[Federal Register Volume 63, Number 246 (Wednesday, December 23, 1998)]
[Rules and Regulations]
[Pages 71027-71039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33869]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 1

[CS Docket No. 96-83; FCC 98-273]


Preemption of Local Zoning Regulation of Satellite Earth Stations 
and Restrictions on Over-the-Air Reception Devices: Television 
Broadcast, Direct Broadcast Satellite and Multichannel Multipoint 
Distribution Services

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: This Second Report and Order amends the Over-the-Air Reception 
Devices Rule, which prohibits governmental and non-governmental 
restrictions that impair a viewer's ability to receive video 
programming through devices designed for over-the-air reception of DBS, 
MDS, or television broadcast signals. This Order concludes that the 
rule will be expanded to apply to antenna restrictions on rental 
property where the viewer has exclusive use or control. This Order also 
concludes that antenna restrictions that apply to common or restricted 
access areas are beyond the scope of the statutory authority for this 
rule, and that the rule, therefore, cannot apply to antenna 
restrictions on common or restricted access.

EFFECTIVE DATES: January 22, 1999.

FOR FURTHER INFORMATION CONTACT: Eloise Gore at (202) 418-1066 or via 
internet at [email protected] or Darryl Cooper at (202) 418-1039 or via 
internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Second Report and Order, CS Docket No. 96-83, adopted October 14, 1998 
and released November 20, 1998. This Order is in response to the 
Further Notice of Proposed Rulemaking (CS Docket No. 96-83, FCC 96-328, 
61 FR 46557). 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, D.C. 20554, 
or may be purchased from the Commission's copy contractor, 
International Transcription Service (``ITS''), (202) 857-3800, 1231 
20th Street, NW, Washington, D.C. 20036, or may be reviewed via 
internet at http://www.fcc.gov/Bureaus/Cable/WWW/csb.html. For copies 
in alternative formats, such as braille, audio cassette or large print, 
please contact Sheila Ray at ITS.
    Paperwork Reduction Act: This Second Report and Order contains 
information collection requirements for which the Commission already 
has clearance from the Office of Management and Budget (``OMB''). The 
Commission submitted these information collection requirements to OMB 
for clearance under OMB control number 3060-0707 upon the August 6, 
1996 release of the Report and Order. OMB subsequently issued its 
clearance to sponsor these requirements by means of a Notice of Action 
dated October 14, 1996.
    OMB Approval Number: 3060-0707.
    Title: Over-the-Air Reception Devices.

SYNOPSIS OF ORDER ON RECONSIDERATION

Introductory Background

    1. This Second Report and Order resolves the issues regarding 
Section 207 of the Telecommunications Act of 1996 (``1996 Act'') (Pub. 
L. No. 104-104, 110 Stat. 114 (1996)), on which the Commission sought 
further comment in its Report and Order, Memorandum Opinion and Order, 
and Further Notice of Proposed Rulemaking (``Report and Order'' and 
``Further Notice''). Based on the Commission's review of the comments 
filed in response to the Further Notice, the Commission adopts an 
amendment to Section 1.4000 of the rules, 47 CFR 1.4000 (``Section 207 
rules''), that prohibits restrictions on over-the-air reception devices 
covered by Section 207 (``Section 207 reception devices'') on rental 
property subject to the other terms and conditions of the Section 207 
rules. Section 207 expressly covers over-the-air reception devices used 
to receive television broadcast signals, multichannel multipoint 
distribution service (``MMDS''), and direct broadcast satellite 
services (``DBS''). In the Report and Order, the Commission concluded 
that the rules implementing Section 207 should cover: (1) any type of 
multipoint distribution service, including not only MMDS but also 
instructional television fixed service (``ITFS'') and local multipoint 
distribution service (``LMDS'') provided the antenna is one meter or 
less in diameter or diagonal measurement; (2) medium-power satellite 
services using antennas of one meter or less, even though such services 
may not be technically defined as DBS elsewhere in the Commission's 
rules; (3) DBS antennas that are one meter or less in diameter or over 
one meter in Alaska (smaller DBS antennas do not work in Alaska); and 
television (``TVBS'') antennas without size limitation.
    2. This amendment to the rules serves two federal objectives of 
promoting competition among multichannel video

[[Page 71028]]

providers and of providing viewers with access to multiple choices for 
video programming. The new amendment strikes a balance between the 
interests of tenants, who desire access to more video programming 
services, and the interests of landlords, who seek to control access to 
and use of their property. This Second Report and Order does not amend 
the rules to cover common property and restricted access property, as 
defined below, because Section 207 does not authorize the Commission to 
do so.
    3. In practice, under the amendment to the rules, renters will be 
able, subject to the terms of the Section 207 rules, to install Section 
207 reception devices wherever they rent space outside of a building, 
such as balconies, balcony railings, patios, yards, gardens or any 
other similar areas. Moreover, for renters who have not leased outside 
rental space where a Section 207 reception device could be installed, 
the new rules permit the installation of Section 207 devices inside 
rental units and anticipate the development of future technology that 
will create devices capable of receiving video programming signals 
inside buildings. One such device, LMDS, is already capable of 
receiving signals inside buildings. This amendment to the rules 
provides video programming alternatives to as many viewers as possible 
within the boundaries of Section 207's language.
    4. Section 207 directs the Commission to remove restrictions on 
Section 207 reception devices:

    Within 180 days after the date of enactment of this Act, the 
Commission shall, pursuant to section 303 of the Communications Act 
of 1934, promulgate regulations to prohibit restrictions that impair 
a viewer's ability to receive video programming services through 
devices designed for over-the-air reception of television broadcast 
signals, multichannel multipoint distribution service, or direct 
broadcast satellite services.

    5. Among other things, the Report and Order adopted rules that 
generally prohibit both governmental and nongovernmental restrictions 
that impair the installation, maintenance or use of Section 207 
reception devices, unless the restriction serves a legitimate safety or 
historic preservation objective in a non-discriminatory manner that is 
no more burdensome than necessary to achieve the objective. In 
addition, the Section 207 rules adopted in the Report and Order applied 
only to property within the exclusive use or control of the viewer 
where the viewer has a direct or indirect ownership interest in the 
property.
    6. In the Further Notice, the Commission sought comment on the 
question of whether the antenna restriction preemption rules should be 
extended to the placement of antennas on rental and other property not 
within the exclusive use or control of a person with an ownership 
interest. This includes, for instance, the question of whether Section 
207 authorizes extending the Section 207 rules to (1) rental housing 
(e.g., apartment buildings and single family dwellings) where viewers 
would have possession and exclusive use of the leasehold in which 
Section 207 reception equipment would be placed; (2) common property--
e.g., common property within condominiums, cooperatives, rental 
complexes or manufactured housing parks--where viewers may have access 
to, but not possession of and exclusive rights to use or control, the 
areas where Section 207 reception equipment would be placed; and (3) 
areas of a building to which viewers generally do not have access or 
possession, such as the rooftop, on which Section 207 reception 
equipment would be placed (``restricted access'' property). With regard 
to condominiums, the term ``common property'' herein refers to the 
common elements in which the condominium owner owns an interest with 
other condominium owners but over which the owner does not exercise 
exclusive use or control. The Section 207 rules already cover 
condominium balconies, decks, patios and similar areas over which the 
condominium unit owner exercises exclusive use and has a direct or 
indirect property interest even if he or she does not own 100% of that 
area.
    7. In particular, the Further Notice sought comment on the impact 
of Loretto v. TelePrompter Manhattan CATV Corp., 458 U.S. 419 (1982) 
and Bell Atlantic Telephone Co. v. FCC, 24 F.3d 1441 (D.C. Cir. 1994) 
on any such extensions of the rules. The Further Notice also invited 
commenters to ``address technical and/or practical problems or any 
other considerations they believe the Commission should take into 
account in deciding whether to adopt such a rule and, if so, the form 
such a rule should take.''
    8. After analyzing the statute and the comments filed in response 
to the Further Notice, the Commission concludes that, in Section 207, 
Congress did not direct the Commission to impose affirmative duties on 
other parties to install Section 207 devices or to grant access to 
restricted areas to permit the installation of Section 207 reception 
devices, and in particular, Congress did not direct the Commission to 
require property owners to subject property to a Fifth Amendment 
taking. In addition, Congress gave the Commission the discretion to 
devise rules that would not create serious practical problems in their 
implementation. Section 207 obliges the Commission to prohibit 
restrictions on viewers who wish to install, maintain or use a Section 
207 reception device within their leasehold because this does not 
impose an affirmative duty on property owners, is not a taking of 
private property, and does not present serious practical problems.
    9. To effect the above changes, 47 CFR 1.4000 of the rules is 
amended as follows (new language underlined):

    (a) Any restriction, including but not limited to any state or 
local law or regulation, including zoning, land-use, or building 
regulations, or any private covenant, contract provision, lease 
provision, homeowners' association rule or similar restriction, on 
property within the exclusive use or control of the antenna user 
where the user has a direct or indirect ownership or leasehold 
interest in the property that impairs the installation, maintenance, 
or use of: * * *

    10. We also revise the rule to provide the new Commission street 
address for purposes of filing petitions for waiver or declaratory 
ruling:

    (g) All allegations of fact contained in petitions and related 
pleadings before the Commission must be supported by affidavit of a 
person or persons with actual knowledge thereof. An original and two 
copies of all petitions and pleadings should be addressed to the 
Office of the Secretary, Federal Communications Commission, 445 12th 
St. S.W., Washington, D.C. 20554, Attention: Cable Services Bureau. 
Copies of the petitions and related pleadings will be available for 
public inspection in the Cable Reference Room in Washington, D.C. 
Copies will be available for purchase from the Commission's contract 
copy center, and Commission decisions will be available on the 
Internet.

