Inside Wiring

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 95-184; MM Docket No. 92-260; FCC 97-376]

Inside Wiring

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Commission has adopted a Report and Order and Second

Further Notice of Proposed Rulemaking which addresses rules and

policies concerning cable inside wiring. The Second Further Notice of

Proposed Rulemaking segment of this decision may be found elsewhere in

this issue of the Federal Register. The Report and Order (``Order'')

segment amends the Commission's regulations relating to the disposition

of cable home wiring and establishes regulations for the disposition of

home run wiring and related issues including the sharing of molding,

the demarcation point for multiple dwelling unit buildings (``MDUs''),

loop-through cable wiring configurations, customer access to cable home

wiring before termination of service, and signal leakage. This action

was necessary because competition is currently being deterred by

disputes over control and use of the wires necessary to reach each unit

in an MDU. The intended effect of this action is to expand

opportunities for new entrants seeking to compete in distributing video

programming and to broaden consumers' ability to install and maintain

their own wiring.

DATES: Amendments in Secs. 76.613, 76.802 and 76.804 contain

information collection requirements, and will not become effective

until approved by the Office of Management and Budget (``OMB'').

Amendments in Secs. 76.5, 76.620, 76.800, 76.805 and 76.806 become

effective December 15, 1997. However, compliance with amendments in

Secs. 76.5, 76.620, 76.800, 76.805 and 76.806 will not be required

until OMB approval of the information collection requirements in

Secs. 76.613, 76.802 and 76.804. When approval is received, the

Commission will publish a document announcing the effective date of the

amendments in Secs. 76.613, 76.802 and 76.804, and the date of

compliance for the amendments in Secs. 76.5, 76.620, 76.800, 76.805 and

76.806.

Written comments by the public on the modified information

collections are due on or before January 13, 1998.

ADDRESSES: 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].

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

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

collections contained herein, contact Judy Boley at 202-418-0214, or

via the Internet at [email protected].

Paperwork Reduction Act

The Order contains modified information collection requirements.

The Federal Communications Commission, as part of its continuing effort

to reduce paperwork burdens, invites the general public and other

Federal agencies to take this opportunity to comment on the following

information collection, as required by the Paperwork Reduction Act of

1995, Public Law 104-13. Comments should address: (a) 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; (b) the accuracy of the

Commission's burden estimates; (c) ways to enhance the quality,

utility, and clarity of the information collected; and (d) 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: Cable Inside Wiring Provisions.

Type of Review: Revision of a currently approved collection.

Respondents: Individuals; Businesses or other for-profit entities.

Number of Respondents: 30,500 (20,500 MVPDs and 10,000 MDU owners).

Estimated Time Per Response: 5 minutes to 30 minutes.

Total Annual Burden to Respondents: 46,114 hours, calculated as

follows: This collection (3060-0692) accounts for all information

collection requirements that may come into play during the disposition

of cable home wiring in single dwelling units, as well as the

disposition of home run wiring and cable home wiring in multiple

dwelling units. All multichannel video programming distributors

(``MVPDs''), both cable and non-cable alike, will be subject to the

disposition rules in MDUs. Pursuant to the Paperwork Reduction Act,

when modifying only portions of an information collection, agencies are

still obligated to put forth the entire collection for public comment.

This information collection also now accounts for information

collection stated in 47 CFR 76.613, where MVPDs causing harmful signal

interference may be required by the Commission's District Director and/

or Resident Agent to prepare and submit a report regarding the cause(s)

of the interference, corrective measures planned or taken, and the

efficacy of the remedial measures. Through the course of this

rulemaking proceeding, the Commission

[[Page 61017]]

has identified this information collection requirement as not having

previously been reported to OMB for approval. We estimate that no more

than 10 interference reports will be submitted annually to the

Commission's District Director and/or Resident Agent, each having an

average burden of 2 hours to prepare. (10 reports x 2 hours = 20

hours).

47 CFR 76.620 applies the Commission's signal leakage rules to all

non-cable MVPDs. Our rules require that each cable system perform an

independent signal leakage test annually, therefore, non-cable MVPDs

will now be subject to the same requirement. We recognize, however,

that immediate compliance with these requirements may present hardships

to existing non-cable MVPDs not previously subject to such rules. We

will allow a five-year transition period from the effective date of

these rules to afford non-cable MVPDs time to comply with our signal

leakage rules other than Sec. 76.613. The transition period will apply

only to systems of those non-cable MVPDs that have been substantially

built as of January 1, 1998. Considering non-cable MVPD systems that

will be built after January 1, 1998, we estimate that 500 new entities

will be subject to signal leakage filing requirements, with an

estimated burden of 20 hours per entity. (500 systems x 20 hours =

10,000 hours). 47 CFR 76.802, Disposition of Cable Home Wiring, gives

individual video service subscribers in single unit dwellings and MDUs

the opportunity to purchase their cable home wiring at replacement cost

upon voluntary termination of service. In calculating hour burdens for

notifying individual subscribers of their purchase rights, we make the

following assumptions: 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 or

property owners already have gained ownership of 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, e.g., 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. (216,000

x .083 hours = 17,928 hours).

In addition, 47 CFR 76.802 states that if a subscriber in an MDU

declines to purchase the wiring, the MDU owner or alternative provider

(where permitted by the MDU owner) may purchase the home wiring where

reasonable advance notice has been provided to the incumbent. 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 that 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. We estimate that 2,000 MDU owners will provide advance

notice to the incumbent that the MDU owner or alternative provider

(where permitted by the MDU owner) will purchase the home wiring where

a terminating individual subscriber declines. The estimated average

time for MDU owners to provide such notice is estimated to be 15

minutes (.25 hours). The estimated average time consumed in the process

of the MVPD's subsequent disclosure and the MDU owner or alternative

provider's election is 5 minutes (.083 hours). Estimated annual time

consumed is 2,000 notifications x .333 hours = 666 hours. 47 CFR

76.802 also states that, to inform subscribers of per-foot replacement

costs, MVPDs may develop replacement cost schedules based on readily

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

it must place them in a public file available for public inspection

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

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

all individual subscribers terminate service via telephone, and few

subscribers are anticipated to review cost schedules on public file.

The annual recordkeeping burden for these cost schedules is estimated

to be 0.5 hours per MVPD. (20,000 MVPDs x 50% x 0.5 hours = 5,000

hours).

47 CFR 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 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 against the wishes of the entity that owns or controls 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. We use the term ``MDU owner''

to include whatever entity owns or controls the common areas of an

apartment building, condominium or cooperative. For building-by-

building disposition of home run wiring, the MDU owner gives the

incumbent service provider a minimum of 90 days' written notice that

its access to the entire building will be terminated. The incumbent

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 service provider must elect among

abandonment, removal of the wiring, or arbitration for a price

determination. Also, regarding cable home wiring, when the MDU owner

notifies the incumbent service provider that its access to the building

will be terminated, the incumbent provider must, within 30 days of the

initial notice and in accordance with our 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. The MDU owner must then notify the incumbent provider as

to whether the MDU owner or an alternative provider intends to purchase

the home wiring not later than 30 days before the incumbent's access to

the building will be terminated.

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

provide at least 60 days' written notice to the incumbent MVPD that it

intends to permit multiple MVPDs to compete for the right to use the

individual home run wires dedicated to each unit. The incumbent service

provider then has 30 days to provide the MDU owner with a written

election as to whether, for all of the incumbent's home run wires

[[Page 61018]]

dedicated to individual subscribers who may later choose the

alternative provider's service, it will remove the wiring, abandon the

wiring, or sell the wiring to the MDU owner. In other words, the

incumbent service provider will 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 service providers; that election

will then be implemented each time an individual subscriber switches

service providers. Where parties negotiate a price for the wiring and

are unable to agree on a price, the incumbent service provider must

elect among abandonment, removal of the wiring, or arbitration for a

price determination. The MDU owner also must provide reasonable advance

notice to the incumbent provider that it will purchase, or that it will

allow an alternative provider to purchase, the cable home wiring when a

terminating individual subscriber declines. If the alternative provider

is permitted to purchase the wiring, it will be required to make a

similar election during the initial 30-day notice period for each

subscriber who switches back from the alternative provider to the

incumbent MVPD.

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 that 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, incumbent service providers

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

forego the notice and election processes for various other reasons,

e.g., they have no interest in purchasing the home run or cable home

wiring. We estimate that there will be approximately 12,500 notices and

12,500 elections made on an annual basis. The number of notices

accounts for the occasions when the MDU owner simultaneously notifies

the incumbent provider that: (1) It is invoking the home run wiring

disposition procedures, and (2) whether the MDU owner or alternative

provider intends to purchase the cable home wiring. It also accounts

for those occasions when the MDU owner makes a separate notification

regarding the purchase of cable home wiring. The number of elections

accounts for instances when the incumbent elects to sell the wiring but

the parties are unable to agree on a price, therefore necessitating a

second election. We assume all notifications and elections (except when

an individual subscriber is terminating service) will be in writing and

take an average burden of 30 minutes (0.5 hours) to prepare. (25,000

notifications and elections x 0.5 hours = 12,500 hours).

Total Annual Cost to Respondents: $37,510, estimated as follows:

Under the annual operation and maintenance costs category, we estimate

that stationery and postage costs for interference reports submitted to

the Commission pursuant to Sec. 76.613 to be $1 per report. (10 reports

x $1 = $10). We estimate stationery and postage costs for signal

leakage filings to be $1 per filing. (500 filings x $1 = $500). We

estimate that 50% of the 20,000 MVPDs will annually develop cost

schedules. We estimate recordkeeping expenses for these schedules to be

$1 per MVPD. (20,000 x 50% x $1 = $10,000). We estimate stationery

and postage costs for the various disposition notifications and

elections to be $1 per occurrence. (27,000 notifications and elections

x $1 = $27,000). 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 Report and Order in CS Docket No. 95-184 and MM Docket No.

92-260, FCC No. 97-376, adopted October 9, 1997 and released October

17, 1997. The full text of this decision 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 Services, Inc. (202) 857-3800 (phone), (202) 857-3805

(fax), 1231 20th Street, NW, Washington, DC 20036.

