**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                    | * |                              |
|                                  | * | WC Docket No. 01-338         |
| Customer Premises Equipment      |   |                              |
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| Implementation of the Cable      | * |                              |
| Television Consumer Protection   | ) |                              |
| and Competition Act of 1992:     | * |                              |
| Cable Home Wiring                | * |                              |
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| Clarification of the             | * |                              |
| Commission's Rules and Policies  | * |                              |
| Regarding Unbundled Access to    | ) |                              |
| Incumbent Local Exchange         | * |                              |
| Carriers' Inside Wire Subloop    | * |                              |
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**REPORT AND ORDER AND**

**DECLARATORY RULING**

**Adopted: May 31, 2007 Released: June 8, 2007**

By the Commission: Chairman Martin and Commissioners Copps, Adelstein
and McDowell issuing

separate statements.

**TABLE OF CONTENTS**

**Para.**

I. INTRODUCTION [1](#introduction)

II\. BACKGROUND 4

A. Cable Inside Wiring Rules 4

B. Incumbent LEC Inside Wire Subloops 7

III\. DISCUSSION 12

A. Cable Inside Wiring Rules 12

B. Incumbent LEC Inside Wire Subloops 48

IV\. CONCLUSION 56

V. PROCEDURAL MATTERS 57

VI\. ORDERING CLAUSES 60

APPENDIX A -- List of Commenters in WC Docket No. 01-338

APPENDIX B -- List of Commenters in CS Docket No. 95-184 and MM Docket
No. 92-260

APPENDIX C -- Final Regulatory Flexibility Act Analysis

# INTRODUCTION

1.  In this *Order*, we take steps to eliminate barriers to competitive
    entry in multiple dwelling units (MDUs) and in multiunit premises,
    when a new entrant seeks to compete against an incumbent provider.
    Part I of 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.[^1] 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.[^2] The Commission then concluded that cutting
    and repairing sheet rock adds significantly to the physical
    difficulty and cost of wiring an MDU. In this *Order*, we conclude
    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.  In Part II of this *Order*, we grant, as described below, a petition
    for declaratory ruling filed by Cox Oklahoma Telcom, L.L.C. (Cox)
    regarding the scope of requesting carriers' right to access
    incumbent local exchange carriers' (LECs') inside wire subloops in
    multiunit premises. Specifically, Cox asks the Commission to clarify
    that incumbent LECs must allow requesting carriers to have direct
    access to the inside wire subloop in multi-tenant environments
    (MTEs) for the purposes of performing installations.[^3] As
    explained below, we grant Cox's petition and conclude that state
    commission decisions denying requesting carriers direct physical
    access to incumbent LECs' inside wire subloops in multiunit premises
    pursuant to section 251(c)(3) of the Communications Act of 1934, as
    amended (the Act) are inconsistent with the Act and Commission
    precedent and would frustrate the development of competition.

3.  The *Order* that we adopt today takes important steps to ensure that
    the pro-competitive, deregulatory goals of the 1996 Act are
    realized. Our actions here remove both economic and operational
    barriers to infrastructure investment in the communications market.
    New entrants to the video services and telephony markets should not
    be foreclosed from competing for consumers in multi-unit buildings
    based on regulatory technicalities or costly and inefficient
    industry practices. By removing these obstacles, we further the
    opportunities for consumers living in multi-unit buildings to enjoy
    the social and economic benefits of communication services
    competition.

# BACKGROUND

## Cable Inside Wiring Rules

4.  In 1993, the Commission first promulgated rules for cable home
    wiring and for the disposition of that wiring after termination of
    service.[^4] 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.[^5] In 1997, the Commission
    sought further comment on and addressed issues regarding procedures
    for the disposition of home run wiring in MDUs[^6] 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.[^7] In
    2003, the Commission resolved the issues presented on
    reconsideration in that proceeding.[^8]

5.  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 has 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.[^9] 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.[^10] In the event that the cable
    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.[^11] 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.[^12]

6.  The *Appeals Court decision* remanded that portion of the
    *Reconsideration Order* that amended 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.[^13] 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.[^14]
    Wiring simply enclosed within hallway molding would not be
    considered inaccessible.[^15] 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.[^16] In response, the Commission sought comment on
    its conclusions in the *Reconsideration Order* with regard to
    Section 76.5(mm)(4) of the rules and the amendment of the applicable
    Note.[^17]

## Incumbent LEC Inside Wire Subloops

### Cox's Petition 

7.  Cox filed its petition in response to a decision by the Oklahoma
    Corporation Commission (OCC) arbitrating a dispute over access to
    the inside wire subloop between Cox, a competitive LEC, and the
    incumbent LEC, Southwestern Bell Telephone Company (SBC).[^18] Cox
    seeks a Commission declaration confirming that: (1) requesting
    carriers have a right to direct physical access to incumbent LECs'
    inside wire subloops in MTEs; (2) this right allows requesting
    carriers to obtain direct access to inside wire subloops at
    incumbent LECs' terminal blocks in MTEs; and (3) this right exists
    regardless of any state law or regulation that would otherwise limit
    it.[^19] Cox asserts that the OCC arbitration decision denied it
    those rights.

8.  Cox argues that the right of requesting carriers to access incumbent
    LECs' inside wire subloops is supported by the Commission's decision
    in the *Triennial Review Order,* as well as by the underlying
    principles of the Act and federal policy encouraging local
    competition for customers in MTEs.[^20] Cox also claims that
    Commission action is needed "to resolve an emerging split" among
    state commissions over the manner that requesting carriers must be
    granted access to the inside wire subloop.[^21] According to Cox,
    the state commissions of New York, Washington, and Georgia have all
    adopted access rules more favorable to requesting carriers,[^22] but
    Oklahoma has varied by adopting a rule[^23] that requires Cox "to
    employ burdensome ordering procedures, \[and\] undertake needless
    and time-consuming construction of new facilities."[^24] Cox further
    states that under two of SBC's proposals, Cox would be required to
    construct, or pay SBC to construct, unnecessary intermediate
    facilities between SBC's and Cox's terminal facilities in each
    MTE.[^25] Each of these options would increase both the cost of
    providing service to MTE customers and the time - sometimes as long
    as 120 days - it would take Cox to initiate service to a requesting
    customer.[^26] Cox claims that SBC would maintain the enormous
    competitive advantage inherent in operating legacy facilities that
    can be used to initiate service in a matter of hours or a few days.
    Cox also contends that the *OCC Order* inappropriately applied state
    law to questions the Commission has already settled.[^27]

### Oklahoma Proceedings

9.  In October 2002, Cox and SBC began negotiating an amendment to their
    existing interconnection agreement (ICA) that would govern the
    rates, terms, and conditions of inside wiring subloop access. After
    failing to reach an agreement, Cox submitted the issue to
    arbitration before the OCC pursuant to section 252(b) of the
    Act.[^28] In the arbitration proceeding, Cox asserted that the Act
    and the Commission's rules and orders mandate that competitive LECs'
    technicians must be given direct physical access to SBC's inside
    wire subloops at existing SBC terminals for the purposes of
    accomplishing installation and service changes.[^29] SBC denied that
    Cox had a right of direct physical access to its inside wire
    subloops.[^30] Instead, SBC proposed three options, each of which
    would require Cox to use SBC technicians to provide access to the
    inside wire subloop: (1) an intermediate cross-connect device that
    SBC would place or construct, own, and manage; (2) an intermediate
    cross-connect device that Cox would place or construct, own, and
    manage; (3) SBC's provisioning of inside wire subloops by extending
    jumper/cross connect wire from its existing accessible terminal,
    left coiled up near Cox's terminal.[^31]

10. On April 2, 2004, the arbitrator issued a report adopting, in its
    entirety, SBC's proposal.[^32] In reaching that conclusion, the
    arbitrator accepted SBC's assertions that denial of direct access
    was essential to the integrity of SBC's network.[^33] Specifically,
    the arbitrator found that "direct access" to the terminal block "is
    not in the public interest," and "may seriously jeopardize SBC-OK's
    ability to maintain network integrity, security and control, as well
    as accountability for damage and substandard engineering and
    operational practices."[^34] Cox appealed the matter to the full
    OCC, which affirmed the *Arbitrator's Report* on this issue.[^35]

11. Cox challenged the OCC's decision in the U.S. District Court for the
    Western District of Oklahoma. Cox then asked the court to stay the
    proceeding pending Commission resolution of the instant petition for
    declaratory ruling.[^36]

# DISCUSSION

## Cable Inside Wiring Rules

12. 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.[^37] The
    Commission in 2003 had stated that it considered sheet rock to be a
    "structural element" and reasoned that it was "more like 'brick or
    cinder block,' materials also commonly used to form ceilings and
    hallways, than molding, which is not."[^38] 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.[^39] 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.[^40]

13. 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.[^41] 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."[^42]

14. In response, the Commission sought additional comment with respect
    to whether cable wiring behind sheet rock should be considered
    physically inaccessible.[^43]

### Would accessing the demarcation point behind sheet rock require significant modification of, or significant damage to, preexisting structural elements?

15. As explained below, we find 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.

16. The Commission specifically sought comment on whether sheet rock
    qualifies as an example of a preexisting structural element that is
    an integral and permanent part of an MDU.[^44] The Commission also
    asked if it is 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 for installers to
    complete their work.[^45] The Commission asked whether the damage to
    or modification of ceilings and walls made by alternative providers
    in accessing inside wiring should be considered significant.[^46]

17. The majority of commenters in this proceeding, comprised of
    alternative providers and trade associations that service the MDU
    communities, agree that cable inside wiring located behind sheet
    rock is physically inaccessible because access to such wiring would
    involve significant modification of, or damage to, a preexisting
    structural element.[^47] These commenters offer what they term their
    "real world" experiences and urge the Commission to continue to
    support the expansion of the definition of "physically inaccessible"
    to include sheet rock for purposes of the inside wiring rules.[^48]
    They argue that this is not a theoretical analysis, but rather a
    reflection on the world of day-to-day competition, contract
    negotiation and installation of equipment to provide service to MDU
    residents.[^49] Some assert that these rules serve to stimulate
    competition and have made it possible for hundreds of thousands of
    residents to subscribe to the services provided by alternative
    providers.[^50] These commenters argue that it is essential that the
    current definition of "physically inaccessible," which includes
    wiring behind sheet rock, be maintained in order for the inside
    wiring rules to be effective.[^51]

18. NCTA argues that wiring behind sheet rock does not meet the test of
    "physical inaccessibility."[^52] NCTA asserts that the practical
    questions surrounding the issue of the physical inaccessibility of
    wiring behind sheet rock do not naturally occur within the
    regulatory or policy expertise of the Commission.[^53] NCTA contends
    that the existing record in this proceeding already contains a
    variety of affidavits and declarations that support its position
    submitted by commenters who engage in this line of work.[^54] NCTA
    also submits additional declarations and affidavits in support of
    its position.[^55]

#### Sheet Rock as a Preexisting Structural Element

19. The Commission previously concluded that the term "structural
    elements" encompassed sheet rock.[^56] The majority of commenters
    here assert that it is well-established that sheet rock is a
    preexisting structural element that is an integral and permanent
    part of the building structure of MDUs.[^57] RAA & CAI state that
    sheet rock is installed as part of the construction of the building
    and it is integral to the overall structure: without sheet rock,
    some other material -- such as brick or cinder block -- would have
    to be used to form walls and other building elements.[^58] Moreover,
    sheet rock is permanently fixed to the framing structure of the
    building and is not readily removed or designed to be removed.[^59]
    RAA & CAI further assert that sheet rock is not a mere surface
    finish or decorative flourish and, for that same reason, it is
    clearly "preexisting" because it is not added after the building is
    completed.[^60]

20. RCN states that to access facilities behind sheet rock, whether it
    be wiring, ducts, pipes or other types of utility conduit, the
    opening up and closing of sheet rock is not as simple a matter as
    opening and closing an electrical panel.[^61] Moreover, RCN asserts
    that sheet rock is not easily removed or replaced in the same manner
    as removable hallway molding.[^62] RCN argues that the only
    alternative to cutting holes in sheet rock to access facilities
    would be to remove and replace an entire wall or ceiling.[^63] From
    a materials point of view, RCN acknowledges that while it is not
    difficult to cut through sheet rock, the cost and damage associated
    with accessing a demarcation point behind sheet rock are significant
    enough to render it physically inaccessible.[^64] RCN contends that
    these factors of inaccessibility are exacerbated by the integral and
    permanent nature of sheet rock.[^65]

21. NCTA counters that sheet rock is not considered to be a structural
    element because it is easy to cut and repair.[^66] According to
    NCTA, installers commonly need to make cuts and/or holes in sheet
    rock walls and other nonstructural building materials in order to
    access home wiring.[^67] NCTA contends that such procedures are
    neither difficult nor expensive for experienced installers to
    perform and there should be no adverse impact on the structural
    integrity of the sheet rock.[^68]

22. We agree with those commenters who contend that 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.[^69]

#### Assessing Significant Modification of, or Significant Damage to, Sheet Rock 

23. The Commission sought comment on whether the modification of, or
    damage to, sheet rock ceilings and walls by alternative providers
    accessing inside wiring behind those ceilings and walls should be
    considered significant.[^70] The assessment of significant
    modification or damage must be made regarding a preexisting
    structural element before that location is deemed to be physically
    inaccessible.[^71] When characterizing the modification of or damage
    done to sheet rock in efforts to access inside wiring, the majority
    of commenters agree that the modification of or damage done is
    significant.[^72]

24. Several commenters explain that cutting through sheet rock involves
    careful, difficult, and labor-intensive work. RCN explains that when
    it is required to access the demarcation point through sheet rock,
    its actions result in significant modification and damage to the
    walls and ceilings of the MDUs.[^73] RCN attests to the fact that it
    must cut a hole in the sheet rock that is at least 12" by 12" in
    order to gain access to wiring behind sheet rock.[^74] RCN further
    notes that cutting through sheet rock with a knife or similar tool
    results in the creation of considerable dust and debris and an
    effort must be made to avoid damage to elements behind sheet rock,
    such as electrical wiring, insulation, duct work and plumbing.[^75]
    RCN states that although cutting through sheet rock is relatively
    easy, the process results in permanent damage to MDU walls or
    ceilings and the holes that remain must be repaired.[^76] RCN states
    that in order to repair the damage, subcontractors must "plug" the
    hole by cutting another piece of sheet rock that is large enough to
    fill the hole.[^77] The hole must be spackled, taped and sanded and
    the area around the hole must later be repainted or re-wallpapered
    to the satisfaction of MDU managers and owners.[^78] RCN contends
    that the whole wall or ceiling may need to be repainted or
    re-wallpapered in order to restore a uniform appearance.[^79]

25. Commenters also note that they must pay careful attention to
    aesthetic considerations. IMCC states that each penetration or hole
    in the wall or ceiling must be patched twice, sanded twice, primed
    and painted to match the prior paint.[^80] IMCC also comments that
    the work requires a minimum three-day time period and requires
    several hours of labor, and that part of the job in many "upscale"
    properties involves entire hallways being repainted or
    re-wallpapered.[^81] Similarly, RAA and CAI state that property
    owners are concerned with the appearance of their buildings, and
    that as a result, any work involving cutting into sheet rock
    requires meticulous restoration. [^82] These commenters assert that
    this is no small task because obtaining access to wiring behind
    sheet rock requires the removal of sizable pieces of sheet rock, not
    only at the demarcation point, but at times at other places along
    the corridor or inside different units.[^83] RAA & CAI argue that
    property owners do not know exactly where wiring is located and
    finding hundreds of demarcation points within a building is not a
    precise science.[^84]