    11. In light of the decision to allow a tenant to install a Section 
207 device within a leasehold without the landlord's permission, 47 CFR 
1.4000 is further amended to delete paragraph (h) which required that 
the landlord consent to such an installation. The tenant's installation 
is subject to the terms of the Section 207 rules.

Application of the Section 207 Rules to Rental Property

Scope of Section 207
    12. The starting point of the analysis is the statute. If Congress 
has directly spoken to the precise question at issue ``that is the end 
of the matter,'' and the Commission must give ``effect to the 
unambiguously expressed intent of Congress.'' (See Chevron, U.S.A., 
Inc. v.

[[Page 71029]]

NRDC, 467 U.S. 837, 842-43 (1984).) If, however, Congress has not 
spoken to the precise question at hand--i.e., if ``the statute is 
silent or ambiguous with respect to the specific issue''--the 
Commission may exercise its reasonable discretion in construing the 
statute.
    13. As an initial matter, we agree with those commenters that argue 
that Section 207 applies on its face to all viewers, and that the 
Commission should not create different classes of ``viewers'' depending 
upon their status as property owners. For instance, if a local 
government imposed a zoning restriction that prohibited a landlord from 
installing a master antenna system for his tenants to receive over-the-
air broadcast signals, such a restriction would be preempted, 
notwithstanding the fact that the viewers in that situation are 
renters.
    14. Section 207 expressly directs the Commission only to ``prohibit 
restrictions'' that impair a viewer's ability to receive covered video 
programming; Section 207 does not grant the Commission the authority to 
require property owners or third parties to take affirmative steps to 
enable a viewer to receive such video programming. Accordingly, the 
Commission may prohibit restrictions that a property owner or third 
party may impose upon a viewer (e.g., local zoning ordinances or 
community association rules), but may not impose affirmative 
requirements on a property owner or a third party, such as a duty to 
install Section 207 reception devices for a viewer or give a viewer or 
video provider possession of restricted access areas or common areas 
for an installation. (``Community associations'' includes homeowners'' 
associations, townhome or townhouse associations, condominium 
associations, cooperative associations, planned unit development 
associations and similar associations and entities.) This distinction 
between prohibiting restrictions and imposing affirmative duties is 
consistent with Section 207's legislative history, which states that 
``[e]xisting regulations, including but not limited to, zoning laws, 
ordinances, restrictive covenants or homeowners' association rules, 
shall be unenforceable to the extent contrary to this section.''
    15. Removing a restriction on installing an antenna within a 
leasehold does not impose a duty on the landlord to relinquish property 
because the landlord has already voluntarily relinquished possession of 
the leasehold by virtue of the lease; therefore, the language of 
Section 207 permits the Commission to prohibit lease and other 
restrictions on a viewer's installation, maintenance or use of a 
Section 207 device within a leasehold subject to the terms and 
conditions of the Section 207 rules.

Constitutional Considerations

    16. Under Bell Atlantic, where an agency authorizes ``an 
identifiable class of cases in which the application of a statute will 
necessarily constitute a taking,'' its authority is construed narrowly 
to defeat such an interpretation unless the statute grants express or 
implied authority to the agency to effect the taking. According to the 
Bell Atlantic court, implied authority may be found only where `` `the 
grant [of authority] itself would be defeated unless [takings] power 
were implied.' '' Section 207 does not expressly authorize the 
Commission to permit the taking of private property, and we do not 
believe that it is necessary to authorize a taking of private property 
in order to comply with Congress' direction that we prohibit 
restrictions that impair a viewer's ability to exercise his or her 
rights under Section 207. The ``takings'' clause of the Fifth Amendment 
provides: ``[N]or shall private property be taken for public use, 
without just compensation.'' In general, there are two types of Fifth 
Amendment takings: ``per se'' takings and ``regulatory'' takings. (See 
generally Yee v. City of Escondido, 503 U.S. 519, 522-23 (1992).) Where 
the government authorizes the permanent physical occupation of property 
it constitutes a per se taking. Under Loretto, a permanent physical 
occupation of property is a taking without regard to the public 
interest that it may serve, the size of the occupation, or the economic 
impact on the property owner.
    17. Where the government does not authorize a physical occupation 
of property but merely regulates its use, a court will examine the 
following factors identified in Penn Central Transportation Co. v. City 
of New York, 438 U.S. 104, 124 (1978) to determine whether a regulatory 
taking has occurred: (1) the character of the governmental action; (2) 
its economic impact; and (3) its interference with reasonable 
investment-backed expectations. Moreover, where the private property 
owner voluntarily agrees to the possession of its property by another, 
the government can regulate the terms and conditions of that possession 
without effecting a per se taking. In FCC v. Florida Power Corp., 480 
U.S. 245, 252 (1987), the utility company voluntarily agreed to the 
physical occupation of its poles by a cable operator's wires at certain 
lease rates; the utility claimed that a subsequent rate reduction 
ordered by the Commission for the occupation of its poles constituted a 
per se taking under Loretto. Rather, such regulations are analyzed 
under the Penn Central multifactor inquiry. As the Florida Power Court 
stated:

    [I]t is the invitation, not the rent, that makes the difference. 
The line which separates these cases from Loretto is the unambiguous 
distinction between a commercial lessee and an interloper with a 
government license.

    18. Applying the above framework to the property at issue here, we 
agree with DIRECTV that a per se takings analysis would not apply to an 
expansion of the Section 207 rules to a leasehold where a landlord has 
invited a tenant to physically occupy and possess the property. In 
Loretto, the Court identified three rights ``to possess, use, and 
dispose of'' property that are destroyed by an uninvited permanent 
physical occupation of the property. However, by leasing his or her 
property to a tenant, the property owner voluntarily relinquishes the 
rights to possess and use the property and retains the right to dispose 
of the property. First, within his or her leasehold a tenant is an 
invitee with a possessory estate interest in the property, not ``an 
interloper with a government license.'' Second, to a large extent, the 
property owner relinquishes its right to control the use of its 
property when it leases the property. For example, tenants have the 
right to ``make changes in the physical condition of the leased 
property which are reasonably necessary in order for the tenant to use 
the leased property in a manner that is reasonable under all 
circumstances.'' Third, the property owner may retain the right to sell 
the property even if the property is leased. Thus, none of the property 
rights that Loretto held were ``effectively destroyed'' by a permanent 
physical occupation of property would be compromised by expanding the 
Section 207 rules to leased property, because the landlord voluntarily 
relinquishes two of those rights (possessing and using) and is free to 
retain the third right (disposing of the property) when entering into a 
lease. In contrast, in Loretto, the physical possession was on the 
building roof, possession of which was not leased to anyone but was 
retained by the property owner, Ms. Loretto.
    19. Accordingly, it does not constitute a per se taking to prohibit 
lease restrictions that would impair a tenant's ability to install, 
maintain or use a Section 207 reception device within the leasehold. 
Indeed, prohibiting restrictions on the installation of a

[[Page 71030]]

