[Federal Register Volume 66, Number 8 (Thursday, January 11, 2001)]
[Rules and Regulations]
[Pages 2322-2335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-843]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 64 and 68

[WT Docket No. 99-217; CC Docket No. 96-98; CC Docket No. 88-57; FCC 
00-366]


Promotion of Competitive Networks in Local Telecommunications 
Markets

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission takes actions to further 
competition in local communications markets by ensuring that competing 
telecommunications providers are able to provide services to customers 
in multiple tenant environments (MTEs). The actions that the Commission 
takes in this item will reduce the likelihood that incumbent local 
exchange carriers (LECs) can obstruct their competitors' access to 
MTEs, as well as address particular potentially anticompetitive actions 
by premises owners and other third parties.

DATES: The rule changes to 47 CFR 64.2500, 64.2501, and 64.2502, shall 
become effective March 12, 2001. The rule changes to 47 CFR 1.4000 and 
the rule changes amending the definition of the term ``demarcation 
point'' in 47 CFR 68.3 contain an information collection requirement 
that has not yet been approved by OMB; the FCC will publish a document 
in the Federal Register announcing the effective date of these rule 
changes. Comments from the public, OMB, and other agencies on the 
information collections contained in this document are due March 12, 
2001.

ADDRESSES: A copy of any comments on the information collections 
contained herein should be submitted to Judy Boley, Federal 
Communications Commission, Room 1-C804, 445 12th Street, SW., 
Washington, DC 20554, or via the Internet to [email protected], and to 
Edward C. Springer, OMB Desk Officer, Room 10236 NEOB, 725 17th Street, 
NW., Washington, DC 20503 or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Lauren Van Wazer at (202) 418-0030 or 
Joel Taubenblatt at (202) 418-1513 (Wireless Telecommunications 
Bureau). For additional information concerning the information 
collection(s) contained in this document, contact Judy Boley at 202-
418-0214, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the First Report and 
Order in WT Docket No. 99-217, the Fifth Report and Order and 
Memorandum Opinion and Order in CC Docket No. 96-98, and the Fourth 
Report and Order and Memorandum Opinion and Order in CC Docket No. 88-
57 (collectively, the ``Order''), FCC 00-366, adopted October 12, 2000 
and released October 25, 2000. This summary also reflects errata issued 
in this proceeding subsequent to the release of this Order. The 
Commission seeks further comments on the issues in this proceeding in a 
Further Notice of Proposed Rulemaking, available at the addresses 
listed below and summarized separately in the Federal Register. The 
complete text of the document is available for inspection and copying 
during normal business hours in the FCC Reference Center, 445 12th 
Street, SW., Washington, DC, and also may be purchased from the 
Commission's copy contractor, International Transcription Services, 
(202) 857-3800, 445 12th Street, SW., CY-B400, Washington, D.C. 20554. 
This document is also available via the Internet at http://fcc.gov/Bureaus/Wireless/Orders/2000/fcc00366.pdf. 

Paperwork Reduction Act

    This Order contains a new information collection as described in 
Section D of the Final Regulatory Flexibility Analysis set forth below. 
The Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public, Office of Management and Budget 
(OMB), and other federal agencies to comment on the information 
collection(s) contained in this Order as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. It will be submitted to the 
OMB for review under section 3507(d) of the PRA. Public, OMB, and other 
agency comments are due March 12, 2001. Comments should address: (a) 
Whether the new collection of information is necessary for the proper 
performance of the functions of the Commission, including whether the 
information shall have practical utility; (b) the accuracy of the 
Commission's burden estimates; (c) ways to enhance the quality, 
utility, and clarity of the information collected; and (d) ways to 
minimize the burden of the collection of information on the 
respondents, including the use of automated collection techniques or 
other forms of information technology.
    A copy of any comments on the information collections contained 
herein should be submitted to Judy Boley, Federal Communications 
Commission, Room 1-C804, 445 12th Street, SW., Washington, DC 20554, or 
via the Internet to [email protected], and to Edward C. Springer, OMB Desk 
Officer, Room 10236 NEOB, 725 17th Street, NW., Washington, DC 20503 or 
via the Internet to [email protected].
    OMB Control Number: 3060-XXXX.
    Title: Promotion of Competitive Networks in Local 
Telecommunications Markets; Wireless Communications Association 
International, Inc. Petition for Rulemaking to Amend section 1.4000 of 
the Commission's Rules to Preempt Restrictions on Subscriber Premises 
Reception or Transmission Antennas Designed to Provide Fixed Wireless 
Services; Implementation of the Local Competition Provisions in the 
Telecommunications Act of 1996; Review of Sections 68.104 and 68.213 of 
the Commission's Rules Concerning

[[Page 2323]]

Connection of Simple Inside Wiring to the Telephone Network
    Form No.: NA.
    Type of Review: New collection.
    Respondents: Business or other for-profit.
    Number of Respondents: 5983.
    Estimated Time per Response: .5 hrs. for the first information 
collection, 10 hrs. for the second information collection.
    Total Annual Burden: 571,350 hrs.
    Total Annual Costs: $11,427,000.
    Needs and Uses: The first information collection relates to the 
revisions of the Commission's demarcation point rules, 47 CFR 68.3. 
Under these revisions, the LEC shall make available information on the 
location of the demarcation point within ten business days of a request 
from the premises owner. In addition, at the time of installation, the 
LEC shall fully inform the premises owner of its options and rights 
regarding the placement of the demarcation point or points. The 
availability of this information will facilitate efficient interaction 
between premises owners and LECs regarding the placement of the 
demarcation point, which marks the end of wiring under control of the 
LEC and the beginning of wiring under the control of the premises owner 
or subscriber. The demarcation point is a critical point of 
interconnection where competitive LECs can gain access to the inside 
wiring of the building to provide service to customers in the building.
    The second information collection relates to the revisions of the 
Commission's rules on Over-the-Air Reception Devices, 47 CFR 1.4000. 
Under these revisions, as a condition of invoking protection under 47 
CFR 1.4000 from government, landlord, and association restrictions, a 
licensee must ensure that subscriber antennas are labeled to give 
notice of potential radiofrequency safety hazards of these antennas. 
Labeling information should include minimum separation distances 
required between users and radiating antennas to meet the Commission's 
radiofrequency exposure guidelines. Labels should also include 
reference to the Commission's applicable radiofrequency exposure 
guidelines and should use the ANSI-specified warning symbol for 
radiofrequency exposure. In addition, the instruction manuals and other 
information accompanying subscriber transceivers should include a full 
explanation of the labels, as well as a reference to the applicable 
Commission radiofrequency exposure guidelines.

Synopsis of Report and Order

    1. In this document, the Commission took action furthering its 
ongoing efforts under the Telecommunications Act of 1996 to foster 
competition in local communications markets. The Commission implemented 
measures to enhance the ability of competing telecommunications 
providers to provide services to customers in residential and 
commercial buildings or other MTEs.

Discussion

    2. In the Notice of Proposed Rulemaking in WT Docket No. 99-217, 64 
FR 41887, August 2, 1999, and a Third Further Notice of Proposed 
Rulemking in CC Docket No. 96-98, 64 FR 41884, August 2, 1999 
(together, ``Competitive Networks NPRM''), the Commission requested 
comment on the ability of competitive telecommunications providers to 
access MTEs and on a variety of potential measures to improve such 
access. Based on the extensive record compiled in response to the 
Competitive Networks NPRM, the Commission adopts the following four 
measures to remove obstacles to competitive access in MTEs:
     First, the Commission forbids telecommunications carriers 
from entering into contracts to serve commercial properties that 
restrict or effectively restrict the property owner's ability to permit 
entry by other carriers.
     Second, in order to reduce competitive carriers' 
dependence on the incumbent LECs to gain access to on-premises wiring, 
while at the same time recognizing the varied needs of carriers and 
building owners, the Commission establishes procedures to facilitate 
moving the demarcation point to the minimum point of entry (MPOE) at 
the building owner's request, and requires incumbent LECs to timely 
disclose the location of existing demarcation points where they are not 
located at the MPOE.
     Third, the Commission determines that under Section 224 of 
the Communications Act, utilities, including LECs, must afford 
telecommunications carriers and cable service providers reasonable and 
nondiscriminatory access to conduits and rights-of-way located in 
customer buildings and campuses, to the extent such conduits and 
rights-of-way are owned or controlled by the utility.
     Fourth, the Commission extends to antennas that receive 
and transmit telecommunications and other fixed wireless signals its 
existing prohibition of restrictions that impair the installation, 
maintenance or use of certain video antennas 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.
    3. Contemporaneous with this document, the Commission is publishing 
a Further Notice of Proposed Rulemaking that seeks comment on several 
potential actions related to competition in MTEs. In addition, 
subsequent to this document, the Commission will publish a Report and 
Order (FCC 00-400) that steamlines and privatizes many of the functions 
in part 68 of the Commission's rules and, in connection with this 
streamlining, makes a nonsubstantive amendment to the part 68 
demarcation point definition set forth.

Final Regulatory Flexibility Analysis

    4. As required by the Regulatory Flexibility Act (RFA),\1\ an 
Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the 
Notice of Proposed Rulemaking in WT Docket No. 99-217 and Third Further 
Notice of Proposed Rulemaking in CC Docket No. 96-98, released July 7, 
1999 (Competitive Networks NPRM).\2\ The Commission sought written 
public comment on the proposals in the Competitive Networks NPRM, 
including comment on the IRFA. The comments received are discussed 
below. In addition, an IRFA was incorporated in the Second Further 
Notice of Proposed Rulemaking in CC Docket No. 88-57 (1997 Demarcation 
Point Order on Reconsideration).\3\ This present Final Regulatory 
Flexibility Analysis (FRFA) conforms to the RFA.\4\
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    \1\ See 5 U.S.C. 603. The FRA, see 5 U.S.C. 601 et seq., has 
been amended by the Contract With America Advancement Act of 1996, 
Public Law 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the 
CWAAA is the Small business Regulatory Enforcement Fairness Act of 
1996 (SBREFA).
    \2\ Promotion of Competitive Networks in Local 
Telecommunications Markets, Notice of Proposed Rulemaking and Notice 
of Inquiry in WT Docket No. 99-217, and Third Further Notice of 
Proposed Rulemaking in CC Docket No. 96-98, 14 FCC Red 12673, 12723-
12734 (1999) (Competitive Networks NPRM).
    \3\ Review of Sections 68.104, and 68.213 of the Commission's 
Rules Concerning Connection of Simple Inside Wiring to the Telephone 
Network, Order on Reconsideration, Second Report and order and 
Second Further Notice of proposed Rulemaking, CC Docket No. 88-57, 
12 FCC Red 11897, 11934-39 (1997) (1997 Demarcation Point Order on 
Reconsideration).
    \4\ See 5 U.S.C. 604.
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A. Need for, and Objectives of, the Rules

