[Federal Register Volume 62, Number 220 (Friday, November 14, 1997)]
[Rules and Regulations]
[Pages 61016-61034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29514]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

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


Inside Wiring

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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

SUMMARY: The Commission has adopted a Report and Order and Second 
Further Notice of Proposed Rulemaking which addresses rules and 
policies concerning cable inside wiring. The Second Further Notice of 
Proposed Rulemaking segment of this decision may be found elsewhere in 
this issue of the Federal Register. The Report and Order (``Order'') 
segment amends the Commission's regulations relating to the disposition 
of cable home wiring and establishes regulations for the disposition of 
home run wiring and related issues including the sharing of molding, 
the demarcation point for multiple dwelling unit buildings (``MDUs''), 
loop-through cable wiring configurations, customer access to cable home 
wiring before termination of service, and signal leakage. This action 
was necessary because competition is currently being deterred by 
disputes over control and use of the wires necessary to reach each unit 
in an MDU. The intended effect of this action is to expand 
opportunities for new entrants seeking to compete in distributing video 
programming and to broaden consumers' ability to install and maintain 
their own wiring.

DATES: Amendments in Secs. 76.613, 76.802 and 76.804 contain 
information collection requirements, and will not become effective 
until approved by the Office of Management and Budget (``OMB''). 
Amendments in Secs. 76.5, 76.620, 76.800, 76.805 and 76.806 become 
effective December 15, 1997. However, compliance with amendments in 
Secs. 76.5, 76.620, 76.800, 76.805 and 76.806 will not be required 
until OMB approval of the information collection requirements in 
Secs. 76.613, 76.802 and 76.804. When approval is received, the 
Commission will publish a document announcing the effective date of the 
amendments in Secs. 76.613, 76.802 and 76.804, and the date of 
compliance for the amendments in Secs. 76.5, 76.620, 76.800, 76.805 and 
76.806.
    Written comments by the public on the modified information 
collections are due on or before January 13, 1998.

ADDRESSES: A copy of any comments on the information collections 
contained herein should be submitted to Judy Boley, Federal 
Communications Commission, Room 234, 1919 M Street, NW, Washington, DC 
20554, or via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Rick Chessen, Cable Services Bureau, 
(202) 418-7200. For additional information concerning the information 
collections contained herein, contact Judy Boley at 202-418-0214, or 
via the Internet at [email protected].

Paperwork Reduction Act

    The Order contains modified information collection requirements. 
The Federal Communications Commission, as part of its continuing effort 
to reduce paperwork burdens, invites the general public and other 
Federal agencies to take this opportunity to comment on the following 
information collection, as required by the Paperwork Reduction Act of 
1995, Public Law 104-13. Comments should address: (a) whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the Commission, including whether the 
information shall have practical utility; (b) the accuracy of the 
Commission's burden estimates; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology.
    OMB Approval Number: 3060-0692.
    Title: Cable Inside Wiring Provisions.
    Type of Review: Revision of a currently approved collection.
    Respondents: Individuals; Businesses or other for-profit entities.
    Number of Respondents: 30,500 (20,500 MVPDs and 10,000 MDU owners).
    Estimated Time Per Response: 5 minutes to 30 minutes.
    Total Annual Burden to Respondents: 46,114 hours, calculated as 
follows: This collection (3060-0692) accounts for all information 
collection requirements that may come into play during the disposition 
of cable home wiring in single dwelling units, as well as the 
disposition of home run wiring and cable home wiring in multiple 
dwelling units. All multichannel video programming distributors 
(``MVPDs''), both cable and non-cable alike, will be subject to the 
disposition rules in MDUs. Pursuant to the Paperwork Reduction Act, 
when modifying only portions of an information collection, agencies are 
still obligated to put forth the entire collection for public comment.
    This information collection also now accounts for information 
collection stated in 47 CFR 76.613, where MVPDs causing harmful signal 
interference may be required by the Commission's District Director and/
or Resident Agent to prepare and submit a report regarding the cause(s) 
of the interference, corrective measures planned or taken, and the 
efficacy of the remedial measures. Through the course of this 
rulemaking proceeding, the Commission

[[Page 61017]]

has identified this information collection requirement as not having 
previously been reported to OMB for approval. We estimate that no more 
than 10 interference reports will be submitted annually to the 
Commission's District Director and/or Resident Agent, each having an 
average burden of 2 hours to prepare. (10 reports  x  2 hours = 20 
hours).
    47 CFR 76.620 applies the Commission's signal leakage rules to all 
non-cable MVPDs. Our rules require that each cable system perform an 
independent signal leakage test annually, therefore, non-cable MVPDs 
will now be subject to the same requirement. We recognize, however, 
that immediate compliance with these requirements may present hardships 
to existing non-cable MVPDs not previously subject to such rules. We 
will allow a five-year transition period from the effective date of 
these rules to afford non-cable MVPDs time to comply with our signal 
leakage rules other than Sec. 76.613. The transition period will apply 
only to systems of those non-cable MVPDs that have been substantially 
built as of January 1, 1998. Considering non-cable MVPD systems that 
will be built after January 1, 1998, we estimate that 500 new entities 
will be subject to signal leakage filing requirements, with an 
estimated burden of 20 hours per entity. (500 systems  x  20 hours = 
10,000 hours). 47 CFR 76.802, Disposition of Cable Home Wiring, gives 
individual video service subscribers in single unit dwellings and MDUs 
the opportunity to purchase their cable home wiring at replacement cost 
upon voluntary termination of service. In calculating hour burdens for 
notifying individual subscribers of their purchase rights, we make the 
following assumptions: There are approximately 20,000 MVPDs serving 
approximately 72 million subscribers in the United States. The average 
rate of churn (subscriber termination) for all MVPDs is estimated to be 
1% per month, or 12% per year. MVPDs own the home wiring in 50% of the 
occurrences of voluntary subscriber termination and subscribers or 
property owners already have gained ownership of the wiring in the 
other 50% of occurrences (e.g., where the MVPD has charged the 
subscriber for the wiring upon installation, has treated the wiring as 
belonging to the subscriber for tax purposes, or where state and/or 
local law treats cable home wiring as a fixture). Where MVPDs own the 
wiring, we estimate that they intend to actually remove the wiring 5% 
of the time, thus initiating the disclosure requirement. We believe in 
most cases that MVPDs will choose to abandon the home wiring because 
the cost and effort required to remove the wiring generally outweigh 
its value. The burden to disclose the information at the time of 
termination will vary depending on the manner of disclosure, e.g., by 
telephone, customer visit or registered mail. Virtually all voluntary 
service terminations are done by telephone. The estimated average time 
consumed in the process of the MVPD's disclosure and subscriber's 
election is 5 minutes (.083 hours). Estimated annual number of 
occurrences is 72,000,000  x  12%  x  50%  x  5% = 216,000. (216,000 
x  .083 hours = 17,928 hours).
    In addition, 47 CFR 76.802 states that if a subscriber in an MDU 
declines to purchase the wiring, the MDU owner or alternative provider 
(where permitted by the MDU owner) may purchase the home wiring where 
reasonable advance notice has been provided to the incumbent. According 
to the Statistical Abstracts of the United States, 1995 at 733 Table 
No. 1224, over 28 million people resided in MDUs with three or more 
units in 1993. We therefore estimate that there are currently 30 
million MDU residents and that MDUs house an average of 50 residents, 
and so we estimate that there are approximately 600,000 MDUs in the 
United States. We estimate that 2,000 MDU owners will provide advance 
notice to the incumbent that the MDU owner or alternative provider 
(where permitted by the MDU owner) will purchase the home wiring where 
a terminating individual subscriber declines. The estimated average 
time for MDU owners to provide such notice is estimated to be 15 
minutes (.25 hours). The estimated average time consumed in the process 
of the MVPD's subsequent disclosure and the MDU owner or alternative 
provider's election is 5 minutes (.083 hours). Estimated annual time 
consumed is 2,000 notifications  x  .333 hours = 666 hours. 47 CFR 
76.802 also states that, to inform subscribers of per-foot replacement 
costs, MVPDs may develop replacement cost schedules based on readily 
available information; if the MVPD chooses to develop such schedules, 
it must place them in a public file available for public inspection 
during regular business hours. We estimate that 50% of MVPDs will 
develop such cost schedules to place in their public files. Virtually 
all individual subscribers terminate service via telephone, and few 
subscribers are anticipated to review cost schedules on public file. 
The annual recordkeeping burden for these cost schedules is estimated 
to be 0.5 hours per MVPD. (20,000 MVPDs  x  50%  x  0.5 hours = 5,000 
hours).
    47 CFR 76.804 Disposition of Home Run Wiring. We estimate the 
burden for notification and election requirements for building-by-
building and unit-by-unit disposition of home run wiring as described 
below. Note that these requirements apply only when an MVPD owns the 
home run wiring in an MDU and does not (or will not at the conclusion 
of the notice period) have a legally enforceable right to remain on the 
premises against the wishes of the entity that owns or controls the 
common areas of the MDU or have a legally enforceable right to maintain 
any particular home run wire dedicated to a particular unit on the 
premises against the MDU owner's wishes. We use the term ``MDU owner'' 
to include whatever entity owns or controls the common areas of an 
apartment building, condominium or cooperative. For building-by-
building disposition of home run wiring, the MDU owner gives the 
incumbent service provider a minimum of 90 days' written notice that 
its access to the entire building will be terminated. The incumbent 
then has 30 days to elect what it will do with the home run wiring. 
Where parties negotiate a price for the wiring and are unable to agree 
on a price, the incumbent service provider must elect among 
abandonment, removal of the wiring, or arbitration for a price 
determination. Also, regarding cable home wiring, when the MDU owner 
notifies the incumbent service provider that its access to the building 
will be terminated, the incumbent provider must, within 30 days of the 
initial notice and in accordance with our home wiring rules, (1) offer 
to sell to the MDU owner any home wiring within the individual dwelling 
units which the incumbent provider owns and intends to remove, and (2) 
provide the MDU owner with the total per-foot replacement cost of such 
home wiring. The MDU owner must then notify the incumbent provider as 
to whether the MDU owner or an alternative provider intends to purchase 
the home wiring not later than 30 days before the incumbent's access to 
the building will be terminated.
    For unit-by-unit disposition of home run wiring, an MDU owner must 
provide at least 60 days' written notice to the incumbent MVPD that it 
intends to permit multiple MVPDs to compete for the right to use the 
individual home run wires dedicated to each unit. The incumbent service 
provider then has 30 days to provide the MDU owner with a written 
election as to whether, for all of the incumbent's home run wires

[[Page 61018]]

dedicated to individual subscribers who may later choose the 
alternative provider's service, it will remove the wiring, abandon the 
wiring, or sell the wiring to the MDU owner. In other words, the 
incumbent service provider will be required to make a single election 
for how it will handle the disposition of individual home run wires 
whenever a subscriber wishes to switch service providers; that election 
will then be implemented each time an individual subscriber switches 
service providers. Where parties negotiate a price for the wiring and 
are unable to agree on a price, the incumbent service provider must 
elect among abandonment, removal of the wiring, or arbitration for a 
price determination. The MDU owner also must provide reasonable advance 
notice to the incumbent provider that it will purchase, or that it will 
allow an alternative provider to purchase, the cable home wiring when a 
terminating individual subscriber declines. If the alternative provider 
is permitted to purchase the wiring, it will be required to make a 
similar election during the initial 30-day notice period for each 
subscriber who switches back from the alternative provider to the 
incumbent MVPD.
    According to the Statistical Abstracts of the United States, 1995 
at 733 Table No. 1224, over 28 million people resided in MDUs with 
three or more units in 1993. We therefore estimate that there are 
currently 30 million MDU residents and that MDUs house an average of 50 
residents, and so we estimate that there are approximately 600,000 MDUs 
in the United States. In many instances, incumbent service providers 
may no longer own the home run wiring or may continue to have a legally 
enforceable right to remain on the premises. Also, MDU owners may 
forego the notice and election processes for various other reasons, 
e.g., they have no interest in purchasing the home run or cable home 
wiring. We estimate that there will be approximately 12,500 notices and 
12,500 elections made on an annual basis. The number of notices 
accounts for the occasions when the MDU owner simultaneously notifies 
the incumbent provider that: (1) It is invoking the home run wiring 
disposition procedures, and (2) whether the MDU owner or alternative 
provider intends to purchase the cable home wiring. It also accounts 
for those occasions when the MDU owner makes a separate notification 
regarding the purchase of cable home wiring. The number of elections 
accounts for instances when the incumbent elects to sell the wiring but 
the parties are unable to agree on a price, therefore necessitating a 
second election. We assume all notifications and elections (except when 
an individual subscriber is terminating service) will be in writing and 
take an average burden of 30 minutes (0.5 hours) to prepare. (25,000 
notifications and elections  x  0.5 hours = 12,500 hours).
    Total Annual Cost to Respondents: $37,510, estimated as follows: 
Under the annual operation and maintenance costs category, we estimate 
that stationery and postage costs for interference reports submitted to 
the Commission pursuant to Sec. 76.613 to be $1 per report. (10 reports 
 x  $1 = $10). We estimate stationery and postage costs for signal 
leakage filings to be $1 per filing. (500 filings  x  $1 = $500). We 
estimate that 50% of the 20,000 MVPDs will annually develop cost 
schedules. We estimate recordkeeping expenses for these schedules to be 
$1 per MVPD. (20,000  x  50%  x  $1 = $10,000). We estimate stationery 
and postage costs for the various disposition notifications and 
elections to be $1 per occurrence. (27,000 notifications and elections 
x  $1 = $27,000). There are no estimated capital and start-up costs.
    Needs and Uses: The various notification and election requirements 
in this collection (3060-0692) are set forth in order to promote 
competition and consumer choice by minimizing any potential disruption 
in service to a subscriber switching video providers.