satellite dish or other Section 207 device is not distinguishable in a 
constitutional sense from prohibiting restrictions on the installation 
of ``rabbit ears''--a Section 207 reception device--on the top of a 
television set. The Loretto Court recognized that its per se rule would 
not apply to regulations affecting a landlord-tenant relationship that 
did not require the occupation of the landlord's property by a third 
party; the Court acknowledged that such regulations would be analyzed 
under the Penn Central regulatory takings standard.
    20. Contrary to the argument set forth in the dissent, the limits 
of the per se takings doctrine described in Florida Power are clearly 
applicable here. Under that doctrine, any permanent, physical 
occupation of property, no matter how small, constitutes a per se 
taking. But the right to assert a per se taking is easily lost: once a 
property owner voluntarily consents to the physical occupation of its 
property by a third party, any government regulation affecting the 
terms and conditions of that occupation is no longer subject to the 
bright-line per se test, but must be analyzed under the multi-factor 
inquiry reserved for nonpossessory government activity. In Florida 
Power, for instance, the utility company was not required to lease pole 
space to cable operators, but once it voluntarily did so, the 
government could regulate the terms and conditions of that physical 
occupation (i.e., the rates that the utility company could charge for 
the pole space) without effecting a per se taking.
    21. The dissent attempts to muddy this clear dichotomy by arguing 
that a landlord retains the right to assert a per se taking claim 
whenever the government modifies the terms and conditions set forth in 
its lease. But this is the very argument that the Supreme Court 
squarely rejected in Florida Power, where it was argued that the 
utility company's consent to occupation of its pole space was based on 
the payment of a certain lease rate. Whether the terms and conditions 
of occupation relate to a lease rate (as in Florida Power) or to the 
ability to place a Section 207 reception device within the leasehold 
(as here), once a property owner voluntarily consents to the occupation 
of its property it can no longer claim a per se taking if government 
action merely affects the terms and conditions of that occupation. In 
other words, the per se takings doctrine protects a property owner's 
right to exclude all others from its property, but it does not protect 
a property owner's desire to impose conditions on the use of property 
that it has voluntarily invited others to occupy.
    22. The dissent again confuses this crucial distinction by 
asserting that if the terms of a lease help explain why we are not 
giving tenants the right to place reception equipment on common and 
restricted access property, the lease should likewise inform our 
analysis within the leasehold itself. For takings purposes, the lease 
is relevant in defining the physical area of consensual occupation 
(e.g., the apartment but not the roof or exterior walls). Outside of 
such areas of consensual occupation, the property owner may retain its 
per se right to prohibit permanent occupation by third parties. Within 
the area of consensual occupation, however, the terms of the lease are 
no longer relevant to a per se analysis. As the Florida Power Court put 
it, it is ``the invitation [i.e. whether the occupation is voluntary], 
not the rent [i.e., the terms and conditions of that voluntary 
occupation], that makes the difference.''
    23. Given the conclusion that this expansion of the Section 207 
rules does not constitute a per se taking, we therefore turn to whether 
such an expansion of Section 207 rights would constitute a regulatory 
taking under the Penn Central factors: the character of the 
governmental action, its economic impact, and its interference with 
reasonable investment-backed expectations. Because the expansion of the 
Section 207 rules to leased property would not create an identifiable 
class of per se takings, Bell Atlantic's narrowing construction of the 
statutory authority does not apply to this situation. First, Section 
207 promotes the substantial governmental interests of choice and 
competition in the video programming marketplace. See Turner 
Broadcasting System, Inc. v. FCC, 117 S.Ct. 1174, 1181 (1997) 
(reaffirming important governmental interest in promoting fair 
competition in the market for television programming). The specific 
governmental action that we take today--the expansion of the rules to 
leased property--will bring that choice and competition to an 
additional segment of the population. Further, the expansion of the 
rules will promote the important governmental interest in enhancing 
viewers' access to ``social, political, esthetic, moral and other 
ideas.'' The Supreme Court has ``identified a * * * `governmental 
purpose of the highest order' in ensuring public access to `a 
multiplicity of information sources.' ''
    24. Second, there is no evidence in the record that the economic 
impact on property owners will be significant. Generally, the amount of 
money that property owners may derive from restricting the video 
programming options of their residents is minimal in relation to their 
other income. Indeed, some commenters argue that a rule prohibiting 
restrictions on antenna usage enhances the value of the homeowner's 
property to prospective purchasers who want access to video programming 
services competitive with cable. Given property owners' ability to 
continue to use their property to generate rental income, extension of 
the Section 207 rules to restrictions on tenants' use of their 
leasehold would not deprive property owners of ``all economically 
beneficial or productive use'' of their property. Third, there is no 
evidence in the record that the expansion of the rules will interfere 
with reasonable investment-backed expectations.
    25. Moreover, the government has broad power to regulate interests 
in land that interfere with valid federal objectives. In Seniors Civil 
Liberties Ass'n v. Kemp, 761 F. Supp. 1528 (M.D. Fla. 1991), aff'd, 965 
F.2d 1030 (11th Cir. 1992), the court found no taking in an 
implementation of the Fair Housing Amendments Act (``FHAA'') that 
declared unlawful age-based restrictive covenants, thereby abrogating 
the homeowners' association's rules requiring that at least one 
resident of each home be at least 55 years of age and forbidding 
permanent residence to children under the age of 16. The court found 
that the FHAA provisions nullifying the restrictive covenants 
constituted a ``public program adjusting the benefits and burdens of 
economic life to promote the common good,'' and not a taking subject to 
compensation.
    26. Finally, with regard to the argument of some commenters that 
this rule will impair exclusive contracts between MDU owners and cable 
companies, even assuming that this were the case, as we stated in the 
Report and Order with regard to homeowners' associations, condominium 
associations, and cooperative associations, Congress can change 
contractual relationships between private parties through the exercise 
of its constitutional powers, including the Commerce Clause (U.S. 
CONST. art. I, Sec. 8, cl. 3). In Connolly v. Pension Benefit Guaranty 
Corp., 475 U.S. 211 (1986), the Court stated:

    Contracts, however express, cannot fetter the constitutional 
authority of Congress. Contracts may create rights in property, but 
when contracts deal with a subject matter which lies within the 
control of Congress, they have a congenital infirmity. Parties 
cannot remove their transactions from the

[[Page 71031]]

reach of dominant constitutional power by making contracts about 
them.
    If a regulatory statute is otherwise within the powers of 
Congress, therefore, its application may not be defeated by private 
contractual provisions. For the same reason, the fact that 
legislation disregards or destroys existing contractual rights, does 
not always transform the regulation into an illegal taking.

    27. Accordingly, we conclude that interpreting Section 207 to reach 
rental property, i.e. property within a leasehold over which a tenant 
has possession, does not constitute an impermissible taking of private 
property. This rule will prohibit lease or other restrictions (subject 
to the other provisions of 47 CFR 1.4000, including the safety and 
historic preservation exceptions) on leased property under the 
exclusive use or control of the viewer. Typically, for apartments, this 
new ruling will include balconies, balcony railings, and terraces; for 
rented single family homes or manufactured homes which sit on rented 
property, it will typically include patios, yards or gardens within the 
leasehold. Generally, the lease of a house includes the land on which 
the house is situated and the surrounding real estate necessarily 
incident to its use as a home. This conclusion is similar to the 
current application of the Section 207 rules to condominiums, 
cooperatives and manufactured homes. In addition, while restrictions on 
placement of antennas on manufactured homes are already covered by the 
current rules, this new rule expands protection of the Section 207 
rules to the leased property on which the manufactured home sits.
    28. Because the record does not contain evidence that a university 
has the same relationship to a dormitory resident as a landlord to a 
tenant, that a dormitory room is a leasehold, that landlord-tenant law 
applies equally to dormitories, or that the practical problems 
associated with extending the rules to leaseholds can be similarly 
resolved with respect to dormitories, the Section 207 rules will not 
apply to college dormitories at this time. Where, however, the 
relationship between a university and a viewer bears sufficient 
attributes of a commercial landlord-tenant relationship (e.g., where a 
university leases a single family home to a faculty member), the 
Section 207 rules will apply. In addition, in response to commenters 
who requested an exception to the rule for commercial lessees, note 
that Section 207 does not provide an exception for commercial 
properties.
    29. While some commenters have requested that the Commission 
preempt exclusive contracts between building owners and cable 
companies, this issue will be addressed in In re Telecommunications 
Services Inside Wiring, CS Docket No. 95-184. Exclusive contracts are 
already unenforceable to the extent that they impermissibly impair a 
viewer's rights under the currently effective Section 207 rules, and 
will be further unenforceable to the extent that they impermissibly 
impair a viewer's Section 207 rights upon the effective date of the 
revised rules adopted herein.

Practical Considerations

    30. The practical concerns with respect to installation within the 
leasehold can be resolved under the current Section 207 rules, which 
permit the enforcement of restrictions that address legitimate safety 
objectives. In addition, unlike common areas, the leasehold (e.g., an 
apartment including a balcony or terrace) generally is under the 
exclusive use or control of one party (i.e., the lessee), thus enabling 
that party to address liability concerns. Moreover, state landlord-
tenant law can address liability issues that may arise from incidents 
arising on leased property.
    31. The current rules resolve concerns regarding damage to the 
building caused by installation. The rules prohibit restrictions that 
unreasonably delay or prevent installation. A restriction barring 
damage to the structure of the leasehold (e.g., the balcony to an 
apartment or the roof of a rented house) is likely to be a reasonable 
restriction on installation under 47 CFR 1.4000(a). Thus, for example, 
tenants could be prohibited from drilling holes through the exterior 
walls of their apartments. In addition, tenants could be prohibited 
from piercing the roof of a rented house in any manner given the risk 
of serious damage, and there are methods of installing a Section 207 
device on a roof that do not require piercing; e.g, securing it to a 
chimney or using ballast as a non-penetrating roof mount. On the other 
hand, it would likely not be a reasonable restriction to prohibit an 
installation that merely caused ordinary wear and tear (e.g., marks, 
scratches, and minor damage to carpets, walls and draperies) to the 
leasehold. We also note that the Order on Reconsideration clarifies 
that a landlord or community association may restrict installation of 
individual antennas based on the availability of a central or common 
antenna, provided the restriction does not impose unreasonable delay, 
unreasonable expense, or preclude reception of an acceptable quality 
signal, including the particular programming service chosen by the 
viewer.

Application of the Section 207 Rules to Common and Restricted Access 
Areas

Scope of Section 207
    32. Section 207 does not authorize the Commission to permit a 
viewer to install a Section 207 device on common or restricted access 
property over the property owner's objection or to require a landlord 
to provide video programming reception equipment to tenants. As 
discussed, Section 207 authorizes the Commission to remove 
restrictions; Section 207 does not authorize the Commission to impose 
independent affirmative obligations on a property owner or a third 
party to enable the viewer to use a Section 207 device. Interpreting 
Section 207 to grant viewers a right of access to possess common or 
restricted access property for the installation of the viewer's Section 
207 device would impose on the landlord or community association a duty 
to relinquish possession of property. Just as the plain language of the 
statute does not require a property owner to permit his or her neighbor 
to install a Section 207 reception device on the owner's property 
(e.g., if the neighbor were unable to receive an acceptable signal on 
his or her own property), we do not believe the statute requires a 
landlord or community association to relinquish possession of common or 
restricted access property. There is no distinction in this regard 
between a neighbor's property and a landlord's property that the 
landlord has not leased to a tenant: both situations would impose 
affirmative duties not intended by the statute.
    33. Likewise, we disagree with commenters that the Commission can 
require landlords to provide video programming reception equipment to 
their residents. Requiring property owners to purchase and install 
reception equipment for their residents' benefit does not remove a 
restriction, but rather imposes an affirmative duty which is outside 
the mandate of Section 207. Therefore, under the language of Section 
207, the Commission cannot extend the Section 207 rules to reach common 
and restricted access property.

