[Federal Register Volume 65, Number 17 (Wednesday, January 26, 2000)]
[Rules and Regulations]
[Pages 4137-4140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1795]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 68

[CC Docket No. 88-57; FCC 99-405]


Review of the Commission's Rules Concerning Connection of Simple 
Inside Wiring to the Telephone Network and Petition for Modification of 
the Commission's Rules Filed by the Electronic Industries Association

AGENCY:  Federal Communications Commission.

ACTION:  Final rule.

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SUMMARY:  This document amends Commission rules regarding the 
establishment of quality standards for inside wiring, to promote the 
availability of quality telecommunications facilities that will not 
frustrate consumer access to existing and advanced telecommunications 
services. The Commission also affirms the gold or gold equivalent 
standard for connectors, and decline to designate schools and hospitals 
as multiunit structures, establish requirements compelling notification 
of building owners and tenants with respect to additional network 
protectors, and establish a standard time period for carrier responses 
to customer requests for inside wiring information.

DATES:  Effective July 24, 2000.

FOR FURTHER INFORMATION CONTACT:  Vincent Paladini, Attorney, 202/418-
2332, Fax 202/418-2345, TTY 202/418-2224, [email protected], Common 
Carrier Bureau.

SUPPLEMENTARY INFORMATION:  This is a summary of the Commission's Third 
Report and Order (Third R&O) in CC Docket No. 88- 57; FCC 99-405, 
adopted December 21, 1999, and released January 10, 2000. The complete 
text of this Third R&O is available for inspection and copying during 
the weekday hours of 9 a.m. to 4:30 p.m. in the FCC Reference Center, 
Room CY-A257, 445 12th Street, SW, Washington, DC 20554, or copies may 
be purchased from the Commission's copy contractor, International 
Transcription Services, Inc., 445 12th Street, SW., Suite CY-B400, 
Washington, D.C. 20554, phone (202) 314-3070.

Synopsis of the Third Report and Order

    1. In the Review of Secs. 68.104 and 68.213 of the Commission's 
Rules Concerning Connection of Simple Inside Wiring to the Telephone 
Network and Petition for Modification of Sec. 68.213 of the 
Commission's Rules filed by the Electronic Industries Association, 
Order on Reconsideration, Second Report and Order and Second Further 
Notice of Proposed Rulemaking, CC Docket No. 88-57, RM-5643, 12 FCC Rcd 
11897, (1997), 62 FR 36476, the Commission included a Second Further 
Notice of Proposed Rulemaking requesting comment on proposed 
modifications to the demarcation point rule, BICSI's proposed enhanced 
wire quality standards, and the gold or gold equivalent standard.
    2. In this Order, we adopt material standards for copper, twisted 
pair wire used in new, simple inside wiring installations. We introduce 
this standard into our regulations to identify a ``standard industry 
practice.'' This action will benefit consumers and small businesses 
using legacy voice telecommunications services as well as those seeking 
to access broadband services. We envision that consumers may enforce 
this rule by prosecuting claims against builders and contractors that 
have utilized inferior wiring in new construction. For example, an 
aggrieved consumer or building owner, beset by problems caused by poor 
quality inside wire, may make a civil claim against a builder or 
contractor for breach of implied warranty of merchantability or fitness 
for a particular purpose. We also anticipate that telecommunications 
wiring standards will be adopted by building industry organizations, 
and reflected in local building codes.
    3. Poor-quality, non-twisted pair inside wiring can cause network 
harm in the form of ``cross-talk,'' resulting in a loss of privacy, 
interference with digital transmission, and disruption of telephone 
conversations. The presence of inferior wiring may not be immediately 
apparent to homeowners and homebuyers, since the potential for future 
problems may be difficult to detect. Once a problem is discovered, 
homeowners often must rewire the affected premises to rectify the 
problem, at a cost substantially higher than the cost of initially 
installing quality inside wiring.
    4. A primary cause of this troublesome situation is that the simple 
inside wiring market does not function correctly because homebuyers are 
shut out of the inside wire selection process. Building contractors and 
developers generally select telecommunications wire long before the 
homebuyer has entered the picture, and that this situation allows 
builders to prioritize lower cost over quality when purchasing wire to 
be used for simple inside wiring. When homeowners become aware of the 
problem, such as when they attempt to install an additional line or 
experience audible cross-talk, it is often too late to seek reparations 
from the builder or contractor. Thus, since the ``purchasing entity,'' 
in this case the builder or contractor, is not held accountable for the 
problems caused by its least-cost-based decision, market forces will 
not protect the consumer's interest in quality inside wiring. Thus, we 
establish a wire quality standard to correct this market malfunction.
    5. We find that it is in the public interest to adopt inside wiring 
quality standards in order to protect consumers and the PSTN from such 
harm. Thus, we amend Sec. 68.213(c) of the Commission's rules to adopt 
enhanced wire quality standards for simple inside wiring. Specifically, 
we require that copper inside wiring installed July 24, 2000, shall be, 
at a minimum, solid, 24 gauge or thicker, twisted pairs, marked to 
indicate compliance with the electrical specifications for Category 3, 
as defined in the ANSI/EIA/TIA Building Wiring Standards. Inside wiring 
material exceeding the minimum requirements specified in Sec. 68.213(c) 
as amended by this Order may be used and should be marked to indicate 
those characteristics. We note that the inside wiring requirements that 
we adopt in this Order apply only to copper conductor specifically 
installed for use as simple inside wiring for telecommunications 
service. We define the scope of this regulation specifically to avoid 
precluding the development and use of other transmission media that may 
be able to function in place of twisted pair copper inside wiring.
    6. We emphasize that the inside wiring quality standards we adopt 
in this do not imply that inferior materials may be used instead of 
copper. Under Sec. 68.108 of our rules, carriers are afforded certain 
self-help privileges