Synopsis

I. Introduction

The Order addresses the issues raised in the Notice of Proposed

Rulemaking in CS Docket No. 95-184, 61 FR 3657 (February 1, 1996)

(``Inside Wiring Notice''), the Order On Reconsideration and Further

Notice of Proposed Rulemaking in MM Docket No. 92-260, 61 FR 6131

(February 16, 1996) and 61 FR 6210 (February 16, 1996) (``Cable Home

Wiring Further Notice''), and the Further Notice of Proposed Rulemaking

in CS Docket No. 95-184 and MM Docket No. 92-260, 62 FR 46453

(September 3, 1997) (``Inside Wiring Further Notice'') regarding

potential changes in our telephone and cable inside wiring rules in

light of the evolving telecommunications marketplace.

II. Disposition of Home Run Wiring

1. 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. Home run wiring is defined as the wiring from the

point at which it becomes dedicated to an individual unit in an MDU to

the cable demarcation point. 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. Incumbents often refuse to sell the

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

The result, regardless of the cable operators' motives, is to chill the

competitive environment.

2. In the Order, we 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 our procedural mechanisms will not create or destroy any

property rights, but will promote competition and consumer choice by

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

wiring upon termination of service. We clarify that riser cable is not

covered by the following procedures.

A. Building-by-Building Procedures

3. We adopt the following procedures for building-by-building

disposition of home run wiring. 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

[[Page 61019]]

from another provider, the MDU owner may give the incumbent service

provider a minimum of 90 days' written notice that the provider's

access to the entire building will be terminated. By adopting this

procedural mechanism, we do not intend to affect any contractual rights

the parties may have to terminate service in a different manner. We

believe that it is reasonable to require, and thus our rules will

require, that MDU owners that wish to avail themselves of these

procedures notify the incumbent providers of termination of service for

the entire building in writing. The incumbent provider will 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 consistent with state law within 30 days

of the end of the 90-day notice period or within 30 days of actual

service termination, whichever occurs first; (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 MDU owner refuses to purchase

the home run wiring, the MDU owner may permit the alternative video

service provider to purchase it. 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 will

be required to notify the MDU owner at the time of this election of the

date on which it intends to terminate service.

4. If the incumbent elects to abandon the wiring, its ownership

will be determined as a matter of state law. Passive devices such as

splitters, as in the cable home wiring context, will be considered part

of the home run wiring for this purpose. While the operator may remove

its amplifiers or other active devices used in the wiring, it may do so

only if an equivalent replacement can easily be reattached. Our

decision in this proceeding assumes adherence to standards of good

faith that are necessary elements of an orderly transition. In

addition, we will require the party removing any active elements to

comply with the notice requirements and other rules regarding the

removal of home run wiring. Although we will not require that

incumbents must transfer or relinquish all rights in molding or conduit

when they sell, remove or abandon their wiring, we will prohibit

incumbent providers from using any ownership interests they may have in

property located on or near the home run wiring, such as molding or

conduit, to prevent, impede or in any way interfere with the ability of

an alternative MVPD to use the home run wiring.

5. Where the incumbent provider elects to sell the home run wiring,

we will allow the parties to negotiate the price of the wiring. We

believe that market forces will provide adequate incentives for the

parties to reach a reasonable price, particularly in these

circumstances where the incumbent has no legally enforceable right to

remain on the premises. The parties will have 30 days from the date of

the incumbent's election to negotiate a price for the home run wiring.

The parties may also negotiate to purchase additional wiring (e.g.,

riser cables) at their option. As stated above, our procedures do not

apply to riser cable in that the incumbent provider is not required to

sell, remove or abandon its riser cable, but it does have the option of

doing so if all parties agree. If the parties are unable to agree on a

price, the incumbent will then be required to elect: (1) to abandon

without disabling the wiring; (2) to remove the wiring and restore the

MDU consistent with state law; or (3) to submit the price determination

to binding arbitration by an independent expert. If the incumbent fails

to comply with any of the deadlines established herein, it will be

deemed to have elected to abandon its home run wiring at the end of the

90-day notice period. If the incumbent service provider elects to

abandon its wiring at this point, the abandonment will become effective

at the end of the 90-day notice period or upon service termination,

whichever occurs first. Similarly, if the incumbent elects at this

point to remove its wiring and restore the building consistent with

state law, it will have to do so within 30 days of the end of the 90-

day notice period or within 30 days of actual service termination,

whichever occurs first.

6. At this time we decline to establish a penalty for an incumbent

provider that fails to remove wiring after electing to do so, or, for

that matter, for any other party that violates our cable inside wiring

rules. We expect all parties participating in the procedures for the

disposition of home run wiring to cooperate and act in full compliance

with our rules and the policies underlying them. Similarly, at this

time we will not require the incumbent to post a performance bond prior

to removal. There is not sufficient evidence to conclude that a

significant problem will exist, or that MDU owners are unable to

protect their interests pursuant to contract or state law.

7. If the incumbent chooses to abandon or remove its wiring, it

must 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. In addition to this and other notice requirements, we will

adopt a general rule requiring the parties to cooperate to avoid

service disruption to subscribers to the extent possible. One of our

overriding goals in this proceeding is to ensure as seamless a

transition as possible. Our rules are premised on the good faith

cooperation of all parties to protect against such disruption. We

expect service providers to cooperate and to make all necessary efforts

to minimize any service disruption when a transition is undertaken. We

believe that the current notification requirements, in conjunction with

a general rule requiring a seamless transition, are sufficient to

protect subscribers from lengthy service disruptions when switching

providers. We therefore will not require incumbents to continue service

until the new provider is connected.

8. If the parties are unable to agree on a price and the incumbent

elects to submit to binding arbitration, the parties will have seven

days to agree on an independent expert or to each designate an expert

who will pick a third expert within an additional seven days. The

independent expert chosen will be required to assess a reasonable price

for the home run wiring by the end of the 90-day notice period. If the

incumbent elects to submit the matter to binding arbitration and the

MDU owner (or, in some cases, the alternative provider) refuses to

participate, the incumbent will have no further obligations under our

home run wiring disposition procedures.

B. Unit-by-Unit Procedures

9. We adopt the following procedures for unit-by-unit disposition

of home run wiring. Where the incumbent video 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 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. Where an

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

must provide at least 60 days' written notice to the incumbent provider

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

incumbent service provider will then have 30 days to provide the MDU

owner with a written election as to whether,

[[Page 61020]]

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 consistent with state

law; (2) abandon the wiring without disabling it (as in the building-

by-building situation, if the incumbent elects to abandon the wiring,

its ownership will be determined by state law, and passive devices will

be considered part of the home run wiring); or (3) sell the wiring to

the MDU owner (as in the building-by-building situation, the MDU owner

may permit the alternative provider to purchase the home run wiring if

the MDU owner refuses to purchase it). In other words, the incumbent

service provider will 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 will

then be implemented each time an individual subscriber switches service

providers. As in the context of building-by-building dispositions of

home run wiring, incumbent providers will be prohibited from using any

ownership interests they may have in property on or near the home run

wiring, such as molding or conduit, to prevent, impede, or in any way

interfere with the ability of an alternative MVPD to use the home run

wiring. If the MDU owner permits the alternative service provider to

purchase the home run wiring, the alternative service provider will 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.

10. We continue to believe that it would streamline and expedite

the process of changing service providers if alternative service

providers and MDU owners were permitted to act as subscribers' agents

in providing notice of a subscriber's desire to change services.

However, consistent with our intention not to ``create or destroy any

property rights'' by these procedures, we will not create any new right

of MDU owners and alternative providers to act on behalf of subscribers

in terminating service. Nor will we restrict the rights of such MDU

owners and alternative providers under state law. We therefore decline

at this time to adopt specific procedures to guard against unauthorized

changes in service, i.e., ``slamming.'' (``Slamming'' is the

unauthorized change of a consumer's chosen long distance service. We

use the term more generically here to mean an unauthorized change in

any communications service.)

11. As with the proposed building-by-building procedures, we will

permit the parties to negotiate for the sale of the home run wiring. If

one or both of the video service providers elects to negotiate for the

sale of the home run wiring it may own, the parties will 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 may 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.

12. If the parties cannot agree on a price, the provider that has

elected to sell the wiring will be required to elect: (1) to abandon

without disabling the wiring; (2) to remove the wiring and restore the

MDU consistent with state law; or (3) to submit the price determination

to binding arbitration by an independent expert. Again, if the MDU

owner (or, in some cases, the alternative provider) refuses to submit

the issue to arbitration, the incumbent's obligations under our

procedures will cease. If the incumbent fails to comply with any of the

deadlines established herein, the home run wiring will be considered

abandoned and the incumbent may not prevent the alternative provider

from using the home run wiring immediately to provide service.

13. If the incumbent elects to submit to binding arbitration, the

parties will have seven days to agree on an independent expert or each

designate an expert who will pick a third expert within an additional

seven days. The independent expert chosen would be required to assess

the price for the wiring within 14 days. We realize that the expert's

price determination may not be issued for up to 28 days after the 60-

day notice period has expired. If subscribers wish to switch service

providers during this period, the procedures set forth below should be

followed, subject to the price established by the arbitrator. If the

MDU owner (or, in some cases, the alternative provider) refuses to

participate, the incumbent's obligations under the Commission's home

run wiring procedures will cease.

14. After completion of this initial process, a provider's election

will 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 will have seven

days to do so and to restore the building consistent with state law. If

the subscriber has requested service termination more than seven days

in the future, the seven-day removal period will begin on the date of

actual service termination (and, in any event, shall end no later than

seven days after the requested date of termination).

15. If the current service provider has elected to abandon or sell

the wiring, the abandonment or sale will become effective upon actual

service termination or upon the requested date of termination,

whichever occurs first. If the incumbent provider intends to terminate

service prior to the end of the seven-day period, the incumbent will 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, the incumbent

provider must disconnect the home run wiring from its lockbox and leave

it accessible for the new provider within 24 hours of actual service

termination.

16. 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. If, however, 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 will 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. However, the incumbent provider will 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

[[Page 61021]]

the tenant wishes to use the home run wiring to receive a competing

service.

17. 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 will still be required to 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. 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). In

order for the home run wiring and the home wiring to be disposed of in

a coordinated manner, we believe that 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.

