[Federal Register Volume 69, Number 199 (Friday, October 15, 2004)]
[Proposed Rules]
[Pages 61193-61196]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23186]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 95-184; MM Docket No. 92-260; FCC 04-228]


Telecommunications Services Inside Wiring, Customer Premises 
Equipment and Implementation of the Cable Television Consumer 
Protection and Competition Act of 1992: Cable Home Wiring

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Commission addresses an amendment to a 
Note in its rules to include wiring behind sheet rock as an example, 
along with wiring located behind brick, metal conduit or cinder blocks, 
as wiring considered to be ``physically inaccessible'' as that term is 
used regarding the Commission's cable television inside wiring rules. 
The consequence of that conclusion is to move the point at which a 
competing multichannel video programming distributor (``MVPD'') can 
gain access to wiring located behind sheet rock closer to the incumbent 
cable operator's junction box, thereby facilitating competition between 
MVPD providers to serve an MDU. The Court of Appeals found that the 
Commission offered no reasoned basis for the amendment to add sheet 
rock and remanded the case back to the Commission for further 
consideration. This document seeks additional comment from interested 
parties regarding the Commission's conclusion that cable wiring located 
behind sheet rock is ``physically inaccessible'' as that term is used 
in our rules.

DATES: Comments are due November 15, 2004 and reply comments are due 
December 6, 2004.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554. See Supplementary Information for filing 
instructions.

FOR FURTHER INFORMATION CONTACT: Karen A. Kosar, Media Bureau at (202) 
418-1053 or via internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Further Notice of Proposed Rule Making (FNPRM), CS Docket No. 95-184 
and MM Docket No. 92-260, adopted September 22, 2004 and released 
September 29, 2004. The full text is available for inspection and 
copying during normal business hours in the FCC Reference Center, 
Federal Communications Commission, 445 12th Street, SW, CY-A267, 
Washington, DC 20554. Persons with disabilities who need assistance in 
the FCC Reference center may contact Bill Cline at (202) 418-0267 
(voice), (202) 418-7365 (TTY), or [email protected]. Documents are also 
available from the Commission's Electronic Comment Filing System. 
Documents are available electronically in ASCII, Word 97, and Adobe 
Acrobat. Copies of documents also may be obtained from Best Copy and 
Printing, Inc., Portals II, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554, telephone (202) 488-5300 or (800) 378-3160, e-
mail [email protected], or via its Web site http://www.bcpiweb.com. To 
request materials in accessible formats for people with disabilities 
(Braille, large print, electronic files, audio format), send an e-mail 
to [email protected] or call consumer and Governmental Affairs Bureau at 
202-418-0531 (voice), 202-418-7365 (TTY).
    1. This Further Notice of Proposed Rule Making (FNPRM) is issued in 
response to a decision issued by the United States Court of Appeals for 
the District of Columbia Circuit regarding amendment of the 
Commission's cable television inside wiring rules. In the First Order 
on Reconsideration and Second Report and Order in the proceeding, the 
Commission, in part, modified its rules to provide that home run wiring 
located behind sheet rock is considered to be physically inaccessible 
for purposes of determining the demarcation point between home wiring 
and home run wiring. At issue in the Appeals Court decision is the 
Commission's amendment of the Note to Sec.  76.5(mm)(4) of the 
Commission's rules to indicate that wiring embedded in sheet rock would 
be considered physically inaccessible. Prior to its Reconsideration 
Order and amendment of the Note to Sec.  76.5(mm)(4), the Commission 
determined under its definition of ``physically inaccessible,'' for 
example, that wiring embedded in brick, metal conduit or cinder blocks 
would likely be physically inaccessible; wiring simply enclosed within 
hallway molding would not. By expanding the Note to Sec.  76.5(mm)(4) 
to include sheet rock in its Reconsideration Order, the Court of 
Appeals found that the Commission offered no reasoned basis for the 
amendment and remanded the case to the Commission for further 
consideration.
    2. In response to the Court's decision, the FNPRM seeks additional 
comment on whether accessing inside wiring behind sheet rock (1) will 
involve significant modification of or damage to preexisting structural 
elements and (2) will add significantly to the difficulty and cost of 
wiring an MDU. The FNPRM seeks comment as to whether our conclusions in 
general as stated in the Reconsideration Order with regard to Sec.  
76.5(mm)(4) of the rules and the applicable Note are correct. In 
addition, the FNPRM seeks comment as to whether there is an additional 
or more appropriate standard that would support the amendment of our 
rule in light of the Court's remand. The FNPRM also seeks comment as to 
whether any specific language changes or eliminations should be made to 
our rule.