Constitutional Considerations

    34. As discussed above, Section 207 does not expressly authorize 
the Commission to permit a taking in order to enable a viewer to 
install Section 207 reception devices. In the context of common and 
restricted access property, we do not believe that the statutory 
directive to prohibit restrictions implies

[[Page 71032]]

a takings authority given that a taking requires the Commission to 
impose affirmative duties on third parties which, as discussed above, 
is not contemplated by Section 207.
    35. The commenters raise serious concerns that the extension of the 
Section 207 rules to common and restricted access property would 
constitute a taking and assert that the Commission should interpret the 
statute so as to avoid constitutional issues. While by virtue of a 
lease a landlord invites a tenant to take possession of property within 
the leasehold, the landlord does not invite the tenant to take 
possession of common and restricted access property. If the Commission 
were to extend the Section 207 rules to permit a tenant to have 
exclusive possession of a portion of the common or restricted access 
property where a lease has not invited a tenant to do so, the tenant 
would possess that property as an ``interloper with a government 
license'' thereby presenting facts analogous to those presented in 
Loretto. Similarly in a community association, home and unit owners are 
not invited to possess restricted access areas, such as the roof or 
exterior walls, and are not granted exclusive or permanent possession 
of common areas.
    36. Under these circumstances, we agree with those commenters that 
argue that the permanent physical occupation found to constitute a per 
se taking in Loretto appears comparable to the physical occupation of 
the common and restricted access areas at issue here. In Loretto, the 
physical occupation of the landlord's property consisted of the direct 
attachment of cable television equipment to the landlord's property, 
occupying the space immediately above and upon the roof and along the 
building's exterior. Likewise, the physical occupation here would 
involve the direct attachment of video reception devices to common 
areas such as hallways or recreation areas, or to restricted areas such 
as building rooftops.
    37. Loretto is not distinguishable on the grounds asserted by the 
commenters. First, we disagree that the potential occupation in this 
instance would be temporary, not permanent. In Loretto, the Court found 
that the cable operator's occupation was ``permanent'' because so long 
as the property remained residential and a cable company wished to 
retain the installation, the landlord must permit it. The occupation 
here would be similarly ``permanent'' because so long as an individual 
viewer wished to receive one of the services covered by Section 207, 
the property owner would be forced to accept the installation of the 
necessary reception devices.
    38. Second, we are not persuaded by those who contend that as long 
as the entitlement under Section 207 belongs to the tenant and not to a 
``stranger,'' Loretto does not apply. In advancing this argument, 
commenters rely primarily upon the following statement in footnote 19 
in Loretto:

    If [the New York statute] required landlords to provide cable 
installation if a tenant so desires, the statute might present a 
different question from the question before us, since the landlord 
would own the installation. Ownership would give the landlord rights 
to the placement, manner, use, and possibly the disposition of the 
installation.

    39. This argument overlooks a critical aspect of footnote 19: that 
ownership of the property (i.e., the hypothetically required cable 
equipment) must rest with the landlord. So long as a tenant owns the 
reception device placed in a common or restricted access area, and the 
terms of the tenant's lease, the community association's bylaws, or 
other agreement do not give the tenant the right to exclusively possess 
any portion of this property, the landlord's or association's property 
would be subjected to an uninvited permanent physical occupation. As 
the Loretto Court stated: ``[T]he power to exclude has traditionally 
been considered one of the most treasured strands in an owner's bundle 
of property rights.'' This type of ``required acquiescence is at the 
heart of the concept of occupation.'' Even giving the property owner 
control over the installation and maintenance of the equipment, the 
property owner would still lose the right to possess that space for its 
benefit or the benefit of its other residents, and would lose the 
ability to exclude others from that space. In contrast, where the 
viewer has exclusive use of the property or it is within the viewer's 
leasehold, the community association or landlord is already excluded 
from the space and does not have the right to possess or use it.
    40. Thus, because there is a strong argument that modifying the 
Section 207 rules to cover common and prohibited access property would 
create an identifiable class of per se takings, and there is no 
compensation mechanism authorized by the statute, the Commission 
concludes that Section 207 does not authorize us to make such a 
modification.
    41. Nor is Florida Power on point. In Florida Power, the Court 
assumed the utility company had voluntarily agreed to the cable 
company's physical occupation; thus, the Court found that the 
Commission's subsequent rate regulation did not effect a per se taking 
but merely regulated the terms and conditions of the agreed-upon 
occupation. Here, the agreed-upon scope of the physical possession is 
set forth in the lease or other controlling document; individual 
residents generally do not have the right to possess and use the common 
areas for their exclusive benefit over the property owner's objection. 
While the tenant may have been invited to use the common property for 
certain purposes (e.g., ingress, egress, use of the exercise room), 
these rights are voluntary and temporary; the proposal here, by 
contrast, would be involuntary and--so long as the tenant wished to 
keep his or her property in the common areas--permanent. In any event, 
there can be no argument that the resident has been invited in any 
manner to possess and use restricted access areas, such as rooftops.

Practical Considerations

    42. We believe that commenters have raised several practical 
concerns suggesting that, even in the absence of the Constitutional 
takings issue, it may not serve the public convenience, interest and 
necessity to extend the Section 207 rules to common and restricted 
access property. First, it is difficult to discern what limits could be 
set, if any, on the number of reception devices that a viewer could 
install and maintain on common property. For instance, not only would 
every tenant have the right to run wiring through the hallways and on 
the roof of their apartment building in order to install reception 
devices, but they would have the right to install the particular device 
of their service provider (or providers) of choice. With potentially 
hundreds of separate wires and antennas being installed in a single 
building, we believe that space constraints could limit the number of 
residents that would be able to install Section 207 devices, and 
involve the Commission and local courts in countless disputes about the 
feasibility of installing additional reception devices in a building. 
Moreover, it would be difficult to determine whether any limit could be 
set on how often a viewer could reasonably switch service providers and 
require the property owner to suffer another disruption of the common 
or restricted access areas. Any limits on these rights, such as 
DIRECTV's proposal to require property owners to accommodate only two 
MVPDs on the property, seem arbitrary and unsupported by the statutory 
language.
    43. These difficulties would not be solved by relying on the common

[[Page 71033]]

antenna option originally proposed by CAI. As clarified in the Order on 
Reconsideration, a landlord or community association may prohibit 
residents from installing individual antennas as long as this 
prohibition does not impose unreasonable delay, unreasonable expense or 
preclude reception of an acceptable quality signal, including the 
programming an individual could obtain with an individual antenna. The 
common antenna option is purely voluntary; a landlord or community 
association could choose not to establish a common antenna and simply 
permit any resident who wished to receive a Section 207 service to 
install an individual antenna on the resident's own property. Giving 
residents the right to use the common or restricted access areas, by 
contrast, could require the association to maintain as many separate 
antennas as there are service providers, without the option of simply 
requiring the resident to install individual reception equipment on his 
or her own property.
    44. We are also concerned about the potential for structural damage 
and injuries to third parties. It is not clear from the record that an 
individual tenant could obtain liability insurance for common or 
restricted access areas, and, even if it were possible, that such 
insurance would be affordable. Further, not all of these issues can be 
resolved by devising a rule that would indemnify the owner and place 
liability on the tenant for injury or damage caused by the installation 
of a Section 207 reception device.
    45. In the context of a statutory provision that simply provides 
for elimination of restrictions, the practical difficulties inherent in 
giving viewers the right to install Section 207 reception devices on 
common or restricted access property weigh heavily against an extension 
of the rules to cover such property.

First Amendment and Equal Protection Claims

First Amendment
    46. As discussed, the Supreme Court has found that ``assuring that 
the public has access to a multiplicity of information sources is a 
governmental purpose of the highest order, for it promotes values 
central to the First Amendment.'' Turner Broadcasting System, 114 S.Ct. 
at 2470. Additional sources of information enhance a viewer's access to 
``social, political, esthetic, moral and other ideas.'' See Time 
Warner, 93 F.3d at 975 (quoting Red Lion Broadcasting Co. v. FCC, 395 
U.S. 367, 389 (1969)). Based in part on these important government 
purposes, the Commission extended the Section 207 rules to prohibit 
certain restrictions, subject to the terms and exceptions of the 
Section 207 rules, on the placement of Section 207 devices within 
rental property.
    47. Despite our regard for these important government purposes, we 
are not persuaded by the record that the First Amendment compels us to 
interpret Section 207 without regard to the impact on third parties' 
property rights, the creation of affirmative duties not intended by 
Section 207, and the legitimate and serious practical concerns. To the 
contrary, as noted above, Loretto held that a permanent physical 
occupation of property is a taking without regard to the public 
interest that it may serve.
    48. We disagree with the argument that Red Lion requires the 
Commission to interpret Section 207 in such a way as to guarantee 
viewers' access to the video programming service of their choice. Red 
Lion does not require the Commission to promulgate regulations to 
ensure that every viewer has access to every available video 
programming service regardless of the constitutional and practical 
burdens imposed on third parties.
    49. Likewise, we disagree that Pruneyard Shopping Center v. Robins, 
447 U.S. 74 (1980) provides authority that would permit the Commission 
to issue a rule superseding a property owner's property rights. 
Pruneyard was a 21-acre shopping center in which a group of students, 
acting under color of a California state constitutional provision 
providing access to shopping centers, placed a card table and began 
soliciting petition signatures. Performing a Penn Central takings 
analysis, the Court held that because the center was ``open to the 
public at large'' and could adopt time, place and manner restrictions 
to minimize any interference with the center's operations, Pruneyard's 
property rights had not been unconstitutionally infringed: ``In these 
circumstances, the fact that [the students] may have `physically 
invaded' appellants' property cannot be viewed as determinative.'' The 
Loretto Court explicitly distinguished Pruneyard from the permanent 
occupation in Loretto by noting that ``the invasion [of the shopping 
center] was temporary and limited in nature, and * * * the owner had 
not exhibited an interest in excluding all persons from his property.'' 
Likewise, Pruneyard is distinguishable here because the evidence in the 
record does not persuade us that rental buildings have taken on a 
``public forum'' character, that the owners have invited an occupation 
of their common property, or that the occupation would be temporary 
instead of permanent.
    50. The facts are altogether different regarding leaseholds. In 
Pruneyard, because the students were invited to the shopping center, 
the California constitution could require the shopping center to allow 
the students to bring a card table with them for the duration of their 
visit without infringing the shopping center's Fifth Amendment property 
rights. Similarly, when a landlord invites a tenant to possess a 
leasehold for the duration of the lease, permitting the tenant to have 
a Section 207 device within the leasehold during the lease term does 
not infringe the landlord's Fifth Amendment property rights.