SUPPLEMENTARY INFORMATION: The following is a synopsis of the 
Commission's Report and Order in CS Docket No. 95-184 and MM Docket No. 
92-260, FCC No. 97-376, adopted October 9, 1997 and released October 
17, 1997. The full text of this decision is available for inspection 
and copying during normal business hours in the FCC Reference Center 
(Room 239), 1919 M Street, NW, Washington, DC 20554, and may be 
purchased from the Commission's copy contractor, International 
Transcription Services, Inc. (202) 857-3800 (phone), (202) 857-3805 
(fax), 1231 20th Street, NW, Washington, DC 20036.

Synopsis

I. Introduction

    The Order addresses the issues raised in the Notice of Proposed 
Rulemaking in CS Docket No. 95-184, 61 FR 3657 (February 1, 1996) 
(``Inside Wiring Notice''), the Order On Reconsideration and Further 
Notice of Proposed Rulemaking in MM Docket No. 92-260, 61 FR 6131 
(February 16, 1996) and 61 FR 6210 (February 16, 1996) (``Cable Home 
Wiring Further Notice''), and the Further Notice of Proposed Rulemaking 
in CS Docket No. 95-184 and MM Docket No. 92-260, 62 FR 46453 
(September 3, 1997) (``Inside Wiring Further Notice'') regarding 
potential changes in our telephone and cable inside wiring rules in 
light of the evolving telecommunications marketplace.

II. Disposition of Home Run Wiring

    1. We believe that one of the primary competitive problems in MDUs 
is the difficulty for some service providers to obtain access to the 
property for the purpose of running additional home run wires to 
subscribers' units. Home run wiring is defined as the wiring from the 
point at which it becomes dedicated to an individual unit in an MDU to 
the cable demarcation point. The record indicates that MDU property 
owners often object to the installation of multiple home run wires in 
the hallways of their properties, for reasons including aesthetics, 
space limitations, the avoidance of disruption and inconvenience, and 
the potential for property damage. Incumbents often refuse to sell the 
home run wiring to the new provider or to cooperate in any transition. 
The result, regardless of the cable operators' motives, is to chill the 
competitive environment.
    2. In the Order, we establish procedures for building-by-building 
disposition of the home run wiring (where the MDU owner decides to 
convert the entire building to a new video service provider) and for 
unit-by-unit disposition of the home run wiring (where an MDU owner is 
willing to permit two or more video service providers to compete for 
subscribers on a unit-by-unit basis) where the MDU owner wants the 
alternative provider to be able to use the existing home run wiring. We 
believe that our procedural mechanisms will not create or destroy any 
property rights, but will promote competition and consumer choice by 
bringing order and certainty to the disposition of the MDU home run 
wiring upon termination of service. We clarify that riser cable is not 
covered by the following procedures.

A. Building-by-Building Procedures

    3. We adopt the following procedures for building-by-building 
disposition of home run wiring. Where the incumbent service provider 
owns the home run wiring in an MDU and does not (or will not at the 
conclusion of the notice period) have a legally enforceable right to 
remain on the premises, and the MDU owner wants to be able to use the 
existing home run wiring for service

[[Page 61019]]

from another provider, the MDU owner may give the incumbent service 
provider a minimum of 90 days' written notice that the provider's 
access to the entire building will be terminated. By adopting this 
procedural mechanism, we do not intend to affect any contractual rights 
the parties may have to terminate service in a different manner. We 
believe that it is reasonable to require, and thus our rules will 
require, that MDU owners that wish to avail themselves of these 
procedures notify the incumbent providers of termination of service for 
the entire building in writing. The incumbent provider will have 30 
days to notify the MDU owner in writing of its election to do one of 
the following for all the home run wiring inside the MDU: (1) to remove 
the wiring and restore the MDU consistent with state law within 30 days 
of the end of the 90-day notice period or within 30 days of actual 
service termination, whichever occurs first; (2) to abandon and not 
disable the wiring at the end of the 90-day notice period; or (3) to 
sell the wiring to the MDU owner. If the MDU owner refuses to purchase 
the home run wiring, the MDU owner may permit the alternative video 
service provider to purchase it. If the incumbent provider elects to 
remove or abandon the wiring, and it intends to terminate service 
before the end of the 90-day notice period, the incumbent provider will 
be required to notify the MDU owner at the time of this election of the 
date on which it intends to terminate service.
    4. If the incumbent elects to abandon the wiring, its ownership 
will be determined as a matter of state law. Passive devices such as 
splitters, as in the cable home wiring context, will be considered part 
of the home run wiring for this purpose. While the operator may remove 
its amplifiers or other active devices used in the wiring, it may do so 
only if an equivalent replacement can easily be reattached. Our 
decision in this proceeding assumes adherence to standards of good 
faith that are necessary elements of an orderly transition. In 
addition, we will require the party removing any active elements to 
comply with the notice requirements and other rules regarding the 
removal of home run wiring. Although we will not require that 
incumbents must transfer or relinquish all rights in molding or conduit 
when they sell, remove or abandon their wiring, we will prohibit 
incumbent providers from using any ownership interests they may have in 
property located on or near the home run wiring, such as molding or 
conduit, to prevent, impede or in any way interfere with the ability of 
an alternative MVPD to use the home run wiring.
    5. Where the incumbent provider elects to sell the home run wiring, 
we will allow the parties to negotiate the price of the wiring. We 
believe that market forces will provide adequate incentives for the 
parties to reach a reasonable price, particularly in these 
circumstances where the incumbent has no legally enforceable right to 
remain on the premises. The parties will have 30 days from the date of 
the incumbent's election to negotiate a price for the home run wiring. 
The parties may also negotiate to purchase additional wiring (e.g., 
riser cables) at their option. As stated above, our procedures do not 
apply to riser cable in that the incumbent provider is not required to 
sell, remove or abandon its riser cable, but it does have the option of 
doing so if all parties agree. If the parties are unable to agree on a 
price, the incumbent will then be required to elect: (1) to abandon 
without disabling the wiring; (2) to remove the wiring and restore the 
MDU consistent with state law; or (3) to submit the price determination 
to binding arbitration by an independent expert. If the incumbent fails 
to comply with any of the deadlines established herein, it will be 
deemed to have elected to abandon its home run wiring at the end of the 
90-day notice period. If the incumbent service provider elects to 
abandon its wiring at this point, the abandonment will become effective 
at the end of the 90-day notice period or upon service termination, 
whichever occurs first. Similarly, if the incumbent elects at this 
point to remove its wiring and restore the building consistent with 
state law, it will have to do so within 30 days of the end of the 90-
day notice period or within 30 days of actual service termination, 
whichever occurs first.
    6. At this time we decline to establish a penalty for an incumbent 
provider that fails to remove wiring after electing to do so, or, for 
that matter, for any other party that violates our cable inside wiring 
rules. We expect all parties participating in the procedures for the 
disposition of home run wiring to cooperate and act in full compliance 
with our rules and the policies underlying them. Similarly, at this 
time we will not require the incumbent to post a performance bond prior 
to removal. There is not sufficient evidence to conclude that a 
significant problem will exist, or that MDU owners are unable to 
protect their interests pursuant to contract or state law.
    7. If the incumbent chooses to abandon or remove its wiring, it 
must notify the MDU owner at the time of this election if and when it 
intends to terminate service before the end of the 90-day notice 
period. In addition to this and other notice requirements, we will 
adopt a general rule requiring the parties to cooperate to avoid 
service disruption to subscribers to the extent possible. One of our 
overriding goals in this proceeding is to ensure as seamless a 
transition as possible. Our rules are premised on the good faith 
cooperation of all parties to protect against such disruption. We 
expect service providers to cooperate and to make all necessary efforts 
to minimize any service disruption when a transition is undertaken. We 
believe that the current notification requirements, in conjunction with 
a general rule requiring a seamless transition, are sufficient to 
protect subscribers from lengthy service disruptions when switching 
providers. We therefore will not require incumbents to continue service 
until the new provider is connected.
    8. If the parties are unable to agree on a price and the incumbent 
elects to submit to binding arbitration, the parties will have seven 
days to agree on an independent expert or to each designate an expert 
who will pick a third expert within an additional seven days. The 
independent expert chosen will be required to assess a reasonable price 
for the home run wiring by the end of the 90-day notice period. If the 
incumbent elects to submit the matter to binding arbitration and the 
MDU owner (or, in some cases, the alternative provider) refuses to 
participate, the incumbent will have no further obligations under our 
home run wiring disposition procedures.

B. Unit-by-Unit Procedures

    9. We adopt the following procedures for unit-by-unit disposition 
of home run wiring. Where the incumbent video service provider owns the 
home run wiring in an MDU and does not (or will not at the conclusion 
of the notice period) have a legally enforceable right to maintain its 
home run wiring on the premises, the MDU owner may permit multiple 
service providers to compete head-to-head in the building for the right 
to use the individual home run wires dedicated to each unit. Where an 
MDU owner wishes to permit such head-to-head competition, the MDU owner 
must provide at least 60 days' written notice to the incumbent provider 
of the owner's intention to invoke the following procedure. The 
incumbent service provider will then have 30 days to provide the MDU 
owner with a written election as to whether,

[[Page 61020]]

for all of the incumbent's home run wires dedicated to individual 
subscribers who may later choose the alternative provider's service, it 
will: (1) remove the wiring and restore the MDU consistent with state 
law; (2) abandon the wiring without disabling it (as in the building-
by-building situation, if the incumbent elects to abandon the wiring, 
its ownership will be determined by state law, and passive devices will 
be considered part of the home run wiring); or (3) sell the wiring to 
the MDU owner (as in the building-by-building situation, the MDU owner 
may permit the alternative provider to purchase the home run wiring if 
the MDU owner refuses to purchase it). In other words, the incumbent 
service provider will be required to make a single election for how it 
will handle the disposition of individual home run wires whenever a 
subscriber wishes to switch video service providers; that election will 
then be implemented each time an individual subscriber switches service 
providers. As in the context of building-by-building dispositions of 
home run wiring, incumbent providers will be prohibited from using any 
ownership interests they may have in property on or near the home run 
wiring, such as molding or conduit, to prevent, impede, or in any way 
interfere with the ability of an alternative MVPD to use the home run 
wiring. If the MDU owner permits the alternative service provider to 
purchase the home run wiring, the alternative service provider will be 
required to make a similar election within this same 30-day period for 
any home run wiring that the alternative provider subsequently owns 
(i.e., after the alternative provider has purchased the wiring from the 
current incumbent provider) and that is solely dedicated to a 
subscriber who switches back from the alternative provider to the 
incumbent.
    10. We continue to believe that it would streamline and expedite 
the process of changing service providers if alternative service 
providers and MDU owners were permitted to act as subscribers' agents 
in providing notice of a subscriber's desire to change services. 
However, consistent with our intention not to ``create or destroy any 
property rights'' by these procedures, we will not create any new right 
of MDU owners and alternative providers to act on behalf of subscribers 
in terminating service. Nor will we restrict the rights of such MDU 
owners and alternative providers under state law. We therefore decline 
at this time to adopt specific procedures to guard against unauthorized 
changes in service, i.e., ``slamming.'' (``Slamming'' is the 
unauthorized change of a consumer's chosen long distance service. We 
use the term more generically here to mean an unauthorized change in 
any communications service.)
    11. As with the proposed building-by-building procedures, we will 
permit the parties to negotiate for the sale of the home run wiring. If 
one or both of the video service providers elects to negotiate for the 
sale of the home run wiring it may own, the parties will have 30 days 
from the date of such election to reach an agreement. During this 30-
day negotiation period, the incumbent, the MDU owner and/or the new 
provider may also work out arrangements for an up-front lump sum 
payment in lieu of a unit-by-unit payment. An up-front lump sum payment 
would permit either service provider to use the home run wiring to 
provide service to a subscriber without the administrative burden of 
paying separately for each home run wire every time a subscriber 
changes providers.
    12. If the parties cannot agree on a price, the provider that has 
elected to sell the wiring will be required to elect: (1) to abandon 
without disabling the wiring; (2) to remove the wiring and restore the 
MDU consistent with state law; or (3) to submit the price determination 
to binding arbitration by an independent expert. Again, if the MDU 
owner (or, in some cases, the alternative provider) refuses to submit 
the issue to arbitration, the incumbent's obligations under our 
procedures will cease. If the incumbent fails to comply with any of the 
deadlines established herein, the home run wiring will be considered 
abandoned and the incumbent may not prevent the alternative provider 
from using the home run wiring immediately to provide service.
    13. If the incumbent elects to submit to binding arbitration, the 
parties will have seven days to agree on an independent expert or each 
designate an expert who will pick a third expert within an additional 
seven days. The independent expert chosen would be required to assess 
the price for the wiring within 14 days. We realize that the expert's 
price determination may not be issued for up to 28 days after the 60-
day notice period has expired. If subscribers wish to switch service 
providers during this period, the procedures set forth below should be 
followed, subject to the price established by the arbitrator. If the 
MDU owner (or, in some cases, the alternative provider) refuses to 
participate, the incumbent's obligations under the Commission's home 
run wiring procedures will cease.
    14. After completion of this initial process, a provider's election 
will be carried out if and when the provider is notified either orally 
or in writing that a subscriber wishes to terminate service and that an 
alternative service provider intends to use the existing home run wire 
to provide service to that particular subscriber. At that point, a 
provider that has elected to remove its home run wiring will have seven 
days to do so and to restore the building consistent with state law. If 
the subscriber has requested service termination more than seven days 
in the future, the seven-day removal period will begin on the date of 
actual service termination (and, in any event, shall end no later than 
seven days after the requested date of termination).
    15. If the current service provider has elected to abandon or sell 
the wiring, the abandonment or sale will become effective upon actual 
service termination or upon the requested date of termination, 
whichever occurs first. If the incumbent provider intends to terminate 
service prior to the end of the seven-day period, the incumbent will be 
required to inform the subscriber or the subscriber's agent (whichever 
is notifying the incumbent that the subscriber wishes to terminate 
service) at the time of the request for service termination of the date 
on which service will be terminated. In addition, the incumbent 
provider must disconnect the home run wiring from its lockbox and leave 
it accessible for the new provider within 24 hours of actual service 
termination.
    16. We base the above procedures on the assumption that the 
alternative service provider will have an incentive to ensure that the 
incumbent is notified that the alternative service provider intends to 
use the existing home run wire to provide service. If, however, the 
subscriber's service is simply terminated without any indication that a 
competing service provider wishes to use the home run wiring, the 
incumbent service provider will not be required to carry out its 
election to sell, remove or abandon the home run wiring. This might 
occur, for instance, where an MDU tenant is moving out of the building. 
In such cases, we do not believe that it would be appropriate to 
require the incumbent to sell, remove or abandon the home run wiring 
when it might have every reasonable expectation that the next tenant 
will request its service. However, the incumbent provider will be 
required to carry out its election with regard to the home run wiring 
if and when it receives notice from a subsequent tenant (either 
directly or through an alternative provider) that