I. Procedural Matters

A. Initial Regulatory Flexibility Analysis

    3. As required by the Regulatory Flexibility Act, the Commission 
has prepared an Initial Regulatory Flexibility Analysis (IRFA) of the 
possible significant economic impact on a substantial number of small 
entities of the proposals addressed in this document. The IRFA is set 
forth in the below. Written public comments are requested on the IRFA. 
These comments must be filed in accordance with the same filing 
deadlines for comments on the FNPRM, and they should have a separate 
and distinct heading designating them as responses to the IRFA.

B. Paperwork Reduction Act

    4. This FNPRM does not contain proposed information collections 
subject to the Paperwork Reduction Act of 1995 (``PRA''), Public Law 
104-13. In addition, therefore, it does not contain any new or modified 
``information collection burden for small business concerns with fewer 
than 25 employees,'' pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

[[Page 61194]]

C. Ex Parte Rules--Permit-but-Disclose

    5. This is a permit-but-disclose notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided that they are disclosed as provided in 
the Commission's rules. See generally 47 CFR 1.1202, 1.1203, and 
1.1206.

D. Comment Information

    6. Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's 
rules, 47 CFR 1.415, 1.419, interested parties may file comments on or 
before November 15, 2004 and reply comments on or before December 6, 
2004. Comments may be filed using the Commission's Electronic Comment 
Filing System (ECFS) or by filing paper copies. See Electronic Filing 
of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24121 (1998).
    7. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to http://www.fcc.gov/e-file/ecfs.html. 
Generally, only one copy of an electronic submission must be filed. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, U.S. Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit an 
electronic comment by Internet e-mail. To get filing instructions for 
e-mail comments, commenters should send an e-mail to [email protected], and 
should include the following words in the body of the message, ``get 
form .'' A sample form and directions will be sent 
in reply. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appears in the caption of this proceeding, commenters must 
submit two additional copies for each additional docket or rulemaking 
number. Filings can be sent by hand or messenger delivery, by 
commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail (although we continue to experience delays in 
receiving U.S. Postal Service mail). The Commission's contractor, 
Natek, Inc., will receive hand-delivered or messenger-delivered paper 
filings for the Commission's Secretary at 236 Massachusetts Avenue, 
NE., Suite 110, Washington, DC, 20002. The filing hours at this 
location are 8 a.m. to 7 p.m. All hand deliveries must be held together 
with rubber bands or fasteners. Any envelopes must be disposed of 
before entering the building. Commercial overnight mail (other than 
U.S. Postal Service Express Mail and Priority Mail) must be sent to 
9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service 
first-class mail, Express Mail, and Priority Mail should be addressed 
to 445 12th Street, SW., Washington, DC, 20554. All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
    8. Parties also must serve either one copy of each filing via e-
mail or two paper copies to Best Copy and Printing, Inc., Portals II, 
445 12th Street, SW., Room CY-B402, Washington, DC, 20554, telephone 
(202) 488-5300 or (800) 378-3160, e-mail [email protected], or via its 
Web site at http://www.bcpiweb.com. In addition, parties should serve 
one copy of each filing via e-mail or one paper copy to Karen Kosar, 
Media Bureau, 445 12th Street, SW., 4-C453, Washington, DC, 20554. 
Washington, DC, 20554.

II. Initial Regulatory Flexibility Analysis

    9. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA''), the Commission has prepared this Initial Regulatory 
Flexibility Analysis (``IRFA'') of the possible significant economic 
impact on small entities by the policies and rules addressed in the 
Further Notice of Proposed Rulemaking (``FNPRM''). Written comments are 
requested on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed in accordance with the same filing deadlines for 
comments on the FNPRM.

A. Need for and Objectives of the Further Notice of Proposed Rulemaking

    10. This FNPRM is initiated in response to a decision issued by the 
United States Court of Appeals for the District of Columbia regarding 
amendment of the Commission's cable television inside wiring rules. In 
its First Order on Reconsideration and Second Report and Order in this 
proceeding, the Commission modified its rules to provide that home run 
wiring located behind sheet rock is considered to be physically 
inaccessible for purposes of determining the demarcation point between 
home wiring and home run wiring in multiple dwelling units (``MDUs''). 
Specifically, the Commission amended the Note to Sec.  76.5(mm)(4) of 
the rules to include wiring behind sheet rock as an example, along with 
wiring located behind brick, metal conduit or cinder blocks, as wiring 
considered to be ``physically inaccessible'' as that term is used in 
Sec.  76.5(mm)(4) of the rules and the appended Note. The consequence 
of that conclusion is to move the point at which a competing 
multichannel video programming distributor (``MVPD'') can gain access 
to wiring located behind sheet rock closer to the incumbent cable 
operator's junction box, thereby facilitating competition between MVPD 
providers to serve an MDU. The Court of Appeals found that the 
Commission offered no reasoned basis for the amendment to add sheet 
rock as an example of material to be considered as a ``preexisting 
structural element'' in defining physical inaccessibility and remanded 
the case to the Commission for further consideration.

