[Federal Register Volume 62, Number 170 (Wednesday, September 3, 1997)]
[Proposed Rules]
[Pages 46453-46468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23303]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

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


Telecommunications Services Inside Wiring; Cable Home Wiring

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Commission invites comments on proposed procedures for the 
disposition of cable inside wiring (including both the cable home 
wiring within the premises of the individual subscriber and the home 
run wiring dedicated to an individual subscriber's

[[Page 46454]]

unit) upon termination of service in multiple dwelling unit (``MDU'') 
buildings. This Further Notice of Proposed Rulemaking (``Further 
NPRM'') contains proposed or modified information collections subject 
to the Paperwork Reduction Act of 1995 (``PRA''), Public Law 104-13. It 
has been submitted to the Office of Management and Budget (``OMB'') for 
review under section 3507(d) of the PRA. OMB, the general public, and 
other Federal agencies are invited to comment on the proposed or 
modified information collections contained in this proceeding.

DATES: Comments must be submitted on or before September 25, 1997 and 
reply comments must be submitted on or before October 2, 1997. Written 
comments by the public on the proposed and/or modified information 
collections are due September 25, 1997. Written comments must be 
submitted by OMB on the proposed and/or modified information 
collections on or before November 3, 1997.

ADDRESSES: Comments and reply comments should be sent to Office of the 
Secretary, Federal Communications Commission, 1919 M Street, NW, 
Washington, DC 20554. Comments and reply comments will be available for 
public inspection during regular business hours in the FCC Reference 
Center, Room 239, Federal Communications Commission, 1919 M Street 
N.W., Washington D.C. 20554.
    In addition to filing comments with the Secretary, a copy of any 
comments on the information collections contained herein should be 
submitted to Judy Boley, Federal Communications Commission, Room 234, 
1919 M Street, NW, Washington, DC 20554, or via the Internet to 
[email protected], and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 
725--17th Street, N.W., Washington, DC 20503 or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Rick Chessen, Cable Services Bureau, 
(202) 418-7200. For additional information concerning the information 
collections contained in this Further NPRM, contact Judy Boley at 202-
418-0214, or via the Internet at [email protected].
    Paperwork Reduction Act: This Further NPRM contains either a 
proposed or modified information collection. The Commission, as part of 
its continuing effort to reduce paperwork burdens, invites the general 
public and the Office of Management and Budget (``OMB'') to comment on 
the information collections contained in this Further NPRM, as required 
by the Paperwork Reduction Act of 1995, Pub. L. 104-13. Public and 
agency comments are due at the same time as other comments on this 
Further NPRM; OMB comments are due November 3, 1997. Comments should 
address: (1) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (2) the accuracy of the Commission's burden estimates; (3) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (4) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    OMB Approval Number: 3060-0692.
    Title: Home Wiring Provisions.
    Type of Review: Revision of an existing collection.
    Respondents: Individuals; Business and other for-profit entities.
    Number of Respondents: 30,000 (20,000 MVPDs and 10,000 MDU owners).
    Estimated Time Per Response: 5 minutes to 30 minutes.
    Total Annual Burden to Respondents: 33,928 hours, calculated as 
follows: This collection (3060-0692) previously only contained 
information collection requirements concerning the disposition of cable 
home wiring. In addition to those requirements, it now addresses 
proposed notification and election requirements between MDU owners and 
all multichannel video programming distributors (``MVPDs''). Pursuant 
to the Paperwork Reduction Act, when modifying or proposing additional 
information collection requirements in an existing collection, agencies 
are obligated to put forth the entire collection for public comment. 47 
CFR Sec. 76.802 Disposition of Cable Home Wiring. In calculating hour 
burdens for the disposition of home wiring, we make the following 
estimates: There are approximately 20,000 MVPDs serving approximately 
72 million subscribers in the United States. The average rate of churn 
(subscriber termination) for all MVPDs is estimated to be 1% per month, 
or 12% per year. MVPDs own the home wiring in 50% of the occurrences of 
voluntary subscriber termination and subscribers already own the wiring 
in the other 50% of occurrences (e.g., where the MVPD has charged the 
subscriber for the wiring upon installation, has treated the wiring as 
belonging to the subscriber for tax purposes, or where state and/or 
local law treats cable home wiring as a fixture). Where MVPDs own the 
wiring, we estimate that they intend to actually remove the wiring 5% 
of the time, thus initiating the disclosure requirement. We believe in 
most cases that MVPDs will choose to abandon the home wiring because 
the cost and effort required to remove the wiring generally outweigh 
its value. The burden to disclose the information at the time of 
termination will vary depending on the manner of disclosure, i.e., by 
telephone, customer visit or registered mail. Virtually all voluntary 
service terminations are done by telephone. The estimated average time 
consumed in the process of the MVPD's disclosure and subscriber's 
election is 5 minutes (.083 hours). Estimated annual number of 
occurrences is 72,000,000  x  12% x 50% x 5%=216,000. Estimated annual 
burden for MVPDs is 216,000 x .083 hours=17,928 hours. 47 CFR 
Sec. 76.802 also states that to inform subscribers of per-foot 
replacement costs, MVPDs may develop schedules based on readily 
available information; if the MVPD chooses to develop such schedules, 
it must place them in a public file and make them available for public 
inspection during regular business hours. We estimate that 50% of MVPDs 
will develop cost schedules to place in their public files. Virtually 
all subscribers terminate service via telephone, with few subscribers 
anticipated to review cost schedules on public file. The annual 
recordkeeping burden for cost schedules is estimated to be 0.5 hours 
per MVPD. Estimated annual recordkeeping burden is 20,000 x 50% x 0.5 
hours=5,000 hours. 47 CFR Sec. 76.804 Disposition of Home Run Wiring. 
We estimate the burden for notification and election requirements for 
building-by-building and unit-by-unit disposition of home run wiring as 
described below. Note that these requirements apply only when an MVPD 
owns the home run wiring in a MDU and does not (or will not at the 
conclusion of the notice period) have a legally enforceable right to 
remain on the premises against the wishes of the entity that owns the 
common areas of the MDU or have a legally enforceable right to maintain 
any particular home run wire dedicated to a particular unit on the 
premises against the MDU owner's wishes. For building-by-building 
disposition of home run wiring, the MDU owner gives the MVPD a minimum 
of 90 days' notice that its access to the entire building will be 
terminated. The MVPD then has 30 days to elect what it will do with the 
home run wiring. Where parties negotiate a price for the wiring and are 
unable to agree on a price, the incumbent MVPD must make another 
election between abandonment or removal of the wiring.

[[Page 46455]]

For unit-by-unit disposition of home run wiring, an MDU owner must 
notify the incumbent MVPD of its decision to permit multiple MVPDs to 
compete for the right to use the individual home run wires dedicated to 
each unit. The incumbent MVPD then has 30 days to elect what it will do 
with all of its home run wires dedicated to a subscriber who chooses an 
alternative provider's service. According to the Statistical Abstracts 
of the United States, 1995 at 733 Table No. 1224, over 28 million 
people resided in MDUs with three or more units in 1993. We therefore 
estimate there are currently 30 million MDU residents and that MDUs 
house an average of 50 residents, and so we estimate that there are 
approximately 600,000 MDUs in the United States. In many instances, 
MVPDs may no longer own the home run wiring or may continue to have a 
legally enforceable right to remain on the premises. Also, MDU owners 
may choose not to undergo the notice and election process. The 
Commission therefore estimates that there will be 10,000 notices and 
12,000 elections made on an annual basis. The larger amount of 
elections accounts for instances when parties are unable to agree on a 
price for the sale of home run wiring, therefore necessitating an 
additional election. We assume all notifications and elections will be 
in writing and take an average burden of 30 minutes (0.5 hours) to 
prepare. 22,000 notifications and elections x 0.5 hours=11,000 hours.
    Total Annual Cost to Respondents: $32,000 estimated as follows: For 
operation and maintenance costs, we estimate that 50% of the 20,000 
MVPDSs will annually develop cost schedules. Recordkeeping expenses for 
these schedules is estimated to be $1 per MVPD. 
20,000 x 50% x $1=$10,000. Also, annual stationery and postage costs 
for home run wiring disposition notifications and elections are 
estimated to be $1 per occurrence. 22,000 notifications and 
elections x $1=$22,000. There are no estimated capital and start-up 
costs.
    Needs and Uses: The various notification and election requirements 
in this collection (3060-0692) are set forth in order to promote 
competition and consumer choice by minimizing any potential disruption 
in service to a subscriber switching video providers.

SUPPLEMENTARY INFORMATION: The following is a synopsis of the 
Commission's Further NPRM in CS Docket No 95-184 and MM Docket No. 92-
260, adopted August 27, 1997 and released August 28, 1997. The full 
text of this document is available for inspection and copying during 
normal business hours in the FCC Reference Center (Room 239), 1919 M 
Street, NW, Washington, DC 20554, and may be purchased from the 
Commission's copy contractor, International Transcription Service, 
(202) 857-3800, 2100 M Street, NW, Washington, DC 20037.