[[Page 4138]]

enabling them to take necessary actions to protect the PSTN, such as 
temporarily disconnecting or refusing to connect inside wiring or CPE 
that is likely to cause harm to the PSTN.
    7. We also establish that wire must be marked for compliance with 
the Commission's inside wiring quality standard at one-foot intervals, 
as described in Sec. 68.213(c)(3) of our rules as amended by this Third 
Report and Order. The new standard will become effective July 24, 2000.
    8. The growing market presence of communications equipment and 
technology, such as facsimiles, modems, and ISDN, that have low 
tolerance for transmission anomalies and interference, such as those 
caused by poor connectors, indicates that the public interest will be 
served by supporting industry initiatives that pursue improved 
telecommunications transmission quality. Furthermore, the current 
standard has been in place for more than a year and has not been the 
subject of any criticism. Consequently, we decline to further revise 
Sec. 68.500 with respect to the gold or gold equivalent standard.
    9. In the 1997 Rulemaking, the Commission proposed that schools, 
hospitals and other similar facilities be considered multiunit premises 
under the Commission's demarcation point rule. Nothing in the record 
evinces difficulties in this area or indicates that case-by-case 
resolution of this issue would be problematic. Thus, we decline to 
determine that schools, hospitals, and similar facilities should be 
classified as multiunit premises under the demarcation point rule.
    10. In the 1997 Rulemaking, the Commission requested comment 
identifying a reasonable time for telephone companies to respond to 
requests for disclosure of information regarding the wiring layout of 
buildings, including information about inside wiring on the customer's 
side of the demarcation point. The record does not indicate uncertainty 
or problems in this area. Thus, we decline to identify a specific 
period as reasonable for the purposes of customer requests for inside 
wiring information.

Paperwork Reduction Act

    11. It appears that record keeping would not increase or 
significantly decrease as a result of the Commission's affirmation and 
clarification of the demarcation point definition gold and gold 
equivalence standard, and modification of the inside wiring material 
requirements rules. No new skills are necessary to comply with this 
amendment by telephone companies, wire maintenance and installation 
companies, and wire manufacturers.

Final Regulatory Flexibility Analysis

    12. As required by the Regulatory Flexibility Act (RFA) the 
Commission has prepared this Final Regulatory Flexibility Analysis 
(FRFA) of the expected significant economic impact on small entities by 
the policies and rules proposed in the Order on Reconsideration, Second 
Report and Order, and Second Notice of Proposed Rulemaking. See 5 
U.S.C. 603(a).