Equal Protection

    51. Because Section 207 does not provide access rights to common 
and restricted access property, renters whose individual leaseholds 
cannot accommodate a Section 207 device will be unable to gain access 
to the full range of video programming providers. As a result, Section 
207 may unintentionally have a disproportionate effect upon low income 
and minority viewers, to the extent they may comprise a 
disproportionate percentage of renters. However, the amended rule 
eliminates any per se distinction between viewers who own and those who 
rent and that many renters may avail themselves of the Section 207 
rules by either installing a Section 207 reception device on a balcony 
or any other outside area included in their leasehold or installing an 
LMDS-type device inside their dwelling. While we are sympathetic 
towards those renters who are unable to take advantage of the Section 
207 rules, no Fifth Amendment equal protection violation results from 
applying Section 207 according to its terms and not extending its 
coverage to common and restricted access property.
    52. A statutory classification that does not proceed along 
``suspect lines'' or infringe upon a fundamental right will receive a 
``strong presumption of validity'' and will be examined under a 
``rational basis'' equal protection analysis. Heller v. Doe, 509 U.S. 
312, 319 (1993); FCC v. Beach Communications, Inc., 508 U.S. 307, 314 
(1993). Commenters have not adduced any authority that recognizes 
renters or MDU residents as a protected class. Moreover, even if 
minorities, who are a protected class, comprise a significant portion 
of MDU residents, in a case alleging that a protected class is

[[Page 71034]]

harmed by the disparate impact of a facially neutral regulation, the 
regulation will not be examined under strict scrutiny unless it can be 
shown that the disparate impact was intentional. We do not believe that 
such an intent has been alleged or demonstrated here. As noted above, 
the distinctions made in this Second Report and Order were not made 
based on race, but on the limitations on the authority granted by 
Section 207. Moreover, any disparate impact on renters has been 
mitigated by the new rules permitting renters to install Section 207 
reception devices within their leaseholds.
    53. Under the rational basis equal protection scrutiny, a 
classification need only be rationally related to a legitimate 
governmental interest. We believe that the Section 207 rules clearly 
satisfy this standard because the language of Section 207 supports the 
conclusion not to extend our rules to cover common and restricted 
access property.

FINAL REGULATORY FLEXIBILITY ANALYSIS

    54. As required by the Regulatory Flexibility Act (``FRA'') (5 
U.S.C. 603), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Further Notice. The Commission sought written 
public comment on the proposals in the Further Notice, including 
comment on the IRFA. The comments received are discussed below. This 
Final Regulatory Flexibility Analysis (``FRFA'') conforms to the RFA.

Need for, and Objectives of, This Second Report and Order

    55. The rulemaking implements Section 207 of the Telecommunications 
Act of 1996, Pub. L. 104-104, 110 Stat. 56. Section 207 directs the 
Commission to promulgate regulations to prohibit restrictions that 
impair a viewer's ability to receive video programming services through 
certain devices designed for over-the-air reception, including MMDS, 
LMDS, DBS, TVBS and ITFS (``Section 207 devices''). This action is 
authorized under the Communications Act of 1934 Sec. 1, as amended, 47 
U.S.C. 151, pursuant to the Communications Act of 1934 Sec. 303, as 
amended, 47 U.S.C. 303, and by Section 207 of the Telecommunications 
Act of 1996.
    56. On August 6, 1996, the Commission implemented part of Congress' 
directive by releasing rules set forth in 47 CFR 1.4000 (``Section 207 
rules'') that prohibit restrictions that impair a viewer's ability to 
install, maintain and use devices designed for over-the-air reception 
of video programming through Section 207 devices on property within the 
exclusive use or control of the viewer in which the viewer has a direct 
or indirect ownership interest. The rule exempts regulations and 
restrictions which are clearly and specifically designed to preserve 
safety or historic districts, allowing for the enforcement of such 
restrictions even if they impair a viewer's ability to install, 
maintain or use a reception device.
    57. The rule adopted in this Second Report and Order prohibits the 
same types of restrictions on a viewer who desires to place Section 207 
devices on property that the viewer has leased and is within the 
exclusive use or control of the viewer. The same exemptions applicable 
to the initial Section 207 rules apply to this rule.

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

    58. The Commission, in its Report and Order, invited comment on the 
IRFA and the potential economic impact the proposed rules would have on 
small entities. The only comment submitted was a joint response filed 
by the National Apartment Association, et al. (collectively ``NAA''). 
NAA argues that removing restrictions on a viewer's use of a Section 
207 device in the viewer's leased dwelling constitutes a Fifth 
Amendment taking of the property owners' rights. In addition, NAA 
argues that, due to the small staffs and limited resources of small 
businesses, the rules would interfere with the ability of small 
businesses to ensure compliance with safety codes, to protect the 
safety of other tenants, and to prevent damage to the building. 
Finally, NAA argues that Congress did not intend for Section 207 to 
preempt lease restrictions.
    59. The Commission has taken the arguments and views of NAA into 
account in this Second Report and Order. NAA's comments on behalf of 
small businesses in response to the IRFA essentially track its 
objections to the rule overall, which we have already fully addressed. 
As analyzed in the Second Report and Order, the rules removing use 
restrictions on Section 207 devices from leases do not constitute a 
taking under the Fifth Amendment. Removing the use restrictions does 
not constitute a per se possessory taking under Loretto because the 
landlord has voluntarily entered into a commercial relationship with 
the tenant and has given the tenant possession of the leased property. 
Furthermore, removing restrictions on the use of leased property does 
not constitute a Penn Central regulatory taking, given, as discussed 
above, the character of the government action, the minimal economic 
impact on the landlord, and the minimal impact on the landlord's 
reasonable investment-backed expectations.
    60. Regarding the practical concerns of small businesses, as set 
forth in the Second Report and Order, these practical concerns may be 
addressed under the current rules. For example, safety restrictions are 
permitted exceptions to the Section 207 rules. Likewise, a restriction 
barring substantial damage to the building would likely be a reasonable 
restriction under 47 CFR 1.4000.
    61. Finally, we disagree with NAA's last argument that Congress did 
not intend for Section 207 to cover lease restrictions. The express 
language of Section 207 contains no such limitation. Moreover, the 
legislative history of Section 207 demonstrates that Congress 
acknowledged that there might be restrictions that would be covered by 
Section 207 that it had not considered when adopting Section 207 into 
law.
    62. Although local governments did not file comments on the IRFA 
contained in the Further Notice, they did file joint comments in 
response to the IRFA's contained in International Bureau (IB) Docket 
No. 95-59 (DBS Order and Further Notice) and in Cable Services Bureau 
(CS) Docket No. 96-83 (TVBS-MMDS Notice), and we will consider those 
comments with respect to the new rule. National League of Cities 
(``NLC'') commented that the proposed preemption of restrictions on 
property where the viewer had a direct or indirect property interest 
and over which the viewer exercised exclusive use or control would have 
a ``substantial economic and administrative impact'' on over 37,000 
small local governments. NLC states that the proposed rule would 
require ``local governments to amend their laws and to file petitions 
at the FCC * * * for permission to enforce those laws.''
    63. In the Report and Order, we addressed these concerns:

    The Commission has modified its proposed rule and has addressed 
the concerns raised by NLC by providing greater certainty regarding 
the application of the rule, and by clarifying that local 
regulations need not be rewritten or amended. The Commission 
recognizes that some regulations are integral to local governments' 
ability to protect the safety of its citizens. The rule that we 
adopt exempts restrictions clearly defined as necessary to ensure 
safety, and permits enforcement of safety restrictions during the 
pendency of any challenges. In addition, limiting the rule's scope 
to regulations that ``impair,'' rather than the proposed preemption 
of regulations that ``affect,'' will minimize the impact on small 
local

[[Page 71035]]

governments, while effectively implementing Congress' directive. 
Finally, the inclusion in the Report and Order of examples of 
permissible and prohibited restrictions will minimize the need for 
local governments to submit waiver or declaratory ruling petitions 
to the Commission, decreasing the potential economic burden.

We do not believe that preempting government restrictions on viewers 
residing on rental property will have any greater impact than 
preempting government restrictions on viewers residing on property that 
they own.

    64. The Commission also notes the positive economic impact the new 
rule will have on many small businesses. The new rule will allow small 
businesses that use video programming services to select from a broader 
range of providers, which could result in significant economic savings; 
because providers will be competing for customers, more services will 
be available at lower prices. In addition, small business video 
programming providers will be faced with fewer entry hurdles, and will 
thus be able to develop their markets and compete more effectively, 
achieving one of the purposes of Section 207.