Synopsis

A. Introduction

    1. This Further Notice of Proposed Rulemaking (``Further NPRM'') 
sets forth specific proposals for addressing certain issues raised in 
the Notice of Proposed Rulemaking in CS Docket No. 95-184 (``Inside 
Wiring NPRM'') and the First Order on Reconsideration and Further 
Notice of Proposed Rulemaking in MM Docket 92-260 (``Cable Home Wiring 
Further NPRM'') regarding potential changes in our telephone and cable 
inside wiring rules. The issues raised in this Further NPRM are 
intended to supplement the issues already discussed in the Inside 
Wiring NPRM and the Cable Home Wiring Further NPRM.
    2. We believe that our inside wiring rules could more effectively 
promote competition and consumer choice, but we believe that the record 
would benefit from additional comment on our specific proposals. We 
stress that the Commission intends to act quickly on these proposals. 
The proposals herein are set forth in great detail and generally are 
limited to a single issue: the disposition of cable inside wiring in 
multiple dwelling unit buildings (``MDUs'') upon termination of 
service. In addition, our proposals herein are similar to a proposal 
first made by the Independent Cable & Telecommunications Association 
(``ICTA'') in its initial comments in this proceeding, described more 
fully by ICTA in an ex parte letter to the Commission, and discussed by 
interested parties in ex parte letters. Accordingly, and in light of 
the extensive comments and ex parte meetings and comments received in 
response to the Inside Wiring NPRM and the Cable Home Wiring Further 
NPRM, we have set shorter deadlines than usual for interested parties 
to file comments and reply comments. We ask parties to refrain from 
filing comments that are repetitive of their comments filed in response 
to the Inside Wiring NPRM and the Cable Home Wiring Further NPRM. All 
such comments will be considered as part of the record filed in 
response to this Further NPRM to the extent they remain relevant.
    3. Section 16(d) of the Cable Television Consumer Protection and 
Competition Act of 1992 (the ``1992 Cable Act''), codified at section 
624(i) of the Communications Act, requires the Commission to 
``prescribe rules concerning the disposition, after a subscriber to a 
cable system terminates service, of any cable installed by the cable 
operator within the premises of such subscriber.'' In February 1993, 
the Commission issued a Report and Order implementing section 624(i) 
(the ``Cable Wiring Order''). The Cable Wiring Order provided that when 
a subscriber voluntarily terminates cable service, the operator is 
required, if it proposes to remove the wiring, to inform the 
subscriber: (1) That he or she may purchase the wire; and (2) what the 
per-foot charge is. If the subscriber declined to purchase the home 
wiring, the operator was required to remove it within 30 days or make 
no subsequent attempt to remove it or to restrict its use.
    4. We further provided that the subscriber may purchase the cable 
home wiring inside his or her premises up to the demarcation point. As 
in the telephone context, a demarcation point generally is the point at 
which a service provider's system wiring ends and the customer-
controlled wiring begins. From the customer's point of view, this point 
is significant because it defines the wiring that he or she may own or 
control. For purposes of competition, the demarcation point is 
significant because it defines the point where an alternative service 
provider may attach its wiring to the customer's wiring in order to 
provide service.
    5. For MDUs with non-``loop-through'' wiring, the cable demarcation 
point was set at (or about) 12 inches outside of where the cable wire 
enters the subscriber's individual dwelling unit. Generally, in a non-
loop-through configuration, each subscriber in an MDU has a dedicated 
line (often called a ``home run'') running to his or her premises from 
a common ``feeder line'' or ``riser cable'' that serves as the source 
of video programming signals for the entire MDU. The riser cable 
typically runs vertically in a multi-story building (e.g., up a 
stairwell) and connects to the dedicated home run wiring at a ``tap'' 
or ``multi-tap,'' which extracts portions of the signal strength from 
the riser and distributes individual signals to subscribers. Depending 
on the size of the building, the taps are usually located in a security 
box (often called a ``lockbox'') or utility closet located on each 
floor, or at a single point in the basement. Each time the riser cable 
encounters a tap, its signal strength decreases. In addition, the 
strength of a signal diminishes as the signal passes through the 
coaxial cable. As a result,

[[Page 46456]]

cable wiring often requires periodic amplification within an MDU to 
maintain picture quality. Amplifiers are installed at periodic 
intervals along the riser based upon the number of taps and the length 
of coaxial cable within the MDU. Non-cable video service providers 
typically employ a similar inside wiring scheme, except that many of 
them (e.g., multichannel multipoint distribution services (``MMDS''), 
satellite master antenna services (``SMATV'') and direct broadcast 
satellite (``DBS'') providers) use wireless technologies to deliver 
their signal to an antenna on the roof of an MDU, and then run their 
riser cable down from the roof to the taps and dedicated home run 
wires.
    6. In January 1996, the Commission issued the Cable Home Wiring 
Further NPRM and the Inside Wiring NPRM. In the Cable Home Wiring 
Further NPRM, among other things, the Commission clarified that, during 
the initial telephone call in which a subscriber voluntarily terminates 
cable service, if the operator owns and intends to remove the home 
wiring, it must inform the subscriber: (1) That the cable operator owns 
the home wiring; (2) that it intends to remove the home wiring; (3) 
that the subscriber has a right to purchase the home wiring; and (4) 
what the per-foot replacement cost and total charge for the wiring 
would be, including the replacement cost for any passive splitters 
attached to the wiring on the subscriber's side of the demarcation 
point. Where an operator fails to adhere to these procedures, it is 
deemed to have relinquished immediately any and all ownership interests 
in the home wiring, and thus, is not entitled to compensation for the 
wiring and may make no subsequent attempt to remove it or restrict its 
use. If the cable operator informs the subscriber of his or her rights 
and the subscriber agrees to purchase the wiring, constructive 
ownership over the home wiring will transfer immediately to the 
subscriber, who may authorize a competing service provider to connect 
with and use the home wiring. If, on the other hand, the subscriber 
declines to purchase the home wiring, the operator has seven business 
days to remove the wiring or make no subsequent attempt to remove it or 
restrict its use.
    7. In the Inside Wiring NPRM, we sought comment on ``whether and 
how our wiring rules can be structured to promote competition both in 
the markets for multichannel video programming delivery and in the 
market for telephony and advanced telecommunications services.'' In 
particular, we requested comment on whether and where the Commission 
should establish a common demarcation point for wireline communications 
networks, whether we should continue to establish demarcation points 
based on the services provided over facilities, or whether we should 
create demarcation points based upon the nature of the facilities 
ultimately used to deliver the service (i.e., narrowband termination 
facilities or broadband termination facilities). We noted that we 
``recognize that numerous other factors may affect the proper location 
of the cable network's demarcation point, as well as one's control over 
cable inside wiring and cable service generally.'' We also sought 
comment on the ``legal and practical impediments faced by 
telecommunications service providers in gaining access to 
subscribers.''

B. The Competitive Landscape

    8. The evidence in this proceeding leads us to conclude that more 
is needed to foster the ability of subscribers who live in MDUs to 
choose among competing service providers. Based on the record evidence, 
we believe that one of the primary competitive problems in MDUs is the 
difficulty for some service providers to obtain access to the property 
for the purpose of running additional home run wires to subscribers' 
units. The record indicates that MDU property owners often object to 
the installation of multiple home run wires in the hallways of their 
properties, for reasons including aesthetics, space limitations, the 
avoidance of disruption and inconvenience, and the potential for 
property damage.
    9. We believe that property owners' resistance to the installation 
of multiple sets of home run wiring in their buildings may deny MDU 
residents the ability to choose among competing service providers, 
thereby contravening the purposes of the Communications Act, and 
particularly section 624(i), which was intended to promote consumer 
choice and competition by permitting subscribers to avoid the 
disruption of having their home wiring removed upon voluntary 
termination and to subsequently utilize that wiring for an alternative 
service. We believe that the impact is substantial. As of 1990, there 
were almost 31.5 million MDUs in the United States, comprising 
approximately 28% of the nationwide housing market. Moreover, the trend 
between 1980 and 1990 indicates that the number of MDUs is growing at a 
much faster rate than the number of single family dwellings. Data also 
shows that MDUs make up between 32% and 84% of the housing market in 
cities with the greatest numbers of households receiving cable service.
    10. The record does not demonstrate that the current cable home 
wiring rules, having been in place for four years, provide adequate 
incentives for MDU property owners to permit the installation of 
multiple home run wires. We believe that disagreement over ownership 
and control of the home run wire substantially tempers competition. The 
record indicates that, where the property owner or subscriber seeks 
another video service provider, instead of responding to competition 
through varied and improved service offerings, the incumbent provider 
often invokes its alleged ownership interest in the home run wiring. 
Incumbents invoke written agreements providing for continued service, 
perpetual contracts entered into by the incumbent and previous owner, 
easements emanating from the incumbent's installation of the wiring, 
assertions that the wiring has not become a fixture and remains the 
personal property of the incumbent, or that the incumbent's investment 
in the wiring has not been recouped, and oral understandings regarding 
the ownership and continued provision of services. Written agreements 
are frequently unclear, often having been consummated in an era of an 
accepted monopoly, and state and local law as to their meaning is 
vague. Invoking any of these reasons, incumbents often refuse to sell 
the home run wiring to the new provider or to cooperate in any 
transition. The property owner or subscriber is frequently left with an 
unclear understanding of why another provider cannot commence service. 
The litigation alternative, an option rarely conducive to generating 
competition, while typically not pursued by the property owner or 
subscriber, can be employed aggressively by the incumbent. The result 
is to chill the competitive environment.

C. Disposition of Home Run Wiring

    11. We propose to establish procedures for building-by-building 
disposition of the home run wiring (where the MDU owner decides to 
convert the entire building to a new video service provider) and for 
unit-by-unit disposition of the home run wiring (where an MDU owner is 
willing to permit two or more video service providers to compete for 
subscribers on a unit-by-unit basis) where the MDU owner wants the 
alternative provider to be able to use the existing home run wiring. We 
believe that these procedural mechanisms will not create or destroy any 
property rights, but will promote competition and consumer choice by

[[Page 46457]]