B. Description and Estimate of the Number of Small Entities Impacted

    11. The RFA directs agencies to provide a description of, and where 
feasible, an estimate of the number of small entities that may be 
affected by the proposed rules and policies, if adopted. The RFA 
generally defines the term ``small entity'' as having the same meaning 
as the terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small business concern'' under the 
Small Business Act. A ``small business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    12. Cable and Other Program Distribution. This category includes 
cable systems operators, closed circuit television services, direct 
broadcast satellite services, multipoint distribution systems, 
satellite master antenna systems, and subscription television services. 
The SBA has developed a small business size standard for this census 
category, which includes all such companies generating $12.5 million or 
less in revenue annually. According to Census Bureau data for 1997, 
there were a total of 1,311 firms in this category, total, that had 
operated for the entire year. Of this total, 1,180 firms had annual 
receipts of under $10 million and an additional 52 firms had receipts 
of $10 million or more but less than $25 million. Consequently, the 
Commission estimates that the majority of providers in this service 
category are small businesses that may be affected by the rules and 
policies involved herein.
    13. Cable System Operators (Rate Regulation Standard). The 
Commission has developed its own small business

[[Page 61195]]

size standard for cable system operators, for purposes of rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving fewer than 400,000 subscribers nationwide. The most recent 
estimates indicate that there were 1,439 cable operators who qualified 
as small cable system operators at the end of 1995. Since then, some of 
those companies may have grown to serve over 400,000 subscribers, and 
others may have been involved in transactions that caused them to be 
combined with other cable operators. Consequently, the Commission 
estimates that there are now fewer than 1,439 small entity cable system 
operators that may be affected by the rules and policies involved 
herein.
    14. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, 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.'' The Commission has determined that 
there are 67,700,000 subscribers in the United States. Therefore, an 
operator serving fewer than 677,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all its affiliates, do not exceed $250 million in the 
aggregate. Based on the available data, the Commission estimates that 
the number of cable operators serving 677,000 subscribers or fewer, 
totals 1,450. The Commission neither requests nor collects information 
on whether cable system operators are affiliated with entities whose 
gross annual revenues exceed $250 million, and therefore are unable, at 
this time, to estimate more accurately the number of cable system 
operators that would qualify as small cable operators under the size 
standard contained in the Communications Act of 1934.
    15. Cable Television Relay Service. This service includes 
transmitters generally used to relay cable programming within cable 
television system distribution systems. The SBA has defined a small 
business size standard for Cable and other Program Distribution, 
consisting of all such companies having annual receipts of no more than 
$12.5 million. According to Census Bureau data for 1997, there were 
1,311 firms in the industry category Cable and Other Program 
Distribution, total, that operated for the entire year. Of this total, 
1,180 firms had annual receipts of $10 million or less, and an 
additional 52 firms had receipts of $10 million or more but less than 
$25 million. Thus, under this standard, we estimate that the majority 
of providers in this service category are small businesses that may be 
affected by the rules and policies involved herein.
    16. Local Multipoint Distribution Service. Local Multipoint 
Distribution Service (LMDS) is a fixed broadband point-to-multipoint 
microwave service that provides for two-way video telecommunications. 
The auction of the 986 Local Multipoint Distribution Service (LMDS) 
licenses began on February 18, 1998 and closed on March 25, 1998. The 
Commission established a small business size standard for LMDS licenses 
as an entity that has average gross revenues of less than $40 million 
in the three previous calendar years. An additional small business size 
standard for ``very small business'' was added as an entity that, 
together with its affiliates, has average gross revenues of not more 
than $15 million for the preceding three calendar years. The SBA has 
approved these small business size standards in the context of LMDS 
auctions. There were 93 winning bidders that qualified as small 
entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; 
there were 32 small and very small businesses winning that won 119 
licenses.
    17. Multipoint Distribution Service, Multichannel Multipoint 
Distribution Service, and Instructional Television Fixed Service. 
Multichannel Multipoint Distribution Service (MMDS) systems, often 
referred to as ``wireless cable,'' transmit video programming to 
subscribers using the microwave frequencies of the Multipoint 
Distribution Service (MDS) and Instructional Television Fixed Service 
(ITFS). In connection with the 1996 MDS auction, the Commission defined 
``small business'' as an entity that, together with its affiliates, has 
average gross annual revenues that are not more than $40 million for 
the preceding three calendar years. The SBA has approved of this 
standard. The MDS auction resulted in 67 successful bidders obtaining 
licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 
auction winners, 61 claimed status as a small business. At this time, 
we estimate that of the 61 small business MDS auction winners, 48 
remain small business licensees. In addition to the 48 small businesses 
that hold BTA authorizations, there are approximately 392 incumbent MDS 
licensees that have gross revenues that are not more than $40 million 
and are thus considered small entities.
    18. In addition, and as noted supra, the SBA has developed a small 
business size standard for Cable and Other Program Distribution, which 
includes all such companies generating $12.5 million or less in annual 
receipts. According to Census Bureau data for 1997, there were a total 
of 1,311 firms in this category, total, that had operated for the 
entire year. Of this total, 1,180 firms had annual receipts of under 
$10 million, and an additional 52 firms had receipts of $10 million or 
more but less than $25 million. Consequently, we estimate that the 
majority of providers in this service category are small businesses 
that may be affected by the proposed rules and policies.
    19. Finally, while SBA approval for a Commission-defined small 
business size standard applicable to ITFS is pending, educational 
institutions are included in this analysis as small entities. There are 
currently 2,032 ITFS licensees, and all but 100 of these licenses are 
held by educational institutions. Thus, we tentatively conclude that at 
least 1,932 ITFS licensees are small businesses.
    20. Open Video Services. Open Video Service (OVS) systems provide 
subscription services. The SBA has created a small business size 
standard for Cable and Other Program Distribution. This standard 
provides that a small entity is one with $12.5 million or less in 
annual receipts. The Commission has certified approximately 100 OVS 
operators to serve 75 areas, and some of these are currently providing 
service. Affiliates of Residential Communications Network, Inc. (RCN) 
received approval to operate OVS systems in New York City, Boston, 
Washington, D.C., and other areas. RCN has sufficient revenues to 
assure that they do not qualify as a small business entity. Little 
financial information is available for the other entities that are 
authorized to provide OVS and are not yet operational. Given that some 
entities authorized to provide OVS service have not yet begun to 
generate revenues, the Commission concludes that those OVS operators 
remaining might qualify as small businesses that may be affected by the 
rules and policies proposed herein.