[[Page 61021]]

the tenant wishes to use the home run wiring to receive a competing 
service.
    17. Where the incumbent receives a request for service termination 
but does not receive notice that an alternative provider wishes to use 
the home run wiring, the incumbent will still be required to follow the 
procedures set forth in our cable home wiring rules--e.g., to offer to 
sell to the subscriber any cable home wiring that the incumbent 
provider otherwise intends to remove. The required notice in the unit-
by-unit context may be effected in two stages (i.e., the subscriber may 
call to terminate service and the alternative provider may separately 
notify the incumbent that it wishes to use the home run wiring). In 
order for the home run wiring and the home wiring to be disposed of in 
a coordinated manner, we believe that our cable home wiring rules must 
apply upon any termination of service. In addition, we believe that 
subscribers should have the right to purchase their home wiring to 
protect themselves from unnecessary disruption associated with removal 
of home wiring, regardless of whether they intend to subscribe to an 
alternative service.

C. Ownership of Home Run Wiring

    18. In both the building-by-building and unit-by-unit approaches, 
the MDU owner will have the initial option to negotiate for ownership 
and control of the home run wiring because the property owner is 
responsible for the common areas of a building, including safety and 
security concerns, compliance with building and electrical codes, 
maintaining the aesthetics of the building and balancing the concerns 
of all of the residents. Moreover, vesting ownership of the home run 
wiring in the MDU owner, as opposed to the alternative service 
provider, will reduce future transaction costs since the above 
procedures will not need to be repeated if service is subsequently 
switched again. Nevertheless, we recognize that some MDU owners may not 
want to own the home run wiring in their buildings; in such cases, the 
MDU owner may permit the alternative service provider to purchase the 
wiring.
    19. We will not require video service providers to transfer 
ownership of cable inside wiring to MDU owners upon installation. At 
this time, we believe this issue is best left to marketplace 
negotiations between the service provider and the MDU owner. Some MDU 
owners may choose to bargain for ownership of the inside wiring, while 
others may prefer to let the service provider maintain ownership. We 
are not convinced that MDU owners have insufficient bargaining power in 
this situation to protect their interests. Even under the home run 
disposition procedures adopted above, we recognize that some MDU owners 
may not wish to exercise ownership over the inside wiring. We believe 
that MDU owners should have the same option at the time of 
installation.
    20. We do believe, however, that all parties involved would benefit 
from additional certainty regarding ownership of the home run wiring 
upon termination of a service contract. For any contracts between MVPDs 
and MDU owners entered into after the effective date of our rules, we 
will require the MVPD to include a provision describing the disposition 
of the home run wiring upon the contract's termination. We believe that 
such a rule will provide certainty to the parties and permit them to 
address the disposition of home run wiring in light of their 
circumstances. Where the parties' contract clearly and expressly 
addresses the disposition of the home run wiring, our procedures will 
not apply. We also reiterate that the parties may rely upon any 
existing contractual rights upon termination, in addition to the 
procedures we are adopting.

D. Application of Procedural Framework

    21. As noted above, the procedural mechanisms we are adopting will 
apply only where the incumbent provider no longer has an enforceable 
legal right to maintain its home run wiring on the premises against the 
will of the MDU owner. These procedures will not apply where the 
incumbent provider has a contractual, statutory or common law right to 
maintain its home run wiring on the property. We also reiterate that we 
are not preempting any rights the incumbent provider may have under 
state law. In the building-by-building context, the procedures will not 
apply where the incumbent provider has a legally enforceable right to 
maintain its home run wiring on the premises, even against the MDU 
owner's wishes, and to prevent any third party from using the wiring. 
In the unit-by-unit context, the procedures will not apply where the 
incumbent provider has a legally enforceable right to keep a particular 
home run wire dedicated to a particular unit (not including the wiring 
on the subscriber's side of the demarcation point) on the premises, 
even against the property owner's wishes.
    22. We will adopt a presumption that the building-by-building and 
unit-by-unit procedural mechanisms will apply unless and until the 
incumbent obtains a court ruling or an injunction enjoining its 
displacement during the 45-day period following the initial notice. The 
incumbent will still be required to make its election to sell, remove 
or abandon the wiring by the end of the initial 30-day period in the 
absence of such a ruling or injunction. In light of this rule, we 
decline to shorten the initial election period. We also decline to stay 
our procedures until all judicial procedures are terminated, including 
all appeals. We have not received evidence sufficient to persuade us 
that state courts will not respond expeditiously. Significantly, the 
record indicates state courts' ability to protect incumbents' rights. 
The record continues to support our judgment that an incumbent's 
failure to obtain a state court injunction justifies a presumption that 
the incumbent no longer has an enforceable legal right to remain on the 
premises. We do not believe that this presumption interferes with the 
incumbent's state law rights. A court applying state law will continue 
to be the ultimate arbiter of whether the incumbent has a legally 
enforceable right to remain on the premises, and possesses the ability 
to take any necessary and appropriate steps to make the parties whole 
under state law. Our presumption simply means that if the incumbent 
cannot obtain an injunction to maintain its home run wiring on the 
premises, it is appropriate to permit the MDU owner to invoke our 
procedures pending any further litigation.
    23. We will adopt one exception to our presumption that our 
procedures will apply in the absence of a state court ruling or 
injunction obtained within 45 days of the initial notice. We will not 
require an incumbent provider to obtain such a ruling or injunction 
where a state's highest court has found that, under its state mandatory 
access statute, the incumbent always has an enforceable right to 
maintain its home run wiring on the premises. We believe that to 
require the incumbent to initiate court proceedings in this situation 
is wasteful and unnecessary. In such cases, we believe that the burden 
should shift to the new provider to obtain a judicial determination to 
the contrary.
    24. We decline, however, to provide that our procedures do not 
apply in states that have enacted mandatory access statutes. Several 
parties take issue with our statement that where the incumbent 
provider's mandatory right of access is dependent upon a subscriber's 
request for service, the provider may no longer have a legally 
enforceable right to maintain that subscriber's home run wiring on the 
premises against the MDU owner's wishes once the subscriber no longer 
requests service. We clarify that we did

[[Page 61022]]

not intend to and do not now express any opinion on the merits of this 
issue. The enforceability of a state mandatory access statute is an 
issue for the state courts to decide under their particular statutes. 
We are unwilling to conclude that state mandatory access statutes 
always grant incumbents the right to maintain their home run wiring in 
an MDU over the MDU owner's objection. Similarly, we express no opinion 
on whether state mandatory access statutes permit an incumbent MVPD to 
block moldings or conduits with unused wiring. Contrary to the 
arguments of some cable operators, this is not an issue of the right to 
install wiring. Rather, the issue is whether the incumbent has a 
legally enforceable right to maintain its home run wiring on the 
premises over the objection of the MDU owner. Accordingly, our 
procedures will apply in mandatory access states to the extent state 
law does not permit the incumbent to maintain its home run wiring (in 
the case of a building-by-building disposition) or a particular home 
run wire to a particular subscriber (in the case of a unit-by-unit 
disposition) against the will of the MDU owner.
    25. The above procedural mechanisms will apply regardless of the 
identity of the incumbent video service provider involved. While 
initially this incumbent would commonly be a cable operator, it could 
also be a SMATV provider, an MMDS provider, a DBS provider or others. 
We believe that this will ensure competitive parity among MVPDs and 
ensure that MDU owners are able to benefit from these procedures 
regardless of the MVPD that initially wired their buildings.

III. Sharing of Molding

    26. We will permit an alternative MVPD to install its wiring within 
an incumbent's existing molding, even over the incumbent provider's 
objection, where the MDU owner agrees that there is adequate space in 
the molding and the MDU owner gives its affirmative consent. We believe 
that such a rule will promote head-to-head competition among MVPDs by 
overcoming the resistance of MDU owners to the installation of 
redundant molding. At this time we will not require the sharing of 
space within conduits. However, we will not apply this rule where the 
incumbent has an exclusive contractual right to occupy the molding. 
Since we do not believe that the incumbent ordinarily will have a 
property interest in the vacant air space inside the hallway molding, 
we will not require the alternative MVPD to compensate the incumbent 
for the placement of its wires. The alternative provider will, however, 
be required to pay any and all installation costs, including the costs 
of restoring the property to its prior condition and the costs of any 
damage to the incumbent's wiring or other property.
    27. Under the rule we will adopt, where the MDU owner does not 
agree that there is adequate space in the molding for the additional 
wiring, and the MDU owner is willing to permit the installation of 
larger molding that could contain both the incumbent's and the 
alternative MVPD's wiring, the MDU owner (with or without the 
assistance of the incumbent and/or the alternative provider) shall be 
permitted to remove the existing molding (and return the molding to the 
incumbent, if appropriate) and replace it with the larger molding at 
the alternative MVPD's expense. Again, the alternative MVPD would be 
required to pay any and all installation costs, including the costs of 
restoring the property to its prior condition and the costs of any 
damage to the incumbent's wiring or other property. This rule will not 
apply if the incumbent has contracted for the right to maintain its 
molding on the MDU owner's property without alteration by the MDU 
owner. Absent such a contractual provision, we believe that the 
incumbent has no right to prevent the MDU owner from altering the 
molding in its hallways and other areas of its property.

IV. Disposition of Cable Home Wiring

    28. The procedural framework discussed above addresses the 
disposition of MDU home run wiring. Here, we set forth specific rules 
on how to address certain issues regarding the disposition of MDU cable 
home wiring that were not addressed in our prior home wiring order. 
Cable home wiring is defined as the internal wiring contained within 
the premises of a subscriber which begins at the demarcation point, not 
including any active elements such as amplifiers, converter or decoder 
boxes, or remote control units. As in the context of home run wiring, 
our MDU home wiring rules will apply regardless of the identity of the 
incumbent video service provider involved. While initially this 
incumbent will commonly be a cable operator, it could also be a SMATV 
provider, an MMDS provider, a DBS provider or others. We therefore will 
apply all of our cable home wiring rules for multiple-unit 
installations to all MVPDs. We also believe that it may be beneficial 
to apply our cable home wiring rules for single-unit installations to 
all MVPDs. We seek comment on this issue in the Second Further Notice 
of Proposed Rulemaking, which is summarized elsewhere in the Federal 
Register.

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

    29. We conclude that, if the MDU owner has the legal right, either 
by law or by contract, to terminate the subscriber's cable service, the 
owner terminating service for the entire building is effectively 
voluntarily terminating service on the subscriber's behalf, and our 
home wiring rules would be triggered. We conclude that providing the 
cable operator a single point of contact (i.e., the MDU owner) will 
further the statutory purposes of minimizing disruption and 
facilitating the transfer of service to a competing video service 
provider. Because we believe that it would be impractical and 
inefficient for the incumbent provider to deal with each individual 
subscriber regarding the disposition of his or her cable home wiring 
when the entire MDU is switching providers, we will deem the MDU owner 
to be acting as the terminating ``subscriber'' for purposes of the 
disposition of the cable home wiring within the individual dwelling 
unit where the cable home wiring is not already owned by a resident. We 
clarify, however, that we are not changing our definition of subscriber 
to include MDU owners. We believe that, when as a matter of law or 
contract, the MDU owner has the right to terminate service, the MDU 
owner is effectively terminating service on behalf of the subscriber. 
Similarly, with regard to exclusive bulk service contracts, we conclude 
that it is logical for the landlord to be deemed the subscriber, and 
thus for the landlord to have the right to purchase the home wiring as 
provided in our general rules.
    30. For those MDU owners proceeding under our home run wiring 
disposition procedures, we will adopt the following framework in order 
to ensure the orderly disposition of the home wiring. When an incumbent 
provider is notified under our home run wiring disposition procedures 
that the incumbent provider's access to the entire building will be 
terminated and that the MDU owner seeks to use the home run wiring for 
another service, the incumbent provider must, within 30 days: (1) offer 
to sell to the MDU owner any home wiring within the individual dwelling 
units which the incumbent provider owns and intends to remove; and (2) 
provide the MDU owner with the total per-foot replacement cost of such 
home wiring.