bringing order and certainty to the disposition of the MDU home run 
wiring upon termination of service.
    12. In today's marketplace, alternative video service providers 
have no timely and reliable way of ascertaining whether they will be 
able to use the existing home run wiring upon a change in service. MDU 
owners are similarly unsure of their legal rights. Because of this 
uncertainty, an MDU owner seeking to change providers may be confronted 
with choosing among: (1) Allowing the alternative provider to install 
duplicative home run wiring before it knows whether the incumbent will 
abandon the existing home run wiring when it leaves; (2) waiting to see 
what the incumbent does with the home run wiring when it leaves the 
building, risking a potential disruption in service to its residents; 
(3) staying with the incumbent provider; or (4) allowing the 
alternative provider to use the home run wiring and risking litigation. 
The proposed procedures are intended to provide all parties sufficient 
notice and certainty of whether and how the existing home run wiring 
will be made available to the alternative video service provider so 
that a change in service can occur efficiently. We tentatively conclude 
that establishing rules governing the disposition of the MDU home run 
wiring will represent a substantial step toward increased competition 
in the MDU video programming service marketplace.
    13. We propose that the procedural mechanisms described below would 
apply only where the incumbent provider no longer has an enforceable 
legal right to remain on the premises against the will of the MDU 
owner. In other words, these procedures would not apply where the 
incumbent provider has a contractual, statutory or common law right to 
maintain its home run wiring on the property. In the building-by-
building context, the procedures below would not apply where the 
incumbent provider has a legally enforceable right to maintain its home 
run wiring on the premises against the MDU owner's wishes and prevent 
any third party from using the wiring; in the unit-by-unit context, the 
procedures below would not apply where the incumbent provider has a 
legally enforceable right to keep a particular home run wire dedicated 
to a particular unit (not including the wiring on the subscriber's side 
of the demarcation point) on the premises against the property owner's 
wishes. We are not proposing to preempt an incumbent's ability to rely 
upon any rights it may have under state law. We seek comment on the 
impact of this condition on the efficacy of our proposal, and how any 
adverse effects should be addressed. In particular, we seek comment on 
whether the Commission can and should create any presumptions or other 
mechanisms regarding the relative rights of the parties if the 
incumbent's right to maintain its home run wiring on the premises is 
disputed. For example, we seek comment on a presumption that the 
incumbent does not possess an enforceable legal right to maintain its 
home wiring on the premises (and therefore that our proposed procedures 
would apply), unless the incumbent can adduce a clear contractual or 
statutory right to remain.
i. Building-by-Building Disposition of Home Run Wiring
    14. We seek comment on the following proposal: where the incumbent 
service provider owns the home run wiring in an MDU and does not (or 
will not at the conclusion of the notice period) have a legally 
enforceable right to remain on the premises, and the MDU owner wants to 
be able to use the existing home run wiring for service from another 
provider, the MDU owner may give the incumbent service provider a 
minimum of 90 days' notice that the provider's access to the entire 
building will be terminated. The incumbent provider would then have 30 
days to notify the MDU owner in writing of its election to do one of 
the following for all the home run wiring inside the MDU: (1) To remove 
the wiring and restore the MDU to its prior condition by the end of the 
90-day notice period; (2) to abandon and not disable the wiring at the 
end of the 90-day notice period; or (3) to sell the wiring to the MDU 
owner. If the incumbent provider elects to remove or abandon the 
wiring, and it intends to terminate service before the end of the 90-
day notice period, the incumbent provider would be required to notify 
the MDU owner at the time of this election of the date on which it 
intends to terminate service. If the MDU owner refuses to purchase the 
home run wiring, the alternative video service provider may purchase 
it.
    15. We are concerned that an incumbent provider may initially elect 
to remove its home run wiring and then decide to abandon it. Such 
conduct could put the alternative service provider to the unnecessary 
burden and expense of installing a second set of home run wires when 
the incumbent has no intention of removing the existing wiring. We seek 
comment on whether to adopt penalties for incumbent providers that 
elect to remove their home run wiring and then fail to do so.
    16. Where the incumbent provider elects to sell the home run 
wiring, our preference is to let the parties negotiate the price of the 
wiring. We seek comment on whether market forces would provide adequate 
incentives for the parties to reach a reasonable price. If market 
forces are insufficient, we seek comment on how a reasonable price 
should be established. For instance, we seek comment on whether: (1) 
The Commission should establish broad guidelines within which 
negotiations would occur (e.g., a reasonable price should be more than 
a nominal amount but should not include the incumbent provider's lost 
opportunity costs); (2) the price should be left to negotiations 
between the parties but the Commission should establish a default price 
if the parties cannot reach an agreement; or (3) the Commission should 
establish a general rule or formula for determining a reasonable price. 
If parties believe that the Commission should establish guidelines, a 
default price, a general rule or formula, we seek comment on the type 
of guidelines, default price, general rule or formula that should be 
established.
    17. We propose that, if the parties negotiate a price, they would 
have 30 days from the date of election to negotiate a price for the 
home run wiring. The parties could also negotiate to purchase 
additional wiring (e.g., riser cables) at their option. If the parties 
are unable to agree on a price, the incumbent would be required to 
elect to either abandon or remove the wiring and notify the MDU owner 
at the time of this election if and when it intends to terminate 
service before the end of the 90-day notice period. If the incumbent 
service provider elects to abandon its wiring at this point, the 
abandonment would become effective at the end of the 90-day notice 
period or upon service termination, whichever occurs first. Similarly, 
if the incumbent elects to remove its wiring and restore the building 
to its prior condition, it would have to do so by the end of the 90-day 
notice period. If the incumbent failed to comply with any of the 
deadlines established herein, it would be deemed to have elected to 
abandon its home run wiring at the end of the 90-day notice period.
ii. Unit-by-Unit Disposition of Home Run Wiring
    18. We also seek comment on the following proposal for unit-by-unit 
disposition of home run wiring. Where the incumbent video service 
provider owns the home run wiring in an MDU

[[Page 46458]]

and does not (or will not at the conclusion of the notice period) have 
a legally enforceable right to maintain its home run wiring on the 
premises, the MDU owner may permit multiple service providers to 
compete head-to-head in the building for the right to use the 
individual home run wires dedicated to each unit. We propose that, 
where an MDU owner wishes to permit such head-to-head competition, the 
MDU owner must provide at least 60 days' notice to the incumbent 
provider of the owner's intention to invoke the following procedure. 
The incumbent service provider would then have 30 days to provide the 
MDU owner with a written election as to whether, for all of the 
incumbent's home run wires dedicated to individual subscribers who may 
later choose the alternative provider's service, it will: (1) remove 
the wiring and restore the MDU to its prior condition; (2) abandon the 
wiring without disabling it; or (3) sell the wiring to the MDU owner. 
In other words, the incumbent service provider would be required to 
make a single election for how it will handle the disposition of 
individual home run wires whenever a subscriber wishes to switch video 
service providers; that election would then be implemented each time an 
individual subscriber switches service providers. The alternative 
service provider would be required to make a similar election within 
this same 30-day period for any home run wiring that the alternative 
provider subsequently owns (i.e., after the alternative provider has 
purchased the wiring from the current incumbent provider) and that is 
solely dedicated to a subscriber who switches back from the alternative 
provider to the incumbent. We also tentatively conclude that it would 
streamline and expedite the process to permit the alternative service 
provider or the MDU owner to act as the subscriber's agent in providing 
notice of a subscriber's desire to change services. We tentatively 
conclude that unauthorized changes in service (i.e., ``slamming'') are 
unlikely to occur in this context; if slamming does occur, however, we 
would propose to take additional steps to protect consumers, such as 
requiring proof of agency.
    19. As with the proposed building-by-building procedures, we would 
prefer to let the parties negotiate for the sale of the home run wiring 
and seek comment on whether market forces will produce a reasonable 
price. If market forces are not adequate, we seek comment on the 
appropriate mechanism for establishing a reasonable price for the home 
run wiring. We propose that, if one or both of the video service 
providers elects to negotiate for the sale of the home run wiring, the 
parties have 30 days from the date of such election to reach an 
agreement. During this 30-day negotiation period, the incumbent, the 
MDU owner and/or the new provider could also work out arrangements for 
an up-front lump sum payment in lieu of a unit-by-unit payment. An up-
front lump sum payment would permit either service provider to use the 
home run wiring to provide service to a subscriber without the 
administrative burden of paying separately for each home run wire every 
time a subscriber changes providers. We also propose that, if the 
parties cannot agree on a price, the incumbent provider would be 
required to elect one of the other two options (i.e., abandonment or 
removal). If the incumbent fails to comply with any of the deadlines 
established herein, we propose to treat the home run wiring as 
abandoned and permit the alternative provider to use the home run 
wiring immediately to provide service.
    20. We propose that, after completion of this initial process, a 
provider's election would be carried out if and when the provider is 
notified either orally or in writing that a subscriber wishes to 
terminate service and that an alternative service provider intends to 
use the existing home run wire to provide service to that particular 
subscriber. At that point, a provider that has elected to remove its 
home run wiring would have seven days to do so and to restore the 
building to its prior condition. We tentatively conclude that seven 
days is adequate for removal because we believe that, unlike in the 
building-by-building context, the provider would only be required to 
remove a single home run wire. If the current service provider has 
elected to abandon or sell the wiring, the abandonment or sale would 
become effective seven days from the date it receives a request for 
service termination or upon actual service termination, whichever 
occurs first. We would propose that, if the incumbent provider intends 
to terminate service prior to the end of the seven-day period, the 
incumbent would be required to inform the subscriber or the 
subscriber's agent (whichever is notifying the incumbent that the 
subscriber wishes to terminate service) at the time of the request for 
service termination of the date on which service will be terminated. In 
addition, we would propose to require the incumbent provider to 
disconnect the home run wiring from its lockbox and to leave it 
accessible for the new provider by the end of the seven-day period or 
within 24 hours of actual service termination, whichever occurs first.
    21. We base the above procedures on the assumption that the 
alternative service provider will have an incentive to ensure that the 
incumbent is notified that the alternative service provider intends to 
use the existing home run wire to provide service. To the extent this 
assumption is inaccurate, we seek comment on how the incumbent's 
election regarding the home run wiring in the unit-by-unit context 
should be triggered efficiently and so as to minimize disruption of 
service. If the subscriber's service is simply terminated without any 
indication that a competing service provider wishes to use the home run 
wiring, the incumbent service provider would not be required to carry 
out its election to sell, remove or abandon the home run wiring. This 
might occur, for instance, where an MDU tenant is moving out of the 
building. In such cases, we do not believe that it would be appropriate 
to require the incumbent to sell, remove or abandon the home run wiring 
when it might have every reasonable expectation that the next tenant 
will request its service. We would propose, however, that the incumbent 
provider would be required to carry out its election with regard to the 
home run wiring if and when it receives notice from a subsequent tenant 
(either directly or through an alternative provider) that the tenant 
wishes to use the home run wiring to receive a competing service.
    22. Moreover, we propose that, even where the incumbent receives a 
request for service termination but does not receive notice that an 
alternative provider wishes to use the home run wiring, the incumbent 
must follow the procedures set forth in our cable home wiring rules--
e.g., to offer to sell to the subscriber any cable home wiring that the 
incumbent provider otherwise intends to remove. First, the required 
notice in the unit-by-unit context may be effected in two stages (i.e., 
the subscriber may call to terminate service and the alternative 
provider may separately notify the incumbent that it wishes to use the 
home run wiring). We believe that, in order for the home run wiring and 
the home wiring to be disposed of in a coordinated manner, our cable 
home wiring rules must apply upon any termination of service. In 
addition, we believe that subscribers should have the right to purchase 
their home wiring to protect themselves from unnecessary disruption 
associated with removal of home wiring, regardless of whether they 
intend to subscribe to an alternative service.