    4. In this Competitive Networks First Report and Order,\5\ the 
Commission

[[Page 2324]]

furthers its ongoing efforts under the Telecommunications Act of 
1996\6\ to foster competition in local communications markets by 
implementing measures to ensure that competing telecommunications 
providers are able to provide services to customers in multiple tenant 
environments (MTEs). MTEs include apartment buildings, office 
buildings, office parks, shopping centers, and manufactured housing 
communities. Based on the extensive record compiled in response to the 
Competitive Networks NPRM, the Commission adopts several measures to 
remove obstacles to competitive access in this important portion of the 
telecommunications market. Specifically the Commission: (1) Prohibits 
carriers from entering into contracts in commercial buildings that 
prevent access by competing carriers; (2) clarifies its demarcation 
point rules\7\ governing control of in-building wiring and facilitates 
exercise of building owner options regarding that wiring; (3) concludes 
that the access mandated by section 224 of the Communications Act (the 
``Pole Attachments Act'')\8\ includes access to poles, ducts, conduits 
or rights-of-way that are owned or controlled by a utility within MTEs; 
and (4) concludes that tenants in MTEs should have the ability to place 
antennas one meter or less in diameter used to receive or transmit any 
fixed wireless service in areas within their exclusive use or control, 
and prohibits most restrictions on their ability to do so by extending 
the Commission's rules governing Over-the-Air Reception Devices 
(OTARDs).\9\
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    \5\ Promotion of Competitive Networks in Local 
Telecommunications Markets. First Report and Order, WT Docket No. 
99-217, FCC 00-366 (adopted Oct. 12, 2000) (Competitive Networks 
First Report and Order)
    \6\ Telecommunications Act of 1996, Public law 104-104, 110 
Stat. 56 codified at 47 U.S.C. 151 et seq. (1996 Act). The 1996 Act 
amended the Communications Act of 1934 (the ``Communications Act'' 
of the ``Act'' or the ``Act'').
    \7\ See 47 CFR 68.3
    \8\ 47 U.S.C. 224.
    \9\ See 47 CFR 1.4000.
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B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    5. Comments in response to the Competitive Networks NPRM IRFA were 
filed by the Community Associations Institute, et al. (CAI),\10\ the 
National Association of Counties, et al. (NACO),\11\ the Real Access 
Alliance (RAA),\12\ and the Office of Advocacy of the U.S. Small 
Business Administration (SBA).\13\
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    \10\ CAI IRFA Response (filed Aug 27, 1999).
    \11\ NACO IRFA Comments (filed Aug. 27, 1999) and NACO Comments 
(filed Oct. 12, 1999).
    \12\ RAA Joint Regulatory Flexibility Act Comments (filed Aug. 
27, 1999).
    \13\ SBA Reply Comments (filed Sept. 10, 1999).
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    6. CAI states that community associations (i.e., condominiums, 
cooperatives and planned communities) would incur undue expense and 
disruptions if the Commission provides telecommunications carriers so-
called ``forced access'' to association property.\14\ Similarly, RAA 
states that the Commission's ``proposals will interfere with the 
ability of landlords to insure compliance with safety codes; provide 
for the safety of tenants, residents, and visitors; coordinate among 
tenants and service providers; and manage limited physical space.''\15\ 
CAI requests that community associations be exempted from any ``forced 
access'' rules adopted by the Commission,\16\ while RAA requests that 
all affected ``small businesses'' be exempted.\17\ RAA also states that 
the Competitive Networks NPRM should be withdrawn and reissued with a 
revised IRFA.\18\
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    \14\ CAI IRFA Response at 6-14.
    \15\ RAA Joint Regulatory Flexibility Act Comments at 7.
    \16\ CAI IRFA Response at 16-17.
    \17\ RAA Joint Regulatory Flexibility Act Comments at 8.
    \18\ Id. at 8-9.
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    7. The actions taken in the Competitive Networks First Report and 
Order today do not impair the authority of property owners or managers, 
including community associations, under state law to exclude 
telecommunications carriers from their property.\19\ Rather, the 
Competitive Networks First Report and Order makes clear that ``the 
right of access granted under section 224 lies only against 
utilities,''\20\ as defined in section 224(a)(1) of the Act.\21\ We 
also note that our authorization of small antennas for the provision of 
non-video services is limited to antennas situated on property under 
the control of a community association member rather than common 
property of the association, and therefore will not impose undue 
burdens or expense on community associations or small building 
owners.\22\ CAI also states that prohibiting exclusive 
telecommunications contracts would adversely impact community 
associations.\23\ The Competitive Networks First Report and Order does 
not prohibit such contracts for residential properties.\24\ 
Accordingly, even assuming that such a prohibition would significantly 
impact community associations, no such impact will result from the 
actions taken in the Competitive Networks First Report and Order 
today.\25\
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    \19\ See Competitive Networks First Report and order, at 
paragraph 76 (``Section 224 was not intended to override whatever 
authority or control an MTE owners may otherwise retain under the 
terms of its agreements and state law.'').
    \20\ Id. 
    \21\ 47 U.S.C. 224(a)(1).
    \22\ See Competitive Networks First Report and order, Section 
IV.E., supra.
    \23\ CAI IRFA Response at 14-15 (filed August 27, 1999).
    \24\ Competitive Networks First Report and Order, at paragraph 
27.
    \25\ In Section V.A. of the Competitive Networks FNPRM, we seek 
comment on extending the prohibition on exclusive contracts to 
residential MTEs. Issues regarding the potential impact of such an 
action on small entities, including community associations, are 
discussed in the Competitive Networks FNPRM IRFA, infra.
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    8. In its comments filed August 27, 1999, NACO states that the 
Commission's proposals ``for building owners and managers represent the 
federalizing of what is currently a growing local market in site 
leasing.'' \26\ We have deferred to the Competitive Networks Further 
Notice of Proposed Rulemaking (FNPRM) the issue of whether the 
Commission should impose a nondiscriminatory access requirement on 
building owners and managers.\27\ NACO also states that ``[l]ocal 
communities would be * * * deprived of a revenue stream that could 
reduce local tax burdens * * * .'' \28\ In later filed comments, NACO 
reiterates its concern over ``the impact of lost right-of-way and tax 
revenues and the impact on infrastructure of loss of management control 
over the public right of way.'' \29\ Although we sought comment on 
issues related to access to public rights-of-way and franchise taxes in 
the Competitive Networks Notice of Inquiry, we take no action in this 
regard today.
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    \26\ NACO IRFA Comments at 3 (filed Aug. 27, 1999).
    \27\ Competitive Networks FNPRM, Section V.A., supra.
    \28\ NACO IRFA Comments at 3 (filed Aug. 27, 1999).
    \29\ NACO Comments at 48 (filed Oct. 12, 1999).
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    9. SBA states that the IRFA ``inappropriately excludes small 
incumbent LECs from the definition of small business,'' and requests 
that the Commission reconcile its definition of small incumbent LEC 
with SBA's definition.\30\ SBA states that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope.\31\ In the

[[Page 2325]]

Competitive Networks NPRM IRFA, we determined that, for the purposes of 
the IRFA, we would use the term ``small incumbent LECs'' to refer to 
incumbent LECs that might be defined by the SBA as small business 
concerns,\32\ and would explicitly include small incumbent LECs in the 
analysis. In this present FRFA, infra, we have included small incumbent 
LECs within the definition of small business.
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    \30\ SBA Reply Comments at 3-4. (filed Sept. 10, 1999).
    \31\ Id. at 4. The Small Business Act contains a definition of 
``small business concern,'' which the RFA incorporates into its own 
definition of ``small business.'' See 15 U.S.C. 632(a) (Small 
Business Act); 5 U.S.C. 601(3) (RFA). SBA regulations interpret 
``small business concern'' to include the concept of dominance on a 
national basis. 13 CFR 121.102(b). Since 1996, out of an abundance 
of caution, the Commission has included small incumbent LECs in its 
regulatory flexibility analyses. See, e.g., Implementation of the 
Local Competition Provisions of the Telecommunications Act of 1996, 
CC Docket, 96-98, First Report and Order, 11 FCC Rcd 15499, 16144-45 
(1996), 61 FR 45476 (Aug. 29, 1996).
    \32\ Competitive Networks NPRM IRFA, 14 FCC Rcd at 12726, 
paragraph 8. A ``small business'' under the RFA is one that, inter 
alia, meets the pertinent small business size standard (e.g., a 
telephone communications business having 1,500 or fewer employees), 
and ``is not dominant in its field of operation.'' 5 U.S.C. 601(3).
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    10. SBA and RAA separately state that the IRFA did not comply with 
the RFA. NACO concurs with RAA's comments in this regard. SBA states 
that ``[t]he Commission does not adequately discuss any significant 
economic impact its access proposal may have on small business nor does 
it propose sufficient alternatives that might minimize this impact, as 
is required by the RFA.'' \33\ The Commission's access proposal 
included two key elements: (1) A requirement that building owners 
provide reasonable and nondiscriminatory access to their premises; and 
(2) a requirement, under Section 224 of the Act, that utilities provide 
telecommunications carriers access to their poles, ducts, conducts, and 
rights-of-way within buildings. As noted above, we are deferring to the 
Competitive Networks FNPRM the issue of whether and, if so, the extent 
to which, the Commission should impose a nondiscriminatory access 
requirement on building owners.\34\ With respect to the proposed 
implementation of Section 224, in the Competitive Networks NPRM, we 
inquired:
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    \33\ SBA Reply Comments at 4 (filed Sept. 10, 1999).
    \34\ Competitive Networks FNPRM, Section V.A., supra. In the 
Competitive Networks NPRM IRFA, we inquired ``whether we should 
limit the scope of any building owner obligation * * * [and noted] 
that a potential rule could exempt buildings that housed fewer than 
a certain number of tenants or are under a certain size.'' 
Competitive Networks NPRM IRFA, 14 FCC Rcd at 12733, paragraph 31.
    \35\ Competitive Networks NPRM, 14 FCC Rcd at 12697, paragraph 
47.