(1) Need For, and Objectives of, the Proposed Rules

    13. The Commission, in compliance with section 1 and Title II of 
the Communications Act of 1934, as amended in the Telecommunications 
Act of 1996, promulgates rules in this Third Report and Order by 
amending Sec. 68.213 of its rules to establish minimum standards for 
simple inside wiring to be connected to the public switched 
telecommunications network. This rule change will benefit consumers and 
small businesses by ensuring that telecommunications wiring in new 
installations will be capable of accommodating clear telecommunications 
and digital transmissions. Consumers and small businesses will also 
benefit from the decreased necessity for the expensive replacement of 
poor quality simple inside wiring, as may be required to accommodate 
extra lines for additional telephones, personal computers, fax 
machines, and ISDN or xDSL services. Furthermore, this rule change will 
staunch the increasing incidence of cross-talk and the risk of network 
harm associated with the installation of poor quality inside wiring.

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

    14. We have reviewed the general comments to identify issues that 
may have significant economic impact on small businesses, and find that 
no issues were raised in direct response to the IRFA. Furthermore, all 
commenters addressing the issue of amending Part 68 our rules to 
provide enhanced standards for inside wiring supported the proposed 
amendment.

(3) Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    15. The RFA directs the Commission to provide a description of and, 
where feasible, an estimate of the number of small entities that will 
be affected by the proposed rules. The RFA defines the term ``small 
entity'' as having the same meaning as the terms ``small business,'' 
``small organization,'' and ``small business concern'' under section 3 
of the Small Business Act. A small business concern is one that (1) is 
independently owned and operated; (2) is not dominant in its field of 
operation, and (3) satisfies any additional criteria established by the 
SBA. SBA has defined a small business for Standard Industrial 
Classification (SIC) category 4813 (Telephone Communications, except 
Radiotelephone) to be a small entity when it has no more than 1,500 
employees. We first discuss generally the total number of small 
telephone companies falling within both of these SIC categories. We 
then discuss the number of small businesses within the two 
subcategories, and attempt to refine further those estimates to 
correspond with the categories of telephone companies that are commonly 
used under our rules. Finally, we discuss the number of electrical 
contractors that may be affected by the proposed rules, and the extent 
to which they may be affected.
    16. Consistent with our prior practice, we here exclude small 
incumbent local exchange carriers (LECs) from the definition of ``small 
entity'' and ``small business concern.'' While such a company may have 
1,500 or fewer employees and thus fall within the SBA's definition of a 
small telecommunications entity, such companies are either dominant in 
their field or operation or are not independently owner and operated. 
Out of an abundance of caution, however, for regulatory flexibility 
analysis purposes, we will consider small incumbent LECs within this 
present analysis and use the term ``small incumbent LECs'' to refer to 
any incumbent LEC that arguably might be defined by the SBA as a small 
business concern.
    17. Total Number of Telephone Companies Affected. Many of the 
decisions and rules adopted herein may have a significant effect on a 
substantial number of the small telephone companies identified by the 
SBA. The United States Bureau of the Census (``the Census Bureau'') 
reports that, at the end of 1992, there were 3,497 firms engaged in 
providing telephone services, as defined therein, for at least one 
year. This number contains a variety of different categories of 
carriers, including local exchange carriers, interexchange carriers, 
competitive access providers, cellular carriers, mobile service 
carriers, operator service providers, pay telephone operators, PCS 
providers, covered SMR providers and