[[Page 46459]]

iii. Ownership of Home Run Wiring
    23. In both the building-by-building and unit-by-unit approaches, 
we propose to give the MDU owner the initial option to negotiate for 
ownership and control of the home run wiring because the property owner 
is responsible for the common areas of a building, including safety and 
security concerns, compliance with building and electrical codes, 
maintaining the aesthetics of the building and balancing the concerns 
of all of the residents. Moreover, vesting ownership of the home run 
wiring in the MDU owner, as opposed to the alternative service 
provider, will reduce future transaction costs since the procedures 
proposed herein would not need to be repeated if service is 
subsequently switched again. Nevertheless, we recognize that some MDU 
owners may not want to own the home run wiring in their buildings; we 
propose that in such cases the alternative service provider should be 
permitted to purchase the wiring.
    24. We do not believe that individual subscribers would be 
disadvantaged by having the MDU owner own the home run wiring. If a 
subscriber has the ability to choose between multiple service providers 
in the unit-by-unit context, the MDU owner has already concluded that 
it is willing to permit multiple service providers on the premises in 
order to compete for subscribers. Given that the MDU owner would have 
voluntarily opened its building to multiple competitors, we do not 
believe that the MDU owner would deny a resident the ability to use the 
home run wiring for the resident's provider of choice. Furthermore, we 
believe that, if the alternative service provider purchases the home 
run wiring, that provider would not be able to act as a bottleneck and 
the individual subscriber would continue to be protected because, as 
described herein, the alternative service provider would also be 
subject to these same procedures if and when the alternative provider's 
service is terminated.
iv. Impact on Incumbent Video Service Providers
    25. We tentatively conclude that cable operators' argument that the 
loss of their home run wiring eliminates their ability to provide other 
telecommunications services is misplaced. Cable operators' ability to 
compete in the telephony market should be largely unaffected. The 
procedures proposed herein apply where the incumbent has no legally 
enforceable right to remain on the premises and the MDU owner and/or 
the individual subscriber has selected another provider's package--
notwithstanding the incumbent's other telecommunications services. 
Given MDU owners' resistance to the installation of multiple home run 
wires, we tentatively conclude that affording consumers a choice among 
various packages offered by multiple service providers is better than 
the current situation, in which MDU residents often have no choice at 
all. Under our proposal, MDU owners would remain free to implement the 
type of multiple-wire model advocated by the cable industry by 
requiring all service providers to install their own home run wires.
    26. Cable operators also complain that property owners often act as 
``gatekeepers'' in selecting a service provider and pursue their own 
interests rather than the interests of their residents. While we 
acknowledge how these circumstances can exist, we tentatively conclude 
that where the real estate market is competitive, it will discourage 
MDU owners from ignoring their residents' interests. In addition, the 
rules we propose do not grant MDU owners any additional rights, but 
simply establish a procedural mechanism for MDU owners to enforce 
rights they already have. Moreover, in the unit-by-unit context, the 
MDU owner would be expanding its residents' choices, not restricting 
them.
v. Application of Procedural Framework
    27. In both the building-by-building and unit-by-unit contexts, one 
of our goals is to promote competition and consumer choice by 
minimizing any potential disruption in service to a subscriber 
switching video service providers. To that end, we have proposed 
certain rules herein designed to give the subscriber reasonable notice 
if and when his or her service will be terminated prior to the end of 
the applicable notice period. In addition, we would propose to adopt a 
general rule requiring the parties to cooperate to ensure as seamless a 
transition as possible. We seek comment on whether it is necessary to 
promulgate such a rule, or whether a provider's desire to win the 
subscriber back will compel the provider to cooperate during the 
transition period.
    28. We also propose that the above procedural mechanisms would 
apply regardless of the identity of the incumbent video service 
provider involved. While initially this incumbent would commonly be a 
cable operator, it could also be a SMATV provider, an MMDS provider, a 
DBS provider or others.
vi. Statutory Authority
    29. We believe that the Commission has authority under sections 
4(i) and 303(r) of the Communications Act to establish procedures for 
the disposition of MDU home run wiring upon termination of service. 
Section 4(i) permits the Commission to ``perform any and all acts, make 
such rules and regulations, and issue such orders, not inconsistent 
with this Act, as may be necessary in the execution of its functions.'' 
The Commission may properly take action under section 4(i) even if such 
action is not expressly authorized by the Communications Act, as long 
as the action is not expressly prohibited by the Act and is necessary 
to the effective performance of the Commission's functions. We propose 
to invoke section 4(i) here because the law does not expressly prohibit 
the Commission from adopting procedures regarding the disposition of 
home run wiring and because affording the widest range of competitive 
opportunities is necessary to effectuate the purposes of the 
Communications Act.
    30. Section 4(i) has been held to justify various Commission 
regulations that were not within explicit grants of authority. In these 
cases, the courts found that the Commission's regulations were not 
inconsistent with the Communications Act because they did not 
contravene an express prohibition or requirement of the Act, and were 
reasonably ``necessary and proper'' for the execution of the agency's 
enumerated powers. Most recently, in Mobile Communications Corp. v. 
FCC, the United States Court of Appeals for the District of Columbia 
Circuit acknowledged the Commission's authority under section 4(i) to 
regulate even where the Communications Act does not explicitly 
authorize such action. In that case, the D.C. Circuit held that the 
Commission had authority under 4(i) to require Mtel, which held a 
pioneer's preference, to pay for a narrowband personal communications 
service (``PCS'') license, despite the fact that the Act did not 
specifically authorize the Commission to charge a price for a license 
granted to a pioneer's preference holder. The court denied Mtel's 
argument that the Commission's action was inconsistent with the 
Communications Act and therefore not within the Commission's section 
4(i) power. Mtel argued that Congress' explicit grant of authority to 
the Commission to collect certain fees and to conduct auctions for 
specified types of licenses denied the Commission authority to impose 
other fees. The court found Mtel's reliance on the

[[Page 46460]]

expressio unius maxim--that the expression of one is the exclusion of 
other--misplaced. According to the court, ``[t]he maxim `has little 
force in the administrative setting,' where we defer to an agency's 
interpretation of a statute unless Congress has `directly spoken to the 
precise question at issue.' '' The court also denied Mtel's argument 
that, in the absence of an affirmative statutory mandate to support the 
payment requirement, the Commission's action was not ``necessary in the 
execution of [the Commission's] functions,'' as required by section 
4(i).
    31. Applying these principles here, we conclude that the Commission 
is authorized under section 4(i) to establish procedures regarding the 
disposition of MDU home run wiring upon termination of service. First, 
establishing rules regarding the disposition of the home run wiring 
upon termination is necessary to the execution of the Commission's 
functions. As noted above, section 624(i) directs the Commission to 
prescribe rules regarding the disposition of wiring within a 
subscriber's premises in order to promote consumer choice and 
competition by permitting subscribers to avoid the disruption of having 
their home wiring removed upon voluntary termination and to 
subsequently utilize that wiring for an alternative service. We believe 
that, under our current rules, we cannot fully meet those objectives in 
the MDU context because, as described above, MDU owners often will not 
permit multiple home run wires to be installed in their buildings. In 
order to promote consumer choice and competition, we therefore propose 
to prescribe additional rules regarding the disposition of the existing 
home run wiring upon termination of service.
    32. Further, we propose to premise our decision to establish 
procedures regarding the disposition of home run wiring in MDUs on the 
Communications Act's fundamental purpose of ``regulating interstate and 
foreign commerce in communication by wire and radio so as to make 
available, so far as possible, to all people of the United States * * * 
a rapid, efficient, Nation-wide, and world-wide wire and radio 
communications service * * *.'' Moreover, we propose to premise our 
decision on the pervasive regulatory structure Congress established 
regarding cable communications, the goal of which is to replicate or 
encourage competitive conditions. Section 601 of the Communications Act 
states that one of the purposes of Title VI is to promote competition 
in cable communications. Due to the lack of competitive alternatives in 
multichannel video programming services, Congress has authorized the 
Commission to ensure that basic cable services, including equipment, 
are available at reasonable rates, to ensure that cable programming 
service rates are not unreasonable, and to establish standards whereby 
cable operators fulfill customer service requirements.
    33. We believe that establishing procedures regarding the 
disposition of MDU home run wiring will assist the Commission in 
discharging its statutory obligations under section 623(b) and its 
overall responsibility to pursue Congress' preference for competition 
stated in the 1992 Cable Act. Section 623(b) of the Communications Act 
requires the Commission to prescribe rules to ensure that rates for 
basic cable service are ``reasonable'' and that such regulations 
``shall include standards to establish, on the basis of actual cost, 
the price or rate for * * * installation and lease of equipment used by 
subscribers * * *.'' The regulations authorized by section 623(b) cover 
``equipment used by subscribers to receive the basic cable service 
tier, including * * * equipment as is required to access programming * 
* *.'' The term ``equipment'' under section 623(b) includes cable 
inside wiring. This extensive authority seeks to foster enhanced 
services to the subscriber at reasonable prices.
    34. We believe that establishing the above procedures regarding the 
disposition of MDU home run wiring is necessary to fulfill section 
623(b)'s mandate of reasonable basic cable rates. We believe that these 
procedures will provide advance certainty for property owners, 
alternative video service providers and subscribers regarding the 
disposition of the home run wiring when the existing service is 
terminated, thereby alleviating current circumstances that deter the 
property owner from considering alternative service providers and 
fostering competition among service providers. We believe that such 
competitive choice will exert a restraining influence on rates as 
service providers compete for the opportunity to serve the entire 
building or individual subscribers.
    35. Moreover, in the 1992 Cable Act, Congress specifically embraced 
a ``[p]reference for competition'' over regulation in setting rates for 
cable services. Fostering competition among service providers through 
the adoption of rules regarding the disposition of MDU home run wiring 
is a fundamental means to ensure that cable service rates remain 
``reasonable.'' The legislative history of section 623(b) states that 
Congress agreed that ``[r]ather than requiring the Commission to adopt 
a formula to establish the price for equipment, the Commission is given 
the authority to choose the best method of accomplishing the goals of 
this legislation.'' We therefore find that it is within our scope of 
authority under the 1992 Cable Act to establish procedural mechanisms 
that encourage reasonable rates through a competitive environment 
rather than a regulatory one.
    36. Finally, we believe that our proposed approach would help to 
fulfill Congress' mandate in the 1996 Act to ``provide for a pro-
competitive, de-regulatory national policy framework designed to 
accelerate rapidly private sector deployment of advanced 
telecommunications and information technologies and services to all 
Americans.'' We believe that adoption of the above procedural 
mechanisms would enhance competition, fostering the deployment of 
innovative technologies and expanded services.
    37. We believe that the above provisions authorize the Commission 
not only to establish regulations duplicating the behavior of a 
competitive market, but to take actions that prompt the evolution of a 
true competitive environment. Based on the record before us, we find 
that failing to establish such procedures would continue existing 
barriers to competitive choice for individuals residing in MDUs. 
Individuals residing in MDUs often are currently limited to receiving 
service from only one provider. Although we recognize that subscriber 
choice would be enhanced by the use of multiple wires, we do not 
believe that requiring MDU owners to permit multiple wires is a viable 
option at this point in time. We believe that the inability of the MDU 
owner to use the existing home run wiring deters consideration of 
alternative providers, and that providing certainty with regard to the 
disposition of the MDU home run wiring provides a reasonable means of 
increasing choice and promoting competition.
    38. We also conclude that, in accordance with the second part of 
section 4(i), the procedural mechanisms we are proposing are not 
inconsistent with any provision of the law. Nothing in the language of 
section 624(i) prohibits the Commission from adopting rules concerning 
wiring outside the subscriber's premises. This is not a circumstance 
where the general canon of statutory construction, the ``specific 
governs the general,'' applies. The courts have found this canon 
applicable only where there ``is an `inescapable conflict' between the 
specific provision

