**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of:                | * | CS Docket No. 95-184         |
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| Telecommunications Services      | ) | MM Docket No. 92-260         |
| Inside Wiring                    | * |                              |
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| Customer Premises Equipment      |   |                              |
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| In the Matter of:                | * |                              |
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| Implementation of the Cable      | * |                              |
| Television Consumer              | * |                              |
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| Protection and Competition Act   | * |                              |
| of 1992: Cable                   | * |                              |
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| Home Wiring                      | * |                              |
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+----------------------------------+---+------------------------------+

FURTHER NOTICE OF PROPOSED RULE MAKING

**Adopted: September 22, 2004** **Released: September 29, 2004**

**Comments Date: November 15, 2004**

**Reply Comments Date: December 6, 2004**

By the Commission:

# INTRODUCTION

1.  We issue this Further Notice of Proposed Rulemaking in response to a
    decision issued by the United States Court of Appeals for the
    District of Columbia Circuit ("*Appeals Court decision*") regarding
    amendment of the Commission's cable television inside wiring
    rules.[^1] In the First Order on Reconsideration and Second Report
    and Order in this proceeding ("*Reconsideration Order*"), 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.[^2] At issue in the
    *Appeals Court decision* is the Commission's amendment of the Note
    to Section 76.5(mm)(4) of the Commission's rules to indicate that
    wiring embedded in sheet rock would be considered physically
    inaccessible.[^3] Prior to its *Reconsideration Order* and amendment
    of the Note to Section 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.[^4] By expanding the Note to Section
    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.[^5]

# DISCUSSION

2.  The Commission's cable television inside wiring rules are intended
    to facilitate competition in video distribution markets. The rules
    are designed to foster opportunities for multichannel video
    programming distributors ("MVPDs") to provide service in multiple
    dwelling unit buildings ("MDUs")[^6] by establishing procedures and
    describing circumstances under which the existing cable home run
    wiring would be made available to alternative video service
    providers.[^7] A critical component of this process involves the MDU
    demarcation point. Location of the demarcation point is significant
    because it is the place where competing providers may access home
    wiring in an MDU building.[^8] The demarcation point for MDU
    installations is defined as "a point at (or about) twelve inches
    outside of where the cable wire enters the subscriber's dwelling
    unit, or, where the wire is physically inaccessible at such point,
    the closest practicable point thereto that does not require access
    to the individual subscriber's dwelling unit."[^9] The term
    "physically inaccessible" describes a location that: (i) "\[w\]ould
    require significant modification of, or significant damage to,
    preexisting structural elements and (ii) \[w\]ould add significantly
    to the physical difficulty and/or cost of accessing the subscriber's
    home wiring."[^10]

3.  In the *Appeals Court decision*, the Court asserts that the
    Commission does not adequately support its conclusion that wiring
    behind sheet rock is "physically inaccessible" for purposes of the
    cable television inside wiring rules.[^11] In the context of
    examining the Commission's definition of "physically inaccessible,"
    the Court states that there is nothing in the *Reconsideration
    Order* that explains why or how accessing wire behind sheet rock
    requires "significant modification of, or significant damage to" the
    sheet rock.[^12] The Court contends that the *Reconsideration Order*
    fails to explain the relative nature of the "damage" or
    "modification" involved in accessing wire behind sheet rock.[^13]
    The Court asserts that the Commission's conclusion that it considers
    sheet rock to be more like brick or cinder block, rather than
    molding, because sheet rock, brick, and cinder block are materials
    commonly used to form ceilings and hallways, while molding is not,
    offers no support for modifying the Note to its rule.[^14]

4.  The definition of "physically inaccessible" also requires that
    accessing wiring at that location would "add significantly to the
    physical difficulty and/or cost" of accessing the subscriber's home
    wiring.[^15] The Court found that while the Commission acknowledged
    that cutting through sheet rock is easier than cutting through
    brick, metal or cinder block, no support was offered for the
    conclusion that the lesser physical difficulty and cost are
    "significant."[^16]

5.  In the *Reconsideration Order*, the Commission incorporated its
    response to a Request for Letter Ruling from RCN-BeCoCom, L.L.C.
    ("*RCN Request for Letter Ruling*") asking the Commission to address
    the issue of whether cable wiring behind sheet rock is "physically
    inaccessible," such that that the demarcation point should be
    located not at the twelve inch mark, but rather at the operator's
    junction box.[^17] Several parties responded to the *RCN Request for
    Letter Ruling.*[^18] Based on these submissions, 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.[^19]