C. Ownership of Home Run Wiring

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

the MDU owner will have 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 above

procedures will 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; in such cases, the

MDU owner may permit the alternative service provider to purchase the

wiring.

19. We will not require video service providers to transfer

ownership of cable inside wiring to MDU owners upon installation. At

this time, we believe this issue is best left to marketplace

negotiations between the service provider and the MDU owner. Some MDU

owners may choose to bargain for ownership of the inside wiring, while

others may prefer to let the service provider maintain ownership. We

are not convinced that MDU owners have insufficient bargaining power in

this situation to protect their interests. Even under the home run

disposition procedures adopted above, we recognize that some MDU owners

may not wish to exercise ownership over the inside wiring. We believe

that MDU owners should have the same option at the time of

installation.

20. We do believe, however, that all parties involved would benefit

from additional certainty regarding ownership of the home run wiring

upon termination of a service contract. For any contracts between MVPDs

and MDU owners entered into after the effective date of our rules, we

will require the MVPD to include a provision describing the disposition

of the home run wiring upon the contract's termination. We believe that

such a rule will provide certainty to the parties and permit them to

address the disposition of home run wiring in light of their

circumstances. Where the parties' contract clearly and expressly

addresses the disposition of the home run wiring, our procedures will

not apply. We also reiterate that the parties may rely upon any

existing contractual rights upon termination, in addition to the

procedures we are adopting.

D. Application of Procedural Framework

21. As noted above, the procedural mechanisms we are adopting will

apply only where the incumbent provider no longer has an enforceable

legal right to maintain its home run wiring on the premises against the

will of the MDU owner. These procedures will not apply where the

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

maintain its home run wiring on the property. We also reiterate that we

are not preempting any rights the incumbent provider may have under

state law. In the building-by-building context, the procedures will not

apply where the incumbent provider has a legally enforceable right to

maintain its home run wiring on the premises, even against the MDU

owner's wishes, and to prevent any third party from using the wiring.

In the unit-by-unit context, the procedures will 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,

even against the property owner's wishes.

22. We will adopt a presumption that the building-by-building and

unit-by-unit procedural mechanisms will apply unless and until the

incumbent obtains a court ruling or an injunction enjoining its

displacement during the 45-day period following the initial notice. The

incumbent will still be required to make its election to sell, remove

or abandon the wiring by the end of the initial 30-day period in the

absence of such a ruling or injunction. In light of this rule, we

decline to shorten the initial election period. We also decline to stay

our procedures until all judicial procedures are terminated, including

all appeals. We have not received evidence sufficient to persuade us

that state courts will not respond expeditiously. Significantly, the

record indicates state courts' ability to protect incumbents' rights.

The record continues to support our judgment that an incumbent's

failure to obtain a state court injunction justifies a presumption that

the incumbent no longer has an enforceable legal right to remain on the

premises. We do not believe that this presumption interferes with the

incumbent's state law rights. A court applying state law will continue

to be the ultimate arbiter of whether the incumbent has a legally

enforceable right to remain on the premises, and possesses the ability

to take any necessary and appropriate steps to make the parties whole

under state law. Our presumption simply means that if the incumbent

cannot obtain an injunction to maintain its home run wiring on the

premises, it is appropriate to permit the MDU owner to invoke our

procedures pending any further litigation.

23. We will adopt one exception to our presumption that our

procedures will apply in the absence of a state court ruling or

injunction obtained within 45 days of the initial notice. We will not

require an incumbent provider to obtain such a ruling or injunction

where a state's highest court has found that, under its state mandatory

access statute, the incumbent always has an enforceable right to

maintain its home run wiring on the premises. We believe that to

require the incumbent to initiate court proceedings in this situation

is wasteful and unnecessary. In such cases, we believe that the burden

should shift to the new provider to obtain a judicial determination to

the contrary.

24. We decline, however, to provide that our procedures do not

apply in states that have enacted mandatory access statutes. Several

parties take issue with our statement that where the incumbent

provider's mandatory right of access is dependent upon a subscriber's

request for service, the provider may no longer have a legally

enforceable right to maintain that subscriber's home run wiring on the

premises against the MDU owner's wishes once the subscriber no longer

requests service. We clarify that we did

[[Page 61022]]

not intend to and do not now express any opinion on the merits of this

issue. The enforceability of a state mandatory access statute is an

issue for the state courts to decide under their particular statutes.

We are unwilling to conclude that state mandatory access statutes

always grant incumbents the right to maintain their home run wiring in

an MDU over the MDU owner's objection. Similarly, we express no opinion

on whether state mandatory access statutes permit an incumbent MVPD to

block moldings or conduits with unused wiring. Contrary to the

arguments of some cable operators, this is not an issue of the right to

install wiring. Rather, the issue is whether the incumbent has a

legally enforceable right to maintain its home run wiring on the

premises over the objection of the MDU owner. Accordingly, our

procedures will apply in mandatory access states to the extent state

law does not permit the incumbent to maintain its home run wiring (in

the case of a building-by-building disposition) or a particular home

run wire to a particular subscriber (in the case of a unit-by-unit

disposition) against the will of the MDU owner.

25. The above procedural mechanisms will 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 believe that this will ensure competitive parity among MVPDs and

ensure that MDU owners are able to benefit from these procedures

regardless of the MVPD that initially wired their buildings.

III. Sharing of Molding

26. We will permit an alternative MVPD to install its wiring within

an incumbent's existing molding, even over the incumbent provider's

objection, where the MDU owner agrees that there is adequate space in

the molding and the MDU owner gives its affirmative consent. We believe

that such a rule will promote head-to-head competition among MVPDs by

overcoming the resistance of MDU owners to the installation of

redundant molding. At this time we will not require the sharing of

space within conduits. However, we will not apply this rule where the

incumbent has an exclusive contractual right to occupy the molding.

Since we do not believe that the incumbent ordinarily will have a

property interest in the vacant air space inside the hallway molding,

we will not require the alternative MVPD to compensate the incumbent

for the placement of its wires. The alternative provider will, however,

be required to pay any and all installation costs, including the costs

of restoring the property to its prior condition and the costs of any

damage to the incumbent's wiring or other property.

27. Under the rule we will adopt, where the MDU owner does not

agree that there is adequate space in the molding for the additional

wiring, and the MDU owner is willing to permit the installation of

larger molding that could contain both the incumbent's and the

alternative MVPD's wiring, the MDU owner (with or without the

assistance of the incumbent and/or the alternative provider) shall be

permitted to remove the existing molding (and return the molding to the

incumbent, if appropriate) and replace it with the larger molding at

the alternative MVPD's expense. Again, the alternative MVPD would be

required to pay any and all installation costs, including the costs of

restoring the property to its prior condition and the costs of any

damage to the incumbent's wiring or other property. This rule will not

apply if the incumbent has contracted for the right to maintain its

molding on the MDU owner's property without alteration by the MDU

owner. Absent such a contractual provision, we believe that the

incumbent has no right to prevent the MDU owner from altering the

molding in its hallways and other areas of its property.

IV. Disposition of Cable Home Wiring

28. The procedural framework discussed above addresses the

disposition of MDU home run wiring. Here, we set forth specific rules

on how to address certain issues regarding the disposition of MDU cable

home wiring that were not addressed in our prior home wiring order.

Cable home wiring is defined as the internal wiring contained within

the premises of a subscriber which begins at the demarcation point, not

including any active elements such as amplifiers, converter or decoder

boxes, or remote control units. As in the context of home run wiring,

our MDU home wiring rules will apply regardless of the identity of the

incumbent video service provider involved. While initially this

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

provider, an MMDS provider, a DBS provider or others. We therefore will

apply all of our cable home wiring rules for multiple-unit

installations to all MVPDs. We also believe that it may be beneficial

to apply our cable home wiring rules for single-unit installations to

all MVPDs. We seek comment on this issue in the Second Further Notice

of Proposed Rulemaking, which is summarized elsewhere in the Federal

Register.

A. Disposition of Home Wiring When Service is Terminated for an Entire

MDU

29. We 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 subscriber's behalf, and our

home wiring rules would be triggered. We conclude that providing the

cable operator a single point of contact (i.e., the MDU owner) will

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 will 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

clarify, however, that we are not changing our definition of subscriber

to include MDU owners. We believe that, when as a matter of law or

contract, the MDU owner has the right to terminate service, the MDU

owner is effectively terminating service on behalf of the subscriber.

Similarly, with regard to exclusive bulk service contracts, we 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 home wiring as

provided in our general rules.

30. For those MDU owners proceeding under our home run wiring

disposition procedures, we will adopt the following framework in order

to ensure the orderly disposition of the home wiring. When an incumbent

provider is notified under our home run wiring disposition procedures

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, within 30 days: (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.

[[Page 61023]]

31. As with the home run wiring, if an MDU owner declines to

purchase the cable home wiring not already owned by a resident, the MDU

owner may permit the alternative service provider to purchase the

wiring upon service termination under our rules. We will 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. If the MDU owner and the alternative service

provider decline to purchase the home wiring, the incumbent provider

will 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. We will modify our current home wiring rules to

allow the incumbent provider 30 days after service termination, rather

than the current seven days, to remove all of the cable home wiring for

the entire building if the MDU owner has terminated service for the

entire building and has declined to purchase the home wiring. We

believe this is appropriate given the amount of home wiring that may

need to be removed from an entire building. Under these circumstances,

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

days of actual service termination, it cannot make any subsequent

attempt to remove the wiring or restrict its use.

B. Disposition of Home Wiring When Service Is Terminated by an

Individual Subscriber

32. We will continue to apply our rules permitting individual

terminating subscribers (or their agents) to purchase the cable home

wiring up to a point at or about 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. If the subscriber declines to

purchase its home wiring, we believe that the premises owner should be

permitted to purchase the cable home wiring within the individual's

premises based on the per-foot replacement cost. This approach will

preserve the current subscriber's rights, and still allow the premises

owner to act on behalf of future tenants, thus promoting competition

and consumer choice. As with the home run wiring in an MDU, if the

premises owner declines to purchase the cable home wiring, the owner

may permit the alternative service provider to purchase it.