[[Page 46461]]

and the general provision.'' Section 624(i) does not expressly prohibit 
the Commission from adopting rules affecting home run wiring. Thus, we 
tentatively conclude that there is no ``inescapable conflict'' between 
section 624(i) and the procedures discussed below. To the contrary, as 
described above, we believe that the rules we are proposing will 
further promote section 624(i)'s underlying purpose of promoting 
consumer choice and competition by permitting subscribers to use their 
existing home wiring to receive an alternative video programming 
service. Finally, as the Mtel court found, the expressio unius maxim--
that the expression of one is the exclusion of other--`` `has little 
force in the administrative setting,' where we defer to an agency's 
interpretation of a statute unless Congress has `directly spoken to the 
precise question at issue.' '' Indeed, the Mtel court stated: ``[W]e 
think the nature of Congress's auction authorization more supports than 
undermines the Commission's decision here.''
    39. While the legislative history of section 624(i) indicates that 
Congress was concerned about the potential for theft of service and 
signal leakage, we believe that the rules we are proposing would not 
have an adverse impact on those concerns. First, we do not believe that 
the procedural mechanisms we are proposing will increase the frequency 
of service theft; a provider's control over its network security is 
unaffected by our rules. Our proposed rules do not give the MDU owner, 
the alternative service provider or the subscriber access to the 
incumbent's riser cable or lockbox. Second, our proposed rules would 
not affect the service provider's signal leakage responsibilities. It 
would remain the duty of the provider to protect against signal leakage 
while it is providing service, regardless of who owns the home run 
wiring in the building.
    40. We also think that cable operator reliance on the ``Joint Use'' 
provision of the 1996 Act (codified at section 652(d)(2) of the 
Communications Act) as evidence of Congress' intent that cable 
operators retain ownership and control of the home run wiring is 
misplaced. Section 652(d)(2) provides generally that a LEC may obtain 
permission from the cable operator to use that part of the transmission 
facilities extending from the last multi-user terminal to the premises 
of the end user, and that such use must be reasonably limited in scope 
and duration. Cable operators assert that this provision invests them 
with ownership and control of all cable wiring outside the subscriber 
demarcation point, including the home run wiring, even after a 
subscriber terminates service, as Congress otherwise would not have 
established rules allowing cable operators to set the terms and 
conditions for a LEC's use of the facilities.
    41. We disagree. Notably, section 652(d)(2) is entitled ``Joint 
Use,'' indicating Congress'' intent for the provision to govern only 
the joint use of the facilities by a cable operator and a local 
exchange carrier. It is an exception to the general prohibition in 
section 652(c) on joint ventures or partnerships between cable 
operators and LECs that serve the same market area. We believe that 
section 652(d)(2) does not constrain our authority to establish 
procedures governing the disposition of the home run wiring because the 
provision only addresses use of the wiring while the cable operator 
continues to own or use the facilities. Here, the procedural mechanisms 
would not apply until the cable operator has no legally enforceable 
right to remain on the premises and the MDU owner and/or subscriber 
terminates the operator's service.
    42. Additionally, we believe that had Congress intended the ``Joint 
Use'' provision to govern cable wiring, it would have placed the 
provision in section 624, which sets forth the existing wiring 
provisions, rather than in section 652, which concerns telephone 
company-cable television cross-ownership restrictions. We also agree 
with alternative video service providers that Congress would have 
enumerated additional types of potential users of cable operators' 
wiring, other than telephone companies, if it had intended this 
provision to cover uses of the wiring other than the limited situation 
of wiring being shared between a LEC and a cable operator.
    43. We believe that we have authority to apply all our cable inside 
wiring rules to all MVPDs, and not just to cable operators. Section 
303(r) of the Communications Act authorizes the Commission, as required 
by public convenience, interest, or necessity, to promulgate rules and 
restrictions, not inconsistent with law, as may be necessary to carry 
out the provisions of the Act. We believe that applying these rules to 
over-the-air video service providers would be in the public interest. 
The same competitive concerns described above exist regardless of 
whether a cable operator or some other video service provider initially 
installed a subscriber's or an MDU's inside wiring. In addition, we 
believe that applying our cable home wiring rules to MVPDs that are 
radio licensees would not be inconsistent with section 624(i) and would 
further its purposes, since subscribers could use their existing inside 
wiring to receive an alternative service. Further, for similar reasons 
to those discussed above in proposing procedures for disposition of the 
home run wiring in MDUs for cable operators, such procedures would not 
be inconsistent with section 624(i) if applied to MVPDs that are radio 
licensees.
    44. In addition, we tentatively conclude that we have the authority 
under sections 201 to 205 of the Communications Act to extend our cable 
inside wiring rules to common carriers engaged in the transmission of 
video programming. We tentatively conclude that section 4(i) also 
invests the Commission with authority to expand our rules in this 
manner with regard to MVPDs that are neither radio licensees nor common 
carriers. Again, we tentatively conclude that the same competitive 
concerns are present regardless of the type of service provider that 
initially installs the broadband inside wiring. In addition, we 
tentatively conclude that such an extension of our rules is necessary 
in the execution of our functions and is not inconsistent with the 
Communications Act, as described above. To promote parity among 
broadband competitors and to fulfill the directives of the 1992 Cable 
Act and the 1996 Act, we propose to apply our cable inside wiring rules 
to all MVPDs.
vii. Constitutional Arguments
    45. We tentatively conclude that the procedural mechanisms we have 
proposed do not constitute an impermissible ``taking'' under the Fifth 
Amendment. First, there is no forced taking of the incumbent's physical 
property, since the incumbent has a reasonable opportunity to remove, 
abandon, or sell the wiring. If the incumbent fails to act within the 
reasonable periods set forth and its wiring is deemed abandoned, it is 
the operator's failure to act, not the Commission's rule, that would 
extinguish the cable operator's rights. The Fifth Amendment cannot be 
construed to allow a service provider with no contractual or other 
legal right to remain on a person's property to leave its wiring on the 
property indefinitely and prohibit the property owner from using it. In 
addition, there can be no taking of the incumbent's access rights 
because the procedures expressly apply only where the incumbent does 
not have a contractual, statutory or other legal right to maintain its 
wiring on the premises. We seek

[[Page 46462]]

comment on these tentative conclusions.

D. Disposition of Cable Home Wiring

    46. We believe that fostering competitive choice in MDUs requires 
the coordinated disposition of two segments of cable wiring: (1) The 
home run wiring from the point where the wiring becomes devoted to an 
individual unit to the cable demarcation point; and (2) the cable home 
wiring from the demarcation point to the subscriber's television set or 
other customer premises equipment. Without clear and predictable rules 
for the disposition of each of these segments, an alternative 
provider's ability to convince an MDU owner or individual subscriber to 
switch services could be significantly compromised. The procedural 
framework proposed above addressed the disposition of MDU home run 
wiring. Here, we set forth a specific proposal on how to address 
certain issues regarding the disposition of MDU cable home wiring. We 
believe that these rules will promote competition and consumer choice 
by providing a comprehensive and workable framework for the disposition 
of MDU cable wiring.
    47. As in the context of home run wiring, we propose that these 
home wiring procedural mechanisms apply regardless of the identity of 
the incumbent video service provider involved. While initially this 
incumbent would commonly be a cable operator, it could also be a SMATV 
provider, an MMDS provider, a DBS provider or others. We tentatively 
conclude that we have the authority to apply these home wiring rules to 
other video service providers. We request comment on this proposal.
i. Building-by-Building Disposition of Home Wiring
    48. In the Cable Home Wiring Further NPRM, we requested comment on, 
among other issues, whether, in order to promote the goals of section 
624(i) and our rules thereunder, the subscriber (on a non-loop-through 
wiring configuration) or the building owner (with a loop-through wiring 
configuration) should be given the opportunity to purchase the cable 
home wiring when the MDU owner terminates cable service for the entire 
building.
    49. We tentatively conclude that, if the MDU owner has the legal 
right, either by law or by contract, to terminate the subscriber's 
cable service, the owner terminating service for the entire building is 
effectively voluntarily terminating service on the subscribers' behalf. 
We therefore tentatively conclude that our home wiring rules would be 
triggered when an MDU owner terminates service for the entire building. 
We tentatively conclude that providing the cable operator a single 
point of contact (i.e., the MDU owner) would further the statutory 
purposes of minimizing disruption and facilitating the transfer of 
service to a competing video service provider. Because we believe that 
it would be impractical and inefficient for the incumbent provider to 
deal with each individual subscriber regarding the disposition of his 
or her cable home wiring when the entire MDU is switching providers, we 
propose to deem the MDU owner to be acting as the terminating 
``subscriber'' for purposes of the disposition of the cable home wiring 
within the individual dwelling unit where the cable home wiring is not 
already owned by a resident. We request comment on this proposal. 
Similarly, with regard to bulk service contracts, we tentatively 
conclude that it is logical for the landlord to be deemed the 
subscriber, and thus for the landlord to have the right to purchase the 
wiring as provided in our general rules. We tentatively conclude, 
however, that this rule should not override a bulk service contract 
that specifically provides for the disposition of the wiring upon 
termination of the contract.
    50. We propose that, when an MDU owner provides an incumbent 
provider with its minimum of 90 days notice that the incumbent 
provider's access to the entire building will be terminated and that 
the MDU owner seeks to use the home run wiring for another service, the 
incumbent provider must, in accordance with our current home wiring 
rules, (1) offer to sell to the MDU owner any home wiring within the 
individual dwelling units which the incumbent provider owns and intends 
to remove, and (2) provide the MDU owner with the total per-foot 
replacement cost of such home wiring. As with the home run wiring, if 
the MDU owner declines to purchase the cable home wiring not already 
owned by a resident, the alternative service provider could elect to 
purchase it upon service termination under our rules.
    51. We propose to require that the MDU owner decide whether it or 
the alternative provider will purchase the cable home wiring and so 
notify the incumbent provider no later than 30 days before the 
termination of access to the building will become effective. We propose 
to modify our current home wiring rules to allow the incumbent provider 
30 days, rather than the current seven, to remove all of the cable home 
wiring for the entire building. We believe this is appropriate given 
the amount of home wiring that may need to be removed from an entire 
building. We propose that, if the MDU owner and the alternative service 
provider decline to purchase the home wiring, the incumbent provider 
would not be permitted to remove the home wiring until the date of 
actual service termination, i.e., likely 90 days after the building 
owner notified the incumbent that its access to the entire building 
will be terminated. Under these circumstances, we would propose that if 
the incumbent provider fails to remove the home wiring within 30 days 
of actual service termination, it could make no subsequent attempt to 
remove the wiring or restrict its use. We request comment on this 
proposal.
ii. Unit-by-Unit Disposition of Home Wiring
    52. In the unit-by-unit context, we propose to continue to apply 
our rules permitting terminating subscribers (or their agents) to 
purchase the cable home wiring up to a point approximately 12 inches 
outside their individual units. We continue to believe that this is 
consistent with the purposes of section 624(i) to promote consumer 
choice and competition by permitting subscribers to avoid the 
disruption of having their home wiring removed upon voluntary 
termination and to subsequently utilize that wiring for an alternative 
service. We do, however, propose to modify our rules in two ways. 
First, as discussed below, we propose to permit the MDU owner or the 
alternative service provider to purchase the cable home wiring within 
each unit if the subscriber declines, provided that the building owner 
timely notifies the incumbent provider that it or the alternative 
provider wants to purchase the home wiring whenever a subscriber 
declines. Second, we propose to change the time in which an incumbent 
provider must remove the home wiring or make no further effort to use 
it or restrict its use from seven business days to seven calendar days 
after the individual subscriber terminates service. We believe that 
this minor change is sufficient time for removal of a single unit's 
cable home wiring, and will avoid customer confusion by having the time 
permitted for the provider to remove the home wiring within the 
individual unit run concurrently with the time permitted for the 
provider to remove, sell or abandon the home run wiring outside the 
unit.
    53. In the Cable Home Wiring Further NPRM, we requested comment on 
whether the premises owner should have the right to purchase the cable