6.  The Court asks that we provide support for our decision in the
    *Reconsideration Order* to add sheet rock to the list of examples of
    materials which render cable wiring physically inaccessible
    because (1) efforts to access such wiring would cause significant
    damage or modification to a preexisting structural element and (2)
    the cutting and repairing of sheet rock would add significantly to
    the physical difficulty and cost of wiring an MDU.[^20] Our decision
    regarding what preexisting structural elements should be included
    for purposes of determining the demarcation point of our inside
    wiring rules and what is considered to be an accessible or
    inaccessible location should be based on practicality.[^21] In
    response to the Court's direction, we now ask for 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. Commenters should express their views as
    to whether sheet rock qualifies as an example of a preexisting
    structural element that is an integral and permanent part of an MDU.
    Is it likely that many MDU owners and managers would not allow new
    service providers to cut, open, spackle, sand, and paint or replace
    wallpaper or other finishings on the common walls and ceilings on
    each floor of their MDUs in order to install new lines for service?
    Should the damage to or modification of ceilings and walls by
    alternative providers accessing inside wiring behind those ceilings
    and walls be considered significant?

7.  We stated in our *Reconsideration Order* that while we acknowledged
    that cutting through sheet rock is neither as physically difficult
    nor as costly as boring through brick, metal or cinder block, we
    were satisfied that it added significantly to the physical
    difficulty and cost of wiring an MDU.[^22] While we listed as
    examples in our original Note to Section 76.5(mm)(4) of our rules
    various materials that can be considered structural elements capable
    of concealing a coaxial cable, this list was not meant to be
    exclusively tailored to only those load-bearing or specific heavy
    materials and the cost or difficulty that may be associated with
    accessing wire behind those barriers. We did not offer in our
    *Reconsideration Order* cost estimates for cutting through brick,
    metal or cinder block, as opposed to costs associated with cutting
    through sheet rock, and we now ask for such cost estimates and
    whether we should consider resistance that may be posed by MDU
    managers and owners to making such modifications. It would seem that
    the difficulty and costs associated with cutting through sheet rock
    are significantly more than the difficulty and costs involved in
    accessing wiring behind removable wall molding, which we have
    previously concluded is not physically inaccessible.[^23] We seek
    comment on those costs as well.

8.  We seek comment as to whether our conclusions in general as stated
    in the *Reconsideration Order* with regard to Section 76.5(mm)(4) of
    the rules and the applicable Note are correct. We also seek 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. We seek comment as to whether any specific language changes
    or eliminations should be made to our rule.

# ADMINISTRATIVE MATTERS

## INITIAL REGULATORY FLEXIBILITY ANALYSIS

9.  As required by the Regulatory Flexibility Act,[^24] 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 *Further Notice of
    Proposed Rulemaking* ("*FNPRM*"). The IRFA is set forth in the
    Appendix. 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.

## PAPERWORK REDUCTION ACT ANALYSIS

10. 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).

## PROCEDURAL PROVISONS

11. *Ex Parte Rules* -- *permit-but-disclose*. 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 C.F.R. §§ 1.1202, 1.1203, and
    1.1206.

12. *Comment Information*. Pursuant to Sections 1.415 and 1.419 of the
    Commission\'s rules, 47 C.F.R. §§ 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).

13. 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 ecfs@fcc.gov, and should include the following words in the body
    of the message, \"get form \<your e-mail address\>.\" 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, N.E., Suite
    110, Washington, D.C. 20002. The filing hours at this location are
    8:00 a.m. to 7:00 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, D.C. 20554. All
    filings must be addressed to the Commission\'s Secretary, Office of
    the Secretary, Federal Communications Commission.

14. 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
    12^th^ Street, S.W., Room CY-B402, Washington, D.C., 20554,
    telephone (202) 488-5300 or (800) 378-3160, e-mail fcc@bcpiweb.com,
    or via its website at http://www.bcpiweb.com. In addition, parties
    should serve one copy of each filing via email or one paper copy to
    Karen Kosar, Media Bureau, 445 12^th^ Street, S.W., 4-C453,
    Washington, D.C., 20554. Washington, D.C., 20554.