    Whether an overly broad construction of utility ownership or 
control would impose unreasonable burdens on building owners, 
including small building owners, or compromise their ability to 
ensure the safe use of rights-of-way or conduit, or engender other 
practical difficulties.\35\
    11. After a thorough review and analysis of the comments filed on 
our Section 224 proposal, we have determined that a broad definition of 
utility ownership or control would not best serve the public interest. 
Rather, in order to minimize the impact of our proposal on utilities 
(and the buildings that they serve) that must provide access to 
telecommunications carriers pursuant to section 224, we find that 
``state law determines whether, and the extent to which, utility 
ownership or control of a right-of-way exists in any factual situation 
within the meaning of section 224.'' \36\ The Competitive Networks 
First Report and Order, moreover, in no way impairs the authority under 
state law of building owners, including small building owners, to 
exclude telecommunications carriers from their property.\37\
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    \36\ Competitive Networks First, Report an Order, at paragraph 
87.
    \37\ See id.
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    12. In addition, we note that in the Competitive Networks NPRM IRFA 
we discussed certain alternatives that might have lessened the possible 
economic input on small entities. We stated:
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    \38\ Competitive Networks NPRM IRFA, 14 FCC, Red at 12733, 
paragraph 31 (internal citations omitted).

    [W]ith respect to our Section 224 proposal, we seek comment on 
whether an overly broad construction of utility ownership or control 
would impose unreasonable burdens on building owners, including 
small building owners, or compromise their ability to ensure the 
safe use of rights-of-way or conduit, or engender other practical 
difficulties. In addition, with respect to our inquiry into building 
owner obligations, we seek comment on whether we should limit the 
scope of any building owner obligation in order to avoid imposing 
unreasonable regulatory burden on building owners, and we suggest 
that a potential rule could exempt buildings that house fewer than a 
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certain number of tenants or are under a certain size.\38\

This discussion of alternatives included cross-references to the text 
of the Competitive Networks NPRM, to assist the reader. We note that 
the final rules that we adopt here will benefit small 
telecommunications carriers by fostering facilities-based competition. 
We also anticipate that our final rules will benefit small building 
owners and their tenants, by ensuring that utilities cannot block 
access to their rights-of-way.
    13. SBA states that, while we suggested some alternatives to assist 
small entities in the IRFA, on the whole our efforts were 
``inadequate.'' SBA states that a broader analysis was required, 
directed not only toward the alternatives described in the above 
paragraph but also toward alternatives for ``small LECs and the many 
other small businesses listed in the IRFA.'' \39\ We find that we have 
met the requirements of the RFA. We chose reasonable alternatives to 
discuss, and did not discuss alternatives for every affected entity 
where it would not have seemed reasonable or, perhaps, where it simply 
did not occur to us. We believe that the RFA requires a good faith 
effort on our part, but it does not require a discussion of a minimum 
of four alternatives \40\ for each of the possibly affected entities. 
As noted above, we specifically discussed one definitional issue and 
one possible exception, to assist small entities. We also sought 
comment from small entities on other issues throughout the Competitive 
Networks NPRM and IRFA. We appreciate the comments supplied by SBA and 
others as a result, and have considered them in the Competitive 
Networks First Report and Order and this IRFA.
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    \39\ SBA Reply Comments at 2.
    \40\ See id. at 5.
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    14. Finally, RAA contends that the IRFA provided inadequate notice 
as a matter of law.\41\ We note that the IRFA was sufficient to 
generate comments from representatives of the small business community 
and that the record demonstrates that the IRFA met the objectives of 
the RFA. Delaying issuance of final rules at this time would not, 
therefore, advance those objectives. The IRFA provided sufficient 
information so that the public could react to the Commission's proposal 
in the Competitive Networks NPRM in an informed manner. We note that, 
pursuant to the Administrative Procedure Act,\42\ the Commission must 
provide ample opportunity for the public to comment on proposed rules. 
In this proceeding, the Commission provided a 37-day filing period or 
initial comments, followed by a 21-day period for reply comments. The 
public thus had nearly two months to provide comments. In addition, 
numerous parties filed ex parte statements with the Commission during 
the course of the 13-month period after the formal comment period 
closed. More than 1000 comments and other submissions were filed in 
this proceeding. Many of the commenters, including small businesses, 
enthusiastically endorsed

[[Page 2326]]

the proposals in the Competitive Networks NPRM.
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    \41\ RAA Joint Regulatory Flexibility Act Comments at 3-5.
    \42\ See 5 U.S.C. 553.
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C. Description and Estimate of the Number of Small Entities to which 
the Rules Will Apply

    15. The RFA requires that an initial regulatory flexibility 
analysis be prepared for notice-and-comment rulemaking proceedings, 
unless the agency certifies that ``the rule will not, if promulgated, 
have a significant economic impact on a substantial number of small 
entities.'' \43\ The RFA generally defines ``small entity'' as having 
the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.'' \44\ In 
addition, the term ``small business'' has the same meaning as the term 
``small business concern'' under the Small Business Act.\45\ 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).\46\ For many of the entities described below, we utilize SBA 
definitions of small business categories, which are based on Standard 
Industrial Classification (``SIC'') codes.
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    \43\ 5 U.S.C. 605(b).
    \44\ 5 U.S.C. 601(6).
    \45\ 5 U.S.C. 601(3) (incorporating by reference the definition 
of ``small business concern'' in Small Business Act, 15 U.S.C. 632). 
Pursuant to 5 U.S.C. 601(3), the statutory definition of a small 
business applies ``unless an agency, after consultation with the 
Office of Advocacy of the Small Business Administration and after 
opportunity for public comment, establishes one or more definitions 
of such term which are appropriate to the activities of the agency 
and publishes such definition(s) in the Federal Register.''
    \46\ Small Business Act, 15 U.S.C. 632.
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    16. We have included small incumbent LECs in this present RFA 
analysis. As noted above, a ``small business'' under the RFA is one 
that, inter alia, meets the pertinent small business size standard 
(e.g., a telephone communications business having 1,500 or fewer 
employees), and ``is not dominant in its field of operation.'' \47\ The 
SBA contends that, for RFA purposes, small incumbent LECs are not 
dominant in their field of operation because any such dominance is not 
``national'' in scope.\48\ We have therefore included small incumbent 
LECs in this RFA analysis, although we emphasize that this RFA action 
has no effect on FCC analyses and determinations in other, non-RFA 
contexts.
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    \47\ 5 U.S.C. 601(3).
    \48\ SBA Reply Comments at 3-4. See also Letter from Jere W. 
Glover, Chief Counsel for Advocacy, SBA, to William E. Kennard, 
Chairman, FCC (May 27, 1999). The Small Business Act contains a 
definition of ``small business concern,'' which the RFA incorporates 
into its own definition of ``small business.'' See 15 U.S.C. 632(a) 
(Small Business Act); 5 U.S.C. 601(3) (RFA). SBA regulations 
interpret ``small business concern'' to include the concept of 
dominance on a national basis. 13 CFR 121.102(b). Since 1996, out of 
an abundance of caution, the Commission has included small incumbent 
LECs in its regulatory flexibility analyses. See, e.g., 
Implementation of the Local Competition Provisions of the 
Telecommunications Act of 1996, CC Docket, 96-98, First Report and 
Order, 11 FCC Rcd 15499, 16144-45 (1996), 61 FR 45476 (Aug. 29, 
1996).
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    17. This Competitive Networks First Report and Order adopts 
requirements that affect local exchange carriers and other utilities, 
building owners and managers, neighborhood associations, small 
governmental jurisdictions, cable operators, satellite providers, and 
wireless communications providers, as discussed below.
a. Local Exchange Carriers
    18. The legal interpretation of section 224 set forth today, and 
the rule changes adopted today regarding exclusive contracts, 
demarcation point, and an extension of the OTARD rule will affect small 
LECs. Neither the Commission nor the SBA has developed a definition for 
small providers of local exchange services. The closest applicable 
definition under the SBA rules is for telephone communications 
companies other than radiotelephone (wireless) companies.\49\ The SBA 
has defined establishments engaged in providing ``Telephone 
Communications, Except Radiotelephone'' to be small businesses when 
they have no more than 1,500 employees.\50\ According to recent 
Telecommunications Industry Revenue data, 1,348 incumbent carriers 
reported that they were engaged in the provision of local exchange 
services.\51\ We do not have data specifying the number of these 
carriers that are either dominant in their field of operations, are not 
independently owned and operated, or have more than 1,500 employees, 
and thus 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 fewer than 1,348 
providers of local exchange service are small entities or small 
incumbent LECs that may be affected by the rules and policies adopted 
today.
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    \49\ See 13 CFR 121.201, SIC Code 4813.
    \50\ 13 CFR 121.201. See Executive Office of the President, 
Office of Management and Budget, Standard Industrial Classification 
Manual (1987) (1987 SIC Manual).
    \51\ FCC, Common Carrier Bureau, Industry Analysis Division, 
Trends in Telephone Service, Table 19.3 (March 2000)
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b. Other Utilities
    19. The legal interpretation of section 224 set forth today will 
affect utilities other than LECs. Section 224 defines a ``utility'' as 
``any person who is a local exchange carrier or an electric, gas, 
water, steam, or other public utility, and who owns or controls poles, 
ducts, conduits, or rights-of-way used, in whole or in part, for any 
wire communications. Such term does not include any railroad, any 
person who is cooperatively organized, or any person owned by the 
Federal Government or any state.'' The Commission anticipates that, to 
the extent its legal interpretation of Section 224 affects non-LEC 
utilities, the effect would be concentrated on electric utilities.
    (1) Electric Utilities (SIC 4911, 4931 and 4939). 20. Electric 
Services (SIC 4911). The SBA has developed a definition for small 
electric utility firms.\52\ The Census Bureau reports that a total of 
1,379 electric utilities were in operation for at least one year at the 
end of 1992. According to SBA, a small electric utility is an entity 
whose gross revenues do not exceed five million dollars.\53\ The Census 
Bureau reports that 447 of the 1,379 firms listed had total revenues 
below five million dollars in 1992.\54\
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    \52\ 1987 SIC Manual.
    \53\ 53 13 CFR 121.201.
    \54\ U.S. Department of Commerce, Bureau of the Census, 1992 
Economic Census Industry and Enterprise Receipts Size Report, Table 
2D (Bureau of Census data under contract to the Office of Advocacy 
of the SBA) (1992 Economic Census Industry and Enterprise Receipts 
Size Report).
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    21. Electric and Other Services Combined (SIC 4931). The SBA has 
classified this entity as a utility whose business is less than 95% 
electric in combination with some other type of service.\55\ The Census 
Bureau reports that a total of 135 such firms were in operation for at 
least one year at the end of 1992. The SBA's definition of a small 
electric and other services combined utility is a firm whose gross 
revenues do not exceed five million dollars.\56\ The Census Bureau 
reported that 45 of the 135 firms listed had total revenues below five 
million dollars in 1992.\57\
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    \55\ 1987 SIC Manual.
    \56\ 13 CFR 121.201.
    \57\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    22. Combination Utilities, Not Elsewhere Classified (SIC 4939). The 
SBA defines this type of utility as providing a combination of 
electric, gas, and other services that are not otherwise 
classified.\58\ The Census Bureau reports that a total of 79 such 
utilities were in operation for at least one year at the end