[[Page 46463]]

home wiring when a subscriber who voluntarily terminates cable service 
does not own the premises and elects not to purchase the wiring. We 
tentatively conclude that an MDU owner should be permitted to purchase 
the wiring within an individual dwelling unit based on the per-foot 
replacement cost if the individual subscriber declines to do so. This 
approach would preserve the current subscriber's rights, and still 
allow the building owner to act on behalf of future tenants, thus 
promoting competition and consumer choice. As with the home run wiring, 
if the MDU owner declines to purchase the cable home wiring, the 
alternative service provider would be permitted to purchase it. Except 
with respect to the building-by-building procedure described above, we 
would not require that the building owner or the alternative provider 
have the opportunity to purchase the wiring before the subscriber has 
the opportunity to do so because we believe that Congress intended for 
section 624(i) to promote individual subscriber choice whenever 
possible. Our preference is therefore for the subscriber to control its 
own home wiring, and only when that is not reasonable or efficient, for 
the building owner or alternative provider to control it.
    54. We propose that the MDU owner should notify the incumbent 
provider of its election to purchase or to allow the alternative 
provider to purchase the home wiring at the same time as the MDU owner 
provides the incumbent provider with 60 days notice that it intends to 
allow head-to-head competition within its building. Thus, the MDU owner 
would be required to inform the incumbent provider one time for the 
entire building. If the MDU owner fails to provide the incumbent with 
such notice, the incumbent would be under no obligation to sell the 
home wiring to the MDU owner or the alternative provider when an 
individual subscriber terminates and declines to purchase the wiring. 
We request comment on this proposal.

E. Alternatives to Procedural Framework

    55. In some cases, there may be room in the molding or conduit for 
an alternative service provider to install its home run wiring without 
interfering with the incumbent's wiring. We propose to permit the 
alternative service provider to install its wiring within the existing 
molding or conduit, even over the incumbent provider's objection, where 
there is room in the molding or conduit and the MDU owner does not 
object. We seek comment on whether and how to allow compensation for 
the alternative service provider's use of the molding or conduit. We 
tentatively conclude that such a rule would promote competition and 
consumer choice and would not constitute a taking of the incumbent 
provider's private property without just compensation under the Fifth 
Amendment. We seek comment on these tentative conclusions. We also seek 
comment on whether and how this rule would apply in the situation where 
an incumbent provider has an exclusive contractual right to occupy the 
molding or conduit.
    56. Several commenters also point out that the current cable 
demarcation point can be physically inaccessible. We tentatively 
conclude that where the cable demarcation point is truly physically 
inaccessible to an alternative service provider (e.g., embedded in 
brick, metal conduit or cinder blocks, not simply within hallway 
molding), the demarcation point should be moved back to the point at 
which it first becomes physically accessible. We seek comment on this 
tentative conclusion and on how to define ``physically inaccessible.'' 
We also seek comment on the percentage of installations in which the 
demarcation point would be deemed physically inaccessible. Finally, we 
seek comment on our authority to adopt, and any other legal 
implications of, this proposed modification.
    57. We also seek comment on whether we should adopt a rule 
requiring video service providers to transfer to the MDU owner upon 
installation ownership of the home wiring and home run wiring installed 
in MDUs under contracts entered into on or after the effective date of 
any rules we may adopt. Such a rule might increase competition and 
consumer choice in future installations by permitting MDU owners to 
control access to the home run wiring from the start. We seek comment 
on the appropriate mechanism for effecting such a transfer, whether the 
price for the wiring should be regulated or left to private 
negotiations, and whether and how our rules should address the issue of 
an MDU owner that does not want to own the home run wiring in its 
building. In addition, we seek comment on our authority to adopt, and 
any other legal implications of, such a rule.
    58. Finally, we seek comment on any other proposals to promote MVPD 
competition and consumer choice in MDUs that have not already been 
previously raised and commented on in the Inside Wiring NPRM and the 
Cable Home Wiring Further NPRM. In particular, we ask commenters to 
address the legal, policy and practical implications of any such 
proposals.

Initial Regulatory Flexibility Act Analysis

    59. As required by section 603 of the Regulatory Flexibility Act, 5 
U.S.C. Sec. 603, (``RFA''), the Commission has prepared an Initial 
Regulatory Flexibility Analysis (``IRFA'') of the expected significant 
impact on small entities by the policies and rules proposed in this 
Further NPRM. Written public comments are requested on the IRFA. These 
comments must be filed in accordance with the same filing procedures as 
other comments in this proceeding, but they must have a separate and 
distinct heading designating them as responses to the IRFA. The 
Secretary shall send a copy of the Further NPRM, including the IRFA to 
the Chief Counsel for Advocacy of the Small Business Administration in 
accordance with section 603(a) of the RFA.

Need for Action and Objectives of the Proposed Rules

    60. This Further NPRM proposes to supplement the cable home wiring 
rules with new procedural mechanisms to provide certainty regarding the 
use of MDU home run wiring upon termination of existing service. In 
addition, we propose to expand our cable inside wiring rules to apply 
to all MVPDs in order to promote parity among competitors.

Legal Basis

    61. This Further NPRM is adopted pursuant to sections 1, 4(i), 201-
205, 303, 623, 624, and 632 of the Communications Act of 1934, as 
amended, 47 U.S.C. Secs. 151, 154(i), 201-205, 303, 543, 544 and 552.

Description and Estimate of the Number of Small Entities Impacted

    62. The RFA directs the Commission to provide a description of and, 
where feasible, an estimate of the number of small entities that will 
be affected by the proposed rules. The RFA defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction,'' and 
the same meaning as the term ``small business concern'' under section 3 
of the Small Business Act. Under the Small Business Act, a ``small 
business concern'' is one which: (1) Is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (``SBA''). The rules we

[[Page 46464]]

propose in this Further NPRM will affect MVPDs and MDU owners.
    63. Small MVPDs: SBA has developed a definition of a small entity 
for cable and other pay television services, which includes all such 
companies generating $11 million or less in annual receipts. This 
definition includes cable system operators, closed circuit television 
services, direct broadcast satellite services, multipoint distribution 
systems, satellite master antenna systems and subscription television 
services. According to the Bureau of the Census, there were 1423 such 
cable and other pay television services generating less than $11 
million in revenue that were in operation for at least one year at the 
end of 1992. We will address each service individually to provide a 
more succinct estimate of small entities.
    64. Cable Systems: The Commission has developed its own definition 
of a small cable company for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide. Based on our most recent information, 
we estimate that there were 1439 cable operators that qualified as 
small cable companies at the end of 1995. Since then, some of those 
companies may have grown to serve over 400,000 subscribers, and others 
may have been involved in transactions that caused them to be combined 
with other cable operators. Consequently, we estimate that there are 
fewer than 1439 small entity cable system operators that may be 
affected by the decisions and rules proposed in this Further NPRM.
    65. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1% of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 61,700,000 
subscribers in the United States. Therefore, we found that an operator 
serving fewer than 617,000 subscribers shall be deemed a small operator 
if its annual revenues, when combined with the total annual revenues of 
all of its affiliates, do not exceed $250 million in the aggregate. 
Based on available data, we find that the number of cable operators 
serving 617,000 subscribers or less totals 1450. Although it seems 
certain that some of these cable system operators are affiliated with 
entities whose gross annual revenues exceed $250,000,000, we are unable 
at this time to estimate with greater precision the number of cable 
system operators that would qualify as small cable operators under the 
definition in the Communications Act.
    66. MMDS: The Commission refined the definition of ``small entity'' 
for the auction of MMDS as an entity that together with its affiliates 
has average gross annual revenues that are not more than $40 million 
for the preceding three calendar years. This definition of a small 
entity in the context of the Commission's Report and Order concerning 
MMDS auctions has been approved by the SBA.
    67. The Commission completed its MMDS auction in March 1996 for 
authorizations in 493 basic trading areas (``BTAs''). Of 67 winning 
bidders, 61 qualified as small entities. Five bidders indicated that 
they were minority-owned and four winners indicated that they were 
women-owned businesses. MMDS is an especially competitive service, with 
approximately 1573 previously authorized and proposed MMDS facilities. 
Information available to us indicates that no MMDS facility generates 
revenue in excess of $11 million annually. We tentatively conclude that 
there are approximately 1634 small MMDS providers as defined by the SBA 
and the Commission's auction rules.
    68. ITFS: There are presently 1,989 licensed educational ITFS 
stations and 97 licensed commercial ITFS stations. Educational 
institutions are included in the definition of a small business. 
However, we do not collect annual revenue data for ITFS licensees and 
are unable to ascertain how many of the 97 commercial stations would be 
categorized as small under the SBA definition. Thus, we tentatively 
conclude that at least 1,989 ITFS licensees are small businesses.
    69. DBS: There are presently nine DBS licensees, some of which are 
not currently in operation. The Commission does not collect annual 
revenue data for DBS and, therefore, is unable to ascertain the number 
of small DBS licensees that could be impacted by these proposed rules. 
Although DBS service requires a great investment of capital for 
operation, we acknowledge that there are several new entrants in this 
field that may not yet have generated $11 million in annual receipts, 
and therefore may be categorized as a small business, if independently 
owned and operated.
    70. HSD: The market for HSD service is difficult to quantify. 
Indeed, the service itself bears little resemblance to other 
multichannel video service providers. HSD owners have access to more 
than 265 channels of programming placed on C-band satellites by 
programmers for receipt and distribution by video service providers, of 
which 115 channels are scrambled and approximately 150 are unscrambled. 
HSD owners can watch unscrambled channels without paying a subscription 
fee. To receive scrambled channels, however, an HSD owner must purchase 
an integrated receiver-decoder from an equipment dealer and pay a 
subscription fee to an HSD programming packager. Thus, HSD users 
include: (1) Viewers who subscribe to a packaged programming service, 
which affords them access to most of the same programming provided to 
subscribers of other video service providers; (2) viewers who receive 
only non-subscription programming; and (3) viewers who receive 
satellite programming services illegally without subscribing. Because 
scrambled packages of programming are most specifically intended for 
retail consumers, these are the services most relevant to this 
discussion.
    71. According to the most recently available information, there are 
approximately 30 program packagers nationwide offering packages of 
scrambled programming to retail consumers. These program packagers 
provide subscriptions to approximately 2,314,900 subscribers 
nationwide. This is an average of about 77,163 subscribers per program 
packager. This is substantially smaller than the 400,000 subscribers 
used in the Commission's definition of a small MSO. Furthermore, 
because this an average, it is likely that some program packagers may 
be substantially smaller.
    72. OVS: The Commission has certified nine open video system 
(``OVS'') operators. Because these services were introduced so recently 
and only one operator is currently offering programming to our 
knowledge, little financial information is available. Bell Atlantic 
(certified for operation in Dover) and Metropolitan Fiber Systems 
(``MFS,'' certified for operation in Boston and New York) have 
sufficient revenues to assure us that they do not qualify as small 
business entities. Two other operators, Residential Communications 
Network (``RCN,'' certified for operation in New York) and RCN/BETG 
(certified for operation in Boston), are MFS affiliates and thus also 
fail to qualify as small business concerns. However, Digital 
Broadcasting Open Video Systems (a general partnership certified for 
operation in southern California), Urban Communications Transport Corp. 
(a corporation certified for operation in New York and Westchester), 
and Microwave Satellite Technologies, Inc.