26. Commenters also raise safety issues. RAA & CAI state that any action
    that affects the structural integrity of a building is considered
    significant by property owners.[^85] RAA & CAI explain that there
    are special types of sheet rock for specific applications and
    cutting into these different types of sheet rock to gain access to
    wiring may result in a degradation of a building's resistance to
    moisture, or its sound or temperature insulating capability, as well
    as its resistance to fire.[^86] From a safety perspective, RAA & CAI
    assert that the use of sheet rock in firewalls means that any breach
    of a sheet rock surface poses a safety risk to residents and may
    involve a code violation for which property owners are liable.[^87]
    RAA & CAI state that cuts in specialty types of sheet rock that
    affect the building's resistance to water damage, or its sound or
    temperature insulating capacity, will concern building owners and
    may lead to damage to the "fabric" of the building over time.[^88]
    Similarly, Verizon states that cutting into or patching sheet rock
    walls and ceilings compromises the integrity of fire resistant sheet
    rock and may pose a safety hazard for MDU residents if such work is
    not done properly.[^89]

27. Finally, RAA and CAI argue that under the National Electric Code
    (NEC), wiring behind sheet rock is not considered accessible because
    it cannot be removed or exposed without causing damage to the
    structure or finish of the building.[^90] While not binding on the
    Commission, RAA & CAI assert that NEC's definition should be
    instructive to the Commission because it represents the judgment of
    experts in the field of building safety.[^91]

28. NCTA, however, argues that the existing record establishes that
    wiring located behind sheet rock does not meet the test of
    "physically inaccessibility."[^92] NCTA points to a previously filed
    declaration that it is not difficult to access the demarcation point
    of each unit through a 2" x 4" hole cut into the hallway sheet rock
    wall.[^93] That declarant stated that after the cut in the sheet
    rock is made and the old MVPD's wiring is taped off, the hole is
    repaired either by patching and repainting or adding a wall plate
    that matches the interior of the building; a procedure the declarant
    described as not difficult and one having no adverse impact on the
    structural elements or integrity of the building.[^94] NCTA also
    resubmits an affidavit from an industry representative that states
    that cutting, drilling opening, plugging, spackling, taping,
    sanding, painting and repairing sheet rock are insignificant and
    commonplace procedures that do not result in significant
    modification of or damage to a building's structural elements.[^95]

29. NCTA also offers more recent declarations and affidavits to support
    its position that cable wiring behind sheet rock can be readily
    accessed without incurring damage to structural elements.[^96] For
    instance, NCTA submits the declaration of an independent contractor
    that states that in the typical MDU building, it is not difficult to
    access the demarcation point through a small cut in the hallway
    sheet rock, that installers can interconnect wires quickly and
    cheaply and that the repair work for an experienced installer is not
    difficult and has no adverse impact on the aesthetics or structural
    integrity of the building.[^97] NCTA also argues that the procedure
    for accessing wiring behind sheet rock is not significantly more
    difficult or expensive than accessing wiring that is behind
    molding.[^98] With regard to the issues of structural integrity and
    fire safety, NCTA states that while sheet rock walls do provide
    shear resistance and fire protection, there is nothing about cutting
    and properly repairing a small hole in the sheet rock that should
    affect its structural integrity or fire resistance.[^99]

30. When analyzing this issue we are faced with two substantially
    different points of view on whether significant modification or
    damage to preexisting structural elements occurs when efforts are
    made to access cable wiring behind sheet rock. Most commenters,
    consisting of alternative providers and trade associations, contend
    that large holes -- 12"x 12" or 6"x 8" -- must be cut into the sheet
    rock in order to access wiring, while NCTA asserts that only a 2"x
    4" inch hole must be made. Most commenters also emphasize the
    difficulty of locating demarcation points and making numerous cuts
    into the walls, and contend that the repair and restoration of the
    common walls and ceilings frequently require extensive and
    time-consuming work. Most commenters also focus on fire and other
    safety issues including the possible degradation of a building's
    resistance to moisture and potential problems associated with its
    sound and temperature insulating capability once the process of
    accessing wiring begins.

31. We believe 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, we conclude
    that penetration of sheet rock for purposes of accessing inside
    wiring constitutes significant modification and damage to structural
    elements under the Commission's rules.

#### Access of New Service providers by MDU Owners and Managers

32. We conclude that the refusal of MDU owners to permit competitive
    providers to cut into sheet rock walls attests to the significance
    of the work involved. The Commission asked if it is 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 for installers to complete their work.[^100] The
    majority of commenters agree that competition from new service
    providers in MDUs is impeded because MDU owners and managers do not
    want new providers on the premises cutting and repairing sheet rock
    because it causes damage to a preexisting structural element in the
    building and the process is disruptive to building residents.[^101]

33. RCN asserts that it has been clearly demonstrated in the
    Commission's earlier proceedings on this issue that many MDU owners
    are reluctant to permit overbuilders to cut holes in their walls and
    ceilings.[^102] In referring to its own past experiences, RCN
    contends that MDU owners and managers will not allow RCN to cut,
    open, plug, spackle, tape, sand and paint ceilings and walls in
    order to install new lines because it is disruptive and could
    eventually require the replacement of entire ceilings and
    walls.[^103] RCN argues that if an MDU owner prohibits a competitive
    provider from cutting holes in a building's walls and ceilings in
    order to access the home run wiring then it is physically impossible
    to access these lines.[^104] RCN argues that if MDU owners won't
    allow access to home run wiring through sheet rock and the incumbent
    cable operator won't allow a competitor access at the junction box,
    then new entrants are precluded from providing competitive video
    service to consumers.[^105] Verizon agrees that the refusal by MDU
    owners and residents to allow competing providers to cut into sheet
    rock to access home run wiring makes such wiring inaccessible for
    practical purposes.[^106] Verizon argues that meaningful competition
    for cable services for millions of Americans living in MDUs is
    inhibited because MDU owners and residents consider cutting and
    repairing sheet rock a significant inconvenience and new entrants
    are placed at a competitive disadvantage.[^107] RAA & CAI agree and
    add that any action that harms the appearance of the building
    presents significant problems.[^108] They state that cutting and
    repairing drywall is a messy process and is the kind of disruption
    that residents want to avoid whenever possible.[^109] IMCC asserts
    that the resistance of MDU owners and residents to physical
    degradation of their property and the associated inconvenience and
    cost are the reasons contract negotiations between MDU owners and
    alternative providers fail and the incumbent cable provider remains
    entrenched.[^110]

34. NCTA argues that whether building owners choose to allow cable
    operators to access wiring behind sheet rock is not and should not
    be relevant to the determination whether such wiring is physically
    inaccessible.[^111] NCTA asserts that there is nothing in the
    Commission's definition of physical inaccessibility that suggests
    that the owners' willingness to allow a service provider to access
    wiring at a particular point should determine whether that point is,
    in fact, accessible.[^112]

35. Although the Commission's rule defining physical inaccessibility
    does not specifically take into account the willingness of MDU
    owners and managers to allow new service providers to cut and repair
    sheet rock, the refusal by building owners to permit competitive
    providers to cut into building walls, even sheet rock walls,
    suggests that the consequences of doing so are significant to the
    building owners.[^113] This fact supports the proposition that
    accessing wiring behind sheet rock exposes the walls to significant
    modification or damage.

### Would accessing the demarcation point behind sheet rock add significantly to the physical difficulty and/or cost of accessing the subscriber's home wiring?

36. As explained below, we find that accessing the demarcation point
    behind sheet rock adds significantly to the physical difficulty
    and/or cost of accessing the subscriber's home wiring.

37. The majority of commenters agree that accessing the demarcation
    point behind sheet rock adds significantly to the physical
    difficulty and cost of accessing the subscriber's home wiring.[^114]
    NCTA disagrees and argues that there is no significant expense or
    difficulty associated with such work.[^115] The Commission has
    acknowledged that while cutting through sheet rock is neither as
    physically difficult nor as costly as boring through brick, metal or
    cinder block, it was satisfied that the process added significantly
    to the physical difficulty and cost of wiring an MDU.[^116] The
    Commission stated that the examples listed in the original Note to
    Section 76.5(mm)(4) regarding various materials that can be
    considered structural elements capable of concealing a coaxial cable
    was not meant to be exhaustive.[^117] Moreover, the Commission
    sought comment on the costs associated with cutting through sheet
    rock. The Commission further stated that it would seem that the
    difficulty and costs associated with cutting through sheet rock are
    significantly more than what is involved in accessing wiring behind
    removable molding, and sought additional comment on the costs of
    accessing wiring behind molding. The Commission previously
    determined that wiring enclosed within hallway molding is not
    physically inaccessible.[^118]

#### Assessing the Physical Difficulty Involved in Accessing Wiring Behind Sheet Rock 

38. In assessing the physical difficulty involved in accessing cable
    wiring located behind sheet rock, many commenters describe a process
    that involves more than simply cutting through the material. For
    example, IMCC states that once a hole is cut in the sheet rock and
    the wire connection is made at each unit, the wire must either be
    "fished" through the hallway and back to the junction box or
    pedestal or it must be installed in some form of molding.[^119] RCN
    states that once it has cut a hole in the sheet rock there are no
    guarantees that where it cuts the hole it will actually be able to
    locate and retrieve the inside wiring for interconnection with its
    own subscriber lines.[^120] If this is the case, RCN explains that
    it must then cut additional holes in the sheet rock until it can
    locate and retrieve the existing subscriber line.[^121] RCN states
    that once the line has been retrieved, it must then connect its own
    subscriber line to the existing subscriber line at the demarcation
    point.[^122] Thereafter, RCN describes the ensuing difficulty of
    running its own subscriber line back to the junction box to its
    network interface.[^123] RCN states that this process can be
    extremely difficult to undertake behind sheet rock, particularly in
    MDUs where, RCN asserts, it faces unknown obstacles such as heating
    ducts, water pipes, and other facilities.[^124] When encountering
    such obstacles, RCN states that it may be necessary to cut
    additional holes in the sheet rock to avoid them.[^125] Verizon
    asserts that when MDUs are constructed, inside wiring is generally
    run without concern for the path that the wiring will take to get to
    a particular unit.[^126] Moreover, Verizon states that attention is
    rarely paid to ensuring post-construction ready-access to wiring for
    particular units, such as through "chase-ways."[^127] As a result,
    Verizon argues that running cable wiring behind sheet rock is
    invasive and often requires access not only to the particular unit
    seeking service, but also to one or more of the abutting
    units.[^128] Verizon argues that established industry practice in
    the context of telephone wiring confirms that many of the practical
    difficulties of installing or accessing wiring behind sheet rock
    walls or ceilings make such wiring inaccessible for all practical
    purposes.[^129] Verizon asserts that in order to avoid the problems
    with accessing wiring that is behind sheet rock in an MDU, Verizon's
    state telephone tariffs generally provide concealed telephone wiring
    in MDUs where "reusable means" for accessing the wiring are
    installed.[^130]

39. NCTA counters that commenters have confused the difficulties and
    costs of accessing home run wiring at the demarcation point with
    that of installing their own home run wiring behind sheet
    rock.[^131] NCTA argues that the comments of RCN and Verizon are not
    on point when they assert that running new cable wiring behind sheet
    rock is invasive and that new service providers must "fish" wire
    through interior walls and ceilings.[^132] NCTA argues that the
    rules governing the disposition of home run wiring do not allow
    alternative providers to acquire and use such wiring simply because
    it is easier and less costly than to install their own.[^133] NCTA
    notes that once an alternative provider is able to access the wiring
    at the demarcation point, the home run wiring rules provide
    procedures for the disposition of such wiring if the incumbent finds
    it is too difficult or costly to remove.[^134] NCTA argues that
    whether a demarcation point located behind sheet rock is physically
    inaccessible does not depend on whether installing new home wiring
    behind sheet rock is difficult, expensive or causes damage to the
    building.[^135] All that matters, NCTA asserts, is whether accessing
    wiring at such a point would cause significant structural damage,
    difficulty, and expense.[^136]

40. As an initial matter, we note 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, we conclude that the record supports a
    finding of significant physical difficulty in accessing the
    subscriber\'s home wiring.[^137]  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 we have 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).[^138] In any event, we need only find that cutting
    through sheet rock significantly increases the physical difficulty
    **or** cost of accessing the wiring and, as described below, we find
    that the additional costs are typically significant.

#### The Cost of Accessing Wiring Behind Sheet Rock

41. We conclude that the cost of accessing wiring behind sheet rock is
    significant. The majority of commenters agree. IMCC submits two
    letters from private cable operators (PCOs) expressing their views.
    A letter from a PCO in Atlanta states that the work involved in
    accessing wiring at the demarcation point takes between two to four
    hours per unit and one hole cut would add \$150.00 to \$250.00 to
    the cost of wiring a unit.[^139] The PCO further states that in a
    typical 200-unit building this work would cost approximately
    \$40,000.00.[^140] A Manager from a PCO in California asserts that
    accessing the home run wiring in an MDU 12 inches outside each
    residential unit is virtually impossible in most instances because
    that location would be 12 inches inside the neighboring MDU
    residence.[^141] This PCO Manager asserts that this means it is then
    necessary to install a completely separate home run wire from the
    junction location to an access point within the residence at a cost
    of a minimum of \$200.00 per unit.[^142] RCN contends that the costs
    associated with accessing wiring behind sheet rock can range from
    \$450.00 to \$1,000.00 per unit, depending on the degree of
    difficulty that is encountered in efforts to locate, retrieve and
    connect the cable home run wiring to its own subscriber lines at the
    demarcation point and run it back to the junction box in the
    MDU.[^143] Verizon asserts that the high costs to competing
    providers and consumers of accessing wiring behind sheet rock
    discourage competition.[^144] Verizon asserts that restoration of
    sheet rock is the most labor-intensive and expensive part of the
    whole process because it requires multiple visits.[^145] Verizon
    contends that time must be permitted for the repair work to set and
    dry before additional steps can be taken in the restoration
    process.[^146] Verizon states that prices to restore the sheet rock
    to an acceptable condition may vary from \$200.00 for an
    uncomplicated situation to \$1,000.00 or more for high-end MDUs or
    in instances where larger sections of sheet rock must be repainted
    or wallpapered.[^147] Verizon also notes that these costs reflect
    work on a single unit and that they multiply with additional units,
    although cost savings may be available when an entire MDU switches
    to an alternative provider.[^148] Verizon also argues that most
    cable installers are not currently trained or qualified to perform
    the necessary repair and restoration work.[^149] In that regard,
    Verizon contends that significant costs must be expended to train
    installers or to hire additional employees or contractors and these
    costs are passed on to cable subscribers and are likely to keep
    competing providers out of MDUs.[^150]

42. RAA & CAI state that they can offer no reliable cost information
    because this type of work is rarely done, but they maintain that,
    whatever the cost, it would be prohibitive.[^151] RAA & CAI state
    that because property owner resistance and the practical challenges
    of doing the job right are so obvious that drywall installations are
    not given enough consideration by responsible management officials
    to warrant any serious cost analysis.[^152]