[[Page 61023]]

    31. As with the home run wiring, if an MDU owner declines to 
purchase the cable home wiring not already owned by a resident, the MDU 
owner may permit the alternative service provider to purchase the 
wiring upon service termination under our rules. We will require that 
the MDU owner decide whether it or the alternative provider will 
purchase the cable home wiring and so notify the incumbent provider no 
later than 30 days before the termination of access to the building 
will become effective. If the MDU owner and the alternative service 
provider decline to purchase the home wiring, the incumbent provider 
will not be permitted to remove the home wiring until the date of 
actual service termination, i.e., likely 90 days after the building 
owner notified the incumbent that its access to the entire building 
will be terminated. We will modify our current home wiring rules to 
allow the incumbent provider 30 days after service termination, rather 
than the current seven days, to remove all of the cable home wiring for 
the entire building if the MDU owner has terminated service for the 
entire building and has declined to purchase the home wiring. We 
believe this is appropriate given the amount of home wiring that may 
need to be removed from an entire building. Under these circumstances, 
if the incumbent provider fails to remove the home wiring within 30 
days of actual service termination, it cannot make any subsequent 
attempt to remove the wiring or restrict its use.

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

    32. We will continue to apply our rules permitting individual 
terminating subscribers (or their agents) to purchase the cable home 
wiring up to a point at or about 12 inches outside their individual 
units. We continue to believe that this is consistent with the purposes 
of section 624(i) to promote consumer choice and competition by 
permitting subscribers to avoid the disruption of having their home 
wiring removed upon voluntary termination and to subsequently utilize 
that wiring for an alternative service. If the subscriber declines to 
purchase its home wiring, we believe that the premises owner should be 
permitted to purchase the cable home wiring within the individual's 
premises based on the per-foot replacement cost. This approach will 
preserve the current subscriber's rights, and still allow the premises 
owner to act on behalf of future tenants, thus promoting competition 
and consumer choice. As with the home run wiring in an MDU, if the 
premises owner declines to purchase the cable home wiring, the owner 
may permit the alternative service provider to purchase it.
    33. Where an individual MDU resident terminates service, the MDU 
owner must provide reasonable advance notice to the incumbent provider 
if it wishes to purchase the home wiring (or that the alternative 
provider will purchase it) if and when an individual subscriber 
declines. The MDU owner will be required to inform the incumbent 
provider one time for the entire building. If the MDU owner fails to 
provide the incumbent with such notice, the incumbent will be under no 
obligation to sell the home wiring to the MDU owner or the alternative 
provider when an individual subscriber terminates and declines to 
purchase the wiring. Where an MDU owner does not or cannot invoke our 
unit-by-unit home run wiring disposition procedures (e.g., if it elects 
to have two-wire competition to each unit), we will require the MDU 
owner to provide the incumbent provider reasonable advance notice if 
the MDU owner or the alternative provider intends to purchase the home 
wiring if and when a subscriber declines.
    34. In addition, where an individual subscriber is terminating 
service, we will change the time in which an incumbent provider must 
remove the home wiring or make no further effort to use it or restrict 
its use in single unit installations from seven business days to seven 
calendar days after the individual subscriber terminates service. We 
believe that this minor change is sufficient time for removal of a 
single subscriber's cable home wiring, and will avoid customer 
confusion by having the time permitted for the provider to remove the 
home wiring within the individual unit run concurrently with the time 
permitted for the provider to remove, sell or abandon the home run 
wiring under our procedural framework.

C. Effect of Subscriber Vacating the Premises on the Application of 
Cable Home Wiring Rules

    35. We conclude that our cable home wiring rules should apply even 
when the subscriber terminates cable service, elects not to purchase 
the wiring and vacates the premises within the seven-day time period 
the operator has to remove the home wiring. A cable operator that owns 
the wiring and intends to remove it must offer to sell the cable home 
wiring to the subscriber upon voluntary termination, and if the 
subscriber declines, the operator must remove the wiring within seven 
days or make no further effort to remove it or restrict its use. We 
expressly state that the cable operator must be given reasonable access 
to the individual premises during the removal period. We believe that 
the foregoing policy will promote the objectives of section 624(i) by 
minimizing disruption and facilitating subsequent subscribers' ability 
to use their home wiring to connect to the video service provider of 
their choice.
    36. The disposition of the cable home wiring under these 
circumstances will not affect our rules for the unit-by-unit 
disposition of the MDU home run wiring. As described above, our rules 
regarding the disposition of the home run wiring are not triggered 
where a subscriber terminates service and vacates the premises unless 
and until a new or subsequent subscriber (or his or her agent) notifies 
the incumbent service provider that the subscriber wishes to receive 
service from an alternative service provider lawfully serving the 
premises.

V. MDU Demarcation Point

    37. We believe that it is not necessary to establish a common cable 
and telephone demarcation point at this time. At least as far as inside 
wiring is concerned, telephony generally appears to continue to be 
delivered over twisted pair wiring and multichannel video programming 
generally appears to be delivered over coaxial cable. Based on the 
record in this proceeding, it appears that cable operators and other 
entities planning to offer telephone service generally will do so by 
connecting to the existing telephone inside wiring network. The record 
before us indicates that this distinction is likely to continue for at 
least the near future. If and when circumstances change, we will 
revisit this issue with the goal of creating a single set of inside 
wiring rules. We note that, as a practical matter, the telephone 
demarcation point in new single family home installations may be 
located at a point outside of where the wiring enters the home, near 
the cable demarcation point. Similarly, the points at which the 
telephone and cable inside wiring become devoted to individual multiple 
dwelling units may be at similar locations (e.g., in garden-style 
apartment buildings, such points may both be located in the basement of 
the individual buildings). While such examples may create a de facto 
convergence in many cases, so long as the cable and telephone inside 
wiring networks remain distinct, we do not

[[Page 61024]]

believe that the Commission need require such a result.
    38. At this time, we will not modify the cable demarcation point in 
MDUs. We will, however, adopt our tentative conclusion that where the 
cable demarcation point is ``physically inaccessible'' to an 
alternative MVPD, the demarcation point should be moved to the point at 
which it first becomes physically accessible. We clarify that this 
movement should be the closest point at which the wiring becomes 
physically accessible that does not require access to the subscriber's 
unit. Moving the demarcation point into the unit in such situations 
would add significantly to the disruption and inconvenience of 
switching service providers, contrary to the intent of section 624(i).
    39. In addition, we will adopt a definition of ``physically 
inaccessible'' which asks whether accessing the demarcation point (1) 
would require significant modification or damage of preexisting 
structural elements, and (2) would add significantly to the physical 
difficulty and/or cost of accessing the subscriber's home wiring. For 
example, wiring embedded in brick, metal conduit or cinder blocks would 
likely be ``physically inaccessible'' under this definition; wiring 
simply enclosed within hallway molding would not.

VI. Loop-Through Cable Wiring Configurations

    40. In a loop-through cable wiring system, a single cable is used 
to provide service to either a portion of or an entire MDU. Every 
subscriber on the loop is therefore limited to receiving video services 
from the same provider. If the cable is broken or removed, signals to 
all succeeding units are interrupted. Previously, we excluded MDU loop-
through wiring from the cable home wiring rules because we believed 
that applying our rules to loop-through wiring would give the initial 
subscriber control over cable service for all subscribers in the loop. 
Because loop-through configurations are excluded from the home wiring 
rules, cable operators are not currently required to offer to sell the 
wire to subscribers upon termination of service, and no subscriber on 
the loop has the right to purchase that portion of the loop-through 
cable wiring located inside his or her dwelling unit. The ownership of 
loop-through wiring therefore currently depends on the circumstances 
(e.g., who installed the wire, whether the wire has been sold and state 
fixture law) and is not affected by our rules.
    41. As with other cable inside wiring configurations in MDUs, a 
wiring loop may include both wiring inside the individual dwelling unit 
and wiring in common areas which extends outside the individual 
dwelling unit to the riser or feeder cable. We now believe that, for 
purposes of our cable inside wiring rules, all loop-through wiring 
should not be treated the same. We therefore conclude that, when the 
property owner or the entity that owns or controls the common areas 
elects to switch to a new service provider, our cable home wiring rules 
will apply to that portion of the loop-through wiring that is inside 
the individual dwelling unit (up to the demarcation point(s) discussed 
below). For example, when an MDU owner wishes to terminate service for 
a building with loop-through wiring and invokes our building-by-
building procedures for disposition of the home run wiring, those 
procedures will govern the disposition of the wiring that is dedicated 
to each loop other than the cable home wiring within each unit. 
Consistent with our building-by-building procedures, the MDU owner will 
be permitted to purchase the loop-through home wiring pursuant to our 
cable home wiring rules. In addition, where the MDU owner terminates 
service for the entire loop but does not or cannot invoke our 
procedures for the disposition of home run wiring, the MDU owner will 
nevertheless have certain rights to the home wiring within the 
individual dwelling units.
    42. Where a building is comprised of rental units, the building 
owner will have the right to elect to switch service providers and the 
right to purchase the loop-through home wiring. In buildings in which 
persons have a direct or indirect ownership interest in individual 
units (as with condominiums and cooperatives), the election of whether 
to switch service providers will be determined under the rules of the 
association or entity that owns and controls the building's common 
areas, in a manner similar to other decisions made by the entity with 
respect to the common areas. If the MDU owner elects to switch to a new 
service provider but does not wish to purchase the loop-through home 
wiring, the new service provider may elect to purchase the wiring.
    43. Allowing the MDU owner to purchase loop-through home wiring 
under these circumstances will allow that party to control the wiring. 
We believe that, at least in competitive markets, the MDU owner has a 
significant incentive to represent the subscribers' interests. In 
addition, the management structures of condominium or cooperative 
buildings are designed to reflect their residents' interests. Allowing 
the MDU owner to control loop-through home wiring gives the subscriber 
an opportunity for increased choice and enhanced service, and furthers 
section 624(i)'s statutory purpose of facilitating the transfer to an 
alternate service provider with minimal disruption to the subscriber. 
We previously excluded loop-through wiring from our cable home wiring 
rules because we did not believe it was appropriate to give the initial 
individual subscriber in the loop control over the cable service of all 
remaining subscribers on the loop. Under the procedures we adopt today, 
that situation cannot occur.
    44. We clarify that our rules will provide the MDU owner, not the 
alternative provider, with the first opportunity to purchase the loop-
through wiring. Once the MDU owner owns and controls the wiring, the 
cable operator will be on equal footing under our rules with other 
video service providers with regard to subsequently providing service 
to the tenants. Only if the MDU owner declines to purchase the wiring 
will the alternative provider have the opportunity to purchase the 
loop-through wiring.
    45. We will set the demarcation points, i.e., the points between 
which the MDU owner may purchase the loop-through home wiring under our 
cable home wiring rules, at or about 12 inches outside the point at 
which the loop enters or exits the first and last individual dwelling 
units on the loop, or as close as practicable where 12 inches outside 
is physically inaccessible. In some cases, the loop may begin and end 
outside of the same unit, and thus the demarcation points shall be 12 
inches outside the point at which the loop enters and exits that one 
unit, or as close as practicable where 12 inches outside is physically 
inaccessible. We believe that this is consistent with section 624(i), 
i.e., the loop-through home wiring is within the customer's premises, 
and with the cable demarcation point for non-loop-through 
configurations. We note that one of our prior concerns was that 
establishing a separate demarcation point for each subscriber on the 
loop was not feasible. Under the rules set forth herein, however, one 
entity will be purchasing the entire home wiring loop, making it 
unnecessary to set a demarcation point for each subscriber's unit.
    46. We will apply the same rules with respect to compensation and 
technical standards that we apply to non-loop-through wiring systems as 
well. In other words, the loop-through wiring on the subscriber's side 
of the demarcation point may be purchased by the MDU

[[Page 61025]]

owner at the replacement cost as defined in Sec. 76.802(a). The loop-
through wiring outside the demarcation points up to the point at which 
the loop connects with the riser or feeder cable may be addressed 
pursuant to the procedures set forth above with regard to the 
disposition of home run wiring.
    47. Despite the competitive drawbacks of loop-through wiring, we do 
not believe it necessary for the Commission to prohibit future 
installations of loop-through wiring configurations. We believe that 
such a prohibition would unduly restrict the configuration options 
available to building owners and service providers. We have found no 
evidence in the record that cable operators have installed loop-through 
wiring in order to evade our rules since they were implemented in 1993. 
Also, the application of our home wiring rules to loop-through systems 
where the MDU owner seeks to switch service providers should reduce any 
incentive cable operators may have to install loop-through 
configurations for anti-competitive reasons.