Description and Estimate of the Number of Small Entities To Which 
Rules Will Apply

    65. The Regulatory Flexibility Act 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.'' The rule applies to small organizations, 
small governmental jurisdictions, and small businesses.
    66. The term ``small governmental jurisdiction'' is defined as 
``governments of * * * districts, with a population of less than fifty 
thousand.'' There are 85,006 governmental entities in the United 
States. This number includes such entities as states, counties, cities, 
utility districts and school districts. We note that restrictions 
concerning antenna installation are usually promulgated by cities, 
towns and counties, not school or utility districts. Of the 85,006 
governmental entities, 38,978 are counties, cities and towns; and of 
those, 37,566, or 96%, have populations of fewer than 50,000. One 
commenter estimates that there are 37,000 ``small governmental 
jurisdictions'' that may be affected by the proposed rule.
    67. Section 601(4) of the Regulatory Flexibility Act defines 
``small organization'' as ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
This definition includes homeowner and condominium associations that 
operate as not-for-profit organizations. An industry association 
estimates that there were 150,000 associations in 1993. Given the 
nature of a neighborhood association, we assume for the purposes of 
this FRFA that all 150,000 associations are small organizations.
    68. A small business concern is one which: (1) is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the Small Business 
Administration (SBA). Industry sources estimate that the following SIC 
codes apply to this industry: SIC Codes 6512 (operators of 
nonresidential buildings), 6513 (operators of apartment buildings), and 
6514 (operators of dwellings other than apartment buildings). The SBA 
defines a small entity in each of these codes as one with less than 
$5,000,000 in gross annual revenues. Based on census data that lists 
businesses according to these SIC codes and their total revenue, 
industry sources state that there are 28,089 operators of 
nonresidential buildings and 39,903 operators of apartment buildings. 
Industry sources state the Bureau of Census includes operators of 
dwellings other than apartment buildings in the same category as other 
types of businesses, but states that the figures for this category as a 
whole show that the number of operators of dwellings other than 
apartment buildings are similar to the numbers of operators covered by 
SIC codes 6512 and 6513.

Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    69. The rules adopted will result in no changes to reporting, 
recordkeeping, or other compliance requirements beyond those already 
required under the Section 207 rules.

Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Rejected

    70. In the Report and Order, the Commission analyzed steps to 
minimize the impact on small entities, and because the steps the 
Commission took in the Report and Order also minimize the impact on the 
small entities impacted by the new rule, we reiterate here the steps 
taken in the Report and Order:

    The Commission considered various alternatives that would have 
impacted small entities to varying extents. These included a 
rebuttable presumption approach, the use of the term ``affect'' in 
the rule, and a rule that allowed for adjudicatory proceedings in 
courts of competent jurisdiction, all of which were adopted in the 
DBS Order and Further Notice and proposed in the TVBS-MMDS Notice. 
The rule we adopt today replaces the rebuttable presumption with a 
simpler preemption approach, adheres to the statutory language by 
using the term ``impair'' rather than ``affect'' in the rule, and 
allows for adjudication at the Commission. * * * We believe that we 
have effectively minimized the rule's economic impact on small 
entities.
    In the DBS Order and Further Notice and the TVBS-MMDS Notice, we 
adopted and proposed, respectively, a rebuttable presumption 
approach to governmental regulations, and proposed strict preemption 
of nongovernmental restrictions. We acknowledged in the DBS Order 
and Further Notice that a rule relying on a presumptive approach 
would be more difficult to administer than a rule based upon a per 
se prohibition, and we sought comment in the TVBS-MMDS Notice on 
less burdensome approaches. Under the rebuttable presumption 
approach, local governments would have been required to request a 
declaratory ruling from the Commission every time they sought to 
enforce or enact a restriction; and neighborhood associations would 
not have been able to enforce or enact any restrictions that 
impaired a viewer's ability to receive the signals in question. The 
rebuttable presumption approach was adopted to ensure the protection 
of local interests, including local governments. Based on the 
record, the Commission recognizes that the burden of rebutting a 
presumption could strain the resources of local authorities. The 
Commission has rejected the rebuttable presumption approach for a 
less burdensome preemption approach. In addition we have provided 
recourse for both neighborhood associations and municipalities. The 
rule we adopt today provides for a per se prohibition of 
restrictions that impair a viewer's ability to install, maintain or 
use devices designed for over-the-air reception of video programming 
services. The Report and Order provides examples of reasonable 
regulations that can be enforced without a waiver application. The 
Commission believes that the Report and Order provides such clarity 
as will make the enforcement of the rule the most efficient and 
least burdensome for local governments, neighborhood associations, 
and this Commission.
    In adopting the new rule, the Commission rejected the 
alternative of preempting all restrictions that ``affect'' the 
reception of video programming services through devices designed for 
over-the-air reception of TVBS, MMDS and DBS services. The new rule 
prohibits only those local restrictions that ``impair'' a viewer's 
ability to receive these signals and exempts restrictions necessary 
to ensure safety or to preserve historic districts. In defining the 
term ``impair'' we reject the interpretation that impair means 
prevent because that definition would not properly implement 
Congress' objective of promoting competition. We find that a 
restriction impairs a viewer's ability to receive over-the-

[[Page 71036]]

air video programming signals, if it (a) unreasonably delays or 
prevents installation, maintenance or use of a device used for the 
reception of over-the-air video programming signals by DBS, TVBS, or 
MMDS; (b) unreasonably increases the cost of installation, 
maintenance or use of such devices; (c) precludes reception of an 
acceptable quality signal. The use of the term impair will decrease 
the burden on small entities while implementing Congress' objective. 
* * *
    Waiver proceedings will be paper hearings, allowing the 
Commission to alleviate the negative potential economic impact from 
costly litigation. Further, any regulations necessary to the 
safeguarding of safety will remain enforceable pending the 
Commission's resolution of waiver requests. The Commission believes 
that the rule we adopt today effectively implements Congress' intent 
while minimizing any significant economic impact on small entities.

    Report to Congress: The Commission will send a copy of this Second 
Report and Order, including this FRFA, in a report to Congress pursuant 
to the Small Business Regulatory Enforcement Fairness Act of 1996, 5 
U.S.C. 801(a)(1)(A).

Ordering Clauses

    71. Accordingly, it is ordered that, pursuant to authority found in 
Sections 4(i) and 303 of the Communications Act of 1934, as amended, 47 
U.S.C. 154(i), and 303, and Section 207 of the Telecommunications Act 
of 1996, that the amendments to 47 CFR 1.4000 discussed in this Second 
Report and Order are adopted. These amendments shall become effective 
30 days after publication in the Federal Register.
    72. It is further ordered that the Commission's Office of Public 
Affairs, Reference Operations Division, shall send a copy of this 
Second Report and Order, including the Final Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with paragraph 603(a) of the Regulatory 
Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. 601 et. 
seq.

List of Subjects in 47 CFR Part 1

    Antenna, Satellite, Telecommunications, Television.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    Part 1 of Title 47 of the Code of Federal Regulations is amended to 
read as follows:

PART 1--PRACTICE AND PROCEDURE

    1. The authority citation for Part 1 is revised to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309.

    2. Section 1.4000 is revised to read as follows:


Sec. 1.4000  Restrictions impairing reception of television broadcast 
signals, direct broadcast satellite services or multichannel multipoint 
distribution services.

    (a)(1) Any restriction, including but not limited to any state or 
local law or regulation, including zoning, land-use, or building 
regulations, or any private covenant, contract provision, lease 
provision, homeowners' association rule or similar restriction, on 
property within the exclusive use or control of the antenna user where 
the user has a direct or indirect ownership or leasehold interest in 
the property that impairs the installation, maintenance, or use of:
    (i) An antenna that is designed to receive direct broadcast 
satellite service, including direct-to-home satellite services, that is 
one meter or less in diameter or is located in Alaska;
    (ii) An antenna that is designed to receive video programming 
services via multipoint distribution services, including multichannel 
multipoint distribution services, instructional television fixed 
services, and local multipoint distribution services, and that is one 
meter or less in diameter or diagonal measurement;
    (iii) An antenna that is designed to receive television broadcast 
signals; or
    (iv) A mast supporting an antenna described in paragraphs 
(a)(1)(i), (a)(1)(ii) or (a)(1)(iii) of this section;
    is prohibited to the extent it so impairs, subject to paragraph (b) 
of this section.
    (2) For purposes of this section, a law, regulation or restriction 
impairs installation, maintenance or use of an antenna if it:
    (i) Unreasonably delays or prevents installation, maintenance or 
use,
    (ii) Unreasonably increases the cost of installation, maintenance 
or use, or
    (iii) Precludes reception of an acceptable quality signal.
    (3) Any fee or cost imposed on a viewer by a rule, law, regulation 
or restriction must be reasonable in light of the cost of the equipment 
or services and the rule, law, regulation or restriction's treatment of 
comparable devices. No civil, criminal, administrative, or other legal 
action of any kind shall be taken to enforce any restriction or 
regulation prohibited by this section except pursuant to paragraph (c) 
or (d) of this section. In addition, except with respect to 
restrictions pertaining to safety and historic preservation as 
described in paragraph (b) of this section, if a proceeding is 
initiated pursuant to paragraph (c) or (d) of this section, the entity 
seeking to enforce the antenna restrictions in question must suspend 
all enforcement efforts pending completion of review. No attorney's 
fees shall be collected or assessed and no fine or other penalties 
shall accrue against an antenna user while a proceeding is pending to 
determine the validity of any restriction. If a ruling is issued 
adverse to a viewer, the viewer shall be granted at least a 21-day 
grace period in which to comply with the adverse ruling; and neither a 
fine nor a penalty may be collected from the viewer if the viewer 
complies with the adverse ruling during this grace period, unless the 
proponent of the restriction demonstrates, in the same proceeding which 
resulted in the adverse ruling, that the viewer's claim in the 
proceeding was frivolous.
    (b) Any restriction otherwise prohibited by paragraph (a) of this 
section is permitted if:
    (1) It is necessary to accomplish a clearly defined, legitimate 
safety objective that is either stated in the text, preamble or 
legislative history of the restriction or described as applying to that 
restriction in a document that is readily available to antenna users, 
and would be applied to the extent practicable in a non-discriminatory 
manner to other appurtenances, devices, or fixtures that are comparable 
in size and weight and pose a similar or greater safety risk as these 
antennas and to which local regulation would normally apply; or
    (2) It is necessary to preserve a prehistoric or historic district, 
site, building, structure or object included in, or eligible for 
inclusion on, the National Register of Historic Places, as set forth in 
the National Historic Preservation Act of 1966, as amended, 16 U.S.C. 
470, and imposes no greater restrictions on antennas covered by this 
rule than are imposed on the installation, maintenance or use of other 
modern appurtenances, devices or fixtures that are comparable in size, 
weight, and appearance to these antennas; and
    (3) It is no more burdensome to affected antenna users than is 
necessary to achieve the objectives described in paragraph (b)(1) or 
(b) (2) of this section.
    (c) Local governments or associations may apply to the Commission 
for a waiver of this section under Sec. 1.3. Waiver requests must 
comply with the