[[Page 2327]]

of 1992. According to SBA's definition, a small combination utility is 
a firm whose gross revenues do not exceed five million dollars.\59\ The 
Census Bureau reported that 63 of the 79 firms listed had total 
revenues below five million dollars in 1992.\60\
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    \58\ 1987 SIC Manual.
    \59\ 13 CFR 121.201.
    \60\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    (2) Gas Production and Distribution (SIC 4922, 4923, 4924, 4925 and 
4932). 23. Natural Gas Transmission (SIC 4922). The SBA's definition of 
a natural gas transmitter is an entity that is engaged in the 
transmission and storage of natural gas.\61\ The Census Bureau reports 
that a total of 144 such firms were in operation for at least one year 
at the end of 1992. According to SBA's definition, a small natural gas 
transmitter is an entity whose gross revenues do not exceed five 
million dollars.\62\ The Census Bureau reported that 70 of the 144 
firms listed had total revenues below five million dollars in 1992.\63\
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    \61\ 1987 SIC Manual.
    \62\ 13 CFR 121.201.
    \63\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    24. Natural Gas Transmission and Distribution (SIC 4923). The SBA 
has classified this type of entity as a utility that transmits and 
distributes natural gas for sale.\64\ The Census Bureau reports that a 
total of 126 such entities were in operation for at least one year at 
the end of 1992. The SBA's definition of a small natural gas 
transmitter and distributor is a firm whose gross revenues do not 
exceed five million dollars.\65\ The Census Bureau reported that 43 of 
the 126 firms listed had total revenues below five million dollars in 
1992.\66\
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    \64\ 1987 SIC Manual.
    \65\ 65 13 CFR 121.201.
    \66\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    25. Natural Gas Distribution (SIC 4924). The SBA defines a natural 
gas distributor as an entity that distributes natural gas for sale.\67\ 
The Census Bureau reports that a total of 478 such firms were in 
operation for at least one year at the end of 1992. According to the 
SBA, a small natural gas distributor is an entity whose gross revenues 
do not exceed five million dollars.\68\ The Census Bureau reported that 
267 of the 478 firms listed had total revenues below five million 
dollars in 1992.\69\
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    \67\ 1987 SIC Manual.
    \68\ 13 CFR 121.201.
    \69\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    26. Mixed, Manufactured, or Liquefied Petroleum Gas Production and/
or Distribution (SIC 4925). The SBA has classified this type of entity 
as a utility that engages in the manufacturing and/or distribution of 
the sale of gas.\70\ These mixtures may include natural gas. The Census 
Bureau reports that a total of 43 such firms were in operation for at 
least one year at the end of 1992. The SBA's definition of a small 
mixed, manufactured or liquefied petroleum gas producer or distributor 
is a firm whose gross revenues do not exceed five million dollars.\71\ 
The Census Bureau reported that 31 of the 43 firms listed had total 
revenues below five million dollars in 1992.\72\
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    \70\ 1987 SIC Manual.
    \71\ 13 CFR 121.201.
    \72\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    27. Gas and Other Services Combined (SIC 4932). The SBA has 
classified this entity as a gas company whose business is less than 95% 
gas, in combination with other services.\73\ The Census Bureau reports 
that a total of 43 such firms were in operation for at least one year 
at the end of 1992. According to the SBA, a small gas and other 
services combined utility is a firm whose gross revenues do not exceed 
five million dollars.\74\ The Census Bureau reported that 24 of the 43 
firms listed had total revenues below five million dollars in 1992.\75\
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    \73\ 1987 SIC Manual.
    \74\ 13 CFR 121.201.
    \75\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    (3) Water Supply (SIC 4941).
    28. The SBA defines a water utility as a firm who distributes and 
sells water for domestic, commercial and industrial use.\76\ The Census 
Bureau reports that a total of 3,169 water utilities were in operation 
for at least one year at the end of 1992. According to SBA's 
definition, a small water utility is a firm whose gross revenues do not 
exceed five million dollars.\77\ The Census Bureau reported that 3,065 
of the 3,169 firms listed had total revenues below five million dollars 
in 1992.\78\
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    \76\ 1987 SIC Manual.
    \77\ 13 CFR 121.201.
    \78\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    (4) Sanitary Systems (SIC 4952, 4953 & 4959).
    29. Sewerage Systems (SIC 4952). The SBA defines a sewage firm as a 
utility whose business is the collection and disposal of waste using 
sewage systems.\79\ The Census Bureau reports that a total of 410 such 
firms were in operation for at least one year at the end of 1992. 
According to SBA's definition, a small sewerage system is a firm whose 
gross revenues did not exceed five million dollars.\80\ The Census 
Bureau reported that 369 of the 410 firms listed had total revenues 
below five million dollars in 1992.\81\
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    \79\ 1987 SIC Manual.
    \80\ 13 CFR 121.201.
    \81\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    30. Refuse Systems (SIC 4953). The SBA defines a firm in the 
business of refuse as an establishment whose business is the collection 
and disposal of refuse ``by processing or destruction or in the 
operation of incinerators, waste treatment plants, landfills, or other 
sites for disposal of such materials.''\82\ The Census Bureau reports 
that a total of 2,287 such firms were in operation for at least one 
year at the end of 1992. According to SBA's definition, a small refuse 
system is a firm whose gross revenues do not exceed six million 
dollars.\83\ The Census Bureau reported that 1,908 of the 2,287 firms 
listed had total revenues below six million dollars in 1992.\84\
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    \82\ 1987 SIC Manual.
    \83\ 13 CFR 121.201.
    \84\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    31. Sanitary Services, Not Elsewhere Classified (SIC 4959). The SBA 
defines these firms as engaged in sanitary services.\85\ The Census 
Bureau reports that a total of 1,214 such firms were in operation for 
at least one year at the end of 1992. According to SBA's definition, a 
small sanitary service firm's gross revenues do not exceed five million 
dollars.\86\ The Census Bureau reported that 1,173 of the 1,214 firms 
listed had total revenues below five million dollars in 1992.\87\
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    \85\ 1987 SIC Manual.
    \86\ 13 CFR 121.201.
    \87\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    (5) Steam and Air Conditioning Supply (SIC 4961). 32. The SBA 
defines a steam and air conditioning supply utility as a firm who 
produces and/or sells steam and heated or cooled air.\88\ The Census 
Bureau reports that a total of 55 such firms were in operation for at 
least one year at the end of 1992. According to SBA's definition, a 
steam and air conditioning supply utility is a firm whose gross 
revenues do not exceed nine million dollars.\89\ The Census Bureau 
reported that 30 of the 55 firms listed had total revenues below nine 
million dollars in 1992.\90\
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    \88\ 1987 SIC Manual.
    \89\ 13 CFR 121.201.
    \90\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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    (6) Irrigation Systems (SIC 4971). 33. The SBA defines irrigation 
systems as firms who operate water supply systems

[[Page 2328]]

for the purpose of irrigation.\91\ The Census Bureau reports that a 
total of 297 firms were in operation for at least one year at the end 
of 1992. According to SBA's definition, a small irrigation service is a 
firm whose gross revenues do not exceed five million dollars.\92\ The 
Census Bureau reported that 286 of the 297 firms listed had total 
revenues below five million dollars in 1992.\93\
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    \91\ 1987 SIC Manual.
    \92\ 13 CFR 121.201.
    \93\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D.
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c. Building Owners and Managers
    34. The rule changes adopted today will affect multiple dwelling 
unit operators and real estate agents and managers.
    (1) Multiple Dwelling Unit Operators (SIC 6512, SIC 6513, SIC 
6514).
    35. The SBA has developed definitions of small entities for 
operators of nonresidential buildings, apartment buildings, and 
dwellings other than apartment buildings, which include all such 
companies generating $5 million or less in revenue annually.\94\ 
According to the Census Bureau, there were 26,960 operators of 
nonresidential buildings generating less than $5 million in revenue 
that were in operation for at least one year at the end of 1992.\95\ 
Also according to the Census Bureau, there were 39,903 operators of 
apartment dwellings generating less than $5 million in revenue that 
were in operation for at least one year at the end of 1992.\96\ The 
Census Bureau provides no separate data regarding operators of 
dwellings other than apartment buildings, and we are unable at this 
time to estimate the number of such operators that would qualify as 
small entities.
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    \94\ 13 CFR 121.601 (SIC 6512, SIC 6513, SIC 6514).
    \95\ 1992 Economic Census of Financial, Insurance and Real 
Estate Industries, Establishment and Firm Size Report, Table 4, SIC 
6512 (U.S. Bureau of the Census data under contract to the Office of 
Advocacy of the U.S. Small Business Administration) (1992 Economic 
Census of Financial, Insurance and Real Estate Industries, 
Establishment and Firm Size Report).
    \96\ 1992 Economic Census of Financial, Insurance and Real 
Estate Industries, Establishment and Firm Size Report, Table 4, SIC 
6513.
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    (2) Real Estate Agents and Managers (SIC 6531).
    36. The SBA defines real estate agents and managers as 
establishments primarily engaged in renting, buying, selling, managing, 
and appraising real estate for others.\97\ According to SBA's 
definition, a small real estate agent or manager is a firm whose 
revenues do not exceed 1.5 million dollars.\98\
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    \97\ 1987 SIC Manual.
    \98\ 13 CFR 121.201.
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d. Neighborhood Associations
    37. The extension of the OTARD rules adopted today will affect 
neighborhood associations. 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.'' 
\99\ This definition includes homeowner and condominium associations 
that operate as not-for-profit organizations. The Community 
Associations Institute estimates that there are 205,000 such 
associations.\100\
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    \99\ See 5 U.S.C. 601(4).
    \100\ CAI IRFA Response at 5 (filed Aug. 27, 1999).
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e. Municipalities
    38. The extension of the OTARD rules adopted today will affect 
neighborhood associations. The term ``small governmental jurisdiction'' 
is defined as ``governments of * * * districts, with a population of 
less than 50,000.'' \101\ As of 1992, there were approximately 85,006 
governmental entities in the United States.\102\ This number includes 
such entities as states, counties, cities, utility districts and school 
districts. Of the 85,006 governmental entities, 38,978 are counties, 
cities and towns. The remainder are primarily utility districts, school 
districts, and states. Of the 38,978 counties, cities and towns, 
37,566, or 96%, have populations of fewer than 50,000.\103\ The Census 
Bureau estimates that this ratio is approximately accurate for all 
governmental entities. Thus, of the 85,006 governmental entities, we 
estimate that 81,606 (96%) are small entities.
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    \101\ 5 U.S.C. 601(5).
    \102\ U.S. Department of Commerce, Bureau of the Census, ``1992 
Census of Governments.''
    \103\ Id.
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f. Cable Services or Systems
    39. The SBA has developed a definition of small entities for cable 
and other pay television services, which includes all such companies 
generating $11 million or less in revenue annually.\104\ This 
definition includes cable systems operators, closed circuit television 
services, direct broadcast satellite services, multipoint distribution 
systems, satellite master antenna systems and subscription television 
services. According to the Census Bureau data from 1992, there were 
1,788 total cable and other pay television services and 1,423 had less 
than $11 million in revenue.\105\
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    \104\ 13 CFR 121.201, SIC code 4841.
    \105\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC code 4841 (U.S. Bureau of the Census data 
under contract to the Office of Advocacy of the U.S. Small Business 
Administration).
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    40. The Commission has developed its own definition of a small 
cable system operator for purposes of rate regulation. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide.\106\ Based on our most recent 
information, we estimate that there were 1,439 cable operators that 
qualified as small cable system operators at the end of 1995.\107\ 
Since then, some of those companies may have grown to serve over 
400,000 subscribers, and others may have been involved in transactions 
that caused them to be combined with other cable operators. 
Consequently, we estimate that there are fewer than 1,439 small entity 
cable system operators.
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    \106\ 47 CFR 76.901(e). The Commission developed this definition 
based on its determination that a small cable system operator is one 
with annual revenues of $100 million or less. Implementation of 
Sections of the 1992 Cable Act: Rate Regulation, Sixth Report and 
Order and Eleventh Order on Reconsideration, 10 FCC Rcd 7393 (1995), 
60 FR 10534 (Feb. 27, 1995).
    \107\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for Dec. 30, 1995).
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    41. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1 percent of 
all subscribers in the United States and is not affiliated with any 
entity or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' \108\ The Commission has determined that there are 
66,690,000 subscribers in the United States. Therefore, we found that 
an operator serving fewer than 666,900 subscribers shall be deemed a 
small operator, if its annual revenues, when combined with the total 
annual revenues of all of its affiliates, do not exceed $250 million in 
the aggregate.\109\ Based on available data, we find that the number of 
cable operators serving 666,900 subscribers or less totals 1,450.\110\ 
We do not request nor do we collect information concerning whether 
cable system operators are affiliated with entities whose gross annual 
revenues exceed $250,000,000,\111\ and thus are unable at this time to 
estimate with greater precision the number of cable system operators 
that would qualify as small

