) To remove the wiring and restore the MDU

building to its prior condition by the end of the 90-day notice period;

(ii) to abandon and not disable the wiring at the end of the 90-day

notice period; or (iii) to sell the wiring to the MDU building owner.

If the incumbent provider elects to remove or abandon the wiring, and

it intends to terminate service before the end of the 90-day notice

period, the incumbent provider shall notify the MDU owner at the time

of this election of the date on which it intends to terminate service.

If the MDU owner refuses to purchase the home run wiring, an

alternative provider that has been authorized to provide service to the

MDU by the MDU owner may negotiate to purchase the wiring. For purposes

of this section, ``home run wiring'' shall refer to the wiring from the

point at which the MVPD's wiring becomes devoted to an individual

subscriber to the demarcation point.

(2) If the parties negotiate a price for the home run wiring, they

shall have 30 days from the date of election to negotiate a price. If

the parties are unable to agree on a price, the incumbent must elect

one of the other two options (i.e., abandonment or removal) and notify

the MDU owner at the time of this election if and when it intends to

terminate service before the end of the 90-day notice period. If the

incumbent service provider elects to abandon its wiring at this point,

the abandonment shall become effective at the end of the 90-day notice

period or upon service termination, whichever occurs first. If the

incumbent elects to remove its wiring and restore the building to its

prior condition, it must do so by the end of the 90-day notice period.

If the incumbent fails to comply with any of the deadlines established

herein, it shall be deemed to have elected to abandon its home run

wiring at the end of the 90-day notice period.

(b) Unit-by-unit disposition of home run wiring: (1) Where an MVPD

owns the home run wiring in an MDU and does not (or will not at the

conclusion of the notice period) have a legally enforceable right to

maintain any particular home run wire dedicated to a particular unit on

the premises against the MDU owner's wishes, an MDU owner may permit

multiple MVPDs to compete for the right to use the individual home run

wires dedicated to each unit. The MDU owner must provide 60 days'

notice to the incumbent MVPD of the MDU owner's intention to invoke

this procedure. The incumbent MVPD will then have 30 days to provide a

single written election to the MDU owner and the competing MVPD(s)

whether, for each and every one of its home run wires dedicated to a

subscriber who chooses an alternative provider's service, the incumbent

MVPD will:

(i) Remove the wiring and restore the MDU building to its prior

condition;

(ii) Abandon the wiring without disabling it; or

(iii) sell the wiring to the MDU owner. If the MDU owner refuses to

purchase the home run wiring, the alternative provider may purchase it.

The alternative provider(s) will be required to make a similar election

within this 30-day period for each home run wire solely dedicated to a

subscriber who switches back from the alternative provider to the

incumbent MVPD.

(2) When an existing MVPD is notified either orally or in writing

that a subscriber wishes to terminate service and that another service

provider intends to use the existing home run wire to provide service

to that particular subscriber, an existing provider that has elected to

remove its home run wiring will have seven days to remove its home run

wiring and restore the building to its prior condition. If the existing

provider has elected to abandon or sell the wiring, the abandonment or

sale will become effective seven days from the date it received the

request for service termination or upon actual service termination,

whichever occurs first. If the incumbent provider intends to terminate

service prior to the end of the seven-day period, the incumbent shall

inform the party requesting service termination, at the time of such

request, of the date on which service will be terminated. The incumbent

provider shall make the home run wiring accessible to the alternative

provider by the end of the seven-day period or within 24 hours of

actual service termination, whichever occurs first.

(3) If the incumbent provider fails to comply with any of the

deadlines established herein, the home run wiring shall be considered

abandoned and the alternative provider shall be permitted to use the

home run wiring immediately to provide service. The alternative

provider or the MDU owner may act as the subscriber's agent in

providing notice of a subscriber's desire to change services. If a

subscriber's service is terminated without notifying the incumbent

provider that the subscriber wishes to use the home run wiring to

receive an alternative service, the incumbent provider will not be

required to carry out its election to sell, remove or abandon the home

run wiring; the incumbent provider will be required to carry out its

election, however, if and when it receives notice that a subscriber

wishes to use the home run wiring to receive an alternative service.

Section 76.802 of our rules regarding the disposition of cable home

wiring will apply where a subscriber's service is terminated without

notifying the incumbent provider that the subscriber

[[Page 46468]]

wishes to use the home run wiring to receive an alternative service.

(4) The parties shall cooperate to ensure as seamless a transition

as possible for the subscriber.

(5) Section 76.802 of our rules regarding the disposition of cable

home wiring will continue to apply to the wiring on the subscriber's

side of the cable demarcation point.

5. Section 76.805 is proposed to be added to read as follows:

Sec. 76.805 Access to molding and conduits

An multichannel video service provider (``MVPD'') shall be

permitted to install one or more home run wires in an existing molding

or conduit where:

(a) Sufficient space is present to permit the installation;

(b) The installation will not interfere with the ability of an

existing MVPD to provide service; and

(c) The owner of the multiple dwelling unit building does not

object to such installation.

[FR Doc. 97-23303 Filed 9-2-97; 8:45 am]

BILLING CODE 6712-01-P