33. Where an individual MDU resident terminates service, the MDU

owner must provide reasonable advance notice to the incumbent provider

if it wishes to purchase the home wiring (or that the alternative

provider will purchase it) if and when an individual subscriber

declines. The MDU owner will 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 will 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. Where an MDU owner does not or cannot invoke our

unit-by-unit home run wiring disposition procedures (e.g., if it elects

to have two-wire competition to each unit), we will require the MDU

owner to provide the incumbent provider reasonable advance notice if

the MDU owner or the alternative provider intends to purchase the home

wiring if and when a subscriber declines.

34. In addition, where an individual subscriber is terminating

service, we will 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 in single unit installations 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 subscriber'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 under our procedural framework.

C. Effect of Subscriber Vacating the Premises on the Application of

Cable Home Wiring Rules

35. We conclude that our cable home wiring rules should apply even

when the subscriber terminates cable service, elects not to purchase

the wiring and vacates the premises within the seven-day time period

the operator has to remove the home wiring. A cable operator that owns

the wiring and intends to remove it must offer to sell the cable home

wiring to the subscriber upon voluntary termination, and if the

subscriber declines, the operator must remove the wiring within seven

days or make no further effort to remove it or restrict its use. We

expressly state that the cable operator must be given reasonable access

to the individual premises during the removal period. We believe that

the foregoing policy will promote the objectives of section 624(i) by

minimizing disruption and facilitating subsequent subscribers' ability

to use their home wiring to connect to the video service provider of

their choice.

36. The disposition of the cable home wiring under these

circumstances will not affect our rules for the unit-by-unit

disposition of the MDU home run wiring. As described above, our rules

regarding the disposition of the home run wiring are not triggered

where a subscriber terminates service and vacates the premises unless

and until a new or subsequent subscriber (or his or her agent) notifies

the incumbent service provider that the subscriber wishes to receive

service from an alternative service provider lawfully serving the

premises.

V. MDU Demarcation Point

37. We believe that it is not necessary to establish a common cable

and telephone demarcation point at this time. At least as far as inside

wiring is concerned, telephony generally appears to continue to be

delivered over twisted pair wiring and multichannel video programming

generally appears to be delivered over coaxial cable. Based on the

record in this proceeding, it appears that cable operators and other

entities planning to offer telephone service generally will do so by

connecting to the existing telephone inside wiring network. The record

before us indicates that this distinction is likely to continue for at

least the near future. If and when circumstances change, we will

revisit this issue with the goal of creating a single set of inside

wiring rules. We note that, as a practical matter, the telephone

demarcation point in new single family home installations may be

located at a point outside of where the wiring enters the home, near

the cable demarcation point. Similarly, the points at which the

telephone and cable inside wiring become devoted to individual multiple

dwelling units may be at similar locations (e.g., in garden-style

apartment buildings, such points may both be located in the basement of

the individual buildings). While such examples may create a de facto

convergence in many cases, so long as the cable and telephone inside

wiring networks remain distinct, we do not

[[Page 61024]]

believe that the Commission need require such a result.

38. At this time, we will not modify the cable demarcation point in

MDUs. We will, however, adopt our tentative conclusion that where the

cable demarcation point is ``physically inaccessible'' to an

alternative MVPD, the demarcation point should be moved to the point at

which it first becomes physically accessible. We clarify that this

movement should be the closest point at which the wiring becomes

physically accessible that does not require access to the subscriber's

unit. Moving the demarcation point into the unit in such situations

would add significantly to the disruption and inconvenience of

switching service providers, contrary to the intent of section 624(i).

39. In addition, we will adopt a definition of ``physically

inaccessible'' which asks whether accessing the demarcation point (1)

would require significant modification or damage of preexisting

structural elements, and (2) would add significantly to the physical

difficulty and/or cost of accessing the subscriber's home wiring. For

example, wiring embedded in brick, metal conduit or cinder blocks would

likely be ``physically inaccessible'' under this definition; wiring

simply enclosed within hallway molding would not.

VI. Loop-Through Cable Wiring Configurations

40. In a loop-through cable wiring system, a single cable is used

to provide service to either a portion of or an entire MDU. Every

subscriber on the loop is therefore limited to receiving video services

from the same provider. If the cable is broken or removed, signals to

all succeeding units are interrupted. Previously, we excluded MDU loop-

through wiring from the cable home wiring rules because we believed

that applying our rules to loop-through wiring would give the initial

subscriber control over cable service for all subscribers in the loop.

Because loop-through configurations are excluded from the home wiring

rules, cable operators are not currently required to offer to sell the

wire to subscribers upon termination of service, and no subscriber on

the loop has the right to purchase that portion of the loop-through

cable wiring located inside his or her dwelling unit. The ownership of

loop-through wiring therefore currently depends on the circumstances

(e.g., who installed the wire, whether the wire has been sold and state

fixture law) and is not affected by our rules.

41. As with other cable inside wiring configurations in MDUs, a

wiring loop may include both wiring inside the individual dwelling unit

and wiring in common areas which extends outside the individual

dwelling unit to the riser or feeder cable. We now believe that, for

purposes of our cable inside wiring rules, all loop-through wiring

should not be treated the same. We therefore conclude that, when the

property owner or the entity that owns or controls the common areas

elects to switch to a new service provider, our cable home wiring rules

will apply to that portion of the loop-through wiring that is inside

the individual dwelling unit (up to the demarcation point(s) discussed

below). For example, when an MDU owner wishes to terminate service for

a building with loop-through wiring and invokes our building-by-

building procedures for disposition of the home run wiring, those

procedures will govern the disposition of the wiring that is dedicated

to each loop other than the cable home wiring within each unit.

Consistent with our building-by-building procedures, the MDU owner will

be permitted to purchase the loop-through home wiring pursuant to our

cable home wiring rules. In addition, where the MDU owner terminates

service for the entire loop but does not or cannot invoke our

procedures for the disposition of home run wiring, the MDU owner will

nevertheless have certain rights to the home wiring within the

individual dwelling units.

42. Where a building is comprised of rental units, the building

owner will have the right to elect to switch service providers and the

right to purchase the loop-through home wiring. In buildings in which

persons have a direct or indirect ownership interest in individual

units (as with condominiums and cooperatives), the election of whether

to switch service providers will be determined under the rules of the

association or entity that owns and controls the building's common

areas, in a manner similar to other decisions made by the entity with

respect to the common areas. If the MDU owner elects to switch to a new

service provider but does not wish to purchase the loop-through home

wiring, the new service provider may elect to purchase the wiring.

43. Allowing the MDU owner to purchase loop-through home wiring

under these circumstances will allow that party to control the wiring.

We believe that, at least in competitive markets, the MDU owner has a

significant incentive to represent the subscribers' interests. In

addition, the management structures of condominium or cooperative

buildings are designed to reflect their residents' interests. Allowing

the MDU owner to control loop-through home wiring gives the subscriber

an opportunity for increased choice and enhanced service, and furthers

section 624(i)'s statutory purpose of facilitating the transfer to an

alternate service provider with minimal disruption to the subscriber.

We previously excluded loop-through wiring from our cable home wiring

rules because we did not believe it was appropriate to give the initial

individual subscriber in the loop control over the cable service of all

remaining subscribers on the loop. Under the procedures we adopt today,

that situation cannot occur.

44. We clarify that our rules will provide the MDU owner, not the

alternative provider, with the first opportunity to purchase the loop-

through wiring. Once the MDU owner owns and controls the wiring, the

cable operator will be on equal footing under our rules with other

video service providers with regard to subsequently providing service

to the tenants. Only if the MDU owner declines to purchase the wiring

will the alternative provider have the opportunity to purchase the

loop-through wiring.

45. We will set the demarcation points, i.e., the points between

which the MDU owner may purchase the loop-through home wiring under our

cable home wiring rules, at or about 12 inches outside the point at

which the loop enters or exits the first and last individual dwelling

units on the loop, or as close as practicable where 12 inches outside

is physically inaccessible. In some cases, the loop may begin and end

outside of the same unit, and thus the demarcation points shall be 12

inches outside the point at which the loop enters and exits that one

unit, or as close as practicable where 12 inches outside is physically

inaccessible. We believe that this is consistent with section 624(i),

i.e., the loop-through home wiring is within the customer's premises,

and with the cable demarcation point for non-loop-through

configurations. We note that one of our prior concerns was that

establishing a separate demarcation point for each subscriber on the

loop was not feasible. Under the rules set forth herein, however, one

entity will be purchasing the entire home wiring loop, making it

unnecessary to set a demarcation point for each subscriber's unit.

46. We will apply the same rules with respect to compensation and

technical standards that we apply to non-loop-through wiring systems as

well. In other words, the loop-through wiring on the subscriber's side

of the demarcation point may be purchased by the MDU

[[Page 61025]]

owner at the replacement cost as defined in Sec. 76.802(a). The loop-

through wiring outside the demarcation points up to the point at which

the loop connects with the riser or feeder cable may be addressed

pursuant to the procedures set forth above with regard to the

disposition of home run wiring.

47. Despite the competitive drawbacks of loop-through wiring, we do

not believe it necessary for the Commission to prohibit future

installations of loop-through wiring configurations. We believe that

such a prohibition would unduly restrict the configuration options

available to building owners and service providers. We have found no

evidence in the record that cable operators have installed loop-through

wiring in order to evade our rules since they were implemented in 1993.

Also, the application of our home wiring rules to loop-through systems

where the MDU owner seeks to switch service providers should reduce any

incentive cable operators may have to install loop-through

configurations for anti-competitive reasons.

VII. Video Service Provider Access to Private Property

A. Federal Mandatory Access Requirements

48. While we believe that nondiscriminatory access for video and

telephony service providers enhances competition, we will not adopt a

federal mandatory access requirement at this time. We note that

telecommunications carriers' access to telephone companies' facilities

and rights-of-way under the 1996 Act are currently under

reconsideration in First Report and Order in CC Docket No. 96-98 and CC

Docket No. 95-185 (``Interconnection Order''). We do not believe that

the record in this proceeding provides a sufficient basis for us to

address these issues. We will defer decisions on these issues to that

proceeding. Similarly, we do not decide herein whether under section

207 of the 1996 Act viewers living in rental properties, and those who

need access to common property, have the right to receive certain video

programming services over the property owner's objections. This issue

will be addressed in IB Docket No. 95-59 (Preemption of Local Zoning

Regulation of Satellite Earth Stations) and CS Docket No. 96-83

(Implementation of section 207 of the Telecommunications Act,

Restrictions on Over-the-Air Devices: Television Broadcast Service and

Multichannel Multipoint Distribution Service).