[[Page 4139]]

resellers. It seems certain that some of those 3.497 telephone service 
firms may not qualify as small entities or small incumbent LECs because 
they are not ``independently owned and operated.'' For example, a PCS 
provider that is affiliated with an interexchange carrier having more 
than 1,500 employees would not meet the definition of a small business. 
It seems reasonable to conclude, therefore, that fewer than 3,497 
telephone service firms are small entity telephone service firms or 
small incumbent LECs that may be affected by this Third Report and 
Order.
    18. Wireline Carriers and Service Providers. SBA has developed a 
definition of small entities for telephone communications companies 
other than radiotelephone (wireless) companies. The Census Bureau 
reports that there were 2,321 such telephone companies in operation for 
at least one year at the end of 1992. According to the SBA's 
definition, a small business telephone company other than a 
radiotelephony company is one employing fewer than 1,500 persons. All 
but 26 of the 2,321 non-radiotelephone companies listed by the Census 
Bureau were reported to have fewer than 1,000 employees. Thus, even if 
all 26 of those companies had more than 1,500 employees, there would 
still be 2,295 non-radiotelephone companies that might qualify as small 
entities or small incumbent LECs. Although it seems certain that some 
of these carriers are not independently owned and operated, we are 
unable at this time to estimate with greater precision the number of 
wireline carriers and service providers that would qualify as small 
businesses under the SBA's definition. Consequently, we estimate that 
there are fewer than 2,295 small entity telephone communications 
companies other than radiotelephone companies that may be affected by 
the decisions and rules adopted in this Third Report and Order.
    19. Local Exchange Carriers. Neither the Commission nor SBA has 
developed a definition of small providers of local exchange services 
(LECs). The closest applicable definition under SBA rules is for 
telephone communications companies other than radiotelephone (wireless) 
companies. The most reliable source of information regarding the number 
of LECs nationwide of which we are aware appear to be the data that we 
collect annually in connection with the Telecommunications Relay 
Service (TRS). According to our most recent data, 1,347 companies 
reported that they were engaged in the provision of local exchange 
services. Although it seems certain that some of these carriers are not 
independently owned and operated, or have more than 1,500 employees, we 
are unable at this time to estimate with greater precision the number 
of LECs that would qualify as small business concerns under the SBA's 
definition. Consequently we estimate that there are fewer than 1,347 
small incumbent LECs that may be affected by the decisions and rules 
adopted in this Third Report and Order.
    20. Manufacturers of Telecommunications Equipment. The Commission 
has not developed a definition for small manufacturers of 
telecommunications terminal equipment. The closest applicable 
definition under SBA rules is for manufacturers of telephone and 
telegraph apparatus (SIC 3661) which defines a small manufacturer as 
one having 1,000 or fewer employees. According to 1992 Census Bureau 
data, there were 479 such manufacturers, and of those, 436 had 999 or 
fewer employees, and seven had between 1,000 and 1,499 employees. 
Consequently, we estimate that there are fewer than 443 small 
manufacturers of telecommunications terminal equipment that may be 
affected by the decision and rules proposed in this Third Report and 
Order.
    21. Electrical Contractors. Electrical Contractors in this category 
(SIC 1731) are primarily engaged in electrical work at the construction 
site. This category includes establishments engaged in the installation 
of telecommunication equipment, sound equipment, burglar alarms, fire 
alarms, and telephones. According to the 1997 Economic Census there are 
61,414 electrical contractors. Of that number, 61,405 electrical 
contractors have fewer than 1000 employees, and 61,375 have fewer than 
500 employees. Consequently, we estimate that up to 61,405 small 
electrical contractors may be affected by the decision and rules 
proposed in this Third Report and Order.
    22. Telecommunications Wiring Manufacturers. Manufacturers in this 
category (SIC 3357B) are primarily engaged in manufacturing telephone 
and telegraph wire and cable. This category includes establishments 
engaged in the manufacture of inside wiring cable. According to the 
1997 Economic Census there are 28 telephone and telegraph wire and 
cable manufacturers, of which 18 are involved in the manufacture of 
inside wiring cable. The Small Business Administration has determined 
that manufacturing establishments in this category with fewer than 750 
employees qualify as small manufacturers. Consequently, we estimate 
that no more than 18 inside wiring cable manufacturers may be affected 
by the decision and rules proposed in this Third Report and Order.

(4) Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    23. Reporting. None.
    24. Recordkeeping. It appears that recordkeeping would not increase 
or significantly decrease as a result of our affirmation and 
clarification of our demarcation point definition gold and gold 
equivalence standard, and modification of our inside wiring material 
requirements rules. We anticipate that no new skills are necessary to 
comply with this amendment by telephone companies, wire maintenance and 
installation companies, and wire manufacturers.
    25. Other Compliance Requirements. None.