15. *Availability of Documents.* Comments, reply comments, and ex parte
    submissions will be available for public inspection during regular
    business hours in the FCC Reference Center, Federal Communications
    Commission, 445 12th Street, S.W., CY-A257, Washington, D.C. 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 bcline@fcc.gov. These documents also will be
    available from the Commission's Electronic Comment Filing System.
    Documents are available electronically in ASCII, Word 97, and Adobe
    Acrobat. Copies of filings in this proceeding may be obtained from
    Best Copy and Printing, Inc., Portals II, 445 12^th^ Street, S.W.,
    Room, CY-B402, Washington, D.C., 20554, telephone (202) 488-5300
    or (800) 378-3160, e-mail fcc@bcpiweb.com, or via its website
    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 fcc504@fcc.gov or call the
    Consumer and Governmental Affairs Bureau at 202-418-0531 (voice),
    202-418-7365 (TTY).

16. The Media Bureau contact for this proceeding is Karen Kosar at (202)
    418-1053, or Karen.Kosar@fcc.gov.

# ORDERING CLAUSES

17. **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.

18. **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

**APPENDIX**

**INITIAL REGULATORY FLEXIBILITY ANALYSIS**

As required by the Regulatory Flexibility Act of 1980, as amended
("RFA"),[^25] 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 by the deadlines for comments on the FNPRM
provided above in paragraph 12. The Commission will send a copy of the
FNPRM, including this IRFA, to the Chief Counsel for Advocacy of the
Small Business Administration.[^26] In addition, the FNPRM and IRFA (or
summaries thereof) will be published in the Federal Register.[^27]

## Need for and Objectives of the Further Notice of Proposed Rulemaking

This Further Notice of Proposed Rulemaking 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.[^28] 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").[^29] Specifically, the Commission amended the
Note to Section 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 Section 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.

## Description and Estimate of the Number of Small Entities Impacted

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.[^30] The RFA
generally defines the term "small entity" as having the same meaning as
the terms "small business," "small organization," and "small
governmental jurisdiction."[^31] In addition, the term "small business"
has the same meaning as the term "small business concern" under the
Small Business Act.[^32] 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.[^33]

**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.[^34] 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.[^35] 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.

**Cable System Operators (Rate Regulation Standard).** The Commission
has developed its own small business 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.[^36] The most recent estimates indicate that
there were 1,439 cable operators who qualified as small cable system
operators at the end of 1995.[^37] 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.

**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."[^38] The Commission has determined that there are
67,700,000 subscribers in the United States.[^39] 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.[^40]
Based on available data, the Commission estimates that the number of
cable operators serving 677,000 subscribers or fewer, totals 1,450.[^41]
The Commission neither requests nor collects information on whether
cable system operators are affiliated with entities whose gross annual
revenues exceed \$250 million,[^42] 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.

**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.[^43]
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.[^44] 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.[^45] 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.

**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.[^46] 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.[^47] 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.[^48] The SBA has
approved these small business size standards in the context of LMDS
auctions.[^49] 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.

**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).[^50] 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.[^51] The SBA has approved of this standard.[^52] The MDS
auction resulted in 67 successful bidders obtaining licensing
opportunities for 493 Basic Trading Areas (BTAs). [^53]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.[^54]

In addition, and as noted *supra*, the SBA has developed a small
business size standard for Cable and Other Program Distribution,[^55]
which includes all such companies generating \$12.5 million or less in
annual receipts. [^56] 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.[^57] 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.[^58] 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.

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.[^59] 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.

**Open Video Services.** Open Video Service (OVS) systems provide
subscription services.[^60] The SBA has created a small business size
standard for Cable and Other Program Distribution.[^61] 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.[^62] 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.

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

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

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.

## Steps Taken to Minimize Significant Impact on Small Entities and Significant Alternatives Considered.

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.

## Federal Rules which Duplicate, Overlap, or Conflict with the Commission's Rules and Policies herein. None. 

[^1]: *National Cable & Telecommunications Association v. Federal
    Communications Commission and United States of America*, No.
    03-1140, 2004 WL 335201 (D.C. Cir. Feb. 17, 2004, unpublished)
    ("*Appeals Court decision*").