43. NCTA counters by arguing that there are no significant costs
    involved in cutting and repairing sheet rock. NCTA resubmits a
    declaration already on the record from a Time Warner employee that
    states that cutting into sheet rock "is not difficult for an
    experienced MVPD provider to perform and is relatively inexpensive
    (\$25.00)."[^153] Another previously submitted declaration offered
    by NCTA from a Comcast employee referring to the "installation of
    cable television inside and home run wiring" states that the
    "\[r\]estoration of sheet rock subsequent to such installations is
    accomplished easily and inexpensively."[^154] NCTA also submits more
    recent affidavits and declarations in support of its contention
    regarding the costs of accessing wiring behind sheet rock. One
    independent contractor asserts that after the demarcation point is
    accessed, repair of the hole can be accomplished "quickly and
    cheaply."[^155] Another contractor asserts that accessing wiring
    behind sheet rock is a common procedure and "is not difficult for an
    experienced installer to perform, is relatively inexpensive and
    should have no adverse impact on the structural elements or the
    structural integrity of the building."[^156] In addition, NCTA
    submits two affidavits that point out that accessing wiring behind
    sheet rock "is not significantly more difficult or expensive than
    accessing wiring that is behind molding."[^157]

44. In reply, IMCC argues that NCTA's views are not reflective of what
    occurs in the real world of providing video services in MDUs. IMCC
    disputes NCTA's view that connecting to the wiring outside each unit
    can be accomplished easily and inexpensively. IMCC argues that NCTA
    ignores the process of finding the exact place in the ceiling or
    wall to make the connection; ignores the fact that the process
    usually requires using electrical taping at the connection; and,
    that service to each unit must be tested after the connection is
    made. IMCC argues that NCTA is wrong when it says that the process
    of accessing the wire only costs \$25.00. According to IMCC, the
    estimates of \$150.00-\$250.00 presented in its comments by PCOs are
    more realistic numbers.[^158] RCN replies that even if NCTA is
    correct with its \$25.00 cost estimate, this does not complete the
    analysis.[^159] RCN argues that the fact is that placing the
    demarcation point behind sheet rock impedes competitors' access to
    cable inside wiring and, accordingly, deprives consumers of access
    to competitive MVPD services.[^160]

45. In reply, NCTA argues that it is highly misleading that experienced
    installation technicians require additional training in order to
    access MDU wiring at demarcation points.[^161] NCTA maintains that
    in the performance of their normal duties, installers routinely cut
    holes in sheet rock walls.[^162] NCTA also argues that cutting and
    repairing sheet rock in order to access wiring almost never involves
    the disruption of adjacent units or units on other floors.[^163]
    Moreover, NCTA states that installers commonly use inexpensive cable
    locator devices to pinpoint the location of wiring.[^164] NCTA
    states that contrary to the calculations set forth by some
    commenting parties, the per-unit MDU cost where multiple units are
    accessed is much lower than the cost to cut and repair only a single
    unit.[^165] NCTA specifically addresses IMCC's comments that contend
    that cutting and repairing sheet rock is a process that consumes
    two-to-four hours and involves between \$150.00-\$250.00 in labor
    costs.[^166] NCTA argues that in a two-to-four hour scenario, much
    of the time would have to be attributed to downtime involving the
    drying of the patching and repairing material used.[^167] According
    to NCTA, experienced technicians would not work on one unit at a
    time, sitting and waiting for the patching to dry before painting
    and moving on to the next unit.[^168] NCTA argues these installers
    would "multi-task" and create an assembly line process which would
    greatly reduce the downtime and overall cost of the project.[^169]
    NCTA further contends that because most of the expense of accessing
    wiring at demarcation points behind sheet rock is associated with
    the cost of the labor involved, this cost is about the same as it
    would cost to access wiring in hallway molding.[^170] NCTA notes
    that the Commission's rules specifically provide that wiring at a
    demarcation point located behind molding is not physically
    inaccessible.[^171] NCTA argues that it follows that if the costs
    and difficulty of accessing wiring at a point located behind sheet
    rock are comparable to the costs of accessing wiring behind molding,
    then wiring behind sheet rock is also not physically
    inaccessible.[^172]

46. In analyzing the costs involved in accessing wiring behind sheet
    rock, we recognize that the record reveals a wide divergence among
    the estimates offered by commenters -- ranging from \$25.00 to
    \$1,000.00 -- as the appropriate sum needed to accomplish the
    job.[^173]  Although we find that we 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. Taking
    these factors into consideration, we conclude that we should not
    rely on the lower costs estimates, such as the \$25.00 estimate by
    NCTA, because they do not include some of these factors. We believe
    that the estimates that do take into account these factors, which
    range significantly above \$25.00, are closer to reasonable cost
    estimates for accessing wiring behind sheet rock.  For example, as
    Verizon and other commenters note, the cost of repairing sheet rock
    can often include repainting and re-wallpapering entire walls or
    ceilings. Although we do 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.

47. We received little comment on the costs involved in accessing wiring
    behind removable wall molding. Verizon states that, at most, the
    cost of accessing wiring located behind molding would likely be a
    third of the costs of accessing wiring behind sheet rock.[^174]
    Additionally, Verizon asserts that the costs of going behind molding
    would never approach the costs associated with repairing sheet rock
    in expensive, high-end MDUs.[^175] Verizon explains the cost
    differential by asserting that accessing wiring behind molding
    requires no modification of a preexisting structural element, as
    would be the case with sheet rock, and does not require multiple
    trips to an MDU to make the kind of restorations involved with sheet
    rock.[^176] Verizon describes the accessing of wiring behind molding
    as a simple process that generally only requires snapping molding
    off its retainer in order to access the embedded wiring and snapping
    it back on once work is completed.[^177] NCTA contends, however,
    that the cost of accessing wiring behind sheet rock is about the
    same as accessing wiring behind molding.[^178] We are 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.

## Incumbent LEC Inside Wire Subloops

48. We grant Cox's request as described below. The Commission's rules
    and precedent make clear that competitors have the right of direct
    access to an incumbent LEC's unbundled inside wire subloops at any
    "point of technically feasible access," and we clarify that the
    terminal block to a multiunit premise is such a technically feasible
    access point. We find any decision that does not allow for such
    direct access to be contrary to the Commission's rules and policy of
    promoting telephone and broadband competition.[^179] While the
    Commission provided for these rights to be enforced through the
    state section 252 process, we further clarify the applicability of
    Commission precedent precluding certain approaches like those
    adopted by the OCC.

### Competitors Have the Right to Direct Access to Inside Wire Subloops at Any Point of Technically Feasible Access.

49. The text of the *Triennial Review Order* makes clear that
    competitors may directly access inside wire subloops at any
    technically feasible point.[^180] In contrast, the OCC *Arbitrator's
    Report* stated that "direct access" to the terminal block "is not in
    the public interest." A state decision, such as this one, denying
    direct access is at odds with Commission precedent.

50. The notion of forcing access through an intermediate terminal is
    fundamentally inconsistent on its face with the right to direct
    access.[^181] The governing rule gives competitors the right of
    access at "*any point*" where a technician can access wire or
    fiber.[^182] This rule allows a requesting carrier to select the
    point of feasible access, and we conclude that a reading of the word
    "any" to narrow the number or definition of access points, or to
    shift this discretion to an incumbent LEC or a state commission,
    would be unfounded and incompatible with our rules. In the
    *Triennial Review Order,* the Commission made clear that it is the
    competitor's right to choose by emphasizing that "\[c\]ompetitive
    carriers are able to access these subloops at any technically
    feasible terminal point at or near the building *in any technically
    feasible* manner," and that the imposition of at least one form of
    indirect access -- a collocation requirement -- is
    impermissible.[^183] Consequently, we reject any interpretation of
    the Commission's rules that would allow only indirect access to
    inside wire at technically feasible points.[^184]

### The Terminal Block of a Multiunit Premise Is a Point of Technically Feasible Access.

51. The language and intent of the rules that the Commission adopted in
    the *Triennial Review Order* make clear that a terminal block of a
    multiunit premise is a point of technically feasible access to
    inside wire subloops.[^185] The Commission defined "point of
    technically feasible access" as "any point in the incumbent LEC's
    outside plant at or near a multiunit premises where a technician can
    access the wire or fiber within the cable without removing a splice
    case to reach the wire or fiber within to access the wiring in the
    multiunit premises. Such points include, but are not limited to, a
    pole or pedestal, the network interface device (NID),[^186] the
    minimum point of entry (MPOE), the single point of interconnection,
    and the feeder/distribution interface."[^187] The terminal block
    fits squarely under the rules defining a point of technically
    feasible access -- there is no real dispute in the record that a
    technician is capable of accessing the wires in the multiunit
    premises at the terminal block.[^188] In fact, as Cox explains,
    "most incumbent LECs permit a competitive LEC to disconnect the
    inside wire from the incumbent LEC terminal block and connect it to
    the competitive LEC interface without any interference by the
    incumbent LEC."[^189] As one incumbent LEC states, "\[c\]learly, the
    Commission's *Triennial Review Order* requires that CLECs have
    physical access to an ILEC's NID or terminal block, and is intended
    to preempt excessive and unnecessary costs and burdens."[^190] The
    approach we take here is also consistent with the Commission's
    broader goals of removing disincentives for facilities-based
    competitors to deploy their own loop infrastructure and providing
    competitors with the greatest flexibility in network design.[^191]

### Implementation of Access to Inside Wire Subloops 

52. The alternative access arrangements adopted by the OCC, whereby
    either SBC or Cox would place or construct, own, and manage an
    intermediate cross-connect device, conflict with prior Commission
    determinations on the scope of reasonable access. In circumscribing
    the scope of reasonable access in the other contexts, the Commission
    prohibited "a lengthy and burdensome process at the customer
    premises to collocate a separate terminal facility in order to gain
    access to the inside wire subloop, or other inside wire used by the
    LEC to access customers in multiunit premises."[^192] The Commission
    also prohibited "an incumbent LEC requirement to have its technician
    present and to impose an associated charge on the \[requesting
    carrier\] for such contact on the non-network side of the
    NID."[^193] Incumbent LEC impositions of such requirements would be
    contrary to the competitive goals of the NID and inside wire
    unbundling rules and thus were precluded by the Commission. These
    limitations reflect Commission balancing of interests to ensure
    competitive access to inside wire, which the Commission found
    important because competitors may be able to construct and provision
    a local loop using their own facilities all the way to a customer
    premises, yet still remain unable to reach the end user in that
    premises.[^194] As such, consistent with prior Commission findings
    in a similar context, we find that the alternatives adopted by the
    OCC requiring an intermediate cross-connect device are unreasonable
    access requirements and inconsistent with our inside wire subloop
    rules.

53. Further, in explaining how a competitor will access a subloop at a
    technically feasible location, the Commission expressly recognized
    that that the physical work necessary for competitive access does
    not need to be provided by the incumbent LEC, but rather may be
    performed by the requesting carrier itself: "Accessible terminals
    contain cables and their respective wire pairs that terminate on
    screw posts which enables a *competitor's technician* to
    cross-connect its terminal to the incumbent LEC's to access the
    incumbent LEC's loop from that point all the way to the end user
    customer."[^195] Although we do not address the question of whether
    the terminal block is a NID under our rules,[^196] we do find some
    support from the *Triennial Review Order*'s authorization of
    competitors to use their own technicians to access the NID.[^197]
    All three options adopted by the OCC would require Cox to use SBC
    technicians, and thus are also at odds with our holdings in the
    *Triennial Review Order*.

54. We conclude, however, that *factors* such as network security may be
    considered in section 252 proceedings, subject to the constraints
    enumerated by the Commission. Several commenters point to the OCC's
    reliance on network integrity concerns and ask that we defer to
    state-specific analysis of technical feasibility to prevent
    potential network damage and degradation.[^198] However, the OCC did
    not undertake an analysis of technical feasibility under our
    regulations, and we emphasize today that any issue of network
    security must be addressed within the two-step framework of those
    regulations. Specifically, where there is a dispute as to whether it
    is technically feasible to unbundle at a given point in the network,
    under our rules the incumbent LEC then has the burden of
    demonstrating insufficient availability of space or technical
    infeasibility to a state commission.[^199] Under the Commission's
    "best practices" rule, since at least one other state has determined
    that multiunit premises terminal block unbundling is technically
    feasible, an incumbent LEC has this evidentiary burden for terminal
    blocks in all other state proceedings.[^200] We expect that states,
    acting pursuant to section 252 of the Act, will continue to consider
    interconnection, access, and pricing issues, especially those
    affecting the safety or integrity of consumer services, but
    emphasize that states must do so consistent with the Commission's
    framework and directions.[^201]

55. The record before us indicates that in many instances incumbent LECs
    willingly allow direct access to terminal blocks pursuant to
    different arrangements,[^202] and we do not mandate unconditional
    access, or otherwise seek to specify the details of any arrangement
    so long as a competitor has direct access, consistent with the
    principles described above. The *Triennial Review Order* established
    a framework within which state commissions would govern the process
    for interconnection negotiations and related disputes pursuant to
    section 252 of the Act, and nothing we do today is designed to
    disturb that basic role.[^203]

# CONCLUSION

56. In view of the foregoing, we find that that cable wiring located
    behind sheet rock qualifies as physically inaccessible under our
    rules for purposes of determining the demarcation point between home
    wiring and home run wiring. Specifically, we conclude 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. Finally, we grant Cox's petition and conclude that state
    commission decisions denying requesting carriers direct physical
    access to incumbent LECs' inside wire subloops in multiunit premises
    pursuant to section 251(c)(3) of the Act are inconsistent with the
    Act and Commission precedent and would frustrate the development of
    competition.

#  PROCEDURAL MATTERS

57. *Final Regulatory Flexibility Act*. As required by the Regulatory
    Flexibility Act (RFA),[^204] an Initial Regulatory Flexibility
    Analysis (IRFA) was incorporated into the *Further Notice*.[^205]
    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.

58. *Paperwork Reduction Act Analysis*. This document 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).

59. *Congressional Review Act*. The Commission will send a copy of this
    *Report and 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).

# ORDERING CLAUSES

60. 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.**

61. **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 C.F.R. § 76.5(mm)(4) adopted in the Home Wiring
    Decision shall remain in effect.

62. **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.

63. **IT IS FURTHER ORDERED**, pursuant to sections 1, 3, 4, 201-205,
    251, and 252 of the Communications Act, as amended, 47 U.S.C. §§
    151, 153, 154, 201-205, 251, 252, that the petition for declaratory
    ruling filed by Cox in WC Docket No. 01-338 **IS GRANTED** to the
    extent described by this Order.