VII. Video Service Provider Access to Private Property

A. Federal Mandatory Access Requirements

    48. While we believe that nondiscriminatory access for video and 
telephony service providers enhances competition, we will not adopt a 
federal mandatory access requirement at this time. We note that 
telecommunications carriers' access to telephone companies' facilities 
and rights-of-way under the 1996 Act are currently under 
reconsideration in First Report and Order in CC Docket No. 96-98 and CC 
Docket No. 95-185 (``Interconnection Order''). We do not believe that 
the record in this proceeding provides a sufficient basis for us to 
address these issues. We will defer decisions on these issues to that 
proceeding. Similarly, we do not decide herein whether under section 
207 of the 1996 Act viewers living in rental properties, and those who 
need access to common property, have the right to receive certain video 
programming services over the property owner's objections. This issue 
will be addressed in IB Docket No. 95-59 (Preemption of Local Zoning 
Regulation of Satellite Earth Stations) and CS Docket No. 96-83 
(Implementation of section 207 of the Telecommunications Act, 
Restrictions on Over-the-Air Devices: Television Broadcast Service and 
Multichannel Multipoint Distribution Service).
    49. In addition, commenters in this proceeding urged the Commission 
to construe section 621(a)(2) to prohibit a property owner from denying 
a franchised cable operator access to an easement on the property when 
the owner has already granted or is obligated to grant an easement to 
other utilities, whether public or private. Section 621(a)(2) provides 
that ``[a]ny franchise shall be construed to authorize the construction 
of a cable system over public rights-of-way, and through easements, 
which is within the area to be served by the cable system and which 
have been dedicated for compatible uses * * *.'' Numerous court 
decisions have interpreted the statutory language and legislative 
history of section 621(a)(2), several finding that this section does 
not provide cable operators access to purely private easements granted 
to utilities. We decline to address those rulings here, but will 
continue to examine these issues as we seek to ensure parity of access 
among all telecommunications and video services providers. Similarly, 
we decline at this time to adopt a mandatory access rule under section 
706 of the 1996 Act, but may revisit this issue as we consider issues 
of service provider access in the broader competitive context.
    50. We believe that whether an incumbent provider may use its 
existing easements or rights-of-way to provide new or additional 
services generally depends on state law interpretations of the terms of 
the easements or rights-of-way. While we decline at this time to decide 
as a general matter whether such easements and rights-of-way permit the 
provision of additional services, we believe that we do have the 
authority in certain instances to review restrictions imposed upon such 
use.

B. State Cable Mandatory Access Requirements

    51. According to the record in this proceeding, some form of 
mandatory access law may exist in approximately 18 jurisdictions, 
including Connecticut, Delaware, the District of Columbia, Florida, 
Illinois, Iowa, Kansas, Maine, Massachusetts, Minnesota, Nevada, New 
Jersey, New York, Ohio, Pennsylvania, Rhode Island, West Virginia and 
Wisconsin. The record also indicates that there may be local ordinances 
that provide similar access rights. We believe that the record in this 
proceeding does not support the preemption of state mandatory access 
laws at this time. While commenters opposing state mandatory access 
laws argue that these laws act as a barrier to entry, the record also 
indicates that property owners deny access for reasons unrelated to the 
state laws, including property damage, aesthetic considerations and 
space limitations. We believe that our rules regarding the building-by-
building and unit-by-unit disposition of home run wiring adopted herein 
will lower many of these barriers to entry and may alleviate some of 
the advantages incumbent providers may have with respect to providing 
service to particular buildings.
    52. We remain concerned, however, about disparate regulation of 
MVPDs that unfairly skews competition in the multichannel video 
programming marketplace. Despite our decision not to preempt state and 
local mandatory access laws at this time, we encourage these 
jurisdictions to evaluate present laws and circumstances to determine 
whether a nondiscriminatory and competitively neutral environment 
exists. We believe that establishing competitive parity under these 
statutes will promote competition among MVPDs and will expand consumer 
choice.

C. Exclusive Service Contracts

    53. We recognize that there are significant competitive issues 
regarding exclusive contracts. We are concerned that long-term 
exclusive contracts may raise anti-competitive concerns because they 
``lock up'' properties, preventing consumers from receiving the 
benefits of a newly competitive market. However, we also note that 
alternative providers cite the competitive benefits of exclusive 
contracts as a means of financing ``specialized investments.'' Without 
exclusive contracts to allow recovery over time on the cost of new 
installation, these parties assert that they will be unable to compete 
with the incumbent cable operator. We believe that the record would 
benefit from further comment on these issues. In the Second Further 
Notice of Proposed Rulemaking, summarized elsewhere in the Federal 
Register, we seek comment on various options, including: (1) adopting a 
maximum ``cap'' on the enforceability of all MVPDs' exclusive 
contracts; (2) limiting the ability of MVPDs with market power from 
entering into exclusive contracts; and (3) adopting a ``fresh look'' 
period for so-called ``perpetual'' exclusive contracts.

VIII. Customer Access to Cable Home Wiring Before Termination of 
Service

    54. We will establish a rule allowing customers to provide and 
install their own cable home wiring within their premises, and to 
connect additional home wiring within their premises to

[[Page 61026]]

the wiring installed and owned by the cable operator prior to 
termination of service. Under this rule, customers will be able to 
select who will install their home wiring (e.g., themselves, the cable 
operator or a commercial contractor). In addition, customers may 
connect additional wiring, splitters or other equipment to the cable 
operator's wiring, or redirect or reroute the home wiring, so long as 
no electronic or physical harm is caused to the cable system and the 
physical integrity of the cable operator's wiring remains intact. 
Subscribers will not be permitted to physically cut, improperly 
terminate, substantially alter or otherwise destroy cable operator-
owned inside wiring. To protect cable operators' systems from signal 
leakage, electronic and physical harm and other types of degradation, 
we will permit cable operators to require that any home wiring 
(including any passive splitters, connectors and other equipment used 
in the installation of home wiring) meets reasonable technical 
specifications, not to exceed the technical specifications of such 
equipment installed by the cable operator. If, however, the 
subscriber's connection to, redirection of or rerouting of the home 
wiring causes electronic or physical harm to the cable system, the 
cable operator may impose additional technical specifications to 
eliminate such harm. We believe that subscriber access to home wiring 
is necessary to enhance competition, which will result in lower and 
more reasonable rates for services such as the installation of 
additional outlets. Indeed, where competition is introduced, consumers 
benefit from lower prices, greater technological innovation, and 
additional consumer choice.
    55. We do not believe that the rule we are adopting will pose an 
undue risk of signal leakage or harm to the cable system. Many 
subscribers already own and control their home wiring--e.g., where the 
cable operator charges for it upon installation or where state law 
deems home wiring to be a ``fixture.'' Indeed, as many cable interests 
have pointed out in this proceeding, the marketplace has established 
the F-type connector as the de facto standard for connecting coaxial 
cable to CPE. Such connectors are readily available and, if properly 
used, provide adequate signal leakage protection. In addition, cable 
operators can provide guidance to subscribers who install their own 
wiring. Also, as stated above, we will permit cable operators to 
establish reasonable technical specifications for subscriber-installed 
home wiring (including passive splitters, connectors and other 
equipment used in the installation of home wiring), not to exceed the 
specifications of their own wiring and equipment. Furthermore, we will 
protect the cable system from electronic and physical harm by allowing 
the cable operator to impose additional technical specifications where 
such harm exists.
    56. We will not modify our current requirement that cable operators 
monitor signal leakage and eliminate harmful interference while they 
are providing service, regardless of who owns the home wiring. We also 
will continue to require cable operators to discontinue service to a 
subscriber where signal leakage occurs, until the problem is corrected. 
See 47 CFR 76.617. A cable operator will not be held responsible for 
facilities over which it no longer provides service. We believe that 
the continuation of these requirements will appropriately balance the 
interests of subscribers with the interests of those engaged in 
licensed over-the-air communications and cable operators in maintaining 
the security and integrity of the cable systems.
    57. Allowing subscribers to install their own cable home wiring 
prior to termination of service may raise concerns regarding physical 
and electronic harm to the cable system and degradation of signal 
quality, including interference with other customers' service. To the 
extent a customer's installations or rearrangements of wiring degrade 
the signal quality of or interfere with other customers' signals, or 
cause electronic or physical harm to the cable system, we will allow 
cable operators to discontinue service to that subscriber, as operators 
may do where a customer's wiring causes signal leakage, until the 
degradation or interference is resolved. We note, however, that cable 
operators are not responsible for degradation of signal quality to the 
subscriber where a subscriber has added outlets or owns and maintains 
his or her own wiring. While we recognize that theft of cable service 
is a legitimate concern, we do not agree that our rules granting 
customers pre-termination access to cable home wiring will promote 
theft of service. Some cable companies already provide customer pre-
termination access to wiring, and there is no evidence in the record 
that these policies have resulted in increased theft of service. In 
addition, cable operators may take security measures, such as 
scrambling of their signals, to deter theft of service.
    58. We will neither establish a presumption of ownership of cable 
home wiring nor deregulate home wiring rates at this time. These issues 
are beyond the scope of this proceeding. We believe that our rules 
allowing consumers to install, redirect and reroute their cable home 
wiring adequately promote the goals of expanded competition and 
consumer choice without the need to address ownership issues. We also 
note our obligation under section 623 to regulate the rates of 
equipment used by subscribers to receive the basic service tier. See 47 
U.S.C. Sec. 543.

IX. Signal Leakage

    59. The purpose of the Commission's signal leakage rules is to 
protect licensed over-the-air communications, including aeronautical, 
police, and fire safety communications, from interference caused by 
signal leakage. Until now, the Commission rules governing signal 
leakage have been applied only to cable systems, which often deliver 
signals over the same frequency bands as many over-the-air licensees. 
Specifically, Sec. 76.605(a)(12) establishes the maximum individual 
signal leakage limits for all cable operators using frequencies outside 
the broadcast television bands, while Secs. 76.610-76.617 impose more 
stringent operating and monitoring requirements for cable systems 
operating in the bands that are used by aircraft for communications and 
navigation.
    60. An increasing number of MVPDs are competing with cable 
operators in the provision of video programming and other services. 
Because these MVPDs often transmit signals over the same public safety 
and navigation frequencies as cable operators, they may be a source of 
potentially harmful signal leakage. The public safety concerns that 
underlie application of our signal leakage regulations to cable 
operators are equally present with respect to other MVPDs such as 
SMATV, MMDS and open video system operators and others. We will 
therefore modify our rules to extend existing cable signal leakage 
requirements to non-cable MVPDs. In light of the potential harm to 
public safety that may be caused by broadband signal leakage 
interfering with aeronautical, navigational and communications radio 
systems, we will not rely on labelling requirements, installation 
instructions or cable performance specifications.
    61. Systems transmitting digitized signals may operate in the 
restricted aeronautical and public safety bands. Our signal leakage 
rules provide that systems operating in the restricted bands are only 
subject to the testing and monitoring requirements when they operate 
above a threshold power level.

[[Page 61027]]

Systems using digital transmissions normally operate below this power 
threshold. Systems using digital technology that operate below our 
threshold power level therefore would not generally be subject to the 
most rigorous sections of our signal leakage rules. For digital 
transmissions that may operate above the power threshold, the 
Commission shall continue to apply the same requirements as those for 
analog transmissions due to the potential harm to public safety. MVPDs 
using digital transmission will be subject to section 76.605(a)(12) 
which sets forth the maximum signal leakage limits for systems, 
regardless of the frequency band or power level in use.
    62. We will require that all MVPDs comply with Sec. 76.613 of our 
rules upon the effective date of the Order. Section 76.613 protects 
licensed over-the-air communications from harmful interference and 
requires prompt action to eliminate such interference. We believe that 
immediate compliance with Sec. 76.613 is necessary because, unlike our 
other signal leakage rules that are designed to minimize the risk of 
interference by requiring that leakage be detected and repaired, 
Sec. 76.613 provides that once harmful interference actually occurs it 
must be promptly eliminated. We recognize, however, that immediate 
compliance with many of our other signal leakage requirements may 
present hardships to existing MVPDs not previously subject to such 
rules. We will allow for a five-year transition period from the 
effective date of these rules to afford non-cable MVPDs time to comply 
with our signal leakage rules other than Sec. 76.613. The five-year 
transition period will apply only to the systems of those non-cable 
MVPDs that have been substantially built as of January 1, 1998. We will 
define ``substantially built'' as having 75% of the distribution plant 
completed. The signal leakage requirements under Part 15 of the 
Commission's rules will continue to apply during the transition period.
    63. Our rules require that each cable system perform an independent 
signal leakage test annually. 47 CFR 76.611. Based on the current 
record, we will not amend our rules to treat MDUs or different 
geographic areas connected by microwave link as separate systems for 
testing purposes. We believe that for the past six years our testing 
criteria have provided effective standards for monitoring and 
rectifying signal leakage in 31,000 cable communities nationwide. 
Cognizant of the changing technologies that may be used by MVPDs, we 
will continue to review specific systems' operations and designs that 
may warrant adjustments to our signal leakage testing criteria.
    64. We will not establish any new signal leakage testing procedures 
such as tracking systems to identify the source of signal leakage. We 
believe that MVPDs are capable of devising and selecting the most 
appropriate methods for detecting signal leakage on their own systems. 
We encourage MVPDs to work together to develop methods that will permit 
them to accurately identify the source of any signal leakage.
    65. While our signal leakage rules generally require cable 
operators to perform signal leakage monitoring and testing, Sec. 76.615 
requires cable operators to file specific information with the 
Commission. In particular, Sec. 76.615(b)(7) requires that cable 
operators annually file with the Commission the results of signal 
leakage testing. The reporting requirements of Sec. 76.615(b)(7) may 
impose undue burdens on small MVPDs. In the Second Further Notice of 
Proposed Rulemaking, we seek comment on whether certain MVPDs should be 
exempted from the reporting requirements of Sec. 76.615(b)(7). Since 
Sec. 76.615(b)(7) is one of the provisions covered by the five-year 
transition period, all non-cable MVPDs will have five years to comply 
with the filing requirements; the Second Further Notice of Proposed 
Rulemaking seeks comment on whether we should create a permanent 
exemption for certain types of MVPDs.