49. In addition, commenters in this proceeding urged the Commission

to construe section 621(a)(2) to prohibit a property owner from denying

a franchised cable operator access to an easement on the property when

the owner has already granted or is obligated to grant an easement to

other utilities, whether public or private. Section 621(a)(2) provides

that ``[a]ny franchise shall be construed to authorize the construction

of a cable system over public rights-of-way, and through easements,

which is within the area to be served by the cable system and which

have been dedicated for compatible uses * * *.'' Numerous court

decisions have interpreted the statutory language and legislative

history of section 621(a)(2), several finding that this section does

not provide cable operators access to purely private easements granted

to utilities. We decline to address those rulings here, but will

continue to examine these issues as we seek to ensure parity of access

among all telecommunications and video services providers. Similarly,

we decline at this time to adopt a mandatory access rule under section

706 of the 1996 Act, but may revisit this issue as we consider issues

of service provider access in the broader competitive context.

50. We believe that whether an incumbent provider may use its

existing easements or rights-of-way to provide new or additional

services generally depends on state law interpretations of the terms of

the easements or rights-of-way. While we decline at this time to decide

as a general matter whether such easements and rights-of-way permit the

provision of additional services, we believe that we do have the

authority in certain instances to review restrictions imposed upon such

use.

B. State Cable Mandatory Access Requirements

51. According to the record in this proceeding, some form of

mandatory access law may exist in approximately 18 jurisdictions,

including Connecticut, Delaware, the District of Columbia, Florida,

Illinois, Iowa, Kansas, Maine, Massachusetts, Minnesota, Nevada, New

Jersey, New York, Ohio, Pennsylvania, Rhode Island, West Virginia and

Wisconsin. The record also indicates that there may be local ordinances

that provide similar access rights. We believe that the record in this

proceeding does not support the preemption of state mandatory access

laws at this time. While commenters opposing state mandatory access

laws argue that these laws act as a barrier to entry, the record also

indicates that property owners deny access for reasons unrelated to the

state laws, including property damage, aesthetic considerations and

space limitations. We believe that our rules regarding the building-by-

building and unit-by-unit disposition of home run wiring adopted herein

will lower many of these barriers to entry and may alleviate some of

the advantages incumbent providers may have with respect to providing

service to particular buildings.

52. We remain concerned, however, about disparate regulation of

MVPDs that unfairly skews competition in the multichannel video

programming marketplace. Despite our decision not to preempt state and

local mandatory access laws at this time, we encourage these

jurisdictions to evaluate present laws and circumstances to determine

whether a nondiscriminatory and competitively neutral environment

exists. We believe that establishing competitive parity under these

statutes will promote competition among MVPDs and will expand consumer

choice.

C. Exclusive Service Contracts

53. We recognize that there are significant competitive issues

regarding exclusive contracts. We are concerned that long-term

exclusive contracts may raise anti-competitive concerns because they

``lock up'' properties, preventing consumers from receiving the

benefits of a newly competitive market. However, we also note that

alternative providers cite the competitive benefits of exclusive

contracts as a means of financing ``specialized investments.'' Without

exclusive contracts to allow recovery over time on the cost of new

installation, these parties assert that they will be unable to compete

with the incumbent cable operator. We believe that the record would

benefit from further comment on these issues. In the Second Further

Notice of Proposed Rulemaking, summarized elsewhere in the Federal

Register, we seek comment on various options, including: (1) adopting a

maximum ``cap'' on the enforceability of all MVPDs' exclusive

contracts; (2) limiting the ability of MVPDs with market power from

entering into exclusive contracts; and (3) adopting a ``fresh look''

period for so-called ``perpetual'' exclusive contracts.

VIII. Customer Access to Cable Home Wiring Before Termination of

Service

54. We will establish a rule allowing customers to provide and

install their own cable home wiring within their premises, and to

connect additional home wiring within their premises to

[[Page 61026]]

the wiring installed and owned by the cable operator prior to

termination of service. Under this rule, customers will be able to

select who will install their home wiring (e.g., themselves, the cable

operator or a commercial contractor). In addition, customers may

connect additional wiring, splitters or other equipment to the cable

operator's wiring, or redirect or reroute the home wiring, so long as

no electronic or physical harm is caused to the cable system and the

physical integrity of the cable operator's wiring remains intact.

Subscribers will not be permitted to physically cut, improperly

terminate, substantially alter or otherwise destroy cable operator-

owned inside wiring. To protect cable operators' systems from signal

leakage, electronic and physical harm and other types of degradation,

we will permit cable operators to require that any home wiring

(including any passive splitters, connectors and other equipment used

in the installation of home wiring) meets reasonable technical

specifications, not to exceed the technical specifications of such

equipment installed by the cable operator. If, however, the

subscriber's connection to, redirection of or rerouting of the home

wiring causes electronic or physical harm to the cable system, the

cable operator may impose additional technical specifications to

eliminate such harm. We believe that subscriber access to home wiring

is necessary to enhance competition, which will result in lower and

more reasonable rates for services such as the installation of

additional outlets. Indeed, where competition is introduced, consumers

benefit from lower prices, greater technological innovation, and

additional consumer choice.

55. We do not believe that the rule we are adopting will pose an

undue risk of signal leakage or harm to the cable system. Many

subscribers already own and control their home wiring--e.g., where the

cable operator charges for it upon installation or where state law

deems home wiring to be a ``fixture.'' Indeed, as many cable interests

have pointed out in this proceeding, the marketplace has established

the F-type connector as the de facto standard for connecting coaxial

cable to CPE. Such connectors are readily available and, if properly

used, provide adequate signal leakage protection. In addition, cable

operators can provide guidance to subscribers who install their own

wiring. Also, as stated above, we will permit cable operators to

establish reasonable technical specifications for subscriber-installed

home wiring (including passive splitters, connectors and other

equipment used in the installation of home wiring), not to exceed the

specifications of their own wiring and equipment. Furthermore, we will

protect the cable system from electronic and physical harm by allowing

the cable operator to impose additional technical specifications where

such harm exists.

56. We will not modify our current requirement that cable operators

monitor signal leakage and eliminate harmful interference while they

are providing service, regardless of who owns the home wiring. We also

will continue to require cable operators to discontinue service to a

subscriber where signal leakage occurs, until the problem is corrected.

See 47 CFR 76.617. A cable operator will not be held responsible for

facilities over which it no longer provides service. We believe that

the continuation of these requirements will appropriately balance the

interests of subscribers with the interests of those engaged in

licensed over-the-air communications and cable operators in maintaining

the security and integrity of the cable systems.

57. Allowing subscribers to install their own cable home wiring

prior to termination of service may raise concerns regarding physical

and electronic harm to the cable system and degradation of signal

quality, including interference with other customers' service. To the

extent a customer's installations or rearrangements of wiring degrade

the signal quality of or interfere with other customers' signals, or

cause electronic or physical harm to the cable system, we will allow

cable operators to discontinue service to that subscriber, as operators

may do where a customer's wiring causes signal leakage, until the

degradation or interference is resolved. We note, however, that cable

operators are not responsible for degradation of signal quality to the

subscriber where a subscriber has added outlets or owns and maintains

his or her own wiring. While we recognize that theft of cable service

is a legitimate concern, we do not agree that our rules granting

customers pre-termination access to cable home wiring will promote

theft of service. Some cable companies already provide customer pre-

termination access to wiring, and there is no evidence in the record

that these policies have resulted in increased theft of service. In

addition, cable operators may take security measures, such as

scrambling of their signals, to deter theft of service.

58. We will neither establish a presumption of ownership of cable

home wiring nor deregulate home wiring rates at this time. These issues

are beyond the scope of this proceeding. We believe that our rules

allowing consumers to install, redirect and reroute their cable home

wiring adequately promote the goals of expanded competition and

consumer choice without the need to address ownership issues. We also

note our obligation under section 623 to regulate the rates of

equipment used by subscribers to receive the basic service tier. See 47

U.S.C. Sec. 543.

IX. Signal Leakage

59. The purpose of the Commission's signal leakage rules is to

protect licensed over-the-air communications, including aeronautical,

police, and fire safety communications, from interference caused by

signal leakage. Until now, the Commission rules governing signal

leakage have been applied only to cable systems, which often deliver

signals over the same frequency bands as many over-the-air licensees.

Specifically, Sec. 76.605(a)(12) establishes the maximum individual

signal leakage limits for all cable operators using frequencies outside

the broadcast television bands, while Secs. 76.610-76.617 impose more

stringent operating and monitoring requirements for cable systems

operating in the bands that are used by aircraft for communications and

navigation.

60. An increasing number of MVPDs are competing with cable

operators in the provision of video programming and other services.

Because these MVPDs often transmit signals over the same public safety

and navigation frequencies as cable operators, they may be a source of

potentially harmful signal leakage. The public safety concerns that

underlie application of our signal leakage regulations to cable

operators are equally present with respect to other MVPDs such as

SMATV, MMDS and open video system operators and others. We will

therefore modify our rules to extend existing cable signal leakage

requirements to non-cable MVPDs. In light of the potential harm to

public safety that may be caused by broadband signal leakage

interfering with aeronautical, navigational and communications radio

systems, we will not rely on labelling requirements, installation

instructions or cable performance specifications.

61. Systems transmitting digitized signals may operate in the

restricted aeronautical and public safety bands. Our signal leakage

rules provide that systems operating in the restricted bands are only

subject to the testing and monitoring requirements when they operate

above a threshold power level.

[[Page 61027]]

Systems using digital transmissions normally operate below this power

threshold. Systems using digital technology that operate below our

threshold power level therefore would not generally be subject to the

most rigorous sections of our signal leakage rules. For digital

transmissions that may operate above the power threshold, the

Commission shall continue to apply the same requirements as those for

analog transmissions due to the potential harm to public safety. MVPDs

using digital transmission will be subject to section 76.605(a)(12)

which sets forth the maximum signal leakage limits for systems,

regardless of the frequency band or power level in use.