64. **IT IS FURTHER ORDERED**, pursuant to section 1.103(a) of the
    Commission's rules, 47 C.F.R. § 1.103(a), that this Declaratory
    Ruling **SHALL BE EFFECTIVE** upon release.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

> Secretary

APPENDIX A

List of Commenters in Docket 01-338

  -----------------------------------------------------------------------
  **[Comments Filed By:]{.underline}**   **[Abbreviation]{.underline}**
  -------------------------------------- --------------------------------
  AT&T Corp.                             AT&T

  BellSouth Corporation                  BellSouth

  Real Access Alliance                   RAA

  SBC Communications Inc.                SBC

  Sigecom, LLC                           Sigecom

  The World Company, d/b/a/ Sunflower    Sunflower
  Broadband                              

  Qwest Communications International     Qwest
  Inc.                                   
  -----------------------------------------------------------------------

**List of Replies**

  -----------------------------------------------------------------------
  **[Replies Filed By:]{.underline}**    **[Abbreviation]{.underline}**
  -------------------------------------- --------------------------------
  BellSouth Corporation                  BellSouth

  Cox Oklahoma Telcom, L.L.C.            Cox

  New Jersey Division of Ratepayer       NJ Ratepayer
  Advocate                               

  SBC Communications Inc.                SBC

  Verizon Communications Inc.            Verizon
  -----------------------------------------------------------------------

**APPENDIX B**

List of Commenters in CS Docket No. 95-184 and MM Docket No. 92-260

  -----------------------------------------------------------------------
  **[Comments Filed By:]{.underline}**   **[Abbreviation]{.underline}**
  -------------------------------------- --------------------------------
  Independent Multi-Family               IMCC
  Communications Council                 

  National Cable & Telecommunications    NCTA
  Association                            

  Real Access Alliance and the Community RAA & CAI
  Association Institute                  

  RCN Telecom Services, Inc.             RCN

  Verizon                                Verizon
  -----------------------------------------------------------------------

**List of Replies**

  -----------------------------------------------------------------------
  **[Comments Filed By:]{.underline}**   **[Abbreviation]{.underline}**
  -------------------------------------- --------------------------------
  Independent Multi-Family               IMCC
  Communications Council                 

  National Cable & Telecommunications    NCTA
  Association                            

  Real Access Alliance and the Community RAA &CAI
  Association Institute                  

  RCN Telecom Services, Inc.             RCN
  -----------------------------------------------------------------------

**Ex Parte filings**

Verizon Declaration of Daniel VanRoekel, Senior Engineer, Outside Plant
Engineering (June 22, 2005).

**APPENDIX C**

**Final Regulatory Flexibility Analysis**

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    (the "RFA")[^206] an Initial Regulatory Analysis (IRFA) was
    incorporated in the *Further Notice of Proposed Rulemaking* in CS
    Docket No. 95-184 and MM Docket No. 92-260 (hereinafter referred to
    as the *Further* Notice).[^207] The Commission sought written public
    comment on the possible impact of the proposed policies and rules on
    small entities in the *Further Notice*, including comments on the
    IFRA. This Final Regulatory Flexibility Analysis (FRFA) in this
    *Report and Order* (*Report and Order*) conforms to the RFA.[^208]

A. Need for, and Objectives of, the Proposed Regulatory Approaches

2.  This *Report and Order* is issued 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.[^209] 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).[^210] 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. The *Further Notice* was issued to seek comment on
    this matter. This *Report* *and Order* finds that the record
    adequately supports our finding that home run wiring located behind
    sheet rock is physically inaccessible for purposes of determining
    the demarcation point between home wiring and home run wiring.

B. Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply

3.  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, if adopted.[^211] The RFA generally
    defines the term "small entity" as having the same meaning as the
    terms "small business," "small organization," and "small
    governmental jurisdiction."[^212] In addition, the term "small
    business" has the same meaning as the term "small business concern"
    under the Small Business Act.[^213] 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).[^214]

4.  *Cable and Other Program Distribution.* The Census Bureau defines
    this category as follows: "This industry comprises establishments
    primarily engaged as third-party distribution systems for broadcast
    programming. The establishments of this industry deliver visual,
    aural, or textual programming received from cable networks, local
    television stations, or radio networks to consumers via cable or
    direct-to-home satellite systems on a subscription or fee basis.
    These establishments do not generally originate programming
    material."[^215] The SBA has developed a small business size
    standard for Cable and Other Program Distribution, which is: all
    such firms having \$13.5 million or less in annual receipts.[^216]
    According to Census Bureau data for 2002, there were a total of
    1,191 firms in this category that operated for the entire
    year.[^217] Of this total, 1,087 firms had annual receipts of under
    \$10 million, and 43 firms had receipts of \$10 million or more but
    less than \$25 million.[^218] Thus, under this size standard, the
    majority of firms can be considered small.

5.  *Cable Companies and Systems.* The Commission has also developed its
    own small business size standards, for the purpose of cable rate
    regulation. Under the Commission's rules, a "small cable company" is
    one serving 400,000 or fewer subscribers, nationwide.[^219] Industry
    data indicate that, of 1,076 cable operators nationwide, all but
    eleven are small under this size standard.[^220] In addition, under
    the Commission's rules, a "small system" is a cable system serving
    15,000 or fewer subscribers.[^221] Industry data indicate that, of
    7,208 systems nationwide, 6,139 systems have under 10,000
    subscribers, and an additional 379 systems have 10,000-19,999
    subscribers.[^222] Thus, under this second size standard, most cable
    systems are small.

6.  *Cable System Operators*. 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."[^223] The Commission has determined that 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.[^224] Industry data indicate that, of 1,076 cable
    operators nationwide, all but ten are small under this size
    standard.[^225] We note that the Commission neither requests nor
    collects information on whether cable system operators are
    affiliated with entities whose gross annual revenues exceed \$250
    million,[^226] and therefore we are unable to estimate more
    accurately the number of cable system operators that would qualify
    as small under this size standard.

7.  *Direct Broadcast Satellite (DBS) Service.* DBS service is a
    nationally distributed subscription service that delivers video and
    audio programming via satellite to a small parabolic "dish" antenna
    at the subscriber's location. Because DBS provides subscription
    services, DBS falls within the SBA-recognized definition of Cable
    and Other Program Distribution.[^227] This definition provides that
    a small entity is one with \$13.5 million or less in annual
    receipts.[^228] Currently, only four operators hold licenses to
    provide DBS service, which requires a great investment of capital
    for operation. All four currently offer subscription services. Two
    of these four DBS operators, DIRECTV[^229] and EchoStar
    Communications Corporation (EchoStar),[^230] report annual revenues
    that are in excess of the threshold for a small business. A third
    operator, Rainbow DBS, is a subsidiary of Cablevision's Rainbow
    Network, which also reports annual revenues in excess of \$13.5
    million, and thus does not qualify as a small business.[^231] The
    fourth DBS operator, Dominion Video Satellite, Inc. (Dominion),
    offers religious (Christian) programming and does not report its
    annual receipts.[^232] The Commission does not know of any source
    which provides this information and, thus, we have no way of
    confirming whether Dominion qualifies as a small business. Because
    DBS service requires significant capital, we believe it is unlikely
    that a small entity as defined by the SBA would have the financial
    wherewithal to become a DBS licensee. Nevertheless, given the
    absence of specific data on this point, we acknowledge the
    possibility that there are entrants in this field that may not yet
    have generated \$13.5 million in annual receipts, and therefore may
    be categorized as a small business, if independently owned and
    operated.

8.  *Private Cable Operators (PCOs) also known as Satellite Master
    Antenna Television (SMATV) Systems*. PCOs, also known as SMATV
    systems or private communication operators, are video distribution
    facilities that use closed transmission paths without using any
    public right-of-way. PCOs acquire video programming and distribute
    it via terrestrial wiring in urban and suburban multiple dwelling
    units such as apartments and condominiums, and commercial multiple
    tenant units such as hotels and office buildings. The SBA definition
    of small entities for Cable and Other Program Distribution Services
    includes PCOs and, thus, small entities are defined as all such
    companies generating \$13.5 million or less in annual
    receipts.[^233] Currently, there are approximately 135 members in
    the Independent Multi-Family Communications Council (IMCC), the
    trade association that represents PCOs.[^234] Individual PCOs often
    serve approximately 3,000-4,000 subscribers, but the larger
    operations serve as many as 15,000-55,000 subscribers. In total,
    PCOs currently serve approximately 1.1 million subscribers.[^235]
    Because these operators are not rate regulated, they are not
    required to file financial data with the Commission. Furthermore, we
    are not aware of any privately published financial information
    regarding these operators. Based on the estimated number of
    operators and the estimated number of units served by the largest
    ten PCOs, we believe that a substantial number of PCO may qualify as
    small entities.

9.  *Home* Satellite *Dish (HSD) Service.* Because HSD provides
    subscription services, HSD falls within the SBA-recognized
    definition of Cable and Other Program Distribution, which includes
    all such companies generating \$13.5 million or less in revenue
    annually.[^236] HSD or the large dish segment of the satellite
    industry is the original satellite-to-home service offered to
    consumers, and involves the home reception of signals transmitted by
    satellites operating generally in the C-band frequency. Unlike DBS,
    which uses small dishes, HSD antennas are between four and eight
    feet in diameter and can receive a wide range of unscrambled (free)
    programming and scrambled programming purchased from program
    packagers that are licensed to facilitate subscribers' receipt of
    video programming. There are approximately 30 satellites operating
    in the C-band, which carry over 500 channels of programming
    combined; approximately 350 channels are available free of charge
    and 150 are scrambled and require a subscription. HSD is difficult
    to quantify in terms of annual revenue. HSD owners have access to
    program channels placed on C-band satellites by programmers for
    receipt and distribution by MVPDs. Commission data shows that,
    between June 2003 and June 2004, HSD subscribership fell from
    502,191 subscribers to 335,766 subscribers, a decline of more than
    33 percent.[^237] The Commission has no information regarding the
    annual revenue of the four C-Band distributors.

10. *Wireless Cable Systems.* Wireless cable systems use 2 GHz band
    frequencies of the Broadband Radio Service ("BRS"), formerly
    Multipoint Distribution Service ("MDS"),[^238] and the Educational
    Broadband Service ("EBS"), formerly Instructional Television Fixed
    Service ("ITFS"),[^239] to transmit video programming and provide
    broadband services to residential subscribers.[^240] These services
    were originally designed for the delivery of multichannel video
    programming, similar to that of traditional cable systems, but over
    the past several years licensees have focused their operations
    instead on providing two-way high-speed Internet access
    services.[^241] We estimate that the number of wireless cable
    subscribers is approximately 100,000, as of March 2005. Local
    Multipoint Distribution Service ("LMDS") is a fixed broadband
    point-to-multipoint microwave service that provides for two-way
    video telecommunications.[^242] As described below, the SBA small
    business size standard for the broad census category of Cable and
    Other Program Distribution, which consists of such entities
    generating \$13.5 million or less in annual receipts, appears
    applicable to MDS, ITFS and LMDS.[^243] Other standards also apply,
    as described.

11. The Commission has defined small MDS (now BRS) and LMDS entities in
    the context of Commission license auctions. In the 1996 MDS
    auction,[^244] the Commission defined a small business as an entity
    that had annual average gross revenues of less than \$40 million in
    the previous three calendar years.[^245] This definition of a small
    entity in the context of MDS auctions has been approved by the
    SBA.[^246] In the MDS auction, 67 bidders won 493 licenses. Of the
    67 auction winners, 61 claimed status as a small business. At this
    time, the Commission estimates 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.[^247] MDS licensees and wireless cable operators that did
    not receive their licenses as a result of the MDS auction fall under
    the SBA small business size standard for Cable and Other Program
    Distribution. Information available to us indicates that there are
    approximately 850 of these licensees and operators that do not
    generate revenue in excess of \$13.5 million annually. Therefore, we
    estimate that there are approximately 850 small entity MDS (or BRS)
    providers, as defined by the SBA and the Commission's auction rules.

12. Educational institutions are included in this analysis as small
    entities; however, the Commission has not created a specific small
    business size standard for ITFS (now EBS).[^248] We estimate that
    there are currently 2,032 ITFS (or EBS) licensees, and all but 100
    of the licenses are held by educational institutions. Thus, we
    estimate that at least 1,932 ITFS licensees are small entities.

13. In the 1998 and 1999 LMDS auctions,[^249] the Commission defined a
    small business as an entity that has annual average gross revenues
    of less than \$40 million in the previous three calendar
    years.[^250] Moreover, the Commission added an additional
    classification for a "very small business," which was defined as an
    entity that had annual average gross revenues of less than \$15
    million in the previous three calendar years.[^251] These
    definitions of "small business" and "very small business" in the
    context of the LMDS auctions have been approved by the SBA.[^252] In
    the first LMDS auction, 104 bidders won 864 licenses. Of the 104
    auction winners, 93 claimed status as small or very small
    businesses. In the LMDS re-auction, 40 bidders won 161 licenses.
    Based on this information, we believe that the number of small LMDS
    licenses will include the 93 winning bidders in the first auction
    and the 40 winning bidders in the re-auction, for a total of 133
    small entity LMDS providers as defined by the SBA and the
    Commission's auction rules.

14. *Open Video Systems ("OVS").* In 1996, Congress established the open
    video system ("OVS") framework, one of four statutorily recognized
    options for the provision of video programming services by local
    exchange carriers (["]{.underline}LECs["]{.underline}).[^253] The
    OVS framework provides opportunities for the distribution of video
    programming other than through cable systems. Because OVS operators
    provide subscription services,[^254] OVS falls within the SBA small
    business size standard of Cable and Other Program Distribution
    Services, which consists of such entities having \$13.5 million or
    less in annual receipts.[^255] The Commission has certified 25 OVS
    operators, with some now providing service. Broadband service
    providers (["]{.underline}BSPs["]{.underline}) are currently the
    only significant holders of OVS certifications or local OVS
    franchises.[^256] As of June, 2005, BSPs served approximately 1.4
    million subscribers, representing 1.5 percent of all MVPD
    households.[^257] Affiliates of Residential Communications Network,
    Inc. ("RCN"), which serves about 371,000 subscribers as of June,
    2005, is currently the largest BSP and 14th largest MVPD.[^258] RCN
    received approval to operate OVS systems in New York City, Boston,
    Washington, D.C. and other areas. The Commission does not have
    financial information regarding the entities authorized to provide
    OVS, some of which may not yet be operational. We thus believe that
    at least some of the OVS operators may qualify as small entities.

15. *Incumbent Local Exchange Carriers (LECs).* Neither the Commission
    nor the SBA has developed a small business size standard
    specifically for incumbent local exchange services. The appropriate
    size standard under SBA rules is for the category Wired
    Telecommunications Carriers. Under that size standard, such a
    business is small if it has 1,500 or fewer employees.[^259]
    According to Commission data,[^260] 1,307 carriers have reported
    that they are engaged in the provision of incumbent local exchange
    services. Of these 1,307 carriers, an estimated 1,019 have 1,500 or
    fewer employees and 288 have more than 1,500 employees.
    Consequently, the Commission estimates that most providers of
    incumbent local exchange service are small businesses.

16. *Competitive Local Exchange Carriers, Competitive Access Providers
    (CAPs), "Shared-Tenant Service Providers," and "Other Local Service
    Providers*." Neither the Commission nor the SBA has developed a
    small business size standard specifically for these service
    providers. The appropriate size standard under SBA rules is for the
    category Wired Telecommunications Carriers. Under that size
    standard, such a business is small if it has 1,500 or fewer
    employees.[^261] According to Commission data,[^262] 859 carriers
    have reported that they are engaged in the provision of either
    competitive access provider services or competitive local exchange
    carrier services. Of these 859 carriers, an estimated 741 have 1,500
    or fewer employees and 118 have more than 1,500 employees. In
    addition, 16 carriers have reported that they are "Shared-Tenant
    Service Providers," and all 16 are estimated to have 1,500 or fewer
    employees. In addition, 44 carriers have reported that they are
    "Other Local Service Providers." Of the 44, an estimated 43 have
    1,500 or fewer employees and one has more than 1,500 employees.
    Consequently, the Commission estimates that most providers of
    competitive local exchange service, competitive access providers,
    "Shared-Tenant Service Providers," and "Other Local Service
    Providers" are small entities.

