[Federal Register Volume 72, Number 168 (Thursday, August 30, 2007)]
[Rules and Regulations]
[Pages 50074-50077]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17206]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 95-184; MM Docket No. 92-260; FCC 07-111]


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

AGENCY: Federal Communications Commission.

[[Page 50075]]


ACTION: Final rule.

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SUMMARY: In this document, the Commission eliminates barriers to 
competitive entry in multiple dwelling units (MDUs) and in multiunit 
premises, when a new entrant seeks to compete against an incumbent 
provider. The Commission concluded that cutting and repairing sheet 
rock adds significantly to the physical difficulty and cost of wiring 
an MDU. In this document, the Commission again concludes that cable 
wiring located behind sheet rock qualifies as physically inaccessible 
under the Commission's rules for purposes of determining the 
demarcation point between home wiring and home run wiring. This ruling 
will facilitate competition in video distribution markets by clarifying 
the circumstances under which the existing cable home run wiring in 
MDUs can be made available to alternative video service providers.

DATES: Effective August 30, 2007.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Karen Kosar, [email protected] of the Media 
Bureau, Policy Division, (202) 418-2120.

SUPPLEMENTARY INFORMATION: This is a summary of that portion of the 
Commission's Report and Order and Declaratory Ruling, FCC 07-111, 
adopted on May 31, 2007, and released on June 8, 2007, which addresses 
the Commission's adoption in 2003 of the note to 47 CFR 76.5(mm) (4) 
and the subsequent remand by the U.S. Court of Appeals. The full text 
of this document is available for public inspection and copying during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. These documents will also be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will be available electronically in 
ASCII, Word 97, and/or Adobe Acrobat.) The complete text may be 
purchased from the Commission's copy contractor, 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554. To request this document in 
accessible formats (computer diskettes, large print, audio recording, 
and Braille), send an e-mail to [email protected] or call the Commission's 
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), 
(202) 418-0432 (TTY).

I. Summary of the Final Rule

    1. In this Order, the Commission eliminates barriers to competitive 
entry in multiple dwelling units (MDUs) and in multiunit premises, when 
a new entrant seeks to compete against an incumbent provider. An MDU is 
a building or buildings with two or more residences, such as an 
apartment building, condominium building, or cooperative. See 47 CFR 
76.800. This Order responds 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 2003 order reviewed by the court, the Commission had modified its 
rules to provide that ``home run wiring'' located behind sheet rock is 
considered physically inaccessible for purposes of determining the 
demarcation point between home wiring and home run wiring. Cable home 
run wiring in a MDU is the wiring that runs from the demarcation point 
to the point at which the multichannel video programming distributor's 
(MVPD) wiring becomes devoted to an individual subscriber or individual 
loop. See 47 CFR 76.800(d). In contrast, ``cable home wiring'' is the 
internal wiring contained within the premises of a subscriber, which 
begins at the demarcation point and runs to the subscriber's television 
set or other customer premises equipment. See 47 CFR 76.5(ll). The 
Commission concluded in 2003 that cutting and repairing sheet rock adds 
significantly to the physical difficulty and cost of wiring an MDU. In 
this Order, the Commission concludes that cable wiring located behind 
sheet rock qualifies as physically inaccessible under the Commission's 
rules for purposes of determining the demarcation point between home 
wiring and home run wiring. The record shows that accessing such wiring 
causes significant damage or modification to a preexisting structural 
element and generally adds significantly to the physical difficulty 
and/or cost of accessing the subscriber's home wiring. This ruling will 
facilitate competition in video distribution markets by clarifying the 
circumstances under which the existing cable home run wiring in MDUs 
can be made available to alternative video service providers.
    2. The Order takes important steps to ensure that the pro-
competitive, deregulatory goals of the 1996 Act are realized. The 
Commission actions here remove both economic and operational barriers 
to infrastructure investment in the communications market. New entrants 
to the video services market should not be foreclosed from competing 
for consumers in MDUs based on regulatory technicalities or costly and 
inefficient industry practices. By removing these obstacles, the 
Commission furthers the opportunities for consumers living in MDUs to 
enjoy the social and economic benefits of communication services 
competition.
    3. In 1993, the Commission first promulgated rules for cable home 
wiring and for the disposition of that wiring after termination of 
service. In 1996, the Commission addressed certain cable home wiring 
issues and sought comment regarding how the Commission should revise 
these rules to reflect new developments, and how to promote competition 
by ensuring that the Commission's rules would facilitate the use of new 
and diverse services. In 1997, the Commission sought further comment on 
and addressed issues regarding procedures for the disposition of home 
run wiring in MDUs when an MDU owner decides to terminate service for 
the entire building and when an MDU owner is willing to permit two or 
more video service providers to compete for subscribers in the MDU on a 
unit-by-unit basis. In 2003, the Commission resolved the issues 
presented on reconsideration in that proceeding. See 18 FCC Rcd at 1342 
(2003).
    4. Central to any discussion on cable home wiring or cable home run 
wiring is the matter of the MDU demarcation point, which is the point 
at which a consumer's home wiring becomes the network's home run 
wiring. The Commission had previously stated that the cable wiring 
demarcation point serves such multiple purposes as defining (1) the 
location at which the subscriber may control the internal home wiring 
if he or she owns it; (2) the point at which an alternative 
multichannel video programming distributor (MVPD) would attach its 
wiring to the subscriber's wiring in order to provide service; and (3) 
the point from which the customer has the right to purchase cable home 
wiring upon termination of service. For purposes of this proceeding, a 
critical component of our discussion involves the location of the 
demarcation point because it is where a competing provider may access 
existing cable home wiring in an MDU building. The demarcation point 
for MDUs is set at (or about) twelve inches outside of where the cable 
wire enters the subscriber's individual dwelling unit. The demarcation 
point for single unit installations is the same. See 47 CFR 
76.5(mm)(1). The presumptive demarcation point was adopted in the Cable 
Wiring Order, 8 FCC Rcd 1435 (1993). In the event that the cable