[[Page 2329]]

cable operators under the definition in the Communications Act.
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    \108\ 47 U.S.C. 543(m)(2).
    \109\ 47 CFR 76.1403(b).
    \110\ Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 
1996 (based on figures for Dec. 30, 1995).
    \111\ We do receive such information on a case-by-case basis 
only if a cable operator appeals a local franchise authority's 
finding that the operator does not qualify as a small cable operator 
pursuant to Section 76.1403(b) of the Commission's Rules. See 47 CFR 
76.1403(d).
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g. International Services
    42. The Commission has not developed a definition of small entities 
applicable to licensees in the international services. Therefore, the 
applicable definition of small entity is generally the definition under 
the SBA rules applicable to Communications Services, Not Elsewhere 
Classified (NEC).\112\ This definition provides that a small entity is 
expressed as one with $11.0 million or less in annual receipts.\113\ 
According to the Census Bureau, there were a total of 848 
communications services providers, NEC, in operation in 1992, and a 
total of 775 had annual receipts of less than $9.999 million.\114\ The 
Census report does not provide more precise data.
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    \112\ An exception is the Direct Broadcast Satellite (DBS) 
Service, infra.
    \113\ 13 CFR 120.121, SIC code 4899.
    \114\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC code 4899 (U.S. Bureau of the Census data 
under contract to the Office of Advocacy of the U.S. Small Business 
Administration).
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    43. International Broadcast Stations. Commission records show that 
there are 20 international broadcast station licensees. We do not 
request or collect annual revenue information, and thus are unable to 
estimate the number of international broadcast licensees that would 
constitute a small business under the SBA definition. However, the 
Commission estimates that only six international broadcast stations are 
subject to regulatory fee payments.
    44. International Public Fixed Radio (Public and Control Stations). 
There are 3 licensees in this service subject to payment of regulatory 
fees. We do not request or collect annual revenue information, and thus 
are unable to estimate the number of international broadcast licensees 
that would constitute a small business under the SBA definition.
    45. Fixed Satellite Transmit/Receive Earth Stations. There are 
approximately 2,679 earth station authorizations, a portion of which 
are Fixed Satellite Transmit/Receive Earth Stations. We do not request 
or collect annual revenue information, and thus are unable to estimate 
the number of the earth stations that would constitute a small business 
under the SBA definition.
    46. Fixed Satellite Small Transmit/Receive Earth Stations. There 
are approximately 2,679 earth station authorizations, a portion of 
which are Fixed Satellite Small Transmit/Receive Earth Stations. We do 
not request or collect annual revenue information, and thus are unable 
to estimate the number of fixed satellite transmit/receive earth 
stations that would constitute a small business under the SBA 
definition.
    47. Mobile Satellite Earth Stations. There are 11 licensees. We do 
not request or collect annual revenue information, and thus are unable 
to estimate the number of mobile satellite earth stations that would 
constitute a small business under the SBA definition.
    48. Radio Determination Satellite Earth Stations. There are four 
licensees. We do not request or collect annual revenue information, and 
thus are unable to estimate the number of radio determination satellite 
earth stations that would constitute a small business under the SBA 
definition.
    49. Direct Broadcast Satellites. Because DBS provides subscription 
services, DBS falls within the SBA-recognized definition of ``Cable and 
Other Pay Television Services.''\115\ This definition provides that a 
small entity is one with $11.0 million or less in annual receipts.\116\ 
As of December 1996, there were eight DBS licensees. However, the 
Commission does not collect annual revenue data for DBS and, therefore, 
is unable to ascertain the number of small DBS licensees that would be 
impacted by these proposed rules. Although DBS service requires a great 
investment of capital for operation, there are several new entrants in 
this field that may not yet have generated $11 million in annual 
receipts, and therefore may be categorized as small businesses, if 
independently owned and operated.
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    \115\ 13 CFR 120.121, SIC code 4841.
    \116\ 13 CFR 121.201, SIC code 4841.
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    50. Fixed Satellite Very Small Aperture Terminal (VSAT) Systems. 
These stations operate on a primary basis, and frequency coordination 
with terrestrial microwave systems is not required. Thus, a single 
``blanket'' application may be filed for a specified number of small 
antennas and one or more hub stations. The Commission has processed 377 
applications. We do not request nor collect annual revenue information, 
and thus are unable to estimate the number of VSAT systems that would 
constitute a small business under the SBA definition.
h. Multipoint Distribution Service (MDS)
    51. MDS involves a variety of transmitters, which are used to relay 
programming to the home or office, similar to that provided by cable 
television systems.\117\ In connection with the 1996 MDS auction, the 
Commission defined small businesses as entities that had annual average 
gross revenues for the three preceding years not in excess of $40 
million.\118\ This definition of a small entity in the context of MDS 
auctions has been approved by the SBA.\119\ These stations were 
licensed prior to implementation of Section 309(j) of the 
Communications Act of 1934, as amended.\120\ Licenses for new MDS 
facilities are now awarded to auction winners in Basic Trading Areas 
(BTAs) and BTA-like areas.\121\ The MDS auctions resulted in 67 
successful bidders obtaining licensing opportunities for 493 BTAs. Of 
the 67 auction winners, 61 meet the definition of a small business. 
There are 2,050 MDS stations currently licensed. Thus, we conclude that 
there are 1,634 MDS providers that are small businesses as deemed by 
the SBA and the Commission's auction rules.
i. Wireless Services
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    \117\ For purposes of this item, MDS includes both the single 
channel Multipoint Distribution Service (MDS) and the Multichannel 
Multipoint Distribution Service (MMDS).
    \118\ 47 CFR 1.2110 (a)(1).
    \119\ Amendment of parts 21 and 74 of the Commission's Rules 
with Regard to Filing Procedures in the Multipoint Distribution 
Service and in the Instructional Television Fixed Service and 
Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, 10 FCC Rcd 9589 (1995), 60 FR 36524 (Jul. 17, 
1995).
    \120\ 47 U.S.C. 309(j).
    \121\ Id. A Basic Trading Area (BTA) is the geographic area by 
which the Multipoint Distribution Service is licensed. See Rand 
McNally 1992 Commercial Atlas and Marketing Guide, 123rd Edition, 
pp. 36-39.
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    52. Broadband Personal Communications Service (PCS). The broadband 
PCS spectrum is divided into six frequency blocks designated A through 
F, and the Commission has held auctions for each block. The Commission 
defined ``small entity'' for Blocks C and F as an entity that has 
average gross revenues of $40 million or less in the three previous 
calendar years.\122\ For Block F, an additional classification for 
``very small business'' was added and is defined as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years.\123\ These 
regulations defining ``small entity'' in the context of broadband PCS 
auctions have been