17. *MDU Operators*. Under the Commission's Rules, an MDU is a
    residential "multiple dwelling unit building (*e.g*., an apartment
    building, condominium building or cooperative)." 47 C.F.R. §
    76.800(a). The Census Bureau has created two broad Economic Census
    categories that appear pertinent. The first category, Lessors of
    Residential Buildings and Dwellings, is described as follows: "This
    industry comprises establishments primarily engaged in acting as
    lessors of buildings used as residences or dwellings, such as
    single-family homes, apartment buildings, and town homes. Included
    in this industry are owner-lessors and establishments renting real
    estate and then acting as lessors in subleasing it to others. The
    establishments in this industry may manage the property themselves
    or have another establishment manage it for them."[^263] The SBA has
    developed a small business size standard for Lessors of Residential
    Buildings and Dwellings, which is: all such firms having \$6.5
    million or less in annual receipts.[^264] According to Census Bureau
    data for 2002, there were 44,165 firms in this category that
    operated for the entire year.[^265] Of this total, 43,031 firms had
    annual sales of under \$5 million, and 671 firms had sales of \$5
    million or more but less than \$10 million.[^266] Thus, the majority
    of firms in this category can be considered small.

18. The second category is that of Residential Property Managers, which
    "comprises establishments primarily engaged in managing residential
    real estate for others."[^267] The SBA has developed a small
    business size standard for Residential Property Managers, which is:
    all such firms having \$2 million or less in annual receipts.[^268]
    According to Census Bureau data for 2002, there were 19,359 firms in
    this category that operated for the entire year.[^269] Of this
    total, 16,057 firms had annual sales of under \$1 million, and 2,141
    firms had sales of \$1 million or more but less than \$2.5
    million.[^270] Thus, the majority of firms in this category can be
    considered small.

C. Description of Proposed Reporting, Recordkeeping and other Compliance
Requirements

19. The retention of the word "sheet rock" to the Note to Section
    76.5(mm)(4) of the Commission's rules will not impose any additional
    reporting or recordkeeping requirements. With regard to other
    compliance requirements, we note as indicated above, that the
    *Report and Order* 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. This poses no negative
    impact on smaller entities. This decision may save competing video
    providers, including small entity providers, some costs is accessing
    wiring, as we have described *supra.*[^271]

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

20. 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.[^272]

21. We believe that this *Report and Order* will have a positive impact
    on small entities. This determination will foster opportunities for
    competing MVPDs to provide service in MDUs by providing the needed
    support for amendment of our rules addressing circumstances under
    which the existing cable home run wiring in MDUs could be made
    available to alternative video service providers. This determination
    will also be helpful to small MDUs that compete for tenants because
    they will be able to provide the potential to offer multiple MVPD
    service to building subscribers. In addition, the interior of the
    building structures will not be subject to damage because of access
    to home run wiring at the junction box. The alternative of
    determining otherwise on this issue would not be helpful to small
    entities.

E. Federal Rules Which Duplicate, Overlap, or Conflict with the
Commission's Proposals

22. None.

**STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN**

*Re: Telecommunications Services Inside Wiring Customer Premises
Equipment,* CS Docket No. 95-184, *Implementation of the Cable
Television Consumer Protection and Competition Act of 1992: Cable Home
Wiring,* MM Docket No. 92-260, *Clarification of the Commission's Rules
and Policies Regarding Unbundled Access to Incumbent Local Exchange
Carriers' Inside Wire Subloop,* WC Docket No. 01-338, Report and Order
and Declaratory Ruling

Today we take action to ensure that the pro-competitive, deregulatory
goals of the 1996 Act are realized by removing economic and operational
barriers to infrastructure investment in the communications market.
Competition is ultimately the best protector of the consumer's interest.
It is the best method of delivering the benefits of choice, innovation,
and affordability to American consumers.

Consistent with my commitment to fostering a competitive marketplace and
consumer choice, I have and will continue to encourage new entrants
trying to break into both the voice and video markets. Today we take an
important step to facilitate competition in both markets by addressing
the ability of new competitors to use the internal wiring of both
incumbent telephone and cable operators in a consistent fashion.

Specifically, we are granting Cox's petition for declaratory ruling
regarding the scope of access to incumbent telephone companies' inside
wire in apartment buildings. This decision allows a new entrant
competing to provide telephone service to gain access to inside wiring,
thereby facilitating competition between telephone providers to serve
customers who live in apartment buildings.

Similarly, the Order also finds that a new entrant competing to provide
cable service can gain access to inside cable wiring that is "physically
inaccessible." This ruling thereby facilitates competition between cable
providers to serve customers who live in apartment buildings.

The action we take today seeks to foster competition across different
platforms and is competitively and technologically neutral. Importantly,
we are seeking to support all new entrants and do not favor one
technology or industry over another. Moreover, we achieve regulatory
parity by applying a consistent regulatory framework across platforms.
This Order demonstrates the Commission's commitment to ensure that all
consumers---including those living in apartment buildings---benefit from
competition in the provision of voice and video services.

**STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

 

Re:       *Telecommunications Services Inside Wiring Customer Premises
Equipment,* CS Docket No. 95-184, *Implementation of the Cable
Television Consumer Protection and Competition Act of 1992: Cable Home
Wiring,* MM Docket No. 92-260, *Clarification of the Commission's Rules
and Policies Regarding Unbundled Access to Incumbent Local Exchange
Carriers' Inside Wire Subloop,* WC Docket No. 01-338, Report and Order
and Declaratory Ruling

 

This item brings together two sets of inside wiring rules in the
multi-tenant environment -- the rules that apply to common carriers
under Title II, and the rules that apply to cable operators under Title
VI.  But while the lineage of the rules is different, the underlying
goal is very much the same -- to bring the fruits of phone and cable
competition to consumers who live and work in multi-unit buildings.  The
clarification of our inside wiring rules on both the telephone and cable
sides address the legal and practical bottlenecks that may currently
stand in the way of fledgling competition.  I see no reason why
Americans who happen to live or work in multi-unit buildings should have
a narrower range of choices when it comes to phone, video and broadband
services than Americans who live in single-family homes. 

 

But while the underlying policies are important, I want to stress that
they are not before us today.  That is, the basic rules themselves are
not at issue.  Rather, this item deals with narrow implementation
questions.  On the phone side, the issue is the logistics of physically
transferring the wiring from one provider to another.  On the cable
side, the issue is even narrower -- whether wiring behind sheet rock is
"physically inaccessible" under the specific standard set forth in our
rules.  In each case, today's Order interprets our rules in a way that
promotes competition and more choices for phone, internet and video
customers.  I am pleased to support it.

**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

Re: *Telecommunications Services Inside Wiring Customer Premises
Equipment,* CS Docket No. 95-184, *Implementation of the Cable
Television Consumer Protection and Competition Act of 1992: Cable Home
Wiring,* MM Docket No. 92-260, *Clarification of the Commission's Rules
and Policies Regarding Unbundled Access to Incumbent Local Exchange
Carriers' Inside Wire Subloop,* WC Docket No. 01-338, Report and Order
and Declaratory Ruling

We often hear about the challenges of providing "last mile" connections
for competitive video, voice, and broadband services, but for residents
of multi-tenant buildings (referred to as MDUs) another significant
challenge is often that of the last 100 feet. I support this Order which
clarifies the Commission's rules for inside wiring used to serve MDUs
because it should reduce the barriers of those last 100 feet and promote
choice for customers of these buildings, including renters, homeowners,
and small businesses.

Consumers are starved for more choice in video, telecommunications, and
broadband services. Competition in these markets is critical as a means
to constrain prices. I've often said that this Commission should do what
it can within the scope of the law to facilitate increased competition
because it benefits American consumers, promotes deployment of broadband
networks and services, and enhances the free exchange of ideas in our
democratic society. Americans living in MDUs -- which often contain a
disproportionate number of persons with disabilities, seniors,
minorities and low income citizens -- deserve to benefit from a choice
of providers, too. Similarly, these citizens, like their counterparts in
single unit dwellings, stand to benefit greatly from the expanded
educational, career, and health opportunities that are available through
broadband. Although this Order addresses two distinct legal frameworks
-- one for inside wiring owned by incumbent telephone companies, the
other for inside wiring owned by cable system operators -- the effect of
both decisions is to advance the ability of new entrants to access
multi-tenant buildings to provide competitive voice, video, and
broadband offerings.

Even as we take these worthwhile steps, I must highlight my concern that
our consumer notice rules for the use of cable inside wiring may be in
need of an overhaul. Under our current rules, consumers or alternative
cable providers have the option to purchase cable home wiring when the
customer terminates its cable service. These rules, as written,
contemplate a scenario in which only one service -- a video service --
could be provided over any given cable wire, and only one provider would
seek to use that wire. However, technological innovations and
cross-platform competition are now allowing multiple services to be
provided over that same wire. Commenters have observed that, unless
consumers only purchase bundles of services from either their cable or
telephone company, customers may need to make decisions about which
provider is entitled to use the existing wire, and which provider must
install new inside wire. Just as many customer have been "slammed" by
misleading long distance providers, it is easy to imagine customers
being misled or confused by providers seeking to use inside wiring to
provide their services. We should make revisiting our consumer notice
rules a priority, so that customers do not find themselves charged
expensive installation fees or unnecessarily locked into bundles.

**STATEMENT OF**

**COMMISSIONER ROBERT M. McDOWELL**

*Re: Telecommunications Services Inside Wiring Customer Premises
Equipment,* CS Docket No. 95-184, *Implementation of the Cable
Television Consumer Protection and Competition Act of 1992: Cable Home
Wiring,* MM Docket No. 92-260, *Clarification of the Commission's Rules
and Policies Regarding Unbundled Access to Incumbent Local Exchange
Carriers' Inside Wire Subloop,* WC Docket No. 01-338, Report and Order
and Declaratory Ruling

To help create an environment where investment, innovation and
competition can flourish, it is imperative that government treat like
services alike, preferably with a light regulatory touch. Today's order
is a pro-competitive, deregulatory decision and is our latest effort to
achieve regulatory parity between incumbent telephone companies,
incumbent cable companies and new entrants into the voice, video and
data markets.

Today's action takes necessary steps to assure that new entrants seeking
to compete with incumbent cable and telecommunications providers in
multiple dwelling units (MDUs) and multi-unit premises have appropriate
access to inside wiring.

In this Order, we conclude that wiring installed by incumbent video
providers behind sheetrock is physically inaccessible under our rules
for determining the demarcation point between home wiring and home run
wiring. Our ruling will help spur competition among video distributors
in MDUs by making existing cable wiring available to alternative
providers at a point that is not physically difficult and costly to
reach.

Similarly, by granting the Cox Oklahoma Telcom petition for declaratory
ruling, we make certain that competitors have the right of direct access
to incumbent local exchange carriers' unbundled inside wire subloops at
the terminal block to a multi-unit premise. At the same time, all
parties bear a responsibility to make sure their actions do not harm
their competitors' facilities in multi-unit premises. Such
anti-competitive and tortuous behavior will not be tolerated.

As I have said before, as regulators we need to make sure that
competition for all services, and across all platforms does not stop,
literally at the doorstep of multi-unit buildings across the country. I
thank both the Media and Wireline Competition Bureaus for their work and
I support this Order.

#  {#section .unnumbered}

[^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]: *Telecommunications Services Inside Wiring, Customer Premises
    Equipment and Implementation of the Cable Television Consumer
    Protection and Competition Act of 1992: Cable Home Wiring*, CS
    Docket No. 95-184, MM Docket No. 92-260, First Order on
    Reconsideration and Second Report and Order, 18 FCC Rcd 1342 (2003)
    (*Reconsideration Order*). 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 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]: Cox's Petition for a Declaratory Ruling for Clarification of the
    Commission's Rules and Policies Regarding Unbundled Access to
    Incumbent Local Exchange Carrier's Inside Wire Subloop, WC Docket
    No. 01-338 (filed Oct. 27, 2004) (Petition) at 1; *see also* 47
    U.S.C. § 251; Telecommunications Act of 1996, Pub. L. No. 104-104,
    110 Stat. 56 (1996) (1996 Act). The Petition was placed on public
    notice on November 4, 2004 with comments due by December 6, 2004,
    and reply comments due by December 21, 2004. *Pleading Cycle
    Established for Comments On Cox's Petition for a Declaratory Ruling,
    for Clarification of the Commission's Rules and Policies Regarding
    Unbundled Access to Incumbent Local Exchange Carrier's Inside Wire
    Subloop*, WC Docket No. 01-338, Public Notice, 19 FCC Rcd 22040 (WCB
    2004). See Appendix A for a list of commenters filed in WC Docket
    No. 01-338.

[^4]: *See* Cable Television Consumer Protection and Competition Act of
    1992 (1992 Cable Act), Pub. L. No. 102-385, 106 Stat. 1460 (1992),
    47 U.S.C. § 521, *et seq.*; *see also* 47 U.S.C. § 544(i); 47 C.F.R.
    §§ 76.5(ll), (mm) and 76.801, 76.802; *Implementation of the Cable
    Television Consumer Protection and Competition Act of 1992, Cable
    Home Wiring,* MM Docket No. 92-260, Report and Order, 8 FCC Rcd 1435
    (1993) (*Cable Wiring Order*).

[^5]: *Telecommunications Services Inside Wiring and Customer Premises
    Equipment*, Notice of Proposed Rulemaking, 11 FCC Rcd 2747 (1996)
    (*Inside Wiring Notice*); *Implementation of the Cable Television
    Consumer Protection and Competition Act of 1992: Cable Home Wiring*,
    MM Docket No. 92-260, First Order on Reconsideration and Further
    Notice of Proposed Rulemaking, 11 FCC Rcd 4561 (1996) (*First
    Reconsideration Order and Further Notice*).

[^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]: *Telecommunications Services Inside Wiring, Customer Premises
    Equipment and Implementation of the Cable Television Consumer
    Protection and Competition Act of 1992: Cable Home Wiring,* Report
    and Order and Second Further Notice of Proposed Rulemaking, 13 FCC
    Rcd 3659 (1997) *(Report and Order and Second Further Notice).*

[^8]: *See Reconsideration Order*, 18 FCC Rcd at 1342 (2003).

[^9]: *Inside Wiring Notice*, 11 FCC Rcd at 2750.

[^10]: 47 C.F.R. § 76.5(mm)(2). The demarcation point for single unit
    installations is the same. *See* 47 C.F.R. § 76.5(mm)(1). The
    presumptive demarcation point was adopted in the *Cable Wiring
    Order*, 8 FCC Rcd 1435 (1993).

[^11]: *Id;* *see also Report and Order and Second Further Notice*, 13
    FCC Rcd at 3729.

[^12]: 47 C.F.R. § 76.5(mm)(4); *see also Report and Order and Second
    Further Notice*, 13 FCC Rcd at 3730.

[^13]: *See Appeals Court decision* at 1; Note to 47 C.F.R. §
    76.5(mm)(4) (2003).

[^14]: *Report and Order and Second Further Notice at 3730; Note to 47
    C.F.R. § 76.5(mm)(4) (2002).*

[^15]: *Id.*

[^16]: *See Appeals Court decision* at 3.

[^17]: *See* *Telecommunications Services Inside Wiring, Customer
    Premises Equipment and Implementation of the Cable Television
    Consumer Protection and Competition Act of 1992: Cable Home Wiring*,
    CS Docket No. 95-184, MM Docket No. 92-260, Further Notice of
    Proposed Rulemaking, 20 FCC Rcd 1233 (2004) (*Further Notice*); *see
    also Further Notice*, 2004 WL 2187191(FCC). A list of parties filing
    comments and reply comments in these dockets is set forth in
    Appendix B.