[[Page 50076]]

demarcation point is ``physically inaccessible'' to an alternative 
MVPD, the demarcation point moves away from the individual dwelling 
unit to a point at which it first becomes physically accessible. The 
Commission has concluded that, for the cable demarcation point to be 
``physically inaccessible,'' access to the wiring must (1) require 
significant modification or damage to preexisting structural elements, 
and (2) add significantly to the physical difficulty and/or cost of 
accessing the subscriber's home wiring.
    5. The Appeals Court decision remanded that portion of the 2003 
order that amended 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. Previously, the Commission provided 
examples of wiring that would be considered ``physically 
inaccessible,'' including wiring embedded in brick, metal conduit, and 
cinder blocks with limited or no access openings. Wiring simply 
enclosed within hallway molding would not be considered inaccessible. 
The Court found that the Commission offered no reasoned basis for 
expanding the Note to include sheet rock and remanded the case to the 
Commission for further consideration. In response, the Commission 
sought comment on its conclusions in the 2003 order with regard to 
Sec.  76.5(mm)(4) of the rules and the amendment of the applicable 
Note.
    6. The Court asserted that the Commission did not adequately 
support its conclusion that wiring behind sheet rock is ``physically 
inaccessible'' for purposes of the inside wiring rules. The Court found 
that the Commission had not explained why or how accessing wiring 
behind sheet rock requires ``significant modification of, or 
significant damage to'' the sheet rock. The Court also found that the 
Commission failed to explain the relative nature of the ``damage'' or 
``modification'' related to accessing wiring behind sheet rock, and 
therefore that the Commission's conclusion regarding physical 
inaccessibility lacked adequate evidentiary support.
    7. The Court also criticized the Commission's assessment of whether 
accessing cable wire behind sheet rock would ``add significantly to the 
physical difficulty and/or cost'' of accessing the subscriber's home 
wiring. The Court stated that while the Commission acknowledged that 
cutting through sheet rock is easier than boring through brick, metal, 
or cinder block, it did not support the conclusion that the lesser 
physical difficulty and cost are ``significant.''
    8. In response, the Commission sought additional comment with 
respect to whether cable wiring behind sheet rock should be considered 
physically inaccessible. The Commission set forth its premise that what 
preexisting structural elements should be included for purposes of 
determining the demarcation point and what is considered to be an 
accessible or inaccessible location should be based on practicality. In 
the 2003 order, the Commission incorporated its response to a Request 
for Letter Ruling from RCN-BeCoCom, L.L.C. asking the Commission to 
address the issue of whether cable wiring behind sheet rock is 
``physically inaccessible,'' such that the demarcation point should be 
located not at the twelve inch mark, but rather at the operator's 
junction box. Based on the RCN Request for Letter Ruling and responses 
to that request, the Commission incorporated sheet rock as one of the 
examples of materials to be considered as a ``preexisting structural 
element'' in its definition of physical inaccessibility.
    9. In this Order, the Commission finds that sheet rock is a 
preexisting structural element and that accessing inside wiring behind 
sheet rock would cause significant modification and damage to that 
structural element. Sheet rock is a preexisting structural element and 