[[Page 2330]]

approved by the SBA.\124\ No small businesses within the SBA-approved 
definition bid successfully for licenses in Blocks A and B. There were 
90 winning bidders that qualified as small entities in the Block C 
auctions. A total of 93 small and very small business bidders won 
approximately 40 percent of the 1,479 licenses for Blocks D, E, and 
F.\125\ Based on this information, we conclude that the number of small 
broadband PCS licensees will include the 90 winning C Block bidders and 
the 93 qualifying bidders in the D, E, and F blocks, for a total of 183 
small entity PCS providers as defined by the SBA and the Commission's 
auction rules.
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    \122\ See Amendment of parts 20 and 24 of the Commission's 
Rules--Broadband PCS Competitive Bidding and the Commercial Mobile 
Radio Service Spectrum Cap, WT Docket No. 96-59; Amendment of the 
Commission's Cellular/PCS Cross-Ownership Rule, GN Docket 90-314, 
Report and Order, 11 FCC Rcd 7824, 7850-52, paragraphs 57-60 (1996) 
(Cross Ownership Report & Order); see also 47 CFR 24.720(b).
    \123\ Cross Ownership Report & Order, 11 FCC Rcd at 7852, 
paragraph 60.
    \124\ See, e.g., Implementation of Section 309(j) of the 
Communications Act--Competitive Bidding, PP Docket No. 93-253, Fifth 
Report and Order, 9 FCC Rcd 5532, 5581-84, paragraphs 114-20 (1994).
    \125\ FCC News, Broadband PCS, D, E and F Block Auction Closes, 
No. 71744 (rel. Jan. 14, 1997).
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    53. Cellular Licensees. Neither the Commission nor the SBA has 
developed a definition of small entities applicable to cellular 
licensees. Therefore, the applicable definition of a small entity is 
the definition under the SBA rules applicable to radiotelephone 
(wireless) companies. This provides that a small entity is a 
radiotelephone company employing no more than 1,500 persons.\126\ 
According to the Bureau of the Census, only twelve radiotelephone firms 
from a total of 1,178 such firms that operated during 1992 had 1,000 or 
more employees.\127\ Therefore, even if all twelve of these firms were 
cellular telephone companies, nearly all cellular carriers were small 
businesses under the SBA's definition. In addition, we note that there 
are 1,758 cellular licenses; however, a cellular licensee may own 
several licenses. In addition, according to the most recent Trends in 
Telephone Service data, 808 carriers reported that they were engaged in 
the provision of either cellular service, Personal Communications 
Service (PCS), or Specialized Mobile Radio Telephone (SMR) service, 
which are placed together in the data.\128\ We do not have data 
specifying the number of these carriers that are not independently 
owned and operated or have more than 1,500 employees, and thus are 
unable at this time to estimate with greater precision the number of 
cellular service carriers that would qualify as small business concerns 
under the SBA's definition. Consequently, we estimate that there are 
808 or fewer small cellular service carriers that may be affected by 
any regulations adopted pursuant to this proceeding.
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    \126\ 13 CFR 121.201, SIC code 4812.
    \127\ 1992 Census, Series UC92-S-1, at Table 5, SIC code 4812.
    \128\ FCC, Common Carrier Bureau, Industry Analysis Division, 
Trends in Telephone Service, Table 19.3 (March 2000).
---------------------------------------------------------------------------

    54. Fixed Microwave Services. Microwave services include common 
carrier,\129\ private-operational fixed,\130\ and broadcast auxiliary 
radio services.\131\ At present, there are approximately 22,015 common 
carrier fixed licensees and 61,670 private operational-fixed licensees 
and broadcast auxiliary radio licensees in the microwave services. The 
Commission has not yet defined a small business with respect to 
microwave services. For purposes of this IRFA, we will utilize the 
SBA's definition applicable to radiotelephone companies--i.e., an 
entity with no more than 1,500 persons.\132\ We estimate, for this 
purpose, that all of the Fixed Microwave licensees (excluding broadcast 
auxiliary licensees) would qualify as small entities under the SBA 
definition for radiotelephone companies.
---------------------------------------------------------------------------

    \129\ 47 CFR 101 et seq. (formerly, part 21 of the Commission's 
Rules).
    \130\ Persons eligible under parts 80 and 90 of the Commission's 
rules can use Private Operational-Fixed Microwave services. See 47 
CFR parts 80 and 90. Stations in this service are called 
operational-fixed to distinguish them from common carrier and public 
fixed stations. Only the licensee may use the operational-fixed 
station, and only for communications related to the licensee's 
commercial, industrial, or safety operations.
    \131\ Auxiliary Microwave Service is governed by part 74 of 
Title 47 of the Commission's Rules. See 47 CFR 74 et seq. Available 
to licensees of broadcast stations and to broadcast and cable 
network entities, broadcast auxiliary microwave stations are used 
for relaying broadcast television signals from the studio to the 
transmitter, or between two points such as a main studio and an 
auxiliary studio. The service also includes mobile TV pickups, which 
relay signals from a remote location back to the studio.
    \132\ 13 CFR 121.201, SIC 4812.
---------------------------------------------------------------------------

    55. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small entity specific to the Rural Radiotelephone 
Service.\133\ A significant subset of the Rural Radiotelephone Service 
is the Basic Exchange Telephone Radio Systems (BETRS).\134\ We will use 
the SBA's definition applicable to radiotelephone companies, i.e., an 
entity employing no more than 1,500 persons.\135\ There are 
approximately 1,000 licensees in the Rural Radiotelephone Service, and 
we estimate that almost all of them qualify as small entities under the 
SBA's definition.
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    \133\ The service is defined in section 22.99 of the 
Commission's Rules, 47 CFR 22.99.
    \134\ BETRS is defined in sections 22.757 and 22.759 of the 
Commission's Rules, 47 CFR 22.757 and 22.759.
    \135\ 13 CFR 121.201, SIC code 4812.
---------------------------------------------------------------------------

D. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    56. The Competitive Networks First Report and Order requires 
incumbent LECs to respond promptly to requests by building owners to 
identify the location of the demarcation point. The Competitive 
Networks First Report and Order holds that if an incumbent LEC fails to 
produce this information within ten business days of the request, the 
premises owner may presume the demarcation point to be located at the 
minimum point of entry (MPOE).\136\ The Competitive Networks First 
Report and Order further requires that where LECs do not establish a 
practice of placing the demarcation point at the MPOE, they fully 
inform building owners, at the time of installation, of their options 
regarding placement.
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    \136\ The minimum point of entry is defined as ``either the 
closest practicable point to where the wiring crosses a property 
line or the closest practicable point to where the wiring enters a 
multiunit building or buildings.'' 47 CFR 68.3 (definition of 
demarcation point).
---------------------------------------------------------------------------

    57. The Competitive Networks First Report and Order holds that in 
order to further competition, a request by a property owner to relocate 
the demarcation point to the MPOE must be addressed by an incumbent LEC 
in a reasonably timely and fair manner, so as not to unduly delay or 
hinder competitive LEC access. The Competitive Networks First Report 
and Order therefore directs incumbent LECs to conclude negotiations 
with requesting building owners within 45 days of such a request.
    58. In addition, the Competitive Networks First Report and Order 
requires, as a condition of invoking protection under the OTARD rule 
from government, landlord and association restrictions, that licensees 
ensure that subscriber antennas be labeled to give notice of potential 
radiofrequency safety hazards of antennas used for fixed wireless 
transmissions. Labeling information should include minimum separation 
distances required between users and radiating antennas to meet the 
Commission's radiofrequency exposure guidelines. Labels should also 
include reference to the Commission's applicable radiofrequency 
exposure guidelines. In addition, the instruction manuals and other 
information accompanying subscriber transceivers should include a full 
explanation of the labels, as well as a reference to the applicable 
Commission radiofrequency exposure guidelines.

[[Page 2331]]

E. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered.

    59. The rule changes adopted in this Competitive Networks First 
Report and Order are intended to promote competition in local 
communications markets by implementing measures to ensure that 
competing telecommunications providers are able to provide services to 
customers in MTEs. The actions taken today will benefit consumers, 
telecommunications carriers, and building owners, including small 
entities.
    60. In the Competitive Networks NPRM, we sought comment on seven 
proposals: (1) The tentative conclusion that, to the extent that LECs 
or other utilities own or control rooftop and other rights-of-way or 
riser conduit in MTEs, section 224 of the Act\137\ requires that they 
permit competing providers access to such rights-of-way or conduit 
under just, reasonable and nondiscriminatory rates, terms, and 
conditions; (2) whether we should require incumbent LECs to make 
available to any requesting telecommunications carrier unbundled access 
to riser cable and wiring that they control within MTEs, subject to the 
Commission's future interpretation of the ``necessary'' and ``impair'' 
standards of section 251 of the Act;\138\ (3) whether we should require 
building owners, who allow access to their premises to any 
telecommunications provider, to make comparable access available to all 
such providers on a nondiscriminatory basis; (4) whether we should 
forbid telecommunications service providers, under some or all 
circumstances, from entering into exclusive contracts with building 
owners, and abrogate any existing exclusive contracts between these 
parties; (5) whether we should modify our rules governing determination 
of the demarcation point between facilities controlled by the telephone 
company and by the landowner on multiple unit premises; (6) whether the 
rules governing access to cable home wiring for multichannel video 
program distribution should be extended to benefit providers of 
telecommunications services; and (7) whether we should adopt rules 
similar to those adopted in the video context under section 207 of the 
1996 Act protecting the ability to place antennas to transmit and 
receive telecommunications signals and other signals that are not 
covered under section 207. After careful review and analysis of the 
voluminous record developed in response to the Competitive Networks 
NPRM, we take action on four proposals today.
---------------------------------------------------------------------------

    \137\ 47 U.S.C. 224.
    \138\ 47 U.S.C. 251.
---------------------------------------------------------------------------

    61. First, we prohibit telecommunications service providers from 
entering into exclusive contracts to serve commercial buildings. In the 
Competitive Networks NPRM, we solicited comment on this proposal as an 
alternative to our proposal to require building owners to provide 
nondiscriminatory access to their premises to telecommunications 
providers.\139\ As noted above, we received comment opposed to this 
second alternative. We have not adopted the latter proposal in the 
Competitive Networks First Report and Order; however, we do seek 
additional comment on it in the Competitive Networks FNPRM.\140\ In the 
Competitive Networks NPRM, we also inquired whether we should abrogate 
existing exclusive contracts.\141\ Based on the record in this 
proceeding, we have determined that abrogating exclusive contracts may 
interfere with the investment-backed expectations of the parties to 
such contracts, including small entities, and thus we defer 
consideration of this issue to the Competitive Networks FNPRM.\142\ We 
also find that the record is not sufficiently developed to determine 
whether the prohibition on exclusive contracts should apply to 
residential MTEs,\143\ and therefore defer this issue to the 
Competitive Networks FNPRM.\144\ We note that there was widespread 
support in the record for prohibiting future exclusive contracts in 
commercial MTEs.\145\ We also note our expectation that small entities, 
including small telecommunications carriers and small building owners, 
will benefit from the competitive telecommunications environment that 
the ban on exclusive contracts will foster.
---------------------------------------------------------------------------

    \139\ Competitive Networks NPRM, 14 FCC Rcd at 12707, paragraph 
64.
    \140\ See Competitive Networks FNPRM, Section V.A., supra.
    \141\ Competitive Networks NPRM, 14 FCC Rcd at 12707, paragraph 
64.
    \142\ See Competitive Networks First Report and Order, at 
paragraph 36, and Competitive Networks FNPRM, Section V.A., supra.
    \143\ See Competitive Networks First Report and Order, at 
paragraph 33.
    \144\ See Competitive Networks FNPRM, Section V.B., supra.
    \145\ See, e.g., AT&T Comments at 26; Qwest Comments at 11; SBC 
Comments at 7; and Teligent Comments at 17-19.
---------------------------------------------------------------------------