62. We will require that all MVPDs comply with Sec. 76.613 of our

rules upon the effective date of the Order. Section 76.613 protects

licensed over-the-air communications from harmful interference and

requires prompt action to eliminate such interference. We believe that

immediate compliance with Sec. 76.613 is necessary because, unlike our

other signal leakage rules that are designed to minimize the risk of

interference by requiring that leakage be detected and repaired,

Sec. 76.613 provides that once harmful interference actually occurs it

must be promptly eliminated. We recognize, however, that immediate

compliance with many of our other signal leakage requirements may

present hardships to existing MVPDs not previously subject to such

rules. We will allow for a five-year transition period from the

effective date of these rules to afford non-cable MVPDs time to comply

with our signal leakage rules other than Sec. 76.613. The five-year

transition period will apply only to the systems of those non-cable

MVPDs that have been substantially built as of January 1, 1998. We will

define ``substantially built'' as having 75% of the distribution plant

completed. The signal leakage requirements under Part 15 of the

Commission's rules will continue to apply during the transition period.

63. Our rules require that each cable system perform an independent

signal leakage test annually. 47 CFR 76.611. Based on the current

record, we will not amend our rules to treat MDUs or different

geographic areas connected by microwave link as separate systems for

testing purposes. We believe that for the past six years our testing

criteria have provided effective standards for monitoring and

rectifying signal leakage in 31,000 cable communities nationwide.

Cognizant of the changing technologies that may be used by MVPDs, we

will continue to review specific systems' operations and designs that

may warrant adjustments to our signal leakage testing criteria.

64. We will not establish any new signal leakage testing procedures

such as tracking systems to identify the source of signal leakage. We

believe that MVPDs are capable of devising and selecting the most

appropriate methods for detecting signal leakage on their own systems.

We encourage MVPDs to work together to develop methods that will permit

them to accurately identify the source of any signal leakage.

65. While our signal leakage rules generally require cable

operators to perform signal leakage monitoring and testing, Sec. 76.615

requires cable operators to file specific information with the

Commission. In particular, Sec. 76.615(b)(7) requires that cable

operators annually file with the Commission the results of signal

leakage testing. The reporting requirements of Sec. 76.615(b)(7) may

impose undue burdens on small MVPDs. In the Second Further Notice of

Proposed Rulemaking, we seek comment on whether certain MVPDs should be

exempted from the reporting requirements of Sec. 76.615(b)(7). Since

Sec. 76.615(b)(7) is one of the provisions covered by the five-year

transition period, all non-cable MVPDs will have five years to comply

with the filing requirements; the Second Further Notice of Proposed

Rulemaking seeks comment on whether we should create a permanent

exemption for certain types of MVPDs.

X. Signal Quality

66. By statute, the Commission is charged with promulgating

regulations governing the quality of television signals delivered to

cable subscribers. We believe that continued application of the

Commission's signal quality standards to cable operators is necessary

because, despite the recent entrance of other service providers into

the video market, cable operators, in most areas of the country, still

exercise significant market power. We do not believe at this time that

market forces alone will ensure that cable subscribers receive the

quality picture they are entitled to expect. With regard to non-cable

broadband service providers, we believe that government regulation of

signal quality would be unnecessary and unduly intrusive. These

alternative providers do not exercise market power and virtually always

compete with an incumbent cable operator. Head-to-head competition with

a cable operator should ensure that alternative MVPDs deliver a good

quality picture in order to attract and retain customers. We believe

that, as cable operators become subject to vigorous competition, market

forces will ensure that they, too, deliver a good quality picture. As

competition develops and its effects become clearer, we expect to leave

the issue of signal quality wholly to market forces.

XI. Means of Connection

67. Based on the record, we will not adopt uniform technical

standards for jacks and connectors for broadband service. The F-type

connector has emerged as the de facto broadband connection standard

within the cable industry. We believe that, properly used, the F-type

connector is an effective means of connecting coaxial cable to customer

premises equipment while minimizing the potential for signal leakage.

Non-cable video service providers also use the F-type connector to

connect their services via coaxial cable to customer premises

equipment. Further government action in this area is therefore

unwarranted at this time. In addition, in light of the fact that we are

extending our cable signal leakage rules to all broadband service

providers, we believe that such providers will have the incentive and

obligation to ensure that connections are properly made with high

quality materials, without the Commission mandating a connection

standard.

XII. Dual Regulation

68. We do not believe that the record before us provides sufficient

information to address the issue of whether and how to harmonize the

dual systems of regulation governing cable and telephone companies

where broadband or multiple services are provided over a single wire or

multiple wires. Based on the current record, it appears that service

providers will continue to use separate inside wiring to provide cable

and telephone service for at least the near future. If and when

circumstances change, we will revisit this issue with the goal of

creating a single set of inside wiring rules.

XIII. Regulation of Simple and Complex and of Residential and Non-

Residential Wiring

69. We will not, at this time, establish common definitions in the

common carrier and cable rules with regard to simple versus complex

wiring and residential versus non-residential wiring. See 47 CFR

68.213, 68.215. In the telephone context, we believe that our

distinction between simple and complex wiring has proven to be a

workable and effective way to promote competition while ensuring

network protection. Similarly, in the cable context, there may be

substantial differences between residential and

[[Page 61028]]

commercial buildings which would make it difficult to adopt uniform

rules for all kinds of property. We do not believe that the current

record provides sufficient evidence to support the need for a

modification of our rules, nor does it provide adequate guidance on the

direction any such modification should take. We therefore will not

modify our rules at this time.

XIV. Customer Premises Equipment

70. The issue of whether we should revise our rules regarding

customer premises equipment will be addressed in a separate ongoing

Commission rulemaking proceeding arising under new section 629 of the

Communications Act.

XV. Final Regulatory Flexibility Act Analysis

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

U.S.C. Sec. 603 (``RFA''), Initial Regulatory Flexibility Analyses

(``IRFAs'') were incorporated in the Inside Wiring Notice, the Cable

Home Wiring Further Notice, and the Inside Wiring Further Notice. The

Commission sought written public comments on the proposals in these

notices, including comments on the IRFAs. This Final Regulatory

Flexibility Analysis (``FRFA'') conforms to the RFA, as amended by the

Contract with America Advancement Act of 1996 (``CWAAA''), Public Law

104-121, 110 Stat. 847 (1996). Title II of the CWAAA is ``The Small

Business Regulatory Enforcement Fairness Act of 1996'' (SBREFA),

codified at 5 U.S.C. Sec. 601 et seq.

Need for Action and Objectives of the Rule

72.This Order adopts new procedural mechanisms to provide order and

certainty regarding the disposition of MDU home run wiring upon

termination of existing service. In addition, this Order promotes

competition and consumer choice by establishing rules for the

disposition of cable ``loop through'' wiring upon termination of

service. This Order also permits consumers to provide or install their

own cable home wiring, or redirect, reroute or connect additional

wiring to the cable operator's home wiring. These rules will promote

competition among MVPDs as well as cable wiring services, which will

result in lower prices, greater technological innovation, and

additional consumer choice. Finally, to protect public safety and

navigation frequencies, this Order applies the cable signal leakage

rules to all broadband service providers that pose a similar threat of

interference with licensed over-the-air communications.

Summary of Issues Raised by the Public Comments in Response to the

Initial Regulatory Flexibility Analysis

73. In response to the IRFAs contained in the Inside Wiring Notice

and the Cable Home Wiring Further Notice, Building Owners, et al.,

filed comments arguing that the proposed rules would have a significant

effect on small residential and commercial building operators and that

the Commission should exempt these entities from any final rules. In

response to the IRFA contained in the Inside Wiring Notice, CATA filed

comments and an ex parte submission requesting that the Commission

rescind the Inside Wiring Notice and reissue it as a notice of inquiry

or reissue it with specific proposed rules. CATA argues that the Inside

Wiring Notice failed to propose specific rules, thereby preventing both

the Commission staff and small entities from analyzing and commenting

on the effects of proposed rules on small entities. RTE Group filed its

comments and reply comments as ``a response by a small business

pursuant to section 603 of the Regulatory Flexibility Act.'' The issues

raised by RTE Group are addressed above. No comments were filed in

response to the IRFA contained in the Inside Wiring Further Notice.

Description and Estimate of the Number of Small Entities Impacted

74. 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 that: (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 adopt in this Order will affect

video service providers and MDU owners.

75. 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. 1992 Economic Census Industry and Enterprise Receipts Size

Report, Table 2D, SIC 4841 (U.S. Bureau of the Census data under

contract to the Office of Advocacy of the U.S. Small Business

Administration). We will address each service individually to provide a

more succinct estimate of small entities.

76. 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. 47 CFR 76.901(e). The Commission

developed this definition based on its determinations that a small

cable system operator is one with annual revenues of $100 million or

less. 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 adopted in the Order.

77. 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

[[Page 61029]]

would qualify as small cable operators under the definition in the

Communications Act.

78. 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.

79. 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 believe that there are

approximately 1634 small MMDS providers as defined by the SBA and the

Commission's auction rules.

80. 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 believe that at

least 1,989 ITFS licensees are small businesses.

81. 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.

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

Indeed, the service itself bears little resemblance to other MVPDs. 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.

83. 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.

84. OVS: The Commission has certified nine 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. (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 believe that three OVS licensees may qualify as small

business concerns.

85. 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

believe that a substantial number of SMATV operators qualify as small

entities.

86. 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.

87. 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

[[Page 61030]]

tentatively conclude that a majority of the potential LMDS licensees

will be small entities, as that term is defined by the SBA.

88. 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

89. Disposition of MDU Home Run Wiring: The Order requires MVPDs to

comply with a set of procedural timetables for the disposition of home

run wiring upon termination of service when an MDU owner invokes the

Commission's procedures. In addition, it requires MVPDs to include in

future contracts with MDU owners a provision addressing the disposition

of home run wiring upon the termination of the contract. It also

requires the parties to cooperate to ensure as seamless a transition as

possible for subscribers.