not merely a surface finish or decorative finish like molding. Sheet 
rock is not added after a building is completed. Sheet rock is a 
fundamental component of the construction of the building. Thus, sheet 
rock is more like ``brick or cinder block'' because it is commonly used 
to form ceilings and walls in MDUs and other structures. We believe 
that ceilings and walls are an integral and permanent part of the 
building structure of MDUs, and therefore, sheet rock used to form 
ceilings and walls qualifies as a preexisting structural element for 
purposes of the Commission's rules.
    10. The Commission concludes that the record supports the 
conclusion that accessing inside wiring behind sheet rock causes 
significant modification and damage to structural elements, i.e., walls 
and ceilings, albeit modification and damage that may be repairable. 
MDU resident owners and their managers are not only concerned with the 
condition of individually-owned units or apartments, but also with the 
condition of the common elements in these structures. For example, the 
record reveals that MDU resident owners and their managers will 
sometimes require an entire wall or ceiling to be repainted or re-
wallpapered even where the hole cut in the sheet rock is significantly 
smaller than the wall or ceiling in order to restore the area to its 
original appearance. Requiring such extensive repair is a strong 
indication that there has been significant modification or damage to 
the pre-existing structural area. Unlike with single family residences, 
MDU residents share common walls and ceilings and have an interest in 
the condition and treatment of those common elements. With regard to 
the issues of fire safety and possible degradation of a building's 
resistance to moisture, we take a conservative approach and give 
credence to the commenters who argue that cutting into sheet rock may 
pose a safety risk or affect a building's resistance to moisture and 
thus may lead to significant modification or damage to such structural 
elements. Consequently, the Commission concludes that penetration of 
sheet rock for purposes of accessing inside wiring constitutes 
significant modification and damage to structural elements under the 
Commission's rules.
    11. The Commission also finds that accessing the demarcation point 
behind sheet rock adds significantly to the physical difficulty and/or 
cost of accessing the subscriber's home wiring. The Commission notes 
that a finding of ``physical difficulty'' is not required because our 
rule requires that we find that cutting through the sheet rock would 
add significantly to the physical difficulty and/or costs of accessing 
the subscriber's home wiring. Nevertheless, the Commission concludes 
that the record supports a finding of significant physical difficulty 
in accessing the subscriber's home wiring. Accessing such wiring 
requires some level of physical harm to the property--i.e., access 
holes cut in the sheet rock--and that the property be restored to its 
original integrity and appearance. As the Commission has recognized 
throughout this decision, the repair is not always limited to the 
hole(s) cut; it can include repainting and/or re-wallpapering necessary 
to restore the premises. Those tasks can add significantly to the 
physical difficulty involved in accessing the wiring, certainly as 
compared to accessing wiring behind hallway molding (the example in the 
Commission's rules of wiring that is not physically inaccessible), See 
note to 47 CFR 76.5(mm)(4). In any event, the Commission needs only 
find that cutting through sheet rock significantly increases the 
physical difficulty or cost of accessing the wiring and, as described 
below, the Commission finds