    62. Second, with respect to to modifying the Commission's 
demarcation point rules, we sought comment on, inter alia, establishing 
a uniform demarcation point at the minimum point of entry (MPOE) to 
multiple unit premises.\146\ We have weighed the evidence in the record 
concerning this proposal carefully. We find that the potential 
financial burden of moving the demarcation point to the MPOE and the 
fact that it may hinder deployment of facilities by carriers, including 
small entities, which utilize unbundled local loops outweigh the 
potential benefits of adopting this proposal.\147\ In the alternative, 
we take the following actions to promote access to telecommunications 
wiring by competing carriers, including small entities: (1) We clarify 
that the Commission's demarcation point rules govern the control of 
inside wiring and related facilities for purposes of competitive 
access, as well as the control of these facilities for purposes of 
installation and maintenance; (2) we require that incumbent LECs 
conclude negotiations with building owners to relocate the demarcation 
point to the MPOE within 45 days of the building owner's request; and 
(3) we require that incumbent LECs fulfill their duty to disclose the 
location of the demarcation point, where it is not located at the MPOE, 
within ten business days of a building owner's request.\148\ 
Collectively, these actions ``will substantially reduce the potential 
for incumbent LECs to obstruct competitive access to MTEs,''\149\ while 
imposing only minimal financial burdens. We expect that that many 
smaller carriers seeking competitive entry will benefit directly from 
these actions.
---------------------------------------------------------------------------

    \146\ Competitive Networks NPRM, 14 FCC Rcd at paragraphs 67 and 
68. The minimum point of entry is defined as ``either the closest 
practicable point to where the wiring crosses a property line or the 
closest practicable point to where the wiring enters a multiunit 
building or buildings.'' 47 CFR 68.3 (definition of demarcation 
point).
    \147\ Competitive Networks First Report and Order, at paragraphs 
52-53.
    \148\ See Competitive Networks First Report and Order, at 
paragraphs 54-57.
    \149\ Id., at paragraph 58.
---------------------------------------------------------------------------

    63. Third, we have adopted our proposal under section 224 of the 
Act \150\ to require LECs and other utilities which own or control 
poles, ducts, conduits and other rights-of-way in MTEs, to permit 
competing providers access to such facilities under just, reasonable 
and nondiscriminatory rates, terms, and conditions. We anticipate that 
this action will benefit many small entities, including property owners 
and managers. We emphasize that our proposal as adopted will not impair 
the authority under state law, of property owners and managers to 
exclude telecommunications carriers from their

[[Page 2332]]

property.\151\ Rather, building owners and managers, and their tenants, 
will benefit from our proposal because utilities, as defined in section 
224(a)(1) of the Act,\152\ will no longer have the unfettered ability 
to exclude telecommunications carriers from their poles, ducts, 
conduits, and defined rights-of way in MTEs. Telecommunications 
carriers, including small entities, will benefit from increased access 
to MTEs. We note that, although it did not file comments on the IRFA, 
the National League of Cities expressed concern that our proposed 
implementation of section 224 within buildings may preempt 
implementation or enforcement of state safety-related codes.\153\ As we 
make clear in the Competitive Networks First Report and Order, ``our 
actions taken today are not intended to preempt, or impede, in any way 
the implementation or enforcement of state safety-related codes.'' 
\154\
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    \150\ 47 U.S.C. 224.
    \151\ See Competitive Networks First Report and Order, at 
paragraph 87.
    \152\ 47 U.S.C. 224(a)(1).
    \153\ National League of Cities, et al. Petition for EIS at 21-
24.
    \154\ Competitive Networks First Report and Order, at paragraph 
84.
---------------------------------------------------------------------------

    64. Fourth, we are amending section 1.4000 of our rules (the 
``OTARD rule'')\155\ to protect the ability of customers to place 
antennas used for transmitting and receiving all forms of fixed 
wireless transmissions. Section 1.4000 currently prohibits any state or 
local law or regulation, private covenant, contract provision, lease 
provision, homeowners' association rule, or similar restriction that 
impairs the installation, maintenance, or use of certain antennas 
designed to receive video programming services 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.
---------------------------------------------------------------------------

    \155\ 47 CFR 1.4000.
---------------------------------------------------------------------------

    65. Currently, section 1.4000 prohibits restrictions that impair 
the installation, maintenance or use of: (1) Any antenna 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; (2) any antenna designed to receive video programming 
services via multipoint distribution services, including multichannel 
multipoint distribution services, and local multipoint distribution 
services, and that is one meter or less in diameter; (3) any antenna 
designed to receive television broadcast signals; or (4) any mast 
supporting an antenna receiving any video programming described in the 
section. For the purposes of section 1.4000, a law, regulation or 
restriction impairs installation, maintenance or use of an antenna if 
it unreasonably delays or prevents installation, maintenance or use, 
unreasonably increases the cost of installation, maintenance or use, or 
precludes reception of an acceptable quality signal. Section 1.4000 
also includes provisions for waiver and declaratory ruling proceedings.
    66. There is widespread support in the record for an extension of 
the OTARD rule to include all fixed wireless services.\156\ Moreover, 
we believe that extending the OTARD rule to include all fixed wireless 
services is essential to meeting our obligation to promote the 
deployment of advanced telecommunications capability under Section 
706(a) of the 1996 Act.\157\ To the extent a restriction unreasonably 
limits a customer's ability to place antennas to receive communications 
services, that restriction may impede the development of advanced, 
competitive services.
---------------------------------------------------------------------------

    \156\ See e.g., AT&T Comments; PCIA Comments; Fixed Wireless 
Communications Coalition Comments; and Teligent Comments.
    \157\ 47 U.S.C. 157 note.
---------------------------------------------------------------------------

    67. The Competitive Networks First Report and Order underscores the 
policy rationale for amending the OTARD rule:

    [D]istinguishing in the protection afforded based on the 
services provided through an antenna produces irrational results. 
Precisely the same antennas may be used for video services, 
telecommunications, and internet access. Indeed, sometimes a single 
company offers different packages of services using the same type of 
antennas. Under our current rules, a customer ordering a 
telecommunications/video package would enjoy protection that a 
customer ordering a telecommunications-only package from the same 
company using the same antenna would not. Thus, we conclude that the 
current rules potentially distort markets by creating incentives to 
include video programming service in many service offerings even if 
it is not efficient or desired by the consumer.\158\
---------------------------------------------------------------------------

    \158\ Competitive Networks First Report and Order, at paragraph 
98.

We do not anticipate that today's rule change will have a significant 
adverse economic impact on small entities. To the contrary, we expect 
that small communications carriers that previously were unable to serve 
customers in MTEs may now be able to do so as a result of our rule 
change. However, we emphasize that ``the action we take today does not 
confer a right as against the building owner in restricted or common 
use areas in commercial or residential buildings, like most rooftops.'' 
\159\ Rather our extension of the OTARD rule to wireless services 
``applies only to areas within the exclusive use or control of the 
antenna user and in which the antenna user has a direct or indirect 
ownership or leasehold interest.''\160\
---------------------------------------------------------------------------

    \159\ Id., at paragraph 124.
    \160\ Id., at paragraph 100.
---------------------------------------------------------------------------

    68. We also note that any impact on small entities is mitigated by 
our preservation of the exceptions to the OTARD rule permitting certain 
restrictions for safety and historic preservation purposes. 
Restrictions that would otherwise be forbidden are permitted if they 
are necessary to achieve certain safety or historic preservation 
purposes, are no more burdensome than necessary to achieve their 
purpose, and meet certain other conditions set forth in the OTARD rule. 
Finally, to address any potential concerns regarding transmitting 
antennas, we have determined that ``[t]o the extent that local 
governments, associations, and property owners elect to require 
professional installation for transmitting antennas, the usual 
prohibition of such requirements under the OTARD rule will not apply.'' 
\161\
---------------------------------------------------------------------------

    \161\ Id., at paragraph 119.
---------------------------------------------------------------------------

Report to Congress

    The Commission will send a copy of the Competitive Networks First 
Report and Order, including this FRFA, in a report to be sent to 
Congress pursuant to the Small Business Regulatory Enforcement Fairness 
Act of 1996, see 5 U.S.C. 801(a)(1)(A). In addition, the Commission 
will send a copy of the Competitive Networks First Report and Order, 
including the FRFA, to the Chief Counsel for Advocacy of the Small 
Business Administration. A copy of the Competitive Networks First 
Report and Order and FRFA (or summaries thereof) will also be published 
in the Federal Register. See 5 U.S.C. 604(b).

Ordering Clauses

    69. Pursuant to sections 1, 2(a), 4(j), 4(i), 7, 201, 202, 205, 
221, 224, 251, 303, and 405 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 152(a), 154(i), 154(j), 157, 201, 202, 205, 
221, 224, 251, 303, and 405, that this First Report and Order and 
Further Notice of Proposed Rulemaking in WT Docket No. 99-217, Fifth 
Report and Order and Memorandum Opinion and Order in CC Docket No. 96-
98, and Fourth Report and Order and Memorandum Opinion and Order in CC 
Docket No. 88-57 and the amendments to the Commission's rules set forth 
are ADOPTED.
    70. Sections 64.2500, 64.2501, and 64.2502 of the Commission's 
rules, 47 CFR 64.2500, 64.2501, and 64.2502, set forth in the Rule 
Changes, Shall Become

[[Page 2333]]

Effective March 12, 2001. The rule changes to 47 CFR 1.4000 and the 
rule changes amending the definition of the term ``demarcation point'' 
in 47 CFR 68.3 contain an information collection requirement that has 
not yet been approved by OMB; the FCC will publish a document in the 
Federal Register announcing the effective date of these rule changes.
    71. The motions to submit Further Reply Comments filed by Concerned 
Communities and Organizations and the Wireless Communications 
Association International Are Granted. 
    72. The Petition for Clarification and Reconsideration of the 1997 
Demarcation Point Order filed by Bell Atlantic Is Granted, as discussed 
in section IV.C.
    73. The Petition for Clarification and Reconsideration of the 1997 
Demarcation Point Order filed by BellSouth Is Denied, as discussed in 
section IV.C.
    74. The Petition for Reconsideration of the Local Competition First 
Report and Order filed by WinStar Is Granted to the extent discussed in 
section IV.D and otherwise Is Denied. 
    75. The Petition for Environmental Impact Statement filed by the 
National League of Cities, the National Association of Counties, the 
Michigan Municipal League, and the Texas Coalition of Cities for 
Utility Issues Is Denied as discussed in Section IV.E, except to the 
extent that the Petition concerns issues raised in the Notice of 
Inquiry portion of the Competitive Networks NPRM, which will be 
addressed separately at a later time.
    76. The Commission's Consumer Information Bureau, Reference 
Information Center, Shall Send a copy of this First Report and Order 
and Further Notice of Proposed Rulemaking, Fifth Report and Order and 
Memorandum Opinion and Order, and Fourth Report and Order and 
Memorandum Opinion and Order, including the Final Regulatory 
Flexibility Analysis and the Initial Regulatory Flexibility Analysis, 
to the Chief Counsel for Advocacy of the Small Business Administration 
in accordance with Sections 603(a) and 604(b) of the Regulatory 
Flexibility Act, Public Law 96-354, 94 Stat. 1164, 5 U.S.C. 603(a), 
604(b).