[^2]: *In the Matter of: Telecommunications Services Inside Wiring,
    Customer Premises Equipment and In the Matter of: Implementation of
    the Cable Television Consumer Protection and Competition Act of
    1992: Cable Home Wiring*, 18 FCC Rcd 1342 (2003) ("*Reconsideration
    Order*"). Cable home run wiring in a multiple dwelling unit ("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 C.F.R. § 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 C.F.R. § 76.5 (ll).

[^3]: *See Appeals Court decision* at 1; Note to 47 C.F.R. § 76.5(mm)(4)
    (2003).

[^4]: *See* *In the Matter of: Telecommunications Services, Inside
    Wiring, Customer Premises Equipment and In the Matter of:
    Implementation of the Cable Television Consumer Protection and
    Competition Act of 1992: Cable Home Wiring,* 13 FCC Rcd 3659, 3730
    (1997) ("*Report and Order*" and "*Second Further Notice*"); Note to
    47 C.F.R. § 76.5(mm)(4) (2002).

[^5]: *See Appeals Court decision* at 3.

[^6]: An MDU is a building or buildings with two or more residences,
    such as an apartment building, condominium building, or cooperative.
    *See* 47 C.F.R. § 76.800.

[^7]: *See Reconsideration Order*, 18 FCC Rcd at 1343.

[^8]: *Id.* at 1361.

[^9]: 47 C.F.R. § 76.5(mm).

[^10]: 47 C.F.R. § 76.5(mm)(4).

[^11]: *See Appeals Court decision* at 3.

[^12]: *Id.*, citing *Reconsideration Order*, 18 FCC Rcd at 1362.

[^13]: *Id.*

[^14]: *Id.*

[^15]: 47 C.F.R. § 76.5(mm)(4).

[^16]: *See Appeals Court decision* at 3, citing *Reconsideration
    Order*, 18 FCC Rcd at 1362.

[^17]: *See Reconsideration Order*, 18 FCC Rcd at 1362; Letter dated
    September 23, 1998 from attorney William L. Fishman (Counsel for
    RCN) to Deborah A. Lathen, Chief, Cable Services Bureau, FCC,
    CSR-5311 ("RCN Request for Letter Ruling").

[^18]: Ameritech New Media, Inc. filed comments in CSR-5311 supporting
    RCN's request. ICTA also asked that the Commission modify its rules
    to make wiring physically inaccessible when it is behind plaster,
    wallboard, sheet rock or molding. *Ex Parte* Letter from William J.
    Burhop, Executive Director, ICTA to Magalie R. Salas, Secretary,
    FCC, Docket No. 95-184 (Dec. 13, 2000)("ICTA December 13, 2000 *Ex
    Parte*") at 1. *See also* Cablevision Comments at 3-9; Comcast
    Comments at 3-10; Joint Opposition of Adelphia and Suburban Cable at
    3-6; NCTA Comments at 5-9 filed in CSR-5311 opposing RCN's request.
    *See Reconsideration Order*, 18 FCC Rcd at n.116.

[^19]: *See* Note to 47 C.F.R. § 76.5(mm)(4) (2003): "*For example*,
    wiring embedded in brick, metal conduit, cinder blocks, or *sheet
    rock* with limited or without access openings would likely be
    physically inaccessible . . . ." (emphasis added).

[^20]: *See National Cable & Telecommunications Association v. Federal
    Communications Commission and United States of America*, No.
    03-1140, 2004 WL 335201 (D.C. Cir. Feb. 17, 2004, unpublished);
    *Reconsideration Order*, 18 FCC Rcd at 1362.

[^21]: *See RCN Request for Letter Ruling* at 4. We base our analysis
    herein, in part, on the *RCN Request for Letter Ruling*.

[^22]: *See Reconsideration Order*, 18 FCC Rcd at 1362.

[^23]: *See* Note to 47 C.F.R. § 76.5(mm)(4).

[^24]: *See* 5 U.S.C. § 603.

[^25]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. §§ 601-612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 ("SBREFA"), Pub. L. No. 104-121, Title II, Stat. 857
    (1996).

[^26]: *See* 5 U.S.C. § 603(a).

[^27]: *See id.*

[^28]: *National Cable & Telecommunications Association v. Federal
    Communications Commission and United States of America*, No.
    03-1140, 2004 WL 335201 (D.C. Cir. Feb. 17, 2004, unpublished).