[^18]: Petition at 2-3. An inside wire subloop is defined as "all loop
    plant owned or controlled by the incumbent LEC at a multiunit
    customer premises between the minimum point of entry as defined in §
    68.105 of this chapter and the point of demarcation of the incumbent
    LEC's network as defined in § 68.3 of this chapter." 47 C.F.R. §
    51.319(b)(2).

[^19]: Petition at i. Although Cox uses the term MTEs, the Commission
    uses the term "multiunit premises" in the inside wire subloop rule.
    47 C.F.R. § 51.319(b)(2).

[^20]: *See* Petition at 2 (citing *Review of the Section 251 Unbundling
    Obligations of Incumbent Local Exchange Carriers, Implementation of
    the Local Competition Provisions of the Telecommunications Act of
    1996, Deployment of Wireline Services Offering Advanced
    Telecommunications Capability*, CC Docket Nos. 96-98, 98-147,
    01-338, Report and Order and Order on Remand and Further Notice of
    Proposed Rulemaking, 18 FCC Rcd 16978 (2003) (*Triennial Review
    Order*), *corrected by* *Errata*, 18 FCC Rcd 19020 (2003), *aff'd in
    part, remanded in part, vacated in part*, *United States Telecom
    Ass'n v. FCC*, 359 F.3d 554 (D.C. Cir. 2004) (*USTA II*), *cert.
    denied sub nom*. *National Ass'n Regulatory Util. Comm'rs v. United
    States Telecom Ass'n*, 125 S. Ct. 313, 316, 345 (2004). Cox also
    asserts that these rights are supported by the Wireline Competition
    Bureau's *Virginia Arbitration Order*. *Petitions of WorldCom, Inc.,
    Cox Virginia Telecom, Inc. and AT&T Communications of Virginia Inc.
    Pursuant to Section 252(e)(5) of the Communications Act for
    Preemption of the Jurisdiction of the Virginia State Corporation
    Commission Regarding Interconnection Disputes with Verizon Virginia,
    Inc., and for Expedited Arbitration*, Memorandum Opinion and Order,
    17 FCC Rcd 27039 (WCB 2002) (*Virginia Arbitration Order*)).

[^21]: Petition at 1.

[^22]: *Id*. at 17-18 (citing *Staff's Proposal to Examine the Issues
    Concerning the Cross-Connection of House and Riser Cable*, Order
    Granting Direct Access Cross-Connections to House and Riser
    Facilities, Subject to Conditions, Case No. 00-C-1931 (NY Pub. Serv.
    Comm'n rel. June 8, 2001) (*New York Order*); *AT&T Communications
    of the Pacific Northwest. Inc. v. Qwest Corporation,* Second
    Supplemental Order, Docket No. UT-003120 (Wash. Pub. Util. and
    Trans. Comm'n rel. April 5, 2001) (*Washington Order*); *Petition of
    AT&T Communications of the Southern States. Inc. and Teleport
    Communications Atlanta, Inc. for Arbitration of Certain Terms and
    Conditions of Proposed Agreement with BellSouth Telecommunications.
    Inc. Under the Telecommunications Act of 1996*, Order, Docket No.
    11853-U (Ga. Pub. Util. Comm'n rel. Mar. 6, 2001) (*Georgia Order*).

[^23]: Petition at 6-7 (citing *Report and Recommendations of the
    Arbitrator,* Docket No. PUD 200300157, Report and Recommendations of
    the Arbitrator (OCC rel. April 2, 2004) (*Arbitrator's Report*);
    *Final Order Adopting and Modifying the Arbitrator's Report,* Order
    No. 491645, OCC Docket No. PUD 200300157 (OCC rel. June 28, 2004)
    (*OCC Order*).

[^24]: Petition at 2; *see infra* para. 9 (describing SBC's proposed
    options). Cox asserts that under all three options, Cox must "rely
    on \[SBC\] technicians to establish service connections for MTE
    customers wishing to subscribe to Cox's telephone service." Petition
    at 2. Cox adds that during the time its petition has been pending
    before the Commission, the Kansas Corporation Commission "issued an
    order that parallels the Oklahoma decision in all material
    respects." *See* Letter from J.G. Harrington, *et al*., Counsel to
    Cox Communications, Inc. to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 01-338 at 2 (filed June 2, 2006).

[^25]: *Id*. at 7.

[^26]: *Id*.

[^27]: *Id*. at 12-15.

[^28]: *Id*. at 6.

[^29]: *Id*.

[^30]: *Id*.

[^31]: *Id*. at 6-7.

[^32]: *Arbitrator's Report*.

[^33]: *Id*. at 45.

[^34]: *Id*.

[^35]: Petition at 7-8. The *OCC Order* affirmed the *Arbitrator's
    Report* without detailed discussion, and with only slight
    modifications. *OCC Order* at 1-2. Accordingly, our discussion of
    the *Arbitrator's Report* also applies to the *OCC Order* adopting
    it.

[^36]: The court granted the stay on January 18, 2005. Petition at i.
    More recently, on February 23, 2007, SBC filed a motion to vacate
    the stay on the grounds that more than two years have passed and the
    Commission has not acted on Cox's petition. *Cox Oklahoma Telcom,
    L.L.C., v. Corporation Commission of the State of Oklahoma and
    Southwestern Bell Telephone, L.P., d/b/a SBC Oklahoma*, Case No.
    CIV-04-1282-M, Motion of AT&T Oklahoma to Vacate Stay (filed Feb.
    23, 2007). In its motion, SBC states that at the time of the filing
    of this case, Southwestern Bell Telephone, LP was doing business as
    "SBC Oklahoma" but now it is doing business in Oklahoma as "AT&T
    Oklahoma." On March 22, 2007, the court denied SBC's motion to
    vacate the stay, and directed Cox to file status reports every three
    months until the Commission issues its decision. *Cox Oklahoma
    Telcom, L.L.C., v. Corporation Commission of the State of Oklahoma
    and Southwestern Bell Telephone, L.P., d/b/a SBC Oklahoma*, Case No.
    CIV-04-1282-M, Order (W.D. Okla. Mar. 22, 2007).

[^37]: *See Appeals Court decision* at 3. The term "inside wiring"
    incorporates both cable home run wiring and cable home wiring. *See*
    n.2, *supra.*

[^38]: *Reconsideration Order*, 18 FCC Rcd at 1362.

[^39]: *See Appeals Court decision* at 3; *see also* 47 C.F.R §
    76.5(mm)(4)(i).

[^40]: *See Appeals Court decision* at 3.

[^41]: 47 C.F.R. § 76.5(mm)(4)(ii).

[^42]: *See Appeals Court decision* at 3, citing *Reconsideration
    Order*, 18 FCC Rcd at 1362.

[^43]: *Further Notice*, 20 FCC Rcd at 1235. In the *Further Notice*,
    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
    *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 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. *See Reconsideration
    Order*, 18 FCC Rcd at 1362. Our analysis on this issue was based, in
    part, on the *RCN Request for Letter Ruling*. *See Notice*, 20 FCC
    Rcd at n.21.

[^44]: *Further Notice*, 20 FCC Rcd at 1235.

[^45]: *Id.*

[^46]: *Id.*

[^47]: *See* IMCC Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 4-5; RAA & CAI Comments, CS Docket No. 95-184 and MM
    Docket No. 92-260 at 5; RCN Comments, CS Docket No. 95-184 and MM
    Docket No. 92-260 at 3; Verizon Comments, CS Docket No. 95-184 and
    MM Docket No. 92-260 at 2.

[^48]: *See* IMCC Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 2; RAA & CAI Comments, CS Docket No. 95-184 and MM Docket
    No. 92-260 at 2.

[^49]: *Id.*

[^50]: *See* IMCC Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 3.

[^51]: *See* IMCC Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 3; RAA & CAI Comments, CS Docket No. 95-184 and MM Docket
    No. 92-260 at 3; RCN Comments, CS Docket No. 95-184 and MM Docket
    No. 92-260 at 2; Verizon Comments, CS Docket No. 95-184 and MM
    Docket No. 92-260 at 2.

[^52]: *See* NCTA Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 3.

[^53]: *Id.*

[^54]: *Id.*

[^55]: *Id.* at 4; NCTA Reply, CS Docket No. 95-184 and MM Docket No.
    92-260 at 5.

[^56]: *Reconsideration Order*, 18 FCC Rcd at 1362.

[^57]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    4; RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 3; RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    3.

[^58]: *See* RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at [3 and Exhibit D (Declaration of Greg O'Berry, President
    of AMLI Management Company, a subsidiary]{.underline} of AMLI
    Residential Properties Trust, at para. 3); *see* *also* IMCC Reply
    Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 2.

[^59]: *Id*.

[^60]: *Id.*

[^61]: *See* RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 3 and Attachment A (Affidavit of John Holbert, ISP Construction
    Manager for RCN-BecoCom, LLC at para. 5).

[^62]: *Id*.

[^63]: *Id.*

[^64]: *Id*.

[^65]: *Id.*

[^66]: NCTA Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 5
    and Attachment A (Declaration of David Jordon, Construction
    Coordinator, Bright House Networks at para. 2).

[^67]: *Id.* and Attachment A (Declaration of Joseph Danno, Vice
    President of Midtown Express, Inc. at para. 4).

[^68]: *Id.* at 6 and Attachment A (Declaration of John Kuhn, President
    and CEO for Prince Telecom, Inc. and William J. Kelly, Executive
    Vice President for General Fiber Communications at paras. 3-5).

[^69]: 47 C.F.R. § 76.5(mm)(4)(i).

[^70]: *Further Notice*, 20 FCC Rcd at 1235.

[^71]: 47 C.F.R. § 76.5(mm)(4)(i).

[^72]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    6; RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 5; RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    3; Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 2.

[^73]: RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 4.

[^74]: *Id.* and Attachment A (Affidavit of John Holbert, ISP
    Construction Manager for RCN-BecoCom, LLC at para. 8). *See also*
    IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 6
    (explaining that in order to connect to home run wiring at the
    demarcation point, a 6" to 18" square or rectangle must be cut into
    the wall or ceiling); *Ex Parte* Verizon filing at 4 (Declaration of
    Daniel VanRoekel, Senior Engineer, Outside Plant Engineering dated
    June 22, 2005) (stating that an installer would need to cut
    approximately a 9" x 9" hole in the ceiling or wall because a
    smaller hole would not be large enough to permit the installer to
    perform the work required to attach the new home run wire to the
    home wiring).

[^75]: RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 4
    and Attachment A (Holbert Affidavit at para. 8).

[^76]: *Id.*

[^77]: *Id.* and Attachment A (Holbert Affidavit at para. 9).

[^78]: *Id.*

[^79]: *Id.* Moreover, RCN argues that repeated access to the sheet rock
    may eventually lead to the disintegration of the structural element
    and may require that a whole wall or ceiling be replaced. *Id.*

[^80]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    6.

[^81]: *See* *Id.*; RAA & CAI Comments, CS Docket No. 95-184 and MM
    Docket No. 92-260 at 6 and Attachment F (Declaration of Michael T.
    Tremmel, Manager of External Infrastructure of Forest City
    Residential Management, Inc., at para. 4) (noting that restoring the
    smoothness and texture of a wall and matching paint and wallpaper
    are difficult tasks).

[^82]: RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 6.

[^83]: *Id.* and Attachment D (Declaration of Greg O'Berry, President of
    AMLI Management Company, at para. 4).

[^84]: *Id.* and Attachment B (Declaration of Lyn Lansdale at para. 5).

[^85]: RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 5.

[^86]: *Id.* at 4. RAA & CAI explain that any gaps or holes in a
    firewall can allow heat and flame to penetrate a firewall and any
    penetrations must be repaired carefully to restore the fire rating
    of the breached element of the structure. *Id.* and Attachment B
    (Declaration of Lyn Lansdale, Vice President of AvalonBay
    Communities, Inc. at para. 3) and Attachment E (Declaration of Henry
    Pye, Director of Resident Services and Technology for JPI Partners,
    LLC para. 5). *See also* http://www.nhci.com/sheetrock.html. The
    information on this web site in supplied by the National Home
    Centers, Inc., a commercial building materials supplier.

[^87]: *Id.* at 5. *See also* International Building Code (IBC) (2003
    ed.) § 712 (addressing penetrations in firewalls). RAA & CAI note
    that 44 states and the District of Columbia have adopted the IBC.
    *See* http://www.iccsafe.org/government/adoption.html. RAA&CAI
    Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at n.5.

[^88]: RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 5-6.

[^89]: Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 6. Verizon argues that if cable installers cut into sheet rock
    walls and ceilings, additional precautions must be taken and
    additional expenses incurred to ensure that the sheet rock is
    properly repaired in accordance with building code standards. *See
    id.* and attached Declaration of P. Kelley Dunne, Executive Director
    for Network Operations for Verizon Avenue, at para. 9.

[^90]: *See* RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 9 (noting that NEC defines "accessible," for purposes of
    wiring methods, as "\[c\]apable of being removed or exposed without
    damaging the building structure or finish or not permanently closed
    in by the structure or finish of the building," and that such wiring
    is permanently closed in by the structure or the finish); *see also*
    NEC Art. 100 (2005 ed.). The NEC is promulgated by the National Fire
    Protection Association.

[^91]: *Id.*

[^92]: NCTA Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    3.

[^93]: *Id.* and Attachment B (Declaration of Al Costanzi, Time Warner
    Cable Vice President/Northeast Ohio at para. 6, filed with
    Opposition of Time Warner Cable on Oct. 22, 1998).

[^94]: *Id.*

[^95]: *Id.* at 4 and Attachment B (Affidavit of John Donahue, Vice
    President of Engineering for Comcast Cable Communications, Inc. at
    para. 4, filed with Comments of Comcast Cable Communications, Inc.
    filed on Oct. 22, 1998).

[^96]: NCTA Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    4.

[^97]: *Id.* and Attachment A (Declaration of John Chamberlain,
    President of JC Communications, at para. 4); *see also* Declaration
    of David Jordan, Construction Coordinator for Bright House Networks
    at para. 2 and Declaration of Joseph Danno, Vice President of
    Midtown Express, Inc. at paras. 4-7.

[^98]: *Id.* at 6 and Attachment A (Affidavit of John Kuhn, President
    and CEO for Prince Telecom, Inc. at para. 6 and Affidavit of William
    J. Kelly, Executive Vice President for General Fiber Communications
    at para. 6).

[^99]: *See Id.* at 6 and Declaration of Joseph Dano, Vice President of
    Midtown Express, Inc. at para. 9.

[^100]: *Further Notice*, 20 FCC Rcd at 1235.

[^101]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    5; RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 2, 6; RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 6-7; Verizon Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 2-3.

[^102]: *See* Letter to Deborah A. Lathen, Chief, Cable Services Bureau,
    from William L. Fishman, Swidler, Berlin, Shereff & Friedman, LLP,
    Inside Wiring -- Request for Letter Ruling (September 23, 1998).
    *See also supra* para. 31.