List of Subjects

47 CFR Part 1

    Communications common carriers, Telecommunications, Television.

47 CFR Part 64

    Communications common carriers, Telecommunications, Telephone.

47 Part 68

    Communications common carriers, Communications equipment, 
Telecommunications, Telephone.

Federal Communications Commission.
Shirley S. Suggs,
Chief, Publications Group.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 1, 64, and 68 as follows:

PART 1--PRACTICE AND PROCEDURES

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

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


    2. Revise Subpart S to read as follows:

Subpart S--Preemption of Restrictions That ``Impair'' the Ability 
to Receive Television Broadcast Signals, Direct Broadcast Satellite 
Services, or Multichannel Multipoint Distribution Services or the 
Ability To Receive or Transmit Fixed Wireless Communications 
Signals

Sec.
1.4000   Restrictions impairing reception of television broadcast 
signals, direct broadcast satellite services, or multichannel 
multipoint distribution services and restrictions impairing 
reception or transmission of fixed wireless communications signals.


Sec. 1.4000  Restrictions impairing reception of television broadcast 
signals, direct broadcast satellite services, or multichannel 
multipoint distribution services and restrictions impairing reception 
or transmission of fixed wireless communications signals.

    (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:
    (A) Used to receive direct broadcast satellite service, including 
direct-to-home satellite service, or to receive or transmit fixed 
wireless signals via satellite, and
    (B) One meter or less in diameter or is located in Alaska;
    (ii) An antenna that is:
    (A) Used to receive video programming services via multipoint 
distribution services, including multichannel multipoint distribution 
services, instructional television fixed services, and local multipoint 
distribution services, or to receive or transmit fixed wireless signals 
other than via satellite, and
    (B) That is one meter or less in diameter or diagonal measurement;
    (iii) An antenna that is used 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.
    (a)(2) For purposes of this section, ``fixed wireless signals'' 
means any commercial non-broadcast communications signals transmitted 
via wireless technology to and/or from a fixed customer location. Fixed 
wireless signals do not include, among other things, AM radio, FM 
radio, amateur (``HAM'') radio, Citizen's Band (CB) radio, and Digital 
Audio Radio Service (DARS) signals.
    (a)(3) 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 or transmission of an acceptable quality 
signal.
    (a)(4) Any fee or cost imposed on a user 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 (d) 
or (e) 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 (d) or (e) 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 user, the user shall be granted at least a 21-day grace 
period

[[Page 2334]]

in which to comply with the adverse ruling; and neither a fine nor a 
penalty may be collected from the user if the user 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 user'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 paragraphs (b)(1) or 
(b)(2) of this section.
    (c) In the case of an antenna that is used to transmit fixed 
wireless signals, the provisions of this section shall apply only if a 
label is affixed to the antenna that:
    (1) Provides adequate notice regarding potential radiofrequency 
safety hazards, e.g., information regarding the safe minimum separation 
distance required between users and transceiver antennas; and
    (2) References the applicable FCC-adopted limits for radiofrequency 
exposure specified in Sec. 1.1310 of this chapter.
    (d) Local governments or associations may apply to the Commission 
for a waiver of this section under Sec. 1.3 of this chapter. Waiver 
requests must comply with the procedures in paragraphs (f) and (h) 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.
    (e) Parties may petition the Commission for a declaratory ruling 
under Sec. 1.2 of this chapter, 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 (f) and (h) 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.
    (f) 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.
    (g) 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 used for over-the-air reception of video programming 
services or devices used to receive or transmit fixed wireless signals 
shall be on the party that seeks to impose or maintain the restriction.
    (h) 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 Street, SW., 
Washington, DC 20554. Copies of the petitions and related pleadings 
will be available for public inspection in the Reference Information 
Center, Consumer Information Bureau, Federal Communications Commission, 
445 12th Street, SW., Washington, DC 20554. Copies will be available 
for purchase from the Commission's contract copy center, and Commission 
decisions will be available on the Internet.

PART 64--MISCELLANEOUS RULES RELATING TO COMMON CARRIERS

    1. The authority citation for part 64 continues to read:

    Authority: 47 U.S.C. 151, 154, 201, 202, 205, 218-220, and 332 
unless otherwise noted. Interpret or apply sections 201, 218, 225, 
226, 227, 229, 332, 48 Stat. 1070, as amended. 47 U.S.C. 201-204, 
208, 225, 226, 227, 229, 332, 501 and 503 unless otherwise noted.



    2. Add Subpart Z to read as follows:

Subpart Z--Prohibition on Exclusive Telecommunications Contracts

Sec.
64.2500   Prohibited agreements.
64.2501   Scope of limitation.
64.2502   Effect of State law or regulation.


Sec. 64.2500  Prohibited agreements.

    No common carrier shall enter into any contract, written or oral, 
that would in any way restrict the right of any commercial multiunit 
premises owner, or any agent or representative thereof, to permit any 
other common carrier to access and serve commercial tenants on that 
premises.


Sec. 64.2501  Scope of limitation.

    For the purposes of this subpart, a multiunit premises is any 
contiguous area under common ownership or control that contains two or 
more distinct units. A commercial multiunit premises is any multiunit 
premises that is predominantly used for non-residential purposes, 
including for-profit, non-profit, and governmental uses. Nothing in 
this subpart shall be construed to forbid a common carrier from 
entering into an exclusive contract to serve only residential customers 
on any premises.

[[Page 2335]]

Sec. 64.2502  Effect of state law or regulation.

    This subpart shall not preempt any state law or state regulation 
that requires a governmental entity to enter into a contract or 
understanding with a common carrier which would restrict such 
governmental entity's right to obtain telecommunications service from 
another common carrier.

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

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

    Authority: Secs. 4, 5, 303, 48 Stat., as amended, 1066, 1068, 
1082; (47 U.S.C. 154, 155, 303).


    2. Section 68.3 is amended by revising the definition of 
``demarcation point'' to read as follows:


Sec. 68.3  Definitions.

* * * * *
    Demarcation point: The point of demarcation and/or interconnection 
between telephone company communications facilities and terminal 
equipment, protective apparatus or wiring at a subscriber's premises. 
Carrier-installed facilities at, or constituting, the demarcation point 
shall consist of wire or a jack conforming to subpart F of part 68 of 
the Commission's rules. ``Premises'' as used herein generally means a 
dwelling unit, other building or a legal unit of real property such as 
a lot on which a dwelling unit is located, as determined by the 
telephone company's reasonable and nondiscriminatory standard operating 
practices. The ``minimum point of entry'' as used herein shall be 
either the closest practicable point to where the wiring crosses a 
property line or the closest practicable point to where the wiring 
enters a multiunit building or buildings. The telephone company's 
reasonable and nondiscriminatory standard operating practices shall 
determine which shall apply. The telephone company is not precluded 
from establishing reasonable classifications of multiunit premises for 
purposes of determining which shall apply. Multiunit premises include, 
but are not limited to, residential, commercial, shopping center and 
campus situations.
    (a) Single unit installations. For single unit installations 
existing as of August 13, 1990, and installations installed after that 
date the demarcation point shall be a point within 30 cm (12 in) of the 
protector or, where there is no protector, within 30 cm (12 in) of 
where the telephone wire enters the customer's premises, or as close 
thereto as practicable.
    (b) Multiunit installations. (1) In multiunit premises existing as 
of August 13, 1990, the demarcation point shall be determined in 
accordance with the local carrier's reasonable and non-discriminatory 
standard operating practices. Provided, however, that where there are 
multiple demarcation points within the multiunit premises, a 
demarcation point for a customer shall not be further inside the 
customer's premises than a point twelve inches from where the wiring 
enters the customer's premises, or as close thereto as practicable.
    (2) In multiunit premises in which wiring is installed, including 
major additions or rearrangements of wiring existing prior to that 
date, the telephone company may place the demarcation point at the 
minimum point of entry (MPOE). If the telephone company does not elect 
to establish a practice of placing the demarcation point at the minimum 
point of entry, the multiunit premises owner shall determine the 
location of the demarcation point or points. The multiunit premises 
owner shall determine whether there shall be a single demarcation point 
location for all customers or separate such locations for each 
customer. Provided, however, that where there are multiple demarcation 
points within the multiunit premises, a demarcation point for a 
customer shall not be further inside the customer's premises than a 
point 30 cm (12 in) from where the wiring enters the customer's 
premises, or as close thereto as practicable. At the time of 
installation, the telephone company shall fully inform the premises 
owner of its options and rights regarding the placement of the 
demarcation point or points and shall not attempt to unduly influence 
that decision for the purpose of obstructing competitive entry.
    (3) In any multiunit premises where the demarcation point is not 
already at the MPOE, the telephone company must comply with a request 
from the premises owner to relocate the demarcation point to the MPOE. 
The telephone company must negotiate terms in good faith and complete 
the negotiations within forty-five days from said request. Premises 
owners may file complaints with the Commission for resolution of 
allegations of bad faith bargaining by telephone companies. See 47 
U.S.C. 208; 47 CFR 1.720 through 1.736 (1999) of this chapter.
    (4) The telephone company shall make available information on the 
location of the demarcation point within ten business days of a request 
from the premises owner. If the telephone company does not provide the 
information within that time, the premises owner may presume the 
demarcation point to be at the MPOE. Notwithstanding the provisions of 
47 CFR 68.110(c), telephone companies must make this information freely 
available to the requesting premises owner.
    (5) In multiunit premises with more than one customer, the premises 
owner may adopt a policy restricting a customer's access to wiring on 
the premises to only that wiring located in the customer's individual 
unit that serves only that particular customer.
* * * * *
[FR Doc. 01-843 Filed 1-10-01; 8:45 am]
BILLING CODE 6712-01-U