[[Page 46465]]

(a corporation owned solely by Frank T. Matarazzo and certified for 
operation in New York) are either just beginning or have not yet 
started operations. Accordingly, we tentatively conclude that three OVS 
licensees may qualify as small business concerns.
    73. SMATVs: Industry sources estimate that approximately 5200 SMATV 
operators were providing service as of December 1995. Other estimates 
indicate that SMATV operators serve approximately 1.05 million 
residential subscribers as of September 1996. The ten largest SMATV 
operators together pass 815,740 units. If we assume that these SMATV 
operators serve 50% of the units passed, the ten largest SMATV 
operators serve approximately 40% of the total number of SMATV 
subscribers. Because these operators are not rate regulated, they are 
not required to file financial data with the Commission. Furthermore, 
we are not aware of any privately published financial information 
regarding these operators. Based on the estimated number of operators 
and the estimated number of units served by the largest ten SMATVs, we 
tentatively conclude that a substantial number of SMATV operators 
qualify as small entities.
    74. LMDS: Unlike the above pay television services, LMDS technology 
and spectrum allocation will allow licensees to provide wireless 
telephony, data, and/or video services. An LMDS provider is not limited 
in the number of potential applications that will be available for this 
service. Therefore, the definition of a small LMDS entity may be 
applicable to both cable and other pay television (SIC 4841) and/or 
radiotelephone communications companies (SIC 4812). The SBA definition 
for cable and other pay services is defined above. A small 
radiotelephone entity is one with 1500 employees or less. For the 
purposes of this proceeding, we include only an estimate of LMDS video 
service providers. The vast majority of LMDS entities providing video 
distribution could be small businesses under the SBA's definition of 
cable and pay television (SIC 4841). However, in the LMDS Second Report 
and Order, we defined a small LMDS provider as an entity that, together 
with affiliates and attributable investors, has average gross revenues 
for the three preceding calendar years of less than $40 million. We 
have not yet received approval by the SBA for this definition.
    75. There is only one company, CellularVision, that is currently 
providing LMDS video services. Although the Commission does not collect 
data on annual receipts, we assume that CellularVision is a small 
business under both the SBA definition and our proposed auction rules. 
We tentatively conclude that a majority of the potential LMDS licensees 
will be small entities, as that term is defined by the SBA.
    76. MDU Operators: The SBA has developed definitions of small 
entities for operators of nonresidential buildings, apartment buildings 
and dwellings other than apartment buildings, which include all such 
companies generating $5 million or less in revenue annually. According 
to the Census Bureau, there were 26,960 operators of nonresidential 
buildings generating less than $5 million in revenue that were in 
operation for at least one year at the end of 1992. Also according to 
the Census Bureau, there were 39,903 operators of apartment dwellings 
generating less than $5 million in revenue that were in operation for 
at least one year at the end of 1992. The Census Bureau provides no 
separate data regarding operators of dwellings other than apartment 
buildings, and we are unable at this time to estimate the number of 
such operators that would qualify as small entities.

Reporting, Recordkeeping, and Other Compliance Requirements

    77. The Further NPRM proposes rules to require that, upon 
termination of existing service, the MDU operator must provide the 
incumbent service provider with notice of termination of the 
incumbent's access to the building or of the owner's wish to permit 
head-to-head competition for individual home run wires. The MDU 
operator would have the option of either purchasing the wiring or 
allowing the alternative provider to purchase it. The incumbent service 
provider would be required to elect to sell, remove or abandon its home 
run wiring and would have to complete its sales negotiations or remove 
its wiring within the time schedule provided herein or be deemed to 
have abandoned its wiring. The Commission's inside wiring rules would 
also be expanded to apply to all MVPDs.
    78. The Further NPRM requests comment on the adoption of penalties 
for incumbent MVPDs that elect to remove their MDU home run wiring upon 
termination of service and then fail to do so. Incumbent providers may 
choose to maintain records to prove their compliance with the rules 
regarding disposition of home run wiring, but we do not believe that 
they will need additional professional skills to maintain such records 
and we propose no requirement for such recordkeeping.
    79. The Further NPRM proposes a rule requiring video service 
providers to transfer ownership of MDU home run wiring to the MDU owner 
upon installation. Video service providers may choose to maintain 
records of the home run wiring subject to such a rule, but we do not 
believe that they will need additional professional skills to maintain 
such records and we propose no requirement for such recordkeeping.
    Steps Taken to Minimize Significant Economic Impact on Small 
Entities and Significant Alternatives Considered: None. However, any 
significant alternatives presented in the comments will be considered.
    Federal Rules That May Duplicate, Overlap, or Conflict with the 
Proposed Rules: None.

Paperwork Reduction Act of 1995 Analysis

    80. The requirements proposed in this Further NPRM have been 
analyzed with respect to the Paperwork Reduction Act of 1995 (the 
``1995 Act'') and would impose new and modified information collection 
requirements on the public. The Commission, as part of its continuing 
effort to reduce paperwork burdens, invites the general public to take 
this opportunity to comment on the proposed information collection 
requirements contained in this Further NPRM, as required by the 1995 
Act. Public comments are due September 25, 1997. Comments should 
address: (1) Whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information would have practical 
utility; (2) the accuracy of the Commission's burden estimates; (3) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (4) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    81. Written comments by the public on the proposed new and modified 
information collection requirements are due September 25, 1997. 
Comments should be submitted to Judy Boley, Federal Communications 
Commission, Room 234, 1919 M Street, N.W., Washington, D.C. 20554, or 
via the Internet to [email protected]. For additional information on the 
proposed information collection requirements, contact Judy Boley at 
202-418-0214 or via the Internet at the above address.

[[Page 46466]]

Procedural Provisions

    82. Ex parte Rules--``Permit-but-Disclose'' Proceeding. This 
proceeding will be treated as a ``permit-but-disclose'' proceeding 
subject to the ``permit-but-disclose'' requirements under section 
1.1206(b) of the rules. 47 CFR 1.1206(b), as revised. Ex parte 
presentations are permissible if disclosed in accordance with 
Commission rules, except during the Sunshine Agenda period when 
presentations, ex parte or otherwise, are generally prohibited. Persons 
making oral ex parte presentations are reminded that a memorandum 
summarizing a presentation must contain a summary of the substance of 
the presentation and not merely a listing of the subjects discussed. 
More than a one or two sentence description of the views and arguments 
presented is generally required. See 47 CFR 1.1206(b)(2), as revised. 
Additional rules pertaining to oral and written presentations are set 
forth in section 1.1206(b).
    83. Filing of Comments and Reply Comments. Pursuant to applicable 
procedures set forth in Sections 1.415 and 1.419 of the Commission's 
Rules, 47 CFR 1.415 and 1.419, interested parties may file comments on 
or before September 25, 1997 and reply comments on or before October 2, 
1997. To file formally in this proceeding, you must file an original 
plus four copies of all comments, reply comments, and supporting 
comments. If you want each Commissioner to receive a personal copy of 
your comments and reply comments, you must file an original plus nine 
copies. You should send comments and reply comments to Office of the 
Secretary, Federal Communications Commission, 1919 M Street, N.W., 
Washington, D.C. 20554. Comments and reply comments will be available 
for public inspection during regular business hours in the FCC 
Reference Center, Room 239, Federal Communications Commission, 1919 M 
Street N.W., Washington D.C. 20554.
    84. Written comments by the public on the proposed and/or modified 
information collections are due September 25, 1997. Written comments 
must be submitted by the Office of Management and Budget (``OMB'') on 
the proposed and/or modified information collections on or before 
November 3, 1997. In addition to filing comments with the Secretary, a 
copy of any comments on the information collections contained herein 
should be submitted to Judy Boley, Federal Communications Commission, 
Room 234, 1919 M Street, N.W., Washington, DC 20554, or via the 
Internet to [email protected] and to Timothy Fain, OMB Desk Officer, 10236 
NEOB, 725--17th Street, N.W., Washington, DC 20503 or via the Internet 
to [email protected].

Ordering Clauses

    85. It is ordered that, pursuant to sections 1, 4(i), 201-205, 303, 
623, 624 and 632 of the Communications Act of 1934, as amended, 47 
U.S.C. Secs. 151, 154(i), 201-205, 303, 543, 544 and 552, notice is 
hereby given of proposed amendments to Part 76, in accordance with the 
proposals, discussions and statements of issues in this Further Notice 
of Proposed Rulemaking, and that comment is sought regarding such 
proposals, discussions and statements of issues.
    86. It is further ordered that the Commission shall send a copy of 
this Further Notice of Proposed Rulemaking, including the Initial 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission
William F. Caton,
Acting Secretary.