C. Description of Projected Recording, Recordkeeping, and Other 
Compliance Requirements

    21. The retention or deletion of the word ``sheet rock'' to the 
Note to Sec.  76.5(mm)(4) of the Commission's rules would not impose 
any additional reporting or recordkeeping

[[Page 61196]]

requirements. With regard to other compliance requirements, we note as 
indicated above, that the FNPRM is initiated in response to a decision 
issued by the United States Court of Appeals for the District of 
Columbia regarding amendment of the Commission's cable television 
inside wiring rules. The Court seeks support for the Commission's 
decision to add wiring behind sheet rock as an example of wiring 
considered to be ``physically inaccessible'' as that term is defined by 
Sec.  76.5(mm)(4) of the Commission's rules and the appended Note. As 
stated, the consequence of the Commission's underlying decision is to 
move the point at which a competing video provider can gain access to 
wiring located behind sheet rock closer to the incumbent cable 
operator's junction box, thereby facilitating competition between video 
providers to serve an MDU.
    22. No alternatives to our proposal herein are mentioned because we 
do not anticipate a negative impact on smaller entities. However, we 
welcome comment on modifications of the Commission's conclusions if 
based on evidence of potential differential impact.

D. Steps Taken To Minimize Significant Impact on Small Entities and 
Significant Alternatives Considered

    23. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives: (1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.

E. Federal Rules Which Duplicate, Overlap, or Conflict With the 
Commission's Rules and Policies Herein

    24. None.

III. Ordering Clauses

    25. It is ordered that, pursuant to sections 1, 4(i), 601, 623, 
624, and 632 of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 154(i), 521, 543, 544 and 552 comment is hereby sought on the 
analysis, questions, discussions and statement of issues in this 
Further Notice of Proposed Rulemaking.
    26. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the Further Notice of Proposed Rulemaking, including the IRFA, 
to the Chief Counsel for Advocacy of the Small Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 04-23186 Filed 10-14-04; 8:45 am]
BILLING CODE 6712-01-P