(5) Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    26. We have considered the effect of enhanced wiring requirements 
on the building industry in general, and specifically with regard to 
the following entities: General Contractor, Single Family Houses (SIC 
1521); General Contractor, Residential Buildings, Other than Single 
Family (SIC 1522); General Contractors, Nonresidential Buildings (SIC 
1542), and Building Construction Trade Contractors, Electrical (SIC 
1731), and find that these rule modifications will not cause 
significant negate impact. To the extant that enhanced wire quality 
standards for simple inside wiring may adversely affect small building 
contractor, it appears to be an insignificant cost in comparison to the 
value and public interest in the elimination of cross-talk interference 
to the service of third party customers that is directly attributable 
to the use of low-quality telephone inside wiring.

(6) Federal Rules that Overlap, Duplicate, or Conflict With These Rules

    27. None.

Report to Congress

    28. The Commission will include a copy of this Final Regulatory 
Flexibility Analysis, along with this Third Report and Order, in a 
report to Congress pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996, 5 U.S.C. 801(a)(1)(A). A copy of this 
FRFA (or summary thereof) will also be published in the Federal 
Register.

[[Page 4140]]

Ordering Clauses

    29. Accordingly pursuant to the authority contained in Sections 1, 
4(I) and (j), 11, 201-205, 218, 220, 256, and 405 of the Communications 
Act as amended, 47 U.S.C. sections 151, 154(I), 151(j), 161, 201-205 
and 218, 220, 256, and 405, and 5 U.S.C. 552 and 553, this Third Report 
and Order and Order on Reconsideration is adopted, and part 68 of the 
Commission's Rules is amended as set forth. Sections 1, 4, 405, and 710 
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 405 
and 610, part 68 of the Commission's rules is amended as set forth.
    30. That the rule amendments set forth shall be effective July 24, 
2000.

List of Subjects in 47 CFR Part 68

    Administrative practice and procedure, Communications common 
carriers, Communications equipment, Hearing aid compatibility, 
Incorporation by reference, Reporting and recordkeeping requirements, 
Telephone, Volume control.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR Part 68 as follows:

PART 68--CONNECTION OF TERMINAL EQUIPMENT TO THE TELEPHONE NETWORK

    1. The authority citation for part 68 continues to read as follows:

    Authority: Sections 1, 4, 5, 201-5, 208, 215, 218, 226, 227, 
303, 313, 314, 403, 404, 410, 522 of the Communications Act of 1934, 
as amended, 47 U.S.C. 151, 154, 155, 201-5, 208, 215, 218, 226, 227, 
303, 313, 314, 403, 404, 410, 522.

    2. Section 68.213 is amended by revising paragraph (c) to read as 
follows:


Sec. 68.213  Installation of other than ``fully protected'' non-system 
simple customer premises wiring.

* * * * *
    (c) Material requirements. (1) For new installations and 
modifications to existing installations, copper conductors shall be, at 
a minimum, solid, 24 gauge or larger, twisted pairs that comply with 
the electrical specifications for Category 3, as defined in the ANSI 
EIA/TIA Building Wiring Standards.
    (2) Conductors shall have insulation with a 1500 Volt rms minimum 
breakdown rating. This rating shall be established by covering the 
jacket or sheath with at least 15 cm (6 inches) (measured linearly on 
the cable) of conductive foil, and establishing a potential difference 
between the foil and all of the individual conductors connected 
together, such potential difference gradually increased over a 30 
second time period to 1500 Volts rms, 60 Hertz, then applied 
continuously for one minute. At no time during this 90 second time 
interval shall the current between these points exceed 10 milliamperes 
peak.
    (3) All wire and connectors meeting the requirements set forth in 
paragraphs (c)(1) and (c)(2) shall be marked, in a manner visible to 
the consumer, with the symbol ``CAT 3'' or a symbol consisting of a 
``C'' with a ``3'' contained within the ``C'' character, at intervals 
not to exceed one foot (12 inches) along the length of the wire.
* * * * *
[FR Doc. 00-1795 Filed 1-25-00; 8:45 am]
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