X. Signal Quality

    66. By statute, the Commission is charged with promulgating 
regulations governing the quality of television signals delivered to 
cable subscribers. We believe that continued application of the 
Commission's signal quality standards to cable operators is necessary 
because, despite the recent entrance of other service providers into 
the video market, cable operators, in most areas of the country, still 
exercise significant market power. We do not believe at this time that 
market forces alone will ensure that cable subscribers receive the 
quality picture they are entitled to expect. With regard to non-cable 
broadband service providers, we believe that government regulation of 
signal quality would be unnecessary and unduly intrusive. These 
alternative providers do not exercise market power and virtually always 
compete with an incumbent cable operator. Head-to-head competition with 
a cable operator should ensure that alternative MVPDs deliver a good 
quality picture in order to attract and retain customers. We believe 
that, as cable operators become subject to vigorous competition, market 
forces will ensure that they, too, deliver a good quality picture. As 
competition develops and its effects become clearer, we expect to leave 
the issue of signal quality wholly to market forces.

XI. Means of Connection

    67. Based on the record, we will not adopt uniform technical 
standards for jacks and connectors for broadband service. The F-type 
connector has emerged as the de facto broadband connection standard 
within the cable industry. We believe that, properly used, the F-type 
connector is an effective means of connecting coaxial cable to customer 
premises equipment while minimizing the potential for signal leakage. 
Non-cable video service providers also use the F-type connector to 
connect their services via coaxial cable to customer premises 
equipment. Further government action in this area is therefore 
unwarranted at this time. In addition, in light of the fact that we are 
extending our cable signal leakage rules to all broadband service 
providers, we believe that such providers will have the incentive and 
obligation to ensure that connections are properly made with high 
quality materials, without the Commission mandating a connection 
standard.

XII. Dual Regulation

    68. We do not believe that the record before us provides sufficient 
information to address the issue of whether and how to harmonize the 
dual systems of regulation governing cable and telephone companies 
where broadband or multiple services are provided over a single wire or 
multiple wires. Based on the current record, it appears that service 
providers will continue to use separate inside wiring to provide cable 
and telephone service for at least the near future. If and when 
circumstances change, we will revisit this issue with the goal of 
creating a single set of inside wiring rules.

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

    69. We will not, at this time, establish common definitions in the 
common carrier and cable rules with regard to simple versus complex 
wiring and residential versus non-residential wiring. See 47 CFR 
68.213, 68.215. In the telephone context, we believe that our 
distinction between simple and complex wiring has proven to be a 
workable and effective way to promote competition while ensuring 
network protection. Similarly, in the cable context, there may be 
substantial differences between residential and

[[Page 61028]]

commercial buildings which would make it difficult to adopt uniform 
rules for all kinds of property. We do not believe that the current 
record provides sufficient evidence to support the need for a 
modification of our rules, nor does it provide adequate guidance on the 
direction any such modification should take. We therefore will not 
modify our rules at this time.

XIV. Customer Premises Equipment

    70. The issue of whether we should revise our rules regarding 
customer premises equipment will be addressed in a separate ongoing 
Commission rulemaking proceeding arising under new section 629 of the 
Communications Act.

XV. Final Regulatory Flexibility Act Analysis

    71. As required by section 603 of the Regulatory Flexibility Act, 5 
U.S.C. Sec. 603 (``RFA''), Initial Regulatory Flexibility Analyses 
(``IRFAs'') were incorporated in the Inside Wiring Notice, the Cable 
Home Wiring Further Notice, and the Inside Wiring Further Notice. The 
Commission sought written public comments on the proposals in these 
notices, including comments on the IRFAs. This Final Regulatory 
Flexibility Analysis (``FRFA'') conforms to the RFA, as amended by the 
Contract with America Advancement Act of 1996 (``CWAAA''), Public Law 
104-121, 110 Stat. 847 (1996). Title II of the CWAAA is ``The Small 
Business Regulatory Enforcement Fairness Act of 1996'' (SBREFA), 
codified at 5 U.S.C. Sec. 601 et seq.

Need for Action and Objectives of the Rule

    72.This Order adopts new procedural mechanisms to provide order and 
certainty regarding the disposition of MDU home run wiring upon 
termination of existing service. In addition, this Order promotes 
competition and consumer choice by establishing rules for the 
disposition of cable ``loop through'' wiring upon termination of 
service. This Order also permits consumers to provide or install their 
own cable home wiring, or redirect, reroute or connect additional 
wiring to the cable operator's home wiring. These rules will promote 
competition among MVPDs as well as cable wiring services, which will 
result in lower prices, greater technological innovation, and 
additional consumer choice. Finally, to protect public safety and 
navigation frequencies, this Order applies the cable signal leakage 
rules to all broadband service providers that pose a similar threat of 
interference with licensed over-the-air communications.

Summary of Issues Raised by the Public Comments in Response to the 
Initial Regulatory Flexibility Analysis

    73. In response to the IRFAs contained in the Inside Wiring Notice 
and the Cable Home Wiring Further Notice, Building Owners, et al., 
filed comments arguing that the proposed rules would have a significant 
effect on small residential and commercial building operators and that 
the Commission should exempt these entities from any final rules. In 
response to the IRFA contained in the Inside Wiring Notice, CATA filed 
comments and an ex parte submission requesting that the Commission 
rescind the Inside Wiring Notice and reissue it as a notice of inquiry 
or reissue it with specific proposed rules. CATA argues that the Inside 
Wiring Notice failed to propose specific rules, thereby preventing both 
the Commission staff and small entities from analyzing and commenting 
on the effects of proposed rules on small entities. RTE Group filed its 
comments and reply comments as ``a response by a small business 
pursuant to section 603 of the Regulatory Flexibility Act.'' The issues 
raised by RTE Group are addressed above. No comments were filed in 
response to the IRFA contained in the Inside Wiring Further Notice.

Description and Estimate of the Number of Small Entities Impacted

    74. The RFA directs the Commission to provide a description of and, 
where feasible, an estimate of the number of small entities that will 
be affected by the proposed rules. The RFA defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small governmental jurisdiction,'' and 
the same meaning as the term ``small business concern'' under section 3 
of the Small Business Act. Under the Small Business Act, a ``small 
business concern'' is one that: (1) is independently owned and 
operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (``SBA''). The rules we adopt in this Order will affect 
video service providers and MDU owners.
    75. Small MVPDs: SBA has developed a definition of a small entity 
for cable and other pay television services, which includes all such 
companies generating $11 million or less in annual receipts. This 
definition includes cable system operators, closed circuit television 
services, direct broadcast satellite services, multipoint distribution 
systems, satellite master antenna systems and subscription television 
services. According to the Bureau of the Census, there were 1423 such 
cable and other pay television services generating less than $11 
million in revenue that were in operation for at least one year at the 
end of 1992. 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC 4841 (U.S. Bureau of the Census data under 
contract to the Office of Advocacy of the U.S. Small Business 
Administration). We will address each service individually to provide a 
more succinct estimate of small entities.
    76. Cable Systems: The Commission has developed its own definition 
of a small cable company for the purposes of rate regulation. Under the 
Commission's rules, a ``small cable company,'' is one serving fewer 
than 400,000 subscribers nationwide. 47 CFR 76.901(e). The Commission 
developed this definition based on its determinations that a small 
cable system operator is one with annual revenues of $100 million or 
less. Based on our most recent information, we estimate that there were 
1439 cable operators that qualified as small cable companies at the end 
of 1995. Since then, some of those companies may have grown to serve 
over 400,000 subscribers, and others may have been involved in 
transactions that caused them to be combined with other cable 
operators. Consequently, we estimate that there are fewer than 1439 
small entity cable system operators that may be affected by the 
decisions and rules adopted in the Order.
    77. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1% of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 61,700,000 
subscribers in the United States. Therefore, we found that an operator 
serving fewer than 617,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all of its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
operators serving 617,000 subscribers or less totals 1450. Although it 
seems certain that some of these cable system operators are affiliated 
with entities whose gross annual revenues exceed $250,000,000, we are 
unable at this time to estimate with greater precision the number of 
cable system operators that

[[Page 61029]]

would qualify as small cable operators under the definition in the 
Communications Act.
    78. MMDS: The Commission refined the definition of ``small entity'' 
for the auction of MMDS as an entity that together with its affiliates 
has average gross annual revenues that are not more than $40 million 
for the preceding three calendar years. This definition of a small 
entity in the context of the Commission's Report and Order concerning 
MMDS auctions has been approved by the SBA.
    79. The Commission completed its MMDS auction in March 1996 for 
authorizations in 493 basic trading areas (``BTAs''). Of 67 winning 
bidders, 61 qualified as small entities. Five bidders indicated that 
they were minority-owned and four winners indicated that they were 
women-owned businesses. MMDS is an especially competitive service, with 
approximately 1573 previously authorized and proposed MMDS facilities. 
Information available to us indicates that no MMDS facility generates 
revenue in excess of $11 million annually. We believe that there are 
approximately 1634 small MMDS providers as defined by the SBA and the 
Commission's auction rules.
    80. ITFS: There are presently 1,989 licensed educational ITFS 
stations and 97 licensed commercial ITFS stations. Educational 
institutions are included in the definition of a small business. 
However, we do not collect annual revenue data for ITFS licensees and 
are unable to ascertain how many of the 97 commercial stations would be 
categorized as small under the SBA definition. Thus, we believe that at 
least 1,989 ITFS licensees are small businesses.
    81. DBS: There are presently nine DBS licensees, some of which are 
not currently in operation. The Commission does not collect annual 
revenue data for DBS and, therefore, is unable to ascertain the number 
of small DBS licensees that could be impacted by these proposed rules. 
Although DBS service requires a great investment of capital for 
operation, we acknowledge that there are several new entrants in this 
field that may not yet have generated $11 million in annual receipts, 
and therefore may be categorized as a small business, if independently 
owned and operated.
    82. HSD: The market for HSD service is difficult to quantify. 
Indeed, the service itself bears little resemblance to other MVPDs. HSD 
owners have access to more than 265 channels of programming placed on 
C-band satellites by programmers for receipt and distribution by video 
service providers, of which 115 channels are scrambled and 
approximately 150 are unscrambled. HSD owners can watch unscrambled 
channels without paying a subscription fee. To receive scrambled 
channels, however, an HSD owner must purchase an integrated receiver-
decoder from an equipment dealer and pay a subscription fee to an HSD 
programming packager. Thus, HSD users include: (1) Viewers who 
subscribe to a packaged programming service, which affords them access 
to most of the same programming provided to subscribers of other video 
service providers; (2) viewers who receive only non-subscription 
programming; and (3) viewers who receive satellite programming services 
illegally without subscribing. Because scrambled packages of 
programming are most specifically intended for retail consumers, these 
are the services most relevant to this discussion.
    83. According to the most recently available information, there are 
approximately 30 program packagers nationwide offering packages of 
scrambled programming to retail consumers. These program packagers 
provide subscriptions to approximately 2,314,900 subscribers 
nationwide. This is an average of about 77,163 subscribers per program 
packager. This is substantially smaller than the 400,000 subscribers 
used in the Commission's definition of a small MSO. Furthermore, 
because this an average, it is likely that some program packagers may 
be substantially smaller.
    84. OVS: The Commission has certified nine OVS operators. Because 
these services were introduced so recently and only one operator is 
currently offering programming to our knowledge, little financial 
information is available. Bell Atlantic (certified for operation in 
Dover) and Metropolitan Fiber Systems (``MFS,'' certified for operation 
in Boston and New York) have sufficient revenues to assure us that they 
do not qualify as small business entities. Two other operators, 
Residential Communications Network (``RCN,'' certified for operation in 
New York) and RCN/BETG (certified for operation in Boston), are MFS 
affiliates and thus also fail to qualify as small business concerns. 
However, Digital Broadcasting Open Video Systems (a general partnership 
certified for operation in southern California), Urban Communications 
Transport Corp. (a corporation certified for operation in New York and 
Westchester), and Microwave Satellite Technologies, Inc. (a corporation 
owned solely by Frank T. Matarazzo and certified for operation in New 
York) are either just beginning or have not yet started operations. 
Accordingly, we believe that three OVS licensees may qualify as small 
business concerns.
    85. SMATVs: Industry sources estimate that approximately 5200 SMATV 
operators were providing service as of December 1995. Other estimates 
indicate that SMATV operators serve approximately 1.05 million 
residential subscribers as of September 1996. The ten largest SMATV 
operators together pass 815,740 units. If we assume that these SMATV 
operators serve 50% of the units passed, the ten largest SMATV 
operators serve approximately 40% of the total number of SMATV 
subscribers. Because these operators are not rate regulated, they are 
not required to file financial data with the Commission. Furthermore, 
we are not aware of any privately published financial information 
regarding these operators. Based on the estimated number of operators 
and the estimated number of units served by the largest ten SMATVs, we 
believe that a substantial number of SMATV operators qualify as small 
entities.
    86. LMDS: Unlike the above pay television services, LMDS technology 
and spectrum allocation will allow licensees to provide wireless 
telephony, data, and/or video services. An LMDS provider is not limited 
in the number of potential applications that will be available for this 
service. Therefore, the definition of a small LMDS entity may be 
applicable to both cable and other pay television (SIC 4841) and/or 
radiotelephone communications companies (SIC 4812). The SBA definition 
for cable and other pay services is defined above. A small 
radiotelephone entity is one with 1500 employees or less. For the 
purposes of this proceeding, we include only an estimate of LMDS video 
service providers. The vast majority of LMDS entities providing video 
distribution could be small businesses under the SBA's definition of 
cable and pay television (SIC 4841). However, in the LMDS Second Report 
and Order, we defined a small LMDS provider as an entity that, together 
with affiliates and attributable investors, has average gross revenues 
for the three preceding calendar years of less than $40 million. We 
have not yet received approval by the SBA for this definition.
    87. There is only one company, CellularVision, that is currently 
providing LMDS video services. Although the Commission does not collect 
data on annual receipts, we assume that CellularVision is a small 
business under both the SBA definition and our proposed auction rules. 
We

[[Page 61030]]

tentatively conclude that a majority of the potential LMDS licensees 
will be small entities, as that term is defined by the SBA.
    88. MDU Operators: The SBA has developed definitions of small 
entities for operators of nonresidential buildings, apartment buildings 
and dwellings other than apartment buildings, which include all such 
companies generating $5 million or less in revenue annually. According 
to the Census Bureau, there were 26,960 operators of nonresidential 
buildings generating less than $5 million in revenue that were in 
operation for at least one year at the end of 1992. Also according to 
the Census Bureau, there were 39,903 operators of apartment dwellings 
generating less than $5 million in revenue that were in operation for 
at least one year at the end of 1992. The Census Bureau provides no 
separate data regarding operators of dwellings other than apartment 
buildings, and we are unable at this time to estimate the number of 
such operators that would qualify as small entities.