[^103]: *Id.* and RCN Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 6 and Attachment A (Affidavit of John Holbert,
    Construction Manager for RCN-BecoCom, LLC at para. 9). RCN gives an
    example of being foreclosed from serving 209 units in a building in
    Boston because the owner of the apartment building refused to allow
    RCN to cut through walls and ceilings in order to access the
    demarcation point twelve inches outside each unit. RCN Comments, CS
    Docket No. 95-184 and MM Docket No. 92-260 at 6 and Attachment A
    (Holbert Affidavit at para. 4).

[^104]: *Id.* at 6.

[^105]: *Id.* at 6-7. We disagree with Time Warner Cable that our ruling
    today effectively concludes that the demarcation point is located at
    the incumbent's junction box. Specifically, Time Warner Cable
    expresses concern that allowing competitive access to the junction
    box will cause security and signal leakage issues. *See* Letter from
    Arthur Harding, Counsel for Time Warner Cable, to Marlene H. Dortch,
    Secretary, FCC, CS Docket No. 95-184, MM Docket 92-260 at 2-3 (filed
    May 23, 2007). We note that this argument was made and answered in
    the *Report and Order* *and* *Second Further Notice*, where the
    Commission stated that "\[t\]he procedures we are adopting, however,
    do not grant alternative providers, subscribers, or MDU owners
    access to the incumbent provider\'s riser cable or lockbox and
    therefore do not pose the safety concerns about which Congress was
    concerned." *Report and Order* *and* *Second Further Notice*, 13 FCC
    Rcd at 3707. We note that exactly where the wiring will become
    accessible (because it is no longer behind brick, cinderblock, or
    sheetrock) will vary building by building. As the Commission noted
    in the *Report and Order* *and* *Second Further Notice,* "\[t\]he
    incumbent provider must disconnect the home run wiring from its
    lockbox and leave it accessible for the new provider within 24 hours
    of actual service termination." *Id.* at 3688.

[^106]: Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 2.

[^107]: *Id.* and attached Declaration of P. Kelley Dunne, Executive
    Director for Network Operations for Verizon Avenue at para. 2.
    Verizon Avenue is an affiliate of Verizon Communications, Inc. that
    focuses on providing communications and video services to residents
    of MDUs. Dunne Declaration at para. 1.

[^108]: RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 6 and Exhibit B (Declaration of Lyn Lansdale, Vice
    President of AvalonBay Communities, Inc. at para. 4); *see also*
    Exhibit E (Declaration of Henry Pye, Director of Resident Services
    and technology for JPI Partners, LLC at para. 4).

[^109]: *Id.*

[^110]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    5.

[^111]: NCTA Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    6.

[^112]: *Id.* and NCTA Reply, CS Docket No. 95-184 and MM Docket No.
    92-260 at 4.

[^113]: *See* 47 C.F.R. § 76.5(mm)(4).

[^114]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    5; RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 5;
    Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    4; RAA & CAI Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at
    1.

[^115]: NCTA Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    4; NCTA Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at 5.

[^116]: *Further Notice*, 20 FCC Rcd at 1236; *see also*
    *Reconsideration Order*, 18 FCC Rcd at 1362.

[^117]: *Id.* at 1236.

[^118]: *See* Note to 47 C.F.R. § 76.5 (mm)(4).

[^119]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    6.

[^120]: RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 5
    and Attachment A (Affidavit of John Holbert, Construction Manager
    for RCN-BecoCom, LLC at para. 7). RCN describes home run wiring as
    "subscriber lines." *See* RCN Comments, CS Docket No. 95-184 and MM
    Docket No. 92-260 at 1.

[^121]: *Id.*

[^122]: *Id.*

[^123]: *Id.*

[^124]: *Id.*

[^125]: *Id.*

[^126]: Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 3 and attached Declaration of P. Kelley Dunne, Executive Director
    for Network Operations for Verizon Avenue at para. 3.

[^127]: *Id.*

[^128]: *Id.* and Dunne Declaration at para. 4. As an example, Verizon
    states that in order to run cable wiring to a unit on the second
    floor of a three-story MDU, an MVPD installing the wiring might
    require access to units above, below, or beside the unit seeking
    service in order to "fish" the wire through walls and floors.
    Verizon asserts that this process could require cutting into a
    neighbor's sheet rock walls and ceilings and may become more
    difficult if the adjoining units don't correspond, thereby requiring
    additional modification to these structures in order to accommodate
    the wiring. *Id.*

[^129]: Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 7.

[^130]: *Id.* As an example, Verizon points to its tariff in
    Massachusetts which addresses "concealed wiring" by stating: "For
    the initial establishment of service, the Telephone Company installs
    concealed wiring in residential buildings during construction where
    post-construction wiring is not feasible and where, if riser cable
    plant is required, the customer or builder provides conduit or other
    *reusable means satisfactory to the Telephone Company to reach each
    floor and each suite on each floor* . . . ." New England Telephone
    and Telegraph Company, Tariff DTE MA No. 10, Exchange and Network
    Services, § 2.2.2(A) Concealed Wiring (emphasis added). *Id.* at
    n.3.

[^131]: NCTA Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at 1.

[^132]: *Id.* at 2.

[^133]: *Id.*

[^134]: *Id.*

[^135]: *Id.* at 4.

[^136]: *Id.*

[^137]: We disagree with NCTA that commenters are confusing accessing
    existing home run wiring with installing their own. Each of the
    commenters cited above refers to the difficulty of accessing
    existing wiring and states, in addition, that the installation of
    new wiring itself is a difficult and damaging process. Regardless,
    our analysis here is based on the comments only to the extent that
    they discuss the difficulty of accessing existing wiring.

[^138]: *See* note to 47 C.F.R. § 76.5(mm)(4).

[^139]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    7 and Attached Letter from Bryan J. Rader, President/CEO,
    MediaWorks, to Bill Burhop, IMCC (October 27, 2004).

[^140]: *Id.*

[^141]: IMCC Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    7 and Attached Letter from Richard K. Baxter, Consolidated
    Smartsystems to Bill Burhop, IMCC (November 15, 2004).

[^142]: *Id.*

[^143]: RCN Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at 7
    and Attachment A (Affidavit of John Holbert, ISP Construction
    Manager for RCN-BecoCom, LLC at para. 13). In referring to an MDU
    that contained 209 units, RCN asserts that, at a minimum, it would
    cost \$60,000.00 to accomplish the job. *Id.*

[^144]: Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 4. In referring to replacing wiring embedded in sheet rock,
    Verizon contends that the costs are high because all of the cutting
    and repairing of sheet rock must be done to the satisfaction of MDU
    owners and managers. *Id.* and Attached Declaration of P. Kelley
    Dune, Executive Director for Network Operations for Verizon Avenue
    at para. 6.

[^145]: *Ex Parte* Verizon filing at 5 (June 22, 2005).

[^146]: *Id.*

[^147]: *Id.* Verizon notes that this cost would be in addition to the
    roughly \$50.00 required to locate the wiring and cut the initial
    hole in the wall for access. *Id.*

[^148]: *Id.*

[^149]: Verizon Comments, CS Docket No. 95-184 and MM Docket No. 92-260
    at 4 and Attached Declaration of P. Kelley Dunne at para. 6.

[^150]: *Id.*

[^151]: RAA & CAI Comments, CS Docket No. 95-184 and MM Docket No.
    92-260 at 8.

[^152]: *Id.* at 8-9.

[^153]: NCTA Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    3 and Attachment B (Declaration of Al Costanzi, Time Warner Cable
    Vice-President, Engineering/Northeast Ohio at para. 6 filed with
    Opposition of Time Warner Cable -- Oct. 22, 1998).

[^154]: *Id.* at 3-4 and Attachment B (Declaration of John Donahue, Vice
    President of Engineering for Comcast Cable Communications, Inc. at
    para. 4 filed with Comments of Comcast Communications, Inc. -- Oct.
    22, 1998). NCTA also submits two other previously submitted
    declarations in support. These declarations attest to the fact that
    drop pre-wiring at the time of new building construction and the
    *installation* of coaxial cable in pre-existing facilities, using
    such methods as *wall fishing*, do not disrupt the structural
    integrity or aesthetics of the building; however, they do not
    discuss the costs involved. *Id.* at 4 and Attachment B
    (Declarations of Christopher P. Patterson, Vice President of
    Suburban Cable and Jack Rockwell, System Engineer, Adelphia
    Communications at paras. 2-3).

[^155]: *Id.* at 4 and Attachment A (Declaration of John Chamberlain,
    President of JC Communications at para. 4).

[^156]: *Id.* at 5 and Attachment A (Declaration of Joseph Danno, Vice
    President of Midtown Express, Inc. at para. 6).

[^157]: *Id.* at 6 and Attachment A (Affidavits of John Kuhn, President
    and CEO for Prince Telecom, Inc. and William J. Kelly, Executive
    Vice President for General Fiber Communications at para. 6).

[^158]: IMCC Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at 3.

[^159]: RCN Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at 2.

[^160]: *Id.*

[^161]: NCTA Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at 5
    and Attached Declaration of Joseph Danno, Vice President of Midtown
    Express, Inc. at para. 4.

[^162]: *Id.*

[^163]: NCTA Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at 7
    and Danno Declaration at para. 10.

[^164]: *Id.* and Danno Declaration at para. 11.

[^165]: *Id* and Danno Declaration at para. 8*.*

[^166]: *Id.* at 8.

[^167]: *Id.* and Danno Declaration at para. 7.

[^168]: *Id.*

[^169]: *Id.*

[^170]: *Id.* and Danno Declaration at para. 8.

[^171]: *Id.* at 9.

[^172]: *Id.*

[^173]: *See supra* paras. 39-40, and 42.

[^174]: *Id.* at 5-6.

[^175]: *Id.* at 6.

[^176]: *Id.*

[^177]: *Id.*

[^178]: NCTA Comments, CS Docket No. 95-184 and MM Docket No. 92-260 at
    6 and NCTA Reply, CS Docket No. 95-184 and MM Docket No. 92-260 at
    9.

[^179]: We reject Verizon's request that a grant of the Petition could
    only be accomplished through a Commission rulemaking. Letter from
    Dee May, Vice President -- Federal Regulatory, Verizon, to Marlene
    H. Dortch, Secretary, FCC, WC Docket No. 01-338 at 6 (filed May. 17,
    2007) (Verizon May 17 WC Docket No. 01-338 *Ex Parte*). We are not
    adopting new rules, but interpreting the Commission's existing rules
    and precedent.

[^180]: In the underlying Oklahoma proceeding, "direct access" was
    defined as follows: "Direct access means that Cox technicians enter
    SBC-OK terminals at MTEs, identify UNE Subloops that Cox seeks to
    use, disconnect those UNE Subloops from the SBC-OK network and
    connect them to the Cox network by cross-connect procedure."
    *Arbitrator's Report* at 45.

[^181]: In other contexts, the Commission has expressly barred
    intermediate arrangements or devices where it has required "direct
    access." *See,* *e.g.,* 47 C.F.R. § 51.323(k)(2) ("Incumbent LECs
    must permit collocating carriers to have direct access to their
    equipment. An incumbent LEC may not require competitors to use an
    intermediate interconnection arrangement in lieu of direct
    connection to the incumbent's network if technically feasible.");
    *Amendment of Part 90 of the Commission's Rules Concerning the
    Interconnection of Private Land Mobile Paging Systems with the
    Public Switched Telephone Network in the Radio Spectrum Below 900
    MHz, Report and Order*, Report and Order, PR Docket No. 86-335,
    2 FCC Rcd 2379 (1987) (indicating that removing the need for an
    intermediate person or device is equivalent to permitting direct
    access).

[^182]: 47 C.F.R. § 51.319(b)(2)(i) (emphasis added).

[^183]: *Triennial Review Order*, 18 FCC Rcd at 17191, para. 350
    (emphasis in original). Although both Cox and SBC cite to the
    *Virginia Arbitration Order* to support their respective positions
    on direct access, that decision is a Bureau-level order resolving an
    interconnection arbitration, and deals with a fundamentally
    different architecture where the requesting carriers were seeking
    access to inside wiring at the NID. *See*, *e.g.*, Petition at 11;
    SBC Opposition, WC Docket No. 01-338 at 17. However, we recognize in
    that order, the Bureau did interpret Commission precedent as
    establishing that competitors should have direct access to all wire
    on the customer side of the NID. *See* *Virginia Arbitration Order,*
    17 FCC Rcd at 27243, para. 421.

[^184]: Thus, we reject the arguments of commenters that, for example,
    "CLEC access \[to inside wire\] at an incumbent's terminal block may
    be technically feasible where CLECs have access to an intermediate
    access terminal at that terminal block, thus permitting 'direct
    access' at that point while adequately protecting network
    facilities." Verizon Reply, WC Docket No. 01-338 at 3 (citing
    BellSouth Comments at 7-15).

[^185]: Section 51.319(b)(2) defines subloops for access to multiunit
    premises wiring as "any portion of the loop that it is technically
    feasible to access at a terminal in the incumbent LEC's outside
    plant at or near a multiunit premises." 47 C.F.R. § 51.319(b)(2).
    The rule then defines inside wire to be "all loop plant owned or
    controlled by the incumbent LEC at a multiunit customer premises
    between the minimum point of entry as defined in § 68.105 of this
    chapter and the point of demarcation of the incumbent LEC's network
    as defined in § 68.3 of this chapter." 47 C.F.R. § 51.319(b)(2)*.*

[^186]: A NID is defined "as any means of interconnection of customer
    premises wiring to the incumbent LEC's distribution plant, such as a
    cross-connect device used for that purpose." 47 C.F.R. § 51.319(c).
    Apart from a competitor's obligation to provide the NID
    functionality as part of an unbundled loop or subloop, an incumbent
    LEC must also provide nondiscriminatory access to the NID on an
    unbundled basis. 47 C.F.R. § 51.319(c).

[^187]: 47 C.F.R. § 51.319(b)(2)(i).

[^188]: *See* Petition at 8 (describing the "terminal block" at issue).

[^189]: *Id.* at 4.

[^190]: Qwest Comments, WC Docket No. 01-338 at 6.

[^191]: *E.g.*, *Triennial Review Order*, 18 FCC Rcd at 17190, para. 348
    ("For all requesting carriers, especially carriers constructing
    facilities-based networks, the ability to access subloops at, or
    near, the customer's premises in order to reach the infrastructure
    in those premises where they otherwise would not be able to take
    their loop the full way to the customer, is critical.").

[^192]: *Id.* at 17199, para. 358. This decision makes clear that no
    collocation requirement exists for subloops used to access the
    infrastructure in multiunit premises. Incumbent LECs are required to
    provide subloops for access to multiunit premises without
    collocation. *Id.* at 17192, para. 350.

[^193]: *Id.* at 17199, para. 358.

[^194]: *Id.* at 17193, para. 351.

[^195]: *Id.* at 17184-84, para. 343 n.1013 (emphasis added). In light
    of the Commission's explicit identification of the rights of the
    technician of a competitor to perform the cross-connect, we are not
    persuaded by the assertion that the Commission meant to limit its
    intent to indicate technical details rather than substantive
    obligations. *See*, *e.g.*, SBC Opposition, WC Docket No. 01-338 at
    14 (claiming that it is more reasonable to interpret this sentence
    "as merely describing the characteristics of accessible terminals,
    rather than establishing a national right on the part of competitive
    LECs to unfettered access to such terminals.").