[[Page 71037]]

procedures in paragraphs (e) and (g) of this section and will be put on 
public notice. The Commission may grant a waiver upon a showing by the 
applicant of local concerns of a highly specialized or unusual nature. 
No petition for waiver shall be considered unless it specifies the 
restriction at issue. Waivers granted in accordance with this section 
shall not apply to restrictions amended or enacted after the waiver is 
granted. Any responsive pleadings must be served on all parties and 
filed within 30 days after release of a public notice that such 
petition has been filed. Any replies must be filed within 15 days 
thereafter.
    (d) Parties may petition the Commission for a declaratory ruling 
under Sec. 1.2, or a court of competent jurisdiction, to determine 
whether a particular restriction is permissible or prohibited under 
this section. Petitions to the Commission must comply with the 
procedures in paragraphs (e) and (g) of this section and will be put on 
public notice. Any responsive pleadings in a Commission proceeding must 
be served on all parties and filed within 30 days after release of a 
public notice that such petition has been filed. Any replies in a 
Commission proceeding must be served on all parties and filed within 15 
days thereafter.
    (e) Copies of petitions for declaratory rulings and waivers must be 
served on interested parties, including parties against whom the 
petitioner seeks to enforce the restriction or parties whose 
restrictions the petitioner seeks to prohibit. A certificate of service 
stating on whom the petition was served must be filed with the 
petition. In addition, in a Commission proceeding brought by an 
association or a local government, constructive notice of the 
proceeding must be given to members of the association or to the 
citizens under the local government's jurisdiction. In a court 
proceeding brought by an association, an association must give 
constructive notice of the proceeding to its members. Where 
constructive notice is required, the petitioner or plaintiff must file 
with the Commission or the court overseeing the proceeding a copy of 
the constructive notice with a statement explaining where the notice 
was placed and why such placement was reasonable.
    (f) In any proceeding regarding the scope or interpretation of any 
provision of this section, the burden of demonstrating that a 
particular governmental or nongovernmental restriction complies with 
this section and does not impair the installation, maintenance or use 
of devices designed for over-the-air reception of video programming 
services shall be on the party that seeks to impose or maintain the 
restriction.
    (g) All allegations of fact contained in petitions and related 
pleadings before the Commission must be supported by affidavit of a 
person or persons with actual knowledge thereof. An original and two 
copies of all petitions and pleadings should be addressed to the 
Secretary, Federal Communications Commission, 445 12th St. S.W., 
Washington, D.C. 20554, Attention: Cable Services Bureau. Copies of the 
petitions and related pleadings will be available for public inspection 
in the Cable Reference Room in Washington, D.C. Copies will be 
available for purchase from the Commission's contract copy center, and 
Commission decisions will be available on the Internet.

    Note: The following statements will not appear in the Code of 
Federal Regulations:

Separate Statement of Chairman William E. Kennard

    In the Matter of Implementation of Section 207 of the 
Telecommunications Act of 1996:

Preempting Restrictions on Over-the-Air Reception Devices

    Today we complete our proceeding to remove restrictions on 
consumers' ability to access video programming offered by means 
other than cable. I am proud of the Commission's work to expand the 
Over-the-Air Reception Devices rule up to the limits of the 
authority Congress gave us in Section 207 of the Telecommunications 
Act of 1996.
    As a result of Section 207 and our rules, thousands of consumers 
now are able to receive television programming through small 
satellite dishes, wireless cable or traditional ``stick'' antennas. 
The action we take today extends that ability to consumers who rent 
their homes or apartments and have a place within their rental 
property to install an antenna. Our rule brings choice to renters 
who live in high-rise buildings and have a balcony on which to 
install an antenna, just as owners of condominium units may install 
an antenna on their balconies and owners or renters of townhouses 
may have an antenna on their patios. The Commission has thus 
eliminated the have-and-have-not distinction that gave homeowners 
access to the competitive video market but denied it to all 
apartment dwellers.
    I am disappointed that Section 207 did not permit us to go as 
far as we might have to promote competition and eliminate barriers 
for all consumers. In my view, it is vitally important that all 
consumers have the ability to select the video programmer of their 
choice. However, Section 207 directed us only to ``prohibit 
restrictions'' on the receipt of video programming and, as this 
Second Report and Order describes, prohibiting restrictions can only 
take us part of the way. Section 207 does not authorize the 
Commission to impose an affirmative duty on landlords to provide 
access for competitive video providers, and the statute does not 
clearly address the Constitutional requirement for ``just 
compensation'' that may be necessary to give consumers access to the 
roof or common areas of the landlord's property. Nonetheless, I am 
committed to working toward a complete solution to this problem.
    When we released the Fourth Annual Competition Report at the 
beginning of this year, I mentioned my hope that Congress and the 
Commission would work together to evaluate statutory proposals to 
eliminate barriers to competition. I am especially interested in 
working with Congress to find ways to provide access to competitive 
video services for more consumers.

Statement of Commissioner Harold Furchtgott-Roth, Dissenting in Part In 
the Matter of Implementation of Section 207 of the Telecommunications 
Act of 1996, Restrictions on Over-the-Air Reception Devices: Television 
Broadcast Service and Multichannel Multipoint Distribution Service, CS 
Docket No. 96-83

    I fully concur in the Commission's excellent decision not to 
extend our section 207 rules to cover common and restricted access 
property. I also join in the conclusions reached with respect to the 
Equal Protection Clause and First Amendment. For the well-
articulated reasons that such property should not be governed by 
these rules, however, neither should rental property. I therefore 
respectfully dissent from that part of today's Report & Order 
(``R&O'') which subjects leased property to regulation under section 
207.
    In deciding that application of our over-the-air reception 
device (``OTARD'') regulations to common and restricted access 
property would raise grave questions under the Takings Clause, the 
R&O reasons that, as in Loretto v. Teleprompter Manhattan CATV Corp, 
458 U.S. 419 (1982), ``the physical occupation here would involve 
the direct attachment of video reception devices to'' the property. 
Supra at para. 36. Such an attachment, the R&O continues, would 
constitute a ``permanent physical occupation'' and consequently a 
per se taking. Id. But the very same ``direct attachment of video 
reception devices'' to property would occur in the rental property 
context. Thus, the attachment of reception devices to rental 
property is as much a ``permanent physical occupation'' within the 
meaning of the Takings Clause as the attachment of such devices to 
common and restricted access property.
    Nevertheless, the R&O concludes that extension of the OTARD 
rules to rental property would occasion no per se taking. For this 
conclusion, the R&O relies on the proposition that when ``the 
private property owner voluntarily agrees to the possession of its 
property by another, the government can regulate the terms and 
conditions of that possession without effecting a per se taking.'' 
Supra at para. 17 (citing FCC v. Florida Power, 480 U.S. 245 
(1987)). Although the Commission attempts to frame this rule in 
terms of ``possession,'' Florida Power clearly speaks in terms of 
the ``occupation'' of the relevant property. See 480 U.S. at 252; 
see also Yee v. Escondido, 503 U.S. 519, 527

[[Page 71038]]