90. Sharing of Molding: The Order permits an MVPD to install home

run wiring in an existing molding if the MDU owner determines that

there is sufficient space, if the incumbent MVPD's ability to provide

service is not impaired, and if the MDU owner gives its affirmative

consent. If the MDU owner determines that there is not sufficient

space, and the MDU owner will permit larger moldings, the MDU owner may

install larger moldings at the alternative MVPD's expense.

91. Disposition of Cable Home Wiring: The Order requires MVPDs to

implement their election to remove or abandon home wiring within seven

days of learning that the home wiring will not be purchased.

92. Customer Access to Cable Home Wiring before Termination of

Service: The Order requires cable operators to permit subscribers to

provide or install their own cable home wiring, or redirect, reroute or

connect additional wiring to the cable operator's home wiring, so long

as no electronic or physical harm is caused to the cable system and the

physical integrity of the cable operator's wiring remains intact. The

cable operator may choose to impose requirements that any home wiring

meet reasonable technical specifications, not to exceed the technical

specifications of such wiring installed by the cable operator; however,

the cable operator may require additional technical specifications to

eliminate electronic or physical harm.

93. Signal Leakage: The Order extends the Commission's cable signal

leakage rules to all broadband service providers that pose a similar

threat of interference with frequencies used for over-the-air

communications. Section 76.615(b)(7) of the cable signal leakage rules

requires cable operators to file annually with the Commission the

results of their signal leakage tests conducted pursuant to section

76.611.

Significant Alternatives and Steps Taken To Minimize the Significant

Economic Impact on a Substantial Number of Small Entities Consistent

With the Stated Objectives

This section analyzes the impact on small entities of the

regulations adopted, amended, modified, or clarified in this Order.

94. Disposition of MDU Home Run Wiring: We considered several

alternatives for the disposition of MDU home run wiring, including: (1)

Creating a single demarcation point for cable and telephony providers;

(2) moving the cable demarcation point; and (3) maintaining our current

rules. The record indicates that MDU owners often object to the

installation of multiple home run wires for reasons including

aesthetics, space limitations, the avoidance of disruption and

inconvenience, and the potential for property damage. Small video

service providers often are new entrants that will have to install new

home run wiring (if they cannot use the existing wiring), while

incumbent service providers often are established entities that may

resist efforts by both new entrants and MDU operators to arrange for

use of the existing wiring. By bringing order and certainty to the

disposition of the home run wiring upon termination of service, the

rules adopted herein advance the interests of both small video service

providers and small MDU owners.

95. Transfer of Ownership of Home Run Wiring in Future

Installations: We considered adopting a requirement that, for future

installations, MVPDs transfer ownership of home run wiring to MDU

owners. We instead decided to require MVPDs to include in future

contracts with MDU owners a provision addressing the disposition of

home run wiring upon termination of the contract. This requirement will

provide all MDU owners, including small MDU owners, the flexibility to

negotiate for ownership of the home run wiring.

96. Sharing of Molding: We considered not requiring the sharing of

molding even when empty space exists. We concluded, however, that the

ability to share molding often may assist small MVPDs, which frequently

are new entrants, to gain access to MDUs. We considered Time Warner's

proposal to allow affected MVPDs and the MDU owner to determine whether

the molding contains adequate space. Our rule, however, does not

require the concurrence of the affected MVPDs in the determination of

whether adequate space exists.

97. Customer Access to Cable Home Wiring before Termination of

Service: We believe that subscriber access to home wiring will advance

the interests of small entities. As customers gain the ability to

select who will install and maintain their home wiring, small entities

will be able to compete with the incumbent cable operator to provide

such services.

98. Signal Leakage: This Order extends the Commission's cable

signal leakage rules to all broadband service providers that pose a

similar threat of interference with frequencies used for over-the-air

communications. Although this modification will impact small broadband

service providers, we are exploring the possibility of exempting

certain categories of broadband service providers from the reporting

requirements of the signal leakage rules.

Report to Congress

99. The Commission shall send a copy of the Order, including this

FRFA, in a report to Congress pursuant to the Small Business Regulatory

Enforcement Fairness Act of 1996, 5 U.S.C. Sec. 801(a)(1)(A). A copy of

the Order and the FRFA will be sent to the Chief Counsel for Advocacy

of the Small Business Administration.

XVI. Ordering Clauses

100. It is Ordered that, pursuant to sections 1, 4(i), 201-205,

214-215, 220, 303, 623, 624 and 632 of the Communications Act of 1934,

as amended, 47 U.S.C. Secs. 151, 154(i), 201-205, 214-215, 220, 303,

543, 544 and 552, the Commission's rules are hereby amended as set

forth below.

[[Page 61031]]

101. It is further ordered that the amendments in 47 CFR 76.613,

76.802 and 76.804 impose information collection requirements, and will

therefore not become effective until approved by the Office of

Management and Budget (``OMB''). The amendments in 47 CFR 76.5, 76.620,

76.800, 76.805 and 76.806 will become effective 30 days following

publication of this Order in the Federal Register. However, compliance

with amendments in 47 CFR 76.5, 76.620, 76.800, 76.805 and 76.806 will

not be required until OMB approval of the information collection

requirements in 47 CFR 76.613, 76.802 and 76.804. The Commission will

publish a document at a later date announcing the effective date of the

amendments in 47 CFR 76.613, 76.802 and 76.804, and the date of

compliance for the amendments in 47 CFR 76.5, 76.620, 76.800, 76.805

and 76.806.

102. It is further ordered that the Commission shall send a copy of

the Order, including the Final 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.

Rule Changes

Part 76 of title 47 of the Code of Federal Regulations is amended

as follows:

PART 76--CABLE TELEVISION SERVICE

1. The authority citation for part 76 continues 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 amended by revising paragraph (mm)(2) and adding

paragraphs (mm)(3) and (mm)(4), 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, the closest practicable point thereto that

does not require access to the individual subscriber's dwelling unit.

(3) For new and existing multiple dwelling unit installations with

loop-through wiring configurations, the demarcation points shall be at

(or about) twelve inches outside of where the cable wire enters or

exits the first and last individual dwelling units on the loop, or,

where the wire is physically inaccessible at such point(s), the closest

practicable point thereto that does not require access to an individual

subscriber's dwelling unit.

(4) As used in this paragraph (mm)(3), the term ``physically

inaccessible'' describes a location that:

(i) Would require significant modification of, or significant

damage to, preexisting structural elements, and

(ii) Would add significantly to the physical difficulty and/or cost

of accessing the subscriber's home wiring.

Note to paragraph (mm)(4): For example, wiring embedded in

brick, metal conduit or cinder blocks with limited or without access

openings would likely be physically inaccessible; wiring enclosed

within hallway molding would not.

* * * * *

3. Section 76.613 is amended by revising the heading and by

revising paragraphs (b), (c), and (d) to read as follows:

Sec. 76.613 Interference from a multichannel video programming

distributor (``MVPD'').

* * * * *

(b) An MVPD that causes harmful interference shall promptly take

appropriate measures to eliminate the harmful interference.

(c) If harmful interference to radio communications involving the

safety of life and protection of property cannot be promptly eliminated

by the application of suitable techniques, operation of the offending

MVPD or appropriate elements thereof shall immediately be suspended

upon notification by the District Director and/or Resident Agent of the

Commission's local field office, and shall not be resumed until the

interference has been eliminated to the satisfaction of the District

Director and/or Resident Agent. When authorized by the District

Director and/or Resident Agent, short test operations may be made

during the period of suspended operation to check the efficacy of

remedial measures.

(d) The MVPD may be required by the District Director and/or

Resident Agent to prepare and submit a report regarding the cause(s) of

the interference, corrective measures planned or taken, and the

efficacy of the remedial measures.

4. Section 76.620 is added to read as follows:

Sec. 76.620 Non-cable multichannel video programming distributors

(``MVPDs'').

(a) Sections 76.605(a)(12), 76.610, 76.611, 76.612, 76.614,

76.615(b)(1-6), 76.616, and 76.617 shall apply to all non-cable MVPDs.

However, non-cable MVPD systems that are substantially built as of

January 1, 1998 shall not be subject to these sections until January 1,

2003. ``Substantially built'' shall be defined as having 75 percent of

the distribution plant completed. As of January 1, 2003,

Sec. 76.615(b)(7) shall apply to all non-cable MVPDs.

(b) To comply with Sec. 76.615(b)(2), a non-cable MVPD shall submit

its Internal Revenue Service's Employer Identification (E.I.) number

instead of an FCC identifier.

5. Subpart M is amended by revising the heading to read as follows:

Subpart M--Cable Inside Wiring

6. Section 76.800 is added to read as follows:

Sec. 76.800 Definitions.

(a) MDU. A multiple dwelling unit building (e.g., an apartment

building, condominium building or cooperative).

(b) MDU owner. The entity that owns or controls the common areas of

a multiple dwelling unit building.

(c) MVPD. A multichannel video programming distributor, as that

term is defined in Section 602(13) of the Communications Act, 47 U.S.C.

522(13).

(d) Home run wiring. The wiring from the demarcation point to the

point at which the MVPD's wiring becomes devoted to an individual

subscriber or individual loop.

7. Section 76.802 is amended by revising paragraphs (a) and (g),

and adding paragraph (l) 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 installation, 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-unit installation, a cable operator shall not

be

[[Page 61032]]

entitled to remove the cable home wiring unless: it gives the

subscriber the opportunity to purchase the wiring at the replacement

cost; the subscriber declines, and neither the MDU owner nor an

alternative MVPD, where permitted by the MDU owner, has provided

reasonable advance notice to the incumbent provider that it would

purchase the cable home wiring pursuant to this section if and when a

subscriber declines. If the cable system operator is entitled to remove

the cable home wiring, it must then remove the 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) The cost of the cable home wiring is to be based on the

replacement cost 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.

* * * * *

(g) If the cable operator adheres to the procedures described in

paragraph (b) of this section, and the subscriber asks for more time to

make a decision regarding whether to purchase the home wiring, the

seven (7) day period described in paragraph (b) of this section will

not begin running until the subscriber declines to purchase the wiring;

in addition, the subscriber may not use the wiring to connect to an

alternative service provider until the subscriber notifies the operator

whether or not the subscriber wishes to purchase the wiring.