Proposed Rule Changes

    Part 76 of title 47 of the Code of Federal Regulations is proposed 
to be amended as follows:

PART 76--CABLE TELEVISION SERVICE

    1. The authority citation for Part 76 would continue to read as 
follows:

    Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533, 
534, 535, 536, 537, 543, 544, 544a, 545, 548, 552, 554, 556, 558, 
560, 561, 571, 572, 573.

    2. Section 76.5 is proposed to be amended by revising paragraph 
(mm)(2) to read as follows:


Sec. 76.5  Definitions.

* * * * *
    (mm) * * *
    (2) For new and existing multiple dwelling unit installations with 
non-loop-through wiring configurations, the demarcation point shall be 
a point at or about twelve inches outside of where the cable wire 
enters the subscriber's dwelling unit, or, where the wire is physically 
inaccessible at such point, as close as practicable thereto so as to 
permit access to the cable home wiring.
* * * * *
    3. Section 76.802 is proposed to be amended by revising paragraph 
(a) and paragraph (g) by removing the word ``business'', and by adding 
new paragraphs (l), (m) and (n) to read as follows:


Sec. 76.802  Disposition of cable home wiring.

    (a) (1) Upon voluntary termination of cable service by a subscriber 
in a single unit dwelling, a cable operator shall not remove the cable 
home wiring unless it gives the subscriber the opportunity to purchase 
the wiring at the replacement cost, and the subscriber declines. If the 
subscriber declines to purchase the cable home wiring, the cable system 
operator must then remove the cable home wiring within seven days of 
the subscriber's decision, under normal operating conditions, or make 
no subsequent attempt to remove it or to restrict its use.
    (2) Upon voluntary termination of cable service by an individual 
subscriber in a multiple dwelling unit building, a cable operator shall 
not remove the cable home wiring unless it gives the subscriber the 
opportunity to purchase the wiring at the replacement cost, the 
subscriber declines, and the owner of the multiple dwelling unit 
building's common areas (referred to herein as the ``MDU owner'') has 
not previously elected to purchase or have the alternative MVPD 
purchase the cable home wiring when a subscriber declines, as provided 
in paragraph (l) hereof. If the subscriber declines to purchase the 
cable home wiring, and, the MDU owner has not elected to purchase or 
have the alternative MVPD purchase the cable home wiring, the cable 
system operator must then remove the cable home wiring within seven 
days of the subscriber's decision, under normal operating conditions, 
or make no subsequent attempt to remove it or to restrict its use.
    (3) Upon voluntary termination of cable service for an entire 
multiple dwelling unit building by the MDU owner, a cable operator 
shall not remove the cable home wiring unless it gives the MDU owner 
the opportunity to purchase the wiring at the replacement cost, and the 
MDU owner declines either to purchase the wiring or to allow the 
alternative MVPD to purchase the wiring. If the MDU owner declines to 
purchase or have the alternative MVPD purchase the cable home wiring, 
the cable system operator must then remove the cable home wiring no 
later than 30 days, under normal operating conditions, after it is 
notified of the MDU owner's decision, or make no subsequent attempt to 
remove it or to restrict its use.
    (4) The cost of the cable home wiring is to be based on the 
replacement cost

[[Page 46467]]

per foot of the wiring on the subscriber's side of the demarcation 
point multiplied by the length in feet of such wiring, and the 
replacement cost of any passive splitters located on the subscriber's 
side of the demarcation point.
* * * * *
    (l) If a subscriber who is not the owner of the premises terminates 
service and declines to purchase the cable home wiring under this 
section, the owner of the multiple dwelling unit building's common 
areas (referred to herein as the ``MDU owner'') may purchase it under 
the same terms and conditions provided in subsection (a) hereof, 
provided that the MDU owner notified the cable system operator of its 
desire to purchase the cable home wiring in the event the subscriber 
declines. Such notification must occur no later than the time at which 
the MDU owner provides the incumbent MVPD 60 days' notice of the MDU 
owner's intention to invoke the procedure set forth in Section 
76.804(b).
    (m) Where an entire multiple dwelling unit building is switching 
service providers, the MDU owner shall be permitted to exercise the 
rights of individual subscribers for purposes of the disposition of the 
cable home wiring under this section. If the MDU owner declines to 
purchase the cable home wiring, the MDU owner may allow the alternative 
provider to purchase it upon service termination under this section.
    (n) This section shall apply to all multichannel video programming 
distributors, as that term is defined in Section 602(13) of the 
Communications Act, 47 U.S.C. Sec. 522(13), in the same manner as it 
applies to cable operators.
    4. Section 76.804 is proposed to be added to read as follows:


Sec. 76.804  Disposition of home run wiring.

    (a) Building-by-building disposition of home run wiring: (1) Where 
an MVPD owns the home run wiring in a multiple dwelling unit building 
(``MDU'') and does not (or will not at the conclusion of the notice 
period) have a legally enforceable right to remain on the premises 
against the wishes of the entity that owns the common areas of the MDU 
(``the MDU owner''), the MDU owner may give the MVPD a minimum of 90 
days' notice that its access to the entire building will be terminated. 
The MVPD will then have 30 days to elect, for all the home run wiring 
inside the MDU building: (i) To remove the wiring and restore the MDU 
building to its prior condition by the end of the 90-day notice period; 
(ii) to abandon and not disable the wiring at the end of the 90-day 
notice period; or (iii) to sell the wiring to the MDU building owner. 
If the incumbent provider elects to remove or abandon the wiring, and 
it intends to terminate service before the end of the 90-day notice 
period, the incumbent provider shall notify the MDU owner at the time 
of this election of the date on which it intends to terminate service. 
If the MDU owner refuses to purchase the home run wiring, an 
alternative provider that has been authorized to provide service to the 
MDU by the MDU owner may negotiate to purchase the wiring. For purposes 
of this section, ``home run wiring'' shall refer to the wiring from the 
point at which the MVPD's wiring becomes devoted to an individual 
subscriber to the demarcation point.
    (2) If the parties negotiate a price for the home run wiring, they 
shall have 30 days from the date of election to negotiate a price. If 
the parties are unable to agree on a price, the incumbent must elect 
one of the other two options (i.e., abandonment or removal) and notify 
the MDU owner at the time of this election if and when it intends to 
terminate service before the end of the 90-day notice period. If the 
incumbent service provider elects to abandon its wiring at this point, 
the abandonment shall become effective at the end of the 90-day notice 
period or upon service termination, whichever occurs first. If the 
incumbent elects to remove its wiring and restore the building to its 
prior condition, it must do so by the end of the 90-day notice period. 
If the incumbent fails to comply with any of the deadlines established 
herein, it shall be deemed to have elected to abandon its home run 
wiring at the end of the 90-day notice period.
    (b) Unit-by-unit disposition of home run wiring: (1) Where an MVPD 
owns the home run wiring in an MDU and does not (or will not at the 
conclusion of the notice period) have a legally enforceable right to 
maintain any particular home run wire dedicated to a particular unit on 
the premises against the MDU owner's wishes, an MDU owner may permit 
multiple MVPDs to compete for the right to use the individual home run 
wires dedicated to each unit. The MDU owner must provide 60 days' 
notice to the incumbent MVPD of the MDU owner's intention to invoke 
this procedure. The incumbent MVPD will then have 30 days to provide a 
single written election to the MDU owner and the competing MVPD(s) 
whether, for each and every one of its home run wires dedicated to a 
subscriber who chooses an alternative provider's service, the incumbent 
MVPD will:
    (i) Remove the wiring and restore the MDU building to its prior 
condition;
    (ii) Abandon the wiring without disabling it; or
    (iii) sell the wiring to the MDU owner. If the MDU owner refuses to 
purchase the home run wiring, the alternative provider may purchase it. 
The alternative provider(s) will be required to make a similar election 
within this 30-day period for each home run wire solely dedicated to a 
subscriber who switches back from the alternative provider to the 
incumbent MVPD.
    (2) When an existing MVPD is notified either orally or in writing 
that a subscriber wishes to terminate service and that another service 
provider intends to use the existing home run wire to provide service 
to that particular subscriber, an existing provider that has elected to 
remove its home run wiring will have seven days to remove its home run 
wiring and restore the building to its prior condition. If the existing 
provider has elected to abandon or sell the wiring, the abandonment or 
sale will become effective seven days from the date it received the 
request for service termination or upon actual service termination, 
whichever occurs first. If the incumbent provider intends to terminate 
service prior to the end of the seven-day period, the incumbent shall 
inform the party requesting service termination, at the time of such 
request, of the date on which service will be terminated. The incumbent 
provider shall make the home run wiring accessible to the alternative 
provider by the end of the seven-day period or within 24 hours of 
actual service termination, whichever occurs first.
    (3) If the incumbent provider fails to comply with any of the 
deadlines established herein, the home run wiring shall be considered 
abandoned and the alternative provider shall be permitted to use the 
home run wiring immediately to provide service. The alternative 
provider or the MDU owner may act as the subscriber's agent in 
providing notice of a subscriber's desire to change services. If a 
subscriber's service is terminated without notifying the incumbent 
provider that the subscriber wishes to use the home run wiring to 
receive an alternative service, the incumbent provider will not be 
required to carry out its election to sell, remove or abandon the home 
run wiring; the incumbent provider will be required to carry out its 
election, however, if and when it receives notice that a subscriber 
wishes to use the home run wiring to receive an alternative service. 
Section 76.802 of our rules regarding the disposition of cable home 
wiring will apply where a subscriber's service is terminated without 
notifying the incumbent provider that the subscriber

[[Page 46468]]

wishes to use the home run wiring to receive an alternative service.
    (4) The parties shall cooperate to ensure as seamless a transition 
as possible for the subscriber.
    (5) Section 76.802 of our rules regarding the disposition of cable 
home wiring will continue to apply to the wiring on the subscriber's 
side of the cable demarcation point.
    5. Section 76.805 is proposed to be added to read as follows:


Sec. 76.805  Access to molding and conduits

    An multichannel video service provider (``MVPD'') shall be 
permitted to install one or more home run wires in an existing molding 
or conduit where:
    (a) Sufficient space is present to permit the installation;
    (b) The installation will not interfere with the ability of an 
existing MVPD to provide service; and
    (c) The owner of the multiple dwelling unit building does not 
object to such installation.

[FR Doc. 97-23303 Filed 9-2-97; 8:45 am]
BILLING CODE 6712-01-P