[^29]: *In the Matter of: Telecommunications Services Inside Wiring,
    Customer Premises Equipment and In the Matter of: Implementation of
    the Cable Television Consumer Protection and Competition Act of
    1992: Cable Home Wiring*, 18 FCC Rcd 1342 (2003).

[^30]: 5 U.S.C. § 603(b)(3).

[^31]: 5 U.S.C. § 601(6).

[^32]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small-business concern" in the 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."

[^33]: 15 U.S.C. § 632.

[^34]: 13 C.F.R. § 121.201, NAICS code 513220 (changed to 517510 in
    October 2002).

[^35]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4, NAICS code 513220 (issued October 2000).

[^36]: 47 C.F.R. § 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 (February 27, 1995).

[^37]: Paul Kagan Associates, Inc., Cable TV Investor, February 29, 1996
    (based on figures for December 30, 1995).

[^38]: 47 U.S.C. § 543(m)(2).

[^39]: *See* FCC Announces New Subscriber Count for the Definition of
    Small Cable Operator, *Public Notice*, DA 01-158 (released January
    24, 2001).

[^40]: 47 C.F.R. § 76.901(f).

[^41]: *See* FCC Announces New Subscriber Count for the Definition of
    Small Cable Operator, *Public Notice*, DA 01-158 (released January
    24, 2001).

[^42]: The Commission does receive such information on a case-by-case
    basis 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 76.901(f) of the Commission's rules. *See* 47
    C.F.R. 909(b).

[^43]: 13 C.F.R. § 121.201, NAICS code 517510.

[^44]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4 (issued October 2000).

[^45]: *Id.*

[^46]: *See* Rulemaking to Amend Parts 1, 2, 21, 25, of the Commission's
    Rules to Redesignate the 27.5-29.5 GHz Frequency Band, Reallocate
    the 29.5-30.5 Frequency Band, to Establish Rules and Policies for
    Local Multipoint Distribution Service and for Fixed Satellite
    Services, *Second Report and Order, Order on Reconsideration, and
    Fifth Notice of Proposed Rule Making*, 12 FCC Rcd 12545, 12689-90,
    para. 348 (1997).

[^47]: *Id.*

[^48]: *Id.*

[^49]: *See* Letter to Dan Phythyon, Chief, Wireless Telecommunications
    Bureau, FCC, from Aida Alvarez, Administrator, SBA (Jan. 6, 1998).

[^50]: 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,
    *Report and Order*, 10 FCC Rcd 9589, 9593, para. 7 (1995) (MDS
    Auction R&O).

[^51]: 47 C.F.R. § 21.961(b)(1).

[^52]: *See* Letter to Margaret Wiener, Chief, Auctions and Industry
    Analysis Division, Wireless Telecommunications Bureau, FCC, from
    Gary Jackson, Assistant Administrator for Size Standards, Small
    Business Administration, dated March 20, 2003 (noting approval of
    \$40 million size standard for MDS auction).

[^53]: Basic Trading Areas (BTAs) were designed by Rand McNally and are
    the geographic areas by which MDS was auctioned and authorized.
    *See* MDS Auction R&O, 10 FCC Rcd at 9608, para. 34.

[^54]: 47 U.S.C. § 309(j). Hundreds of stations were licensed to
    incumbent MDS licensees prior to implementation of Section 309(j) of
    the Communications Act of 1934, 47 U.S.C. § 309(j). For these
    pre-auction licenses, the applicable standard is SBA's small
    business size standard for "other telecommunications" (annual
    receipts of \$12.5 million or less). *See* 13 C.F.R. § 121.201,
    NAICS code 517910.

[^55]: 13 C.F.R. § 121.201, NAICS code 517510.

[^56]: *Id.*

[^57]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 4 (issued October 2000).

[^58]: *Id.*

[^59]: The term "small entity" under SBREFA applies to small
    organizations (nonprofits) and to small governmental jurisdictions
    (cities, counties, towns, townships, villages, school districts, and
    special districts with populations of less than 50,000). 5 U.S.C. §§
    601(4)-(6). We do not collect annual revenue data on ITFS licensees.

[^60]: *See* 47 U.S.C. § 573.

[^61]: 13 C.F.R. § 121.201, NAICS code 513220 (changed to 517510 in
    October 2002).

[^62]: *See* <http://www.fcc.gov/csb/ovs/csovscer.html> (current as of
    June 2004).