* * * * *

(l) The provisions of Sec. 76.802, except for Sec. 76.802(a)(1),

shall apply to all MVPDs in the same manner that they apply to cable

operators.

8. Section 76.804 is 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 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 against the wishes of the MDU owner, the MDU

owner may give the MVPD a minimum of 90 days' written notice that its

access to the entire building will be terminated to invoke the

procedures in this section. The MVPD will then have 30 days to notify

the MDU owner in writing of its election for all the home run wiring

inside the MDU building: to remove the wiring and restore the MDU

building consistent with state law within 30 days of the end of the 90-

day notice period or within 30 days of actual service termination,

whichever occurs first; to abandon and not disable the wiring at the

end of the 90-day notice period; or 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 incumbent provider elects to remove its

wiring and restore the building consistent with state law, it must do

so within 30 days of the end of the 90-day notice period or within 30

days of actual service termination, which ever occurs first. For

purposes of abandonment, passive devices, including splitters, shall be

considered part of the home run wiring. The incumbent provider that has

elected to abandon its home run wiring may remove its amplifiers or

other active devices used in the wiring if an equivalent replacement

can easily be reattached. In addition, an incumbent provider removing

any active elements shall comply with the notice requirements and other

rules regarding the removal of home run wiring. If the MDU owner

declines to purchase the home run wiring, the MDU owner may permit an

alternative provider that has been authorized to provide service to the

MDU to negotiate to purchase the wiring.

(2) If the incumbent provider elects to sell the home run wiring

under paragraph (a)(1) of this section, the incumbent and the MDU owner

or alternative provider shall have 30 days from the date of election to

negotiate a price. If the parties are unable to agree on a price within

that 30-day time period, the incumbent must elect: to abandon without

disabling the wiring; to remove the wiring and restore the MDU

consistent with state law; or to submit the price determination to

binding arbitration by an independent expert. If the incumbent provider

chooses to abandon or remove its wiring, it must 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 at this point to remove its wiring and restore the

building consistent with state law, it must do so within 30 days of the

end of the 90-day notice period or within 30 days of actual service

termination, which ever occurs first.

(3) If the incumbent elects to submit to binding arbitration, the

parties shall have seven days to agree on an independent expert or to

each designate an expert who will pick a third expert within an

additional seven days. The independent expert chosen will be required

to assess a reasonable price for the home run wiring by the end of the

90-day notice period. If the incumbent elects to submit the matter to

binding arbitration and the MDU owner (or the alternative provider)

refuses to participate, the incumbent shall have no further obligations

under the Commission's home run wiring disposition procedures. 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.

(4) The MDU owner shall be permitted to exercise the rights of

individual subscribers under this subsection for purposes of the

disposition of the cable home wiring under Sec. 76.802. When an MDU

owner notifies an incumbent provider under this section 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 shall, in accordance with our current

home wiring rules: offer to sell to the MDU owner any home wiring

within the individual dwelling units that the incumbent provider owns

and intends to remove; and provide the MDU owner with the total per-

foot replacement cost of such home wiring. This information must be

provided to the MDU owner within 30 days of the initial notice that the

incumbent's access to the building will be terminated. If the MDU owner

declines to purchase the cable home wiring, the MDU owner may allow the

alternative provider to purchase the home wiring upon service

termination under the terms and conditions of Sec. 76.802. If the MDU

owner or the alternative provider elects to purchase the home wiring

under these rules, it must so notify the incumbent MVPD provider not

later than 30 days before the incumbent's termination of access to the

building will become effective. If the MDU owner and the alternative

provider fail to elect to purchase the home wiring, the incumbent

provider must then remove the cable home wiring, under normal operating

conditions, within 30 days of

[[Page 61033]]

actual service termination, or make no subsequent attempt to remove it

or to restrict its use.

(5) The parties shall cooperate to avoid disruption in service to

subscribers to the extent possible.

(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, the MDU owner may permit

multiple MVPDs to compete for the right to use the individual home run

wires dedicated to each unit in the MDU. The MDU owner must provide at

least 60 days' written 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 as to

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: remove the wiring and restore the MDU building consistent

with state law; abandon the wiring without disabling it; or sell the

wiring to the MDU owner. If the MDU owner refuses to purchase the home

run wiring, the MDU owner may permit the alternative provider to

purchase it. If the alternative provider is permitted to purchase the

wiring, it 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) If the incumbent provider elects to sell the home run wiring

under paragraph (b)(1), the incumbent and the MDU owner or alternative

provider shall have 30 days from the date of election to negotiate a

price. During this 30-day negotiation period, the parties may arrange

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

the parties are unable to agree on a price during this 30-day time

period, the incumbent must elect: to abandon without disabling the

wiring; to remove the wiring and restore the MDU consistent with state

law; or to submit the price determination to binding arbitration by an

independent expert. If the incumbent elects to submit to binding

arbitration, the parties shall have seven days to agree on an

independent expert or to each designate an expert who will pick a third

expert within an additional seven days. The independent expert chosen

will be required to assess a reasonable price for the home run wiring

within 14 days. If subscribers wish to switch service providers after

the expiration of the 60-day notice period but before the expert issues

its price determination, the procedures set forth in paragraph (b)(3)

of this section shall be followed, subject to the price established by

the arbitrator. If the incumbent elects to submit the matter to binding

arbitration and the MDU owner (or the alternative provider) refuses to

participate, the incumbent shall have no further obligations under the

Commission's home run wiring disposition procedures.

(3) When an MVPD that is currently providing service to a

subscriber is notified either orally or in writing that that 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, a provider that has elected to remove its home run wiring

pursuant to paragraph (b)(1) or (b)(2) of this section will have seven

days to remove its home run wiring and restore the building consistent

with state law. If the subscriber has requested service termination

more than seven days in the future, the seven-day removal period shall

begin on the date of actual service termination (and, in any event,

shall end no later than seven days after the requested date of

termination). If the provider has elected to abandon or sell the wiring

pursuant to paragraph (b)(1) or (b)(2) of this section, the abandonment

or sale will become effective upon actual service termination or upon

the requested date of termination, whichever occurs first. For purposes

of abandonment, passive devices, including splitters, shall be

considered part of the home run wiring. The incumbent provider may

remove its amplifiers or other active devices used in the wiring if an

equivalent replacement can easily be reattached. In addition, an

incumbent provider removing any active elements shall comply with the

notice requirements and other rules regarding the removal of home run

wiring. 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 within

twenty-four (24) hours of actual service termination.

(4) If the incumbent provider fails to comply with any of the

deadlines established herein, the home run wiring shall be considered

abandoned, and the incumbent may not prevent the alternative provider

from using 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,

consistent with state law. If a subscriber's service is terminated

without notification that another service provider intends to use the

existing home run wiring to provide service to that particular

subscriber, 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 the

Commission's 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 wishes to use the home run

wiring to receive an alternative service.

(5) The parties shall cooperate to avoid disruption in service to

subscribers to the extent possible.

(6) Section 76.802 of the Commission's 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.

(c) The procedures set forth in paragraphs (a) and (b) of this

section shall apply unless and until the incumbent provider obtains a

court ruling or an injunction within forty-five (45) days following the

initial notice enjoining its displacement.

(d) After the effective date of this rule, MVPDs shall include a

provision in all service contracts entered into with MDU owners setting

forth the disposition of any home run wiring in the MDU upon the

termination of the contract.

(e) Incumbents are prohibited from using any ownership interest

they may have in property located on or near the home run wiring, such

as molding or conduit, to prevent, impede, or in any way interfere

with, the ability of an alternative MVPD to use the home run wiring

pursuant to this section.

(f) Section 76.804 shall apply to all MVPDs.

9. Section 76.805 is added to read as follows:

Sec. 76.805 Access to molding.

(a) An MVPD shall be permitted to install one or more home run

wires within the existing molding of an MDU where the MDU owner finds

that there is sufficient space to permit the installation of the

additional wiring without interfering with the ability of an

[[Page 61034]]

existing MVPD to provide service, and gives its affirmative consent to

such installation. This paragraph shall not apply where the incumbent

provider has an exclusive contractual right to occupy the molding.

(b) If an MDU owner finds that there is insufficient space in

existing molding to permit the installation of the new wiring without

interfering with the ability of an existing MVPD to provide service,

but gives its affirmative consent to the installation of larger molding

and additional wiring, the MDU owner (with or without the assistance of

the incumbent and/or the alternative provider) shall be permitted to

remove the existing molding, return such molding to the incumbent, if

appropriate, and install additional wiring and larger molding in order

to contain the additional wiring. This paragraph shall not apply where

the incumbent provider possesses a contractual right to maintain its

molding on the premises without alteration by the MDU owner.

(c) The alternative provider shall be required to pay any and all

installation costs associated with the implementation of paragraphs (a)

or (b) of this section, including the costs of restoring the MDU

owner's property to its original condition, and the costs of repairing

any damage to the incumbent provider's wiring or other property.

10. Section 76.806 is added to read as follows:

Sec. 76.806 Pre-termination access to cable home wiring.

(a) Prior to termination of service, a customer may: install or

provide for the installation of their own cable home wiring; or connect

additional home wiring, splitters or other equipment within their

premises to the wiring owned by the cable operator, so long as no

electronic or physical harm is caused to the cable system and the

physical integrity of the cable operator's wiring remains intact.

(b) Cable operators may require that home wiring (including passive

splitters, connectors and other equipment used in the installation of

home wiring) meets reasonable technical specifications, not to exceed

the technical specifications of such equipment installed by the cable

operator; provided however, that if electronic or physical harm is

caused to the cable system, the cable operator may impose additional

technical specifications to eliminate such harm. To the extent a

customer's installations or rearrangements of wiring degrade the signal

quality of or interfere with other customers' signals, or cause

electronic or physical harm to the cable system, the cable operator may

discontinue service to that subscriber until the degradation or

interference is resolved.

(c) Customers shall not physically cut, substantially alter,

improperly terminate or otherwise destroy cable operator-owned home

wiring.

[FR Doc. 97-29514 Filed 11-13-97; 8:45 am]

BILLING CODE 6712-01-P