[^196]: Under Oklahoma law, NIDs at multiunit premises are "always
    defined to be inside, at the first jack within the individual tenant
    customer premises." SBC Opposition, WC Docket No. 01-338 at 18. We
    agree with SBC that access to terminal blocks for the purposes of
    gaining unbundled access to incumbent LEC subloops is distinct from
    the issue of direct access to NIDs as separate UNEs. *Id.* at 16.
    The Commission clearly indicated in the *Triennial Review Order*
    that competitors have the right to direct access to the NID.
    *Triennial Review Order*, 18 FCC Rcd at 17199, para. 358. We
    therefore do not reach Cox's request that the Commission also
    clarify state law classifications regarding the locations of the
    points of demarcation and NIDs. *See* Petition at 12-15.

[^197]: *Triennial Review Order*, 18 FCC Rcd at 17199, para. 358 ("a
    competitive LEC seeking to make contact with the incumbent LEC's NID
    . . . so that the competitive LEC can reconnect such customer wiring
    to its own NID is not accessing the incumbent LEC's NID as a UNE").

[^198]: *See, e.g.,* SBC Opposition, WC Docket No. 01-338 at 12
    (contending that "Cox's technicians caused pervasive damage to
    SBC-Oklahoma's network, including damage to 7,100 of SBC-Oklahoma's
    terminals, caused more than 3,000 recorded instances of trouble on
    SBC Oklahoma's network and over 9,000 hours of service outages to
    SBC Oklahoma's customers"); Verizon May 17 WC Docket No. 01-338 *Ex
    Parte* Letter at 3 (stating that the OCC resolved the dispute
    between SBC and Cox in a section 252 arbitration based on extensive
    record evidence.)

[^199]: 47 C.F.R. § 51.319(b)(3)(i).

[^200]: 47 C.F.R. § 51.319(b)(3)(ii). *See* Letter from Thomas W.
    Snyder, Corporate Counsel -- Qwest, to Marlene H. Dortch, Secretary,
    FCC, WC Docket No. 01-338 (filed May 29, 2007) (Qwest May 29 WC
    Docket No. 01-338 *Ex Parte* Letter); Letter from Jay Bennett,
    Executive Director -- Federal Regulatory, AT&T Services Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 01-338 (filed May
    25, 2007) (SBC May 25 WC Docket No. 01-338 *Ex Parte*). Thus,
    contrary to Verizon's concern, we are not overriding the rules
    governing state determinations regarding technically feasible access
    to subloops, but are ensuring that the states rely upon these rules
    and our precedent regarding technical feasibility. Verizon May 17 WC
    Docket No. 01-338 *Ex Parte* at 4.

[^201]: 47 C.F.R. § 51.319(b)(3)(i). The record indicates a controversy
    regarding the responsibility for prior damage to SBC's terminals,
    and the declaration we make here has no bearing on the resolution of
    that dispute, or on any incumbent LEC's rights to seek damages
    against any party for past or ongoing damage to its network and for
    compensation for the work it performs. *Arbitrator's Order* at 45
    (finding that direct access "may seriously jeopardize \[SBC's\]
    ability to maintain network integrity, security and control, as well
    as accountability for damage and substandard engineering an
    operational practices); SBC Opposition, WC Docket No. 01-338 at 11;
    SBC Reply, WC Docket No. 01-338 at 4.

[^202]: For example, Qwest indicates that "it is not necessary for an
    ILEC to perform all of the connections and rerouting of inside wire
    subloop themselves, and that Qwest has no objection to CLECs using
    their own personnel." Qwest Comments, WC Docket No. 01-338 at 11.
    Qwest adds that state regulators in all fourteen of the states in
    Qwest's incumbent LEC territory require notification when a
    requesting carrier accesses the incumbent LEC's inside wire subloop.
    *Id.* at 10; *see also* Verizon May 17 WC Docket No. 01-338 *Ex
    Parte* Letter at 7 (stating the New York Public Service Commission
    requires, for example, that a requesting carrier seeking direct
    connection to a terminal block in multiunit premises must first
    identify itself to the owning carrier and indicate, in writing that
    it intends to access directly the owning carrier's subloop
    facilities); SBC May 25 WC Docket No. 01-338 *Ex Parte* at 2
    (stating that such safeguards also could include requirements that a
    requesting carrier is responsible for ensuring that its technicians
    complete training in the engineering standards and practices used by
    the owning carrier.)

[^203]: *Triennial Review Order*, 18 FCC Rcd at 17198, para. 358. Just
    as we do not bar states from adopting legitimate network security
    safeguards, we also reject requests that we set forth safeguards
    that states should or must adopt. *See* SBC May 25 WC Docket No.
    01-338 *Ex Parte* at 2; Letter from Thomas W. Snyder, Corporate
    Counsel -- Qwest, to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 01-338 at 4 (filed May 24, 2007); Qwest May 29 WC Docket No.
    01-338 *Ex Parte* at 1.

[^204]: *See* 5 U.S.C. § 603.

[^205]: *Further Notice,* 20 FCC Rcd at 1239, App.

[^206]: 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, 110 Stat. 857 (1996).

[^207]: *Telecommunications Services Inside Wiring, Customer Premises
    Equipment and Implementation of the Cable Television Consumer
    Protection and Competition Act of 1992: Cable Home Wiring,* Further
    Notice of Proposed Rulemaking*,* 20 FCC Rcd 1233, 1239, Appendix
    (2004)

[^208]: *See* 5 U.S.C. § 604.

[^209]: *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).

[^210]: *Telecommunications Services Inside Wiring, Customer Premises
    Equipment and Implementation of the Cable Television Consumer
    Protection and Competition Act of 1992: Cable Home Wiring*, 18 FCC
    Rcd 1342 (2003).

[^211]: 5 U.S.C. § 603(b)(3).

[^212]: 5 U.S.C. § 601(6).

[^213]: 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."

[^214]: 15 U.S.C. § 632.

[^215]: U.S. Census Bureau, 2002 NAICS Definitions, "517510 Cable and
    Other Program Distribution";
    http://www.census.gov/epcd/naics02/def/NDEF517.HTM.

[^216]: 13 C.F.R. § 121.201, NAICS code 517510.

[^217]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, Table 4, Receipts Size of Firms for the United States:
    2002, NAICS code 517510 (issued November 2005).

[^218]: *Id*. An additional 61 firms had annual receipts of \$25 million
    or more.

[^219]: 47 C.F.R. § 76.901(e). The Commission determined that this size
    standard equates approximately to a size standard of \$100 million
    or less in annual revenues. *Implementation of Sections of the 1992
    Cable Act: Rate Regulation,* Sixth Report and Order and Eleventh
    Order on Reconsideration, 10 FCC Rcd 7393, 7408 (1995).

[^220]: These data are derived from: R.R. Bowker, *Broadcasting & Cable
    Yearbook 2006*, "Top 25 Cable/Satellite Operators," pages A-8 & C-2
    (data current as of June 30, 2005); Warren Communications News,
    *Television & Cable Factbook 2006*, "Ownership of Cable Systems in
    the United States," pages D-1805 to D-1857.

[^221]: 47 C.F.R. § 76.901(c).

[^222]: Warren Communications News, *Television & Cable Factbook 2006*,
    "U.S. Cable Systems by Subscriber Size," page F-2 (data current as
    of Oct. 2005). The data do not include 718 systems for which
    classifying data were not available.

[^223]: 47 U.S.C. § 543(m)(2); *see* 47 C.F.R. § 76.901(f) & nn. 1-3.

[^224]: 47 C.F.R. § 76.901(f); *see* Public Notice*, FCC Announces New
    Subscriber Count for the Definition of Small Cable Operator*, DA
    01‑158 (Cable Services Bureau, Jan. 24, 2001).

[^225]: These data are derived from: R.R. Bowker, *Broadcasting & Cable
    Yearbook 2006*, "Top 25 Cable/Satellite Operators," pages A-8 & C-2
    (data current as of June 30, 2005); Warren Communications News,
    *Television & Cable Factbook 2006*, "Ownership of Cable Systems in
    the United States," pages D-1805 to D-1857.

[^226]: 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 § 76.901(f) of the Commission's rules. *See* 47 C.F.R. §
    76.909(b).

[^227]: 13 C.F.R. § 121.201, NAICS code 517510.

[^228]: *Id.*

[^229]: DirecTV is the largest DBS operator and the second largest MVPD,
    serving an estimated 13.04 million subscribers nationwide; *see*
    *2005 Cable Competition Report*, 20 FCC Rcd at 2793, para. 55.

[^230]: EchoStar, which provides service under the brand name Dish
    Network, is the second largest DBS operator and the fourth largest
    MVPD, serving an estimated 10.12 million subscribers nationwide.
    *Id*.

[^231]: Rainbow DBS, which provides service under the brand name VOOM,
    reported an estimated 25,000 subscribers. *Id*.

[^232]: Dominion, which provides service under the brand name Sky Angel,
    does not publicly disclose its subscribership numbers on an
    annualized basis. *Id*.

[^233]: 13 C.F.R. § 121.201, NAICS code 517510.

[^234]: *See 2005 Cable Competition Report*, 20 FCC Rcd at 2816, para.
    110. Previously, the Commission reported that IMCC had 250 members;
    *see* Annual Assessment of the Status of Competition in the Market
    for the Delivery of Video Programming, *Tenth Annual Report*, 19 FCC
    Rcd 1606, 1666, para. 90 (2004) (*2004 Cable Competition Report*).

[^235]: *See 2005 Cable Competition Report*, 20 FCC Rcd at 2816, para.
    110.

[^236]: 13 C.F.F. § 121.201, NAICS code 517510.

[^237]: *See 2005 Cable Competition Report*, 20 FCC Rcd at 2798, para.
    64. HSD subscribership declined more than 28 percent between June
    2002 and June 2003. *See 2004 Cable Competition Report*, 19 FCC Rcd
    at 1654-55, paras. 73-74.

[^238]: MDS, also known as Multichannel Multipoint Distribution Service
    (MMDS), is regulated by Part 21 of the Commission's rules; *see* 47
    C.F.R. Part 21, subpart K; and has been renamed the Broadband Radio
    Service (BRS); *see* Amendment of Parts 1, 21, 73, 74 and 101 of the
    Commission's Rules to Facilitate the Provision of Fixed and Mobile
    Broadband Access, Educational and Other Advanced Services in the
    2150-2162 and 2500-2690 MHz Bands; Part 1 of the Commission\'s
    Rules - Further Competitive Bidding Procedures; Amendment of Parts
    21 and 74 to Enable Multipoint Distribution Service and the
    Instructional Television Fixed Service Amendment of Parts 21 and 74
    to Engage in Fixed Two-Way Transmissions; Amendment of Parts 21 and
    74 of the Commission\'s Rules With Regard to Licensing in the
    Multipoint Distribution Service and in the Instructional Television
    Fixed Service for the Gulf of Mexico, 19 FCC Rcd 14165 (2004)
    (*MDS/ITFS Order*).

[^239]: ITFS systems are regulated by Part 74 of the Commission's rules;
    *see* 47 C.F.R. Part 74, subpart I. ITFS, an educational service,
    has been renamed the Educational Broadband Service (EBS); *see*
    *MDS/ITFS Order*, 19 FCC Rcd 14165. ITFS licensees, however, are
    permitted to lease spectrum for MDS operation.

[^240]: *See* *Annual Assessment of the Status of Competition in the
    Market for the Delivery of Video Programming, Eleventh Annual
    Report,* 20 FCC Rcd 2507, 2565, para. 131 (2006) (*2006 Cable
    Competition* Report).

[^241]: *Id*.

[^242]: *See* Local Multipoint Distribution Service, 12 FCC Rcd 12545
    (1997).

[^243]: 13 C.F.R. § 121.201, NAICS code 517510.

[^244]: MDS Auction No. 6 began on November 13, 1995, and closed on
    March 28, 1996. (67 bidders won 493 licenses.)

[^245]: 47 C.F.R. § 21.961(b)(1).

[^246]: *See ITFS* *Order*, 10 FCC Rcd at 9589.

[^247]: 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 standards for "other telecommunications" (annual
    receipts of \$13.5 million or less). *See* 13 C.F.R. § 121.201,
    NAICS code 517910.

[^248]: In addition, 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.

[^249]: The Commission has held two LMDS auctions: Auction 17 and
    Auction 23. Auction No. 17, the first LMDS auction, began on
    February 18, 1998, and closed on March 25, 1998. (104 bidders won
    864 licenses.) Auction No. 23, the LMDS re-auction, began on April
    27, 1999, and closed on May 12, 1999. (40 bidders won 161 licenses.)

[^250]: *See LMDS* *Order,* 12 FCC Rcd at 12545.

[^251]: *Id.*

[^252]: *See* Letter to Daniel Phythyon, Chief, Wireless
    Telecommunications Bureau (FCC) from A. Alvarez, Administrator, SBA
    (January 6, 1998).

[^253]: 47 U.S.C. § 571(a)(3)-(4). *See* *Annual Assessment of the
    Status of Competition in the Market for the Delivery of Video
    Programming, Eleventh Annual Report,* 20 FCC Rcd 2507, 2549, para.
    88 (2006) (*2006 Cable Competition Report*).

[^254]: *See* 47 U.S.C. § 573.

[^255]: 13 C.F.R. § 121.201, NAICS code 517510.

[^256]: *See 2006 Cable Competition Report*, 20 FCC Rcd at 2549, para.
    88. BSPs are newer firms that are building state-of-the-art,
    facilities-based networks to provide video, voice, and data services
    over a single network.

[^257]: *See id*. at 2507, para. 14.

[^258]: *See 2006 Cable Competition Report*, 20 FCC Rcd at 2549, para.
    89. WideOpenWest is the second largest BSP and 16th largest MVPD,
    with cable systems serving about 292,000 subscribers as of June,
    2005. The third largest BSP is Knology, serving approximately
    170,800 subscribers as of June, 2005. *Id*.

[^259]: 13 C.F.R. § 121.201, NAICS code 517110 (changed from 513310 in
    Oct. 2002).

[^260]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, "Trends in Telephone Service" at Table 5.3,
    page 5-5 (Feb. 2007) (Trends in Telephone Service). This source uses
    data that are current as of October 20, 2005.

[^261]: 13 C.F.R. § 121.201, NAICS code 517110.

[^262]: "Trends in Telephone Service" at Table 5.3.

[^263]: U.S. Census Bureau, 2002 NAICS Definitions, "531110 Lessors of
    Residential Buildings and Dwellings;
    <http://www.census.gov/epcd/naics02/def/ND531110.HTM#N531110>.

[^264]: 13 C.F.R. § 121.201, NAICS code 531110.

[^265]: U.S. Census Bureau, 2002 Economic Census, Subject Series: Real
    Estate and Rental and Leasing, Table 4, Revenue Size of Firms for
    the United States: 2002, NAICS code 531110 (issued November 2005).

[^266]: *Id*. An additional 463 firms had annual sales of \$10 million
    or more.

[^267]: U.S. Census Bureau, 2002 NAICS Definitions, "531311 Residential
    Property Managers";
    <http://www.census.gov/epcd/naics02/def/ND531311.HTM#N531311>.

[^268]: 13 C.F.R. § 121.201, NAICS code 531311.

[^269]: U.S. Census Bureau, 2002 Economic Census, Subject Series: Real
    Estate and Rental and Leasing, Table 4, Revenue Size of Firms for
    the United States: 2002, NAICS code 531311 (issued November 2005).

[^270]: *Id*. An additional 1,161 firms had annual sales of \$2.5
    million or more.

[^271]: *See Order,* paras. 45-46.

[^272]: *See* 5 U.S.C. § 603.