[[Page 50077]]

that the additional costs are typically significant.
    12. The Commission concludes that the cost of accessing wiring 
behind sheet rock is significant. In analyzing the costs involved in 
accessing wiring behind sheet rock, the Commission recognizes that the 
record reveals a wide divergence among the estimates offered by 
commenters--ranging from $25 to $1,000--as the appropriate sum needed 
to accomplish the job. Although the Commission finds that it cannot 
pick a precise monetary figure that fairly reflects the costs 
associated with accessing cable inside wiring, we believe it is 
reasonable that costs estimates could include factors such as how 
difficult it may be to satisfy the MDU owner and manager with repair 
work and whether a single unit or many units are worked on in one time 
period. Although the Commission does not have specific quotes for 
restoration work, it seems likely that repainting and/or re-
wallpapering entire ceilings and walls can, at a minimum, run into the 
hundreds of dollars, particularly for more high-end MDUs that use more 
expensive surface finishes. These figures appear significant, 
especially when compared to the estimates we received for accessing 
wiring behind hallway molding.
    13. The Commission is persuaded that removing and replacing molding 
is generally less intrusive and less expensive than cutting into sheet 
rock, locating the wiring, and then repairing the wall or ceiling to 
the satisfaction of MDU owners and managers. While there may be cases 
in which the cost of accessing wiring behind sheet rock may be 
comparable to removable molding the record demonstrates that the cost 
for sheet rock generally will be higher, and often significantly so.
    14. The Commission finds that that cable wiring located behind 
sheet rock qualifies as physically inaccessible under Commission rules 
for purposes of determining the demarcation point between home wiring 
and home run wiring. Specifically, the Commission concludes that (1) 
accessing such wiring causes significant damage or modification to a 
preexisting structural element, and (2) accessing wiring behind sheet 
rock generally adds significantly to the physical difficulty and/or 
cost of accessing the subscriber's home wiring. The Commission's cable 
inside wiring rules are intended to facilitate competition in video 
distribution markets. This ruling will foster opportunities for 
competing MVPDs to provide service in MDUs by clarifying the 
circumstances under which the existing cable home run wiring in MDUs 
can be made available to alternative video service providers.

Procedural Matters

    15. Final Regulatory Flexibility Act. As required by the Regulatory 
Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis 
(IRFA) was incorporated into the Further Notice in this proceeding. The 
Commission sought written public comment on the possible significant 
economic impact on small entities regarding the proposals addressed in 
the Further Notice, including comments on the IFRA. Pursuant to the 
RFA, a Final Flexibility Analysis is contained in Appendix C.
    16. Paperwork Reduction Act Analysis. This Order does not contain 
new or modified information collection requirements 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 burdens 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).
    17. Congressional Review Act. The Commission will send a copy of 
this Order in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act, see 5 
U.S.C. 801(a)(1)(A).

II. Ordering Clauses

    18. Accordingly, it is ordered that, pursuant to authority found in 
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, the 
Commission's amendment of the Note to Section 76.5(mm)(4) of the 
Commission's rules to include sheet rock as an example of one of the 
materials that would likely be considered physically inaccessible for 
purposes of the Commission's cable television inside wiring rules is 
affirmed.
    19. It is further ordered, that in light of the United States Court 
of Appeals for the District of Columbia's Circuit's decision in NCTA v. 
FCC, No. 03-1140, 2004 WL 335201, which remanded but did not vacate the 
decision adopted in Telecommunications Services Inside Wiring, Customer 
Premises Equipment; Implementation of the Cable Television Consumer 
Protection and Competition Act of 1992: Cable Home Wiring, 18 FCC Rcd 
1342 (2003) (``Home Wiring Decision''), the note to 47 CFR 76.5(mm)(4) 
adopted in the Home Wiring Decision shall remain in effect.
    20. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel of the Small Business 
Administration.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. E7-17206 Filed 8-29-07; 8:45 am]
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