Reporting, Recordkeeping, and Other Compliance Requirements

    89. Disposition of MDU Home Run Wiring: The Order requires MVPDs to 
comply with a set of procedural timetables for the disposition of home 
run wiring upon termination of service when an MDU owner invokes the 
Commission's procedures. In addition, it requires MVPDs to include in 
future contracts with MDU owners a provision addressing the disposition 
of home run wiring upon the termination of the contract. It also 
requires the parties to cooperate to ensure as seamless a transition as 
possible for subscribers.
    90. Sharing of Molding: The Order permits an MVPD to install home 
run wiring in an existing molding if the MDU owner determines that 
there is sufficient space, if the incumbent MVPD's ability to provide 
service is not impaired, and if the MDU owner gives its affirmative 
consent. If the MDU owner determines that there is not sufficient 
space, and the MDU owner will permit larger moldings, the MDU owner may 
install larger moldings at the alternative MVPD's expense.
    91. Disposition of Cable Home Wiring: The Order requires MVPDs to 
implement their election to remove or abandon home wiring within seven 
days of learning that the home wiring will not be purchased.
    92. Customer Access to Cable Home Wiring before Termination of 
Service: The Order requires cable operators to permit subscribers to 
provide or install their own cable home wiring, or redirect, reroute or 
connect additional wiring to the cable operator's home wiring, so long 
as no electronic or physical harm is caused to the cable system and the 
physical integrity of the cable operator's wiring remains intact. The 
cable operator may choose to impose requirements that any home wiring 
meet reasonable technical specifications, not to exceed the technical 
specifications of such wiring installed by the cable operator; however, 
the cable operator may require additional technical specifications to 
eliminate electronic or physical harm.
    93. Signal Leakage: The Order extends the Commission's cable signal 
leakage rules to all broadband service providers that pose a similar 
threat of interference with frequencies used for over-the-air 
communications. Section 76.615(b)(7) of the cable signal leakage rules 
requires cable operators to file annually with the Commission the 
results of their signal leakage tests conducted pursuant to section 
76.611.

Significant Alternatives and Steps Taken To Minimize the Significant 
Economic Impact on a Substantial Number of Small Entities Consistent 
With the Stated Objectives

    This section analyzes the impact on small entities of the 
regulations adopted, amended, modified, or clarified in this Order.
    94. Disposition of MDU Home Run Wiring: We considered several 
alternatives for the disposition of MDU home run wiring, including: (1) 
Creating a single demarcation point for cable and telephony providers; 
(2) moving the cable demarcation point; and (3) maintaining our current 
rules. The record indicates that MDU owners often object to the 
installation of multiple home run wires for reasons including 
aesthetics, space limitations, the avoidance of disruption and 
inconvenience, and the potential for property damage. Small video 
service providers often are new entrants that will have to install new 
home run wiring (if they cannot use the existing wiring), while 
incumbent service providers often are established entities that may 
resist efforts by both new entrants and MDU operators to arrange for 
use of the existing wiring. By bringing order and certainty to the 
disposition of the home run wiring upon termination of service, the 
rules adopted herein advance the interests of both small video service 
providers and small MDU owners.
    95. Transfer of Ownership of Home Run Wiring in Future 
Installations: We considered adopting a requirement that, for future 
installations, MVPDs transfer ownership of home run wiring to MDU 
owners. We instead decided to require MVPDs to include in future 
contracts with MDU owners a provision addressing the disposition of 
home run wiring upon termination of the contract. This requirement will 
provide all MDU owners, including small MDU owners, the flexibility to 
negotiate for ownership of the home run wiring.
    96. Sharing of Molding: We considered not requiring the sharing of 
molding even when empty space exists. We concluded, however, that the 
ability to share molding often may assist small MVPDs, which frequently 
are new entrants, to gain access to MDUs. We considered Time Warner's 
proposal to allow affected MVPDs and the MDU owner to determine whether 
the molding contains adequate space. Our rule, however, does not 
require the concurrence of the affected MVPDs in the determination of 
whether adequate space exists.
    97. Customer Access to Cable Home Wiring before Termination of 
Service: We believe that subscriber access to home wiring will advance 
the interests of small entities. As customers gain the ability to 
select who will install and maintain their home wiring, small entities 
will be able to compete with the incumbent cable operator to provide 
such services.
    98. Signal Leakage: This Order extends the Commission's cable 
signal leakage rules to all broadband service providers that pose a 
similar threat of interference with frequencies used for over-the-air 
communications. Although this modification will impact small broadband 
service providers, we are exploring the possibility of exempting 
certain categories of broadband service providers from the reporting 
requirements of the signal leakage rules.

Report to Congress

    99. The Commission shall send a copy of the Order, including this 
FRFA, in a report to Congress pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996, 5 U.S.C. Sec. 801(a)(1)(A). A copy of 
the Order and the FRFA will be sent to the Chief Counsel for Advocacy 
of the Small Business Administration.

XVI. Ordering Clauses

    100. It is Ordered that, pursuant to sections 1, 4(i), 201-205, 
214-215, 220, 303, 623, 624 and 632 of the Communications Act of 1934, 
as amended, 47 U.S.C. Secs. 151, 154(i), 201-205, 214-215, 220, 303, 
543, 544 and 552, the Commission's rules are hereby amended as set 
forth below.

[[Page 61031]]

    101. It is further ordered that the amendments in 47 CFR 76.613, 
76.802 and 76.804 impose information collection requirements, and will 
therefore not become effective until approved by the Office of 
Management and Budget (``OMB''). The amendments in 47 CFR 76.5, 76.620, 
76.800, 76.805 and 76.806 will become effective 30 days following 
publication of this Order in the Federal Register. However, compliance 
with amendments in 47 CFR 76.5, 76.620, 76.800, 76.805 and 76.806 will 
not be required until OMB approval of the information collection 
requirements in 47 CFR 76.613, 76.802 and 76.804. The Commission will 
publish a document at a later date announcing the effective date of the 
amendments in 47 CFR 76.613, 76.802 and 76.804, and the date of 
compliance for the amendments in 47 CFR 76.5, 76.620, 76.800, 76.805 
and 76.806.
    102. It is further ordered that the Commission shall send a copy of 
the Order, including the Final Regulatory Flexibility Analysis, to the 
Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

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

PART 76--CABLE TELEVISION SERVICE

    1. The authority citation for part 76 continues to read as follows:

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

    2. Section 76.5 is amended by revising paragraph (mm)(2) and adding 
paragraphs (mm)(3) and (mm)(4), to read as follows:


Sec. 76.5   Definitions.

* * * * *
    (mm) * * *
    (2) For new and existing multiple dwelling unit installations with 
non-loop-through wiring configurations, the demarcation point shall be 
a point at (or about) twelve inches outside of where the cable wire 
enters the subscriber's dwelling unit, or, where the wire is physically 
inaccessible at such point, the closest practicable point thereto that 
does not require access to the individual subscriber's dwelling unit.
    (3) For new and existing multiple dwelling unit installations with 
loop-through wiring configurations, the demarcation points shall be at 
(or about) twelve inches outside of where the cable wire enters or 
exits the first and last individual dwelling units on the loop, or, 
where the wire is physically inaccessible at such point(s), the closest 
practicable point thereto that does not require access to an individual 
subscriber's dwelling unit.
    (4) As used in this paragraph (mm)(3), the term ``physically 
inaccessible'' describes a location that:
    (i) Would require significant modification of, or significant 
damage to, preexisting structural elements, and
    (ii) Would add significantly to the physical difficulty and/or cost 
of accessing the subscriber's home wiring.

    Note to paragraph (mm)(4): For example, wiring embedded in 
brick, metal conduit or cinder blocks with limited or without access 
openings would likely be physically inaccessible; wiring enclosed 
within hallway molding would not.
* * * * *
    3. Section 76.613 is amended by revising the heading and by 
revising paragraphs (b), (c), and (d) to read as follows:


Sec. 76.613   Interference from a multichannel video programming 
distributor (``MVPD'').

* * * * *
    (b) An MVPD that causes harmful interference shall promptly take 
appropriate measures to eliminate the harmful interference.
    (c) If harmful interference to radio communications involving the 
safety of life and protection of property cannot be promptly eliminated 
by the application of suitable techniques, operation of the offending 
MVPD or appropriate elements thereof shall immediately be suspended 
upon notification by the District Director and/or Resident Agent of the 
Commission's local field office, and shall not be resumed until the 
interference has been eliminated to the satisfaction of the District 
Director and/or Resident Agent. When authorized by the District 
Director and/or Resident Agent, short test operations may be made 
during the period of suspended operation to check the efficacy of 
remedial measures.
    (d) The MVPD may be required by the District Director and/or 
Resident Agent to prepare and submit a report regarding the cause(s) of 
the interference, corrective measures planned or taken, and the 
efficacy of the remedial measures.
    4. Section 76.620 is added to read as follows:


Sec. 76.620   Non-cable multichannel video programming distributors 
(``MVPDs'').

    (a) Sections 76.605(a)(12), 76.610, 76.611, 76.612, 76.614, 
76.615(b)(1-6), 76.616, and 76.617 shall apply to all non-cable MVPDs. 
However, non-cable MVPD systems that are substantially built as of 
January 1, 1998 shall not be subject to these sections until January 1, 
2003. ``Substantially built'' shall be defined as having 75 percent of 
the distribution plant completed. As of January 1, 2003, 
Sec. 76.615(b)(7) shall apply to all non-cable MVPDs.
    (b) To comply with Sec. 76.615(b)(2), a non-cable MVPD shall submit 
its Internal Revenue Service's Employer Identification (E.I.) number 
instead of an FCC identifier.
    5. Subpart M is amended by revising the heading to read as follows:

Subpart M--Cable Inside Wiring

    6. Section 76.800 is added to read as follows:


Sec. 76.800   Definitions.

    (a) MDU. A multiple dwelling unit building (e.g., an apartment 
building, condominium building or cooperative).
    (b) MDU owner. The entity that owns or controls the common areas of 
a multiple dwelling unit building.
    (c) MVPD. A multichannel video programming distributor, as that 
term is defined in Section 602(13) of the Communications Act, 47 U.S.C. 
522(13).
    (d) Home run wiring. The wiring from the demarcation point to the 
point at which the MVPD's wiring becomes devoted to an individual 
subscriber or individual loop.
    7. Section 76.802 is amended by revising paragraphs (a) and (g), 
and adding paragraph (l) to read as follows:


Sec. 76.802   Disposition of cable home wiring.

    (a)(1) Upon voluntary termination of cable service by a subscriber 
in a single unit installation, a cable operator shall not remove the 
cable home wiring unless it gives the subscriber the opportunity to 
purchase the wiring at the replacement cost, and the subscriber 
declines. If the subscriber declines to purchase the cable home wiring, 
the cable system operator must then remove the cable home wiring within 
seven days of the subscriber's decision, under normal operating 
conditions, or make no subsequent attempt to remove it or to restrict 
its use.
    (2) Upon voluntary termination of cable service by an individual 
subscriber in a multiple-unit installation, a cable operator shall not 
be

[[Page 61032]]

entitled to remove the cable home wiring unless: it gives the 
subscriber the opportunity to purchase the wiring at the replacement 
cost; the subscriber declines, and neither the MDU owner nor an 
alternative MVPD, where permitted by the MDU owner, has provided 
reasonable advance notice to the incumbent provider that it would 
purchase the cable home wiring pursuant to this section if and when a 
subscriber declines. If the cable system operator is entitled to remove 
the cable home wiring, it must then remove the wiring within seven days 
of the subscriber's decision, under normal operating conditions, or 
make no subsequent attempt to remove it or to restrict its use.
    (3) The cost of the cable home wiring is to be based on the 
replacement cost per foot of the wiring on the subscriber's side of the 
demarcation point multiplied by the length in feet of such wiring, and 
the replacement cost of any passive splitters located on the 
subscriber's side of the demarcation point.
* * * * *
    (g) If the cable operator adheres to the procedures described in 
paragraph (b) of this section, and the subscriber asks for more time to 
make a decision regarding whether to purchase the home wiring, the 
seven (7) day period described in paragraph (b) of this section will 
not begin running until the subscriber declines to purchase the wiring; 
in addition, the subscriber may not use the wiring to connect to an 
alternative service provider until the subscriber notifies the operator 
whether or not the subscriber wishes to purchase the wiring.
* * * * *
    (l) The provisions of Sec. 76.802, except for Sec. 76.802(a)(1), 
shall apply to all MVPDs in the same manner that they apply to cable 
operators.
    8. Section 76.804 is added to read as follows:


Sec. 76.804  Disposition of home run wiring.