(1992). Thus, the Commission's emphasis on possession does not exist 
in the relevant case law. It is the occupation, i.e., the ``required 
acquiescence,'' Florida Power, 480 U.S. at 252, that counts under 
the Takings Clause. It is that act that could theoretically slice 
through an owner's bundle of property rights--rights that include 
the ability not just to possess, but also to use and dispose of 
property. See Loretto, 458 U.S. at 435.
    I must doubt the applicability of Florida Power, however, and 
for this fundamental reason: the particular occupation to which the 
landlord has ``voluntarily agree[d]'' is necessarily defined by the 
terms of the lease. That legal document is the primary determinant 
of the property rights that have, or have not been, transferred from 
owner to tenant, and there are myriad allocations of property rights 
to which landlords and tenants might agree. For this reason, I think 
the R&O goes too far when it states that ``[t]ypically, for 
apartments, [leased property under the exclusive possession of the 
viewer] will include balconies, balcony railings and terraces'' and 
that for ``rented single family homes or manufactured homes which 
sit on rented property, it will typically include patios, yards or 
gardens within the leasehold.'' Supra. We cannot prescribe general 
federalized lease terms (although I fear that may be the logical 
implication of this decision), and the very nature of contracts is 
that their terms can be customized to suit the particular 
circumstances in which the parties find themselves. Where a landlord 
has expressly included lease provisions prohibiting the attachment 
of certain equipment to rental property, it cannot be said that he 
has consented to such an occupation of his property.
    In other words, if the landlord has not agreed to a certain 
occupation or use of his property, there can be no theory of consent 
with respect to the prohibited occupation or use that would prevent 
application of the Takings Clause. Cf. Declaration of Charles M. 
Haar in Support of Reply Comments of National Apartment Association 
et al., at 24-25 (``The notion of implied consent to use the 
property * * * is not applicable here where the owners are careful 
to delineate the boundaries of the demised property to exclude areas 
such as the roof and exterior walls.''). Admittedly, a tenant who 
occupies property subject to certain contractual limitations is not 
a complete stranger to the property, but as far as contractually 
restricted uses of that property are concerned, the law does indeed 
deem him ``an interloper.'' Florida Power, 480 U.S. at 252.
    Indeed, the R&O repeatedly recognizes this very point--namely, 
that the government can regulate property use only within the 
boundaries of the property rights that have actually been conferred 
upon the tenant--in the discussion of common and restricted access 
property. For instance, in rejecting the argument that the 
Commission could strike down lease provisions limiting tenant usage 
of, or access to, common and other property, the R&O correctly 
explains that ``[s]o long as a tenant owns the reception device 
placed in a common or restricted access area, and the terms of the 
tenant's lease * * * or other agreement do not give the tenant the 
right to exclusively possess any portion of this property, the 
landlord's * * * property would be subjected to an uninvited 
permanent physical occupation.'' Supra at para. 39 (emphasis added). 
If placement of a reception device on property such as a balcony or 
exterior wall adjoining a tenant's apartment is barred by the rental 
contract, however, then the landlord would be equally subject to an 
``uninvited'' invasion of his property--the forced introduction of 
the prohibited attachment--if the tenant nevertheless affixed a 
device on that property. Just as ``the landlord does not invite the 
tenant to take possession of common and restricted access 
property,'' supra at para. 35, so too the landlord has not invited 
the tenant to use the property for the attachment of reception 
devices. Accordingly, to say that the attachment of devices to 
rental property is like the attachment of ``rabbit ears'' to a 
television set, see supra at para. 19, does not advance the ball in 
this game: the critical question is whether the person who owns the 
equipment is the same person who owns the property to which it is 
permanently affixed, which the R&O makes clear in its section on 
restricted access property. See supra at para. 39 (noting 
``critical'' issue that ``ownership of the property (i.e., the 
hypothetically required cable equipment) must rest with the 
landlord''). And, if the rabbit ears are the property of some third 
party and their placement is mandated by the government, that would 
raise the issue of a per se Taking.
    Similarly, in declining to rely on Florida Power in the context 
of restricted and common property, the R&O notes that ``the agreed-
upon scope of the physical possession is set forth in the lease or 
other controlling document.'' Supra at para. 41. As noted, supra, it 
is the permanent, physical occupation of the owner's property (which 
could be a number of different kinds of invasions), not just the 
extent of the possession of the property (which is only one of 
several kinds of property rights that might be adversely affected by 
an occupation of the property), that triggers the Takings Clause. As 
discussed above, the same is true in the rental property situation. 
Location of a reception device on an exterior wall when such action 
is barred by the lease is no more ``agreed-upon'' than placement of 
a reception device on a rooftop when that particular action is 
prohibited by the lease. In both cases, what matters is the 
``agreed-upon scope'' of the tenant's legal rights with respect to 
the property in question. Although the majority counters that 
``[f]or takings purposes, the lease is [only] relevant in defining 
the physical area of consensual occupation (e.g., the apartment but 
not the roof or exterior walls),'' supra at para. 22, no support for 
that assertion is provided.
    Given the primacy of the lease agreement in defining the 
respective property rights of landlords and tenants in leased 
property, the standard adopted in this Order--namely, that tenants 
can attach devices to property ``within their leasehold,'' supra at 
para. 8--is entirely circular. The property rights that are ``within 
a leasehold'' can only be ascertained by reference to the lease, but 
this item prohibits any lease restrictions that impair attachments, 
and so it is impossible to limit our regulation in this area to 
property rights actually possessed by the leaseholder. Accordingly, 
it is hard to see, as a matter of black letter contract law, what it 
means for attachment to be authorized ``within a leasehold'' and yet 
undertaken ``without the landlord's permission.'' Supra at 11.
    I question the force of Florida Power in the context of this R&O 
for another reason: that case was about what the Supreme Court 
called ``economic regulation'' of commercial agreements. As the 
Court explained, ``statutes regulating the economic relations of 
landlords and tenants are not per se takings'' under Loretto. 480 
U.S. at 252 (emphasis added). While it is certainly true that simple 
price regulation would fall within this standard--and those were the 
facts in Florida Power--this item, by contrast, does not involve the 
regulation of the economic status of landlords with respect to 
tenants. Rather, it involves the regulation of their respective 
property rights; it transfers from the landlord to the tenant a 
previously unpossessed and intentionally retained aspect of the 
right to use the property. And it does so without providing for any 
compensation to the landlord, much less ``just'' compensation. What 
I question here, primarily, is the logic of the distinction that the 
majority has drawn in concluding that the application of OTARD rules 
presents a per se taking in one area where a tenant lacks the 
necessary property rights but not in the other. Even if there is no 
per se Taking in these situations, however, the extension of section 
207 to rental property certainly creates a potential regulatory 
taking. See Declaration of Charles M. Haar in Support of Reply 
Comments of National Apartment Association et al., at 6-9 (arguing 
that, under the factors set forth in Penn Central Transportation Co. 
v. New York City, 438 U.S. 104 (1978), subjecting rental property to 
OTARD regulation would occasion a regulatory taking).
    If the foregoing does not create a Takings Clause problem, then 
at least the circularity of the amendment adopted today indicates 
that, as a structural matter, section 207 was probably never 
intended to apply to viewers who had no ownership interest in the 
relevant property. When section 207 is limited to governmental and 
homeowners' association limits on reception devices, as opposed to 
lease restrictions, this problem of circularity disappears.
    Finally, I note that in erecting its distinction between the 
legal significance of attaching devices to rental property and to 
common/restricted access property, the R&O appears to assume that 
just because a landlord has agreed to the exclusive possession of 
certain property by a tenant, he has thereby transferred to the 
tenant an absolute right to use that property. This is in error.
    A landlord is not obliged to turn over to a tenant the entire 
``use'' strand in his bundle of property rights. If he chooses, and 
the tenant agrees, he can confer a limited right to use upon the 
tenant. Even the language of the R&O belies this fundamental 
premise. See, e.g., para. 18 (noting that ``to a large extent [but 
not entirely, if contractual usage

[[Page 71039]]

limitations exist!], the property owner relinquishes its right to 
control the use of its property when it leases the property''); id. 
(noting ``that (absent a valid restriction) a tenant may put the 
leased premises to whatever lawful purpose it so desires'') 
(citation omitted). In fact, use restrictions on property that 
tenants have the exclusive right to occupy and possess are 
commonplace. For example, I may possess the exclusive right to 
occupy the patio adjacent to my apartment, and I may also have an 
exclusive right generally to use it. But the landlord can, by power 
of private contract, restrict my use of the balcony: that is, 
notwithstanding my exclusive right to occupy and generally use the 
balcony, I may not be legally entitled to, say, hang laundry on its 
rails or store my bicycle there. The landlord has chosen not to 
bargain away those aspects of his right to use the property and thus 
retains them.
    I do not think that section 207 authorizes us to deprive 
landlords of their right to retain aspects of the right to use their 
property. Conversely, I do not think that section 207 authorizes us 
to bestow new property rights upon tenants--here, the right to use 
property for certain purposes--at the expense of landlords. Although 
the item reasons that the statute does not ``direct the Commission 
to impose affirmative duties on'' non-viewers ``to grant access to 
restricted areas to permit the installation of'' reception devices, 
supra, that is exactly what the rules governing rental property do. 
They require landlords to transfer certain usage rights to tenants 
in order to allow them to attach devices; that is surely an 
affirmative act and, now, a federal obligation.
    To be sure, the language of section 207 is exceedingly broad, 
obliging us to adopt regulations ``to prohibit restrictions that 
impair a viewer's ability to receive video programming services 
through devices designed for over-the-air reception'' of services. 
But we should always read these kinds of statutes against the 
backdrop of the Takings Clause, as Bell Atlantic Co. v. FCC teaches. 
See 24 F.3d 1441 (D.C. Cir. 1994). Because of the Takings issues 
that are at least arguably raised here, I would stop short of 
extending these rules to viewers who lack an ownership interest in 
the property to which they wish to affix reception devices. There is 
no question but that the Commission met its obligation under section 
207 in the first R&O by outlawing governmental and homeowners' 
association rules that impair viewers' abilities to employ reception 
devices. There is no statutory need to go further and create 
constitutional problems by extending the rules to property in which 
viewers lack any ownership interest.
    To sum up, it is not clear to me that there is a significant 
difference, for purposes of Takings Clause analysis, between lease 
provisions that prohibit the installation of reception devices in 
common/restricted access areas and lease provisions that do so in 
other rental property areas. Under Florida Power, the 
constitutionality of the OTARD rules in either context turns on the 
question of consent and, thus, on the terms of the particular 
agreement between the landlord and the tenant. It seems to me that 
if one of these situations presents Takings problems, as this item 
concludes, then so does the other. Moreover, the circularity of the 
standard adopted today suggests that section 207 was never meant to 
apply outside the context of property in which the viewer has an 
ownership interest. For these reasons, and because the decision to 
extend OTARD rules to leased property is a generally unnecessary 
incursion on private property rights, I respectfully dissent.

[FR Doc. 98-33869 Filed 12-22-98; 8:45 am]
BILLING CODE 6712-01-U