    (a) Building-by-building disposition of home run wiring. (1) Where 
an MVPD owns the home run wiring in an MDU and does not (or will not at 
the conclusion of the notice period) have a legally enforceable right 
to remain on the premises against the wishes of the MDU owner, the MDU 
owner may give the MVPD a minimum of 90 days' written notice that its 
access to the entire building will be terminated to invoke the 
procedures in this section. The MVPD will then have 30 days to notify 
the MDU owner in writing of its election for all the home run wiring 
inside the MDU building: to remove the wiring and restore the MDU 
building consistent with state law within 30 days of the end of the 90-
day notice period or within 30 days of actual service termination, 
whichever occurs first; to abandon and not disable the wiring at the 
end of the 90-day notice period; or to sell the wiring to the MDU 
building owner. If the incumbent provider elects to remove or abandon 
the wiring, and it intends to terminate service before the end of the 
90-day notice period, the incumbent provider shall notify the MDU owner 
at the time of this election of the date on which it intends to 
terminate service. If the incumbent provider elects to remove its 
wiring and restore the building consistent with state law, it must do 
so within 30 days of the end of the 90-day notice period or within 30 
days of actual service termination, which ever occurs first. For 
purposes of abandonment, passive devices, including splitters, shall be 
considered part of the home run wiring. The incumbent provider that has 
elected to abandon its home run wiring may remove its amplifiers or 
other active devices used in the wiring if an equivalent replacement 
can easily be reattached. In addition, an incumbent provider removing 
any active elements shall comply with the notice requirements and other 
rules regarding the removal of home run wiring. If the MDU owner 
declines to purchase the home run wiring, the MDU owner may permit an 
alternative provider that has been authorized to provide service to the 
MDU to negotiate to purchase the wiring.
    (2) If the incumbent provider elects to sell the home run wiring 
under paragraph (a)(1) of this section, the incumbent and the MDU owner 
or alternative provider shall have 30 days from the date of election to 
negotiate a price. If the parties are unable to agree on a price within 
that 30-day time period, the incumbent must elect: to abandon without 
disabling the wiring; to remove the wiring and restore the MDU 
consistent with state law; or to submit the price determination to 
binding arbitration by an independent expert. If the incumbent provider 
chooses to abandon or remove its wiring, it must notify the MDU owner 
at the time of this election if and when it intends to terminate 
service before the end of the 90-day notice period. If the incumbent 
service provider elects to abandon its wiring at this point, the 
abandonment shall become effective at the end of the 90-day notice 
period or upon service termination, whichever occurs first. If the 
incumbent elects at this point to remove its wiring and restore the 
building consistent with state law, it must do so within 30 days of the 
end of the 90-day notice period or within 30 days of actual service 
termination, which ever occurs first.
    (3) If the incumbent elects to submit to binding arbitration, the 
parties shall have seven days to agree on an independent expert or to 
each designate an expert who will pick a third expert within an 
additional seven days. The independent expert chosen will be required 
to assess a reasonable price for the home run wiring by the end of the 
90-day notice period. If the incumbent elects to submit the matter to 
binding arbitration and the MDU owner (or the alternative provider) 
refuses to participate, the incumbent shall have no further obligations 
under the Commission's home run wiring disposition procedures. If the 
incumbent fails to comply with any of the deadlines established herein, 
it shall be deemed to have elected to abandon its home run wiring at 
the end of the 90-day notice period.
    (4) The MDU owner shall be permitted to exercise the rights of 
individual subscribers under this subsection for purposes of the 
disposition of the cable home wiring under Sec. 76.802. When an MDU 
owner notifies an incumbent provider under this section that the 
incumbent provider's access to the entire building will be terminated 
and that the MDU owner seeks to use the home run wiring for another 
service, the incumbent provider shall, in accordance with our current 
home wiring rules: offer to sell to the MDU owner any home wiring 
within the individual dwelling units that the incumbent provider owns 
and intends to remove; and provide the MDU owner with the total per-
foot replacement cost of such home wiring. This information must be 
provided to the MDU owner within 30 days of the initial notice that the 
incumbent's access to the building will be terminated. If the MDU owner 
declines to purchase the cable home wiring, the MDU owner may allow the 
alternative provider to purchase the home wiring upon service 
termination under the terms and conditions of Sec. 76.802. If the MDU 
owner or the alternative provider elects to purchase the home wiring 
under these rules, it must so notify the incumbent MVPD provider not 
later than 30 days before the incumbent's termination of access to the 
building will become effective. If the MDU owner and the alternative 
provider fail to elect to purchase the home wiring, the incumbent 
provider must then remove the cable home wiring, under normal operating 
conditions, within 30 days of

[[Page 61033]]

actual service termination, or make no subsequent attempt to remove it 
or to restrict its use.
    (5) The parties shall cooperate to avoid disruption in service to 
subscribers to the extent possible.
    (b) Unit-by-unit disposition of home run wiring: (1) Where an MVPD 
owns the home run wiring in an MDU and does not (or will not at the 
conclusion of the notice period) have a legally enforceable right to 
maintain any particular home run wire dedicated to a particular unit on 
the premises against the MDU owner's wishes, the MDU owner may permit 
multiple MVPDs to compete for the right to use the individual home run 
wires dedicated to each unit in the MDU. The MDU owner must provide at 
least 60 days' written notice to the incumbent MVPD of the MDU owner's 
intention to invoke this procedure. The incumbent MVPD will then have 
30 days to provide a single written election to the MDU owner as to 
whether, for each and every one of its home run wires dedicated to a 
subscriber who chooses an alternative provider's service, the incumbent 
MVPD will: remove the wiring and restore the MDU building consistent 
with state law; abandon the wiring without disabling it; or sell the 
wiring to the MDU owner. If the MDU owner refuses to purchase the home 
run wiring, the MDU owner may permit the alternative provider to 
purchase it. If the alternative provider is permitted to purchase the 
wiring, it will be required to make a similar election within this 30-
day period for each home run wire solely dedicated to a subscriber who 
switches back from the alternative provider to the incumbent MVPD.
    (2) If the incumbent provider elects to sell the home run wiring 
under paragraph (b)(1), the incumbent and the MDU owner or alternative 
provider shall have 30 days from the date of election to negotiate a 
price. During this 30-day negotiation period, the parties may arrange 
for an up-front lump sum payment in lieu of a unit-by-unit payment. If 
the parties are unable to agree on a price during this 30-day time 
period, the incumbent must elect: to abandon without disabling the 
wiring; to remove the wiring and restore the MDU consistent with state 
law; or to submit the price determination to binding arbitration by an 
independent expert. If the incumbent elects to submit to binding 
arbitration, the parties shall have seven days to agree on an 
independent expert or to each designate an expert who will pick a third 
expert within an additional seven days. The independent expert chosen 
will be required to assess a reasonable price for the home run wiring 
within 14 days. If subscribers wish to switch service providers after 
the expiration of the 60-day notice period but before the expert issues 
its price determination, the procedures set forth in paragraph (b)(3) 
of this section shall be followed, subject to the price established by 
the arbitrator. If the incumbent elects to submit the matter to binding 
arbitration and the MDU owner (or the alternative provider) refuses to 
participate, the incumbent shall have no further obligations under the 
Commission's home run wiring disposition procedures.
    (3) When an MVPD that is currently providing service to a 
subscriber is notified either orally or in writing that that subscriber 
wishes to terminate service and that another service provider intends 
to use the existing home run wire to provide service to that particular 
subscriber, a provider that has elected to remove its home run wiring 
pursuant to paragraph (b)(1) or (b)(2) of this section will have seven 
days to remove its home run wiring and restore the building consistent 
with state law. If the subscriber has requested service termination 
more than seven days in the future, the seven-day removal period shall 
begin on the date of actual service termination (and, in any event, 
shall end no later than seven days after the requested date of 
termination). If the provider has elected to abandon or sell the wiring 
pursuant to paragraph (b)(1) or (b)(2) of this section, the abandonment 
or sale will become effective upon actual service termination or upon 
the requested date of termination, whichever occurs first. For purposes 
of abandonment, passive devices, including splitters, shall be 
considered part of the home run wiring. The incumbent provider may 
remove its amplifiers or other active devices used in the wiring if an 
equivalent replacement can easily be reattached. In addition, an 
incumbent provider removing any active elements shall comply with the 
notice requirements and other rules regarding the removal of home run 
wiring. If the incumbent provider intends to terminate service prior to 
the end of the seven-day period, the incumbent shall inform the party 
requesting service termination, at the time of such request, of the 
date on which service will be terminated. The incumbent provider shall 
make the home run wiring accessible to the alternative provider within 
twenty-four (24) hours of actual service termination.
    (4) If the incumbent provider fails to comply with any of the 
deadlines established herein, the home run wiring shall be considered 
abandoned, and the incumbent may not prevent the alternative provider 
from using the home run wiring immediately to provide service. The 
alternative provider or the MDU owner may act as the subscriber's agent 
in providing notice of a subscriber's desire to change services, 
consistent with state law. If a subscriber's service is terminated 
without notification that another service provider intends to use the 
existing home run wiring to provide service to that particular 
subscriber, the incumbent provider will not be required to carry out 
its election to sell, remove or abandon the home run wiring; the 
incumbent provider will be required to carry out its election, however, 
if and when it receives notice that a subscriber wishes to use the home 
run wiring to receive an alternative service. Section 76.802 of the 
Commission's rules regarding the disposition of cable home wiring will 
apply where a subscriber's service is terminated without notifying the 
incumbent provider that the subscriber wishes to use the home run 
wiring to receive an alternative service.
    (5) The parties shall cooperate to avoid disruption in service to 
subscribers to the extent possible.
    (6) Section 76.802 of the Commission's rules regarding the 
disposition of cable home wiring will continue to apply to the wiring 
on the subscriber's side of the cable demarcation point.
    (c) The procedures set forth in paragraphs (a) and (b) of this 
section shall apply unless and until the incumbent provider obtains a 
court ruling or an injunction within forty-five (45) days following the 
initial notice enjoining its displacement.
    (d) After the effective date of this rule, MVPDs shall include a 
provision in all service contracts entered into with MDU owners setting 
forth the disposition of any home run wiring in the MDU upon the 
termination of the contract.
    (e) Incumbents are prohibited from using any ownership interest 
they may have in property located on or near the home run wiring, such 
as molding or conduit, to prevent, impede, or in any way interfere 
with, the ability of an alternative MVPD to use the home run wiring 
pursuant to this section.
    (f) Section 76.804 shall apply to all MVPDs.
    9. Section 76.805 is added to read as follows:


Sec. 76.805  Access to molding.

    (a) An MVPD shall be permitted to install one or more home run 
wires within the existing molding of an MDU where the MDU owner finds 
that there is sufficient space to permit the installation of the 
additional wiring without interfering with the ability of an

[[Page 61034]]

existing MVPD to provide service, and gives its affirmative consent to 
such installation. This paragraph shall not apply where the incumbent 
provider has an exclusive contractual right to occupy the molding.
    (b) If an MDU owner finds that there is insufficient space in 
existing molding to permit the installation of the new wiring without 
interfering with the ability of an existing MVPD to provide service, 
but gives its affirmative consent to the installation of larger molding 
and additional wiring, the MDU owner (with or without the assistance of 
the incumbent and/or the alternative provider) shall be permitted to 
remove the existing molding, return such molding to the incumbent, if 
appropriate, and install additional wiring and larger molding in order 
to contain the additional wiring. This paragraph shall not apply where 
the incumbent provider possesses a contractual right to maintain its 
molding on the premises without alteration by the MDU owner.
    (c) The alternative provider shall be required to pay any and all 
installation costs associated with the implementation of paragraphs (a) 
or (b) of this section, including the costs of restoring the MDU 
owner's property to its original condition, and the costs of repairing 
any damage to the incumbent provider's wiring or other property.
    10. Section 76.806 is added to read as follows:


Sec. 76.806  Pre-termination access to cable home wiring.

    (a) Prior to termination of service, a customer may: install or 
provide for the installation of their own cable home wiring; or connect 
additional home wiring, splitters or other equipment within their 
premises to the wiring owned by the cable operator, so long as no 
electronic or physical harm is caused to the cable system and the 
physical integrity of the cable operator's wiring remains intact.
    (b) Cable operators may require that home wiring (including passive 
splitters, connectors and other equipment used in the installation of 
home wiring) meets reasonable technical specifications, not to exceed 
the technical specifications of such equipment installed by the cable 
operator; provided however, that if electronic or physical harm is 
caused to the cable system, the cable operator may impose additional 
technical specifications to eliminate such harm. To the extent a 
customer's installations or rearrangements of wiring degrade the signal 
quality of or interfere with other customers' signals, or cause 
electronic or physical harm to the cable system, the cable operator may 
discontinue service to that subscriber until the degradation or 
interference is resolved.
    (c) Customers shall not physically cut, substantially alter, 
improperly terminate or otherwise destroy cable operator-owned home 
wiring.

[FR Doc. 97-29514 Filed 11-13-97; 8:45 am]
BILLING CODE 6712-01-P