Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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

# and SECOND REPORT AND ORDER {#and-second-report-and-order .unnumbered}

**Adopted: January 21, 2003** **Released: January 29, 2003**

By the Commission: Commissioner Copps issuing a statement; Commissioner
Martin approving in part,

> dissenting in part and issuing a statement.

**TABLE OF CONTENTS**

Page

I. Introduction [2](#introduction)

II\. issues raised in the petitions for reconsideration 4

A. Legal Authority of the Commission 4

B. Application of Building-by-Building Disposition Procedures 5

C. Control of Home Run Wiring 7

D. Removal of Wiring by Incumbent Providers..................... 8

E. Arbitration/Independent Pricing
Experts................................ 10

F. MDU Owner Compensation 11

G. Notice Period for the Unit-by-Unit Disposition Procedures 12

H. Unauthorized Transfer of Customers 14

I. Mandatory Access 15

J. Signal Leakage 18

K. Sharing of Molding 19

L. MDU Demarcation Point 20

M. Open Video System Providers 22

III\. resolution of issues raised in the Second Further notice 23

A. Exclusive and Perpetual MDU
Contracts................................................. .......23

B. Application of Cable Inside Wiring Rules to all
MVPDs......................................31

C. Exemption from Signal Leakage Reporting
Requirements...........................\.........34

D. Simultaneous Use of Cable Home Run
Wiring.......................................... .......36

IV\. Procedural matters and ordering clauses 36

A. Supplemental Final Regulatory Flexibility Act Analysis
....................................36

B. Paperwork Reduction Act Analysis 36

# Introduction

1.  In the Report and Order and Second Further Notice of Proposed
    Rulemaking in this proceeding ("*Report and Order*\" and \"*Second
    Further Notice*\"), the Commission amended its cable television
    inside wiring rules for the purpose of facilitating competition in
    video distribution markets.[^1] The new rules were intended to
    foster opportunities for multichannel video programming distributors
    ("MVPDs") to provide service in multiple dwelling unit buildings
    ("MDUs")[^2] by establishing procedures regarding how and under what
    circumstances the existing cable home run wiring would be made
    available to alternative video service providers.[^3] By
    facilitating the entry of new providers into MDU communities, the
    Commission advanced Congress\'s objective in the Telecommunications
    Act of 1996 ("1996 Act") to \"provide for a pro-competitive,
    de-regulatory national policy framework designed to accelerate
    rapidly private sector deployment of advanced telecommunications and
    information technologies and services to all Americans.\"[^4]

2.  The rules adopted by the Commission in the *Report and Order*
    establish specific procedural mechanisms requiring the sale, removal
    or abandonment of home run wiring in MDUs where the incumbent
    provider no longer has an enforceable right to remain in the
    building or serve particular units and the MDU owner wishes to: (1)
    terminate service for the entire building and use the home run
    wiring for an alternative video service provider; or (2) permit more
    than one MVPD to compete for the right to use the home run wiring on
    a unit-by-unit basis.[^5] The Commission also determined in the
    *Report and Order* that it would not preempt state mandatory access
    laws nor establish a federal mandatory access requirement.[^6]

3.  In response to the *Report and Order*, the Commission received eight
    petitions for reconsideration and ten oppositions or responses to
    the petitions for reconsideration. The Commission received 17
    comments in response to the *Second Further Notice*, 16 replies to
    the comments filed and eight surreply filings.[^7] In this Order, we
    grant in part and deny in part the petitions for
    reconsideration.[^8] Specifically, we modify our rules to
    provide (1) that, in the event of sale, the home run wiring be made
    available to the MDU owner or alternative provider during the
    24-hour period prior to actual service termination by the incumbent,
    and (2) 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. We believe that these
    modifications will promote competition and reduce entry barriers
    into MDUs for MVPDs.

4.  We also resolve issues raised by the Commission in the *Second
    Further Notice.* We decline to restrict exclusive contracts for the
    provision of video services in MDUs, finding that the record does
    not demonstrate a need for government intervention with marketplace
    forces and privately negotiated contracts. Similarly, we decline to
    ban perpetual contracts for the provision of video services in MDUs
    or subject such contracts to a fresh look window. The record does
    not demonstrate that banning these contracts would significantly
    improve the competitive situation for multi-channel video services.
    In addition, we conclude that the cable home wiring and cable home
    run wiring rules should apply to all MVPDs in the same manner that
    they currently apply to cable operators. We also adopt a limited
    exemption for small non-cable MVPDs from our signal leakage
    reporting requirements (47 CFR § 76.1804), and we decline to adopt
    DirecTV's proposal to allow MDU owners to require sharing of
    incumbent-owned cable wiring.

5.  We expect these modifications of our home wiring rules to increase
    their effectiveness and simplify their use. We recognize, however,
    that there may be situations in which questions arise regarding
    proper application of the rules. We note that, pursuant to 47 C.F.R.
    § 76.7, parties may file petitions for declaratory rulings on
    questions regarding the proper application and interpretation of our
    rules and complaints alleging violation of our rules.

# issues raised in the petitions for reconsideration

## Legal Authority

6.  Several petitioners question the Commission's authority to regulate
    the disposition of cable home run wiring in the first instance.[^9]
    We carefully considered these arguments at length in the *Report and
    Order* and concluded that the Commission has authority under
    Sections 4(i) and 303(r) of the Communications Act of 1934
    ("Communications Act"), in conjunction with the pervasive regulatory
    authority committed to the Commission under Title VI, and
    particularly Section 623, to establish procedures for the
    disposition of MDU home run wiring upon termination of service.[^10]
    The petitioners present no new or compelling arguments that would
    warrant a contrary finding.

7.  We reiterate that our home run wiring rules are consistent with the
    stated goals of the 1992 Cable Competition and Consumer Protection
    Act ("1992 Cable Act"), as codified in the Communications Act. Those
    goals include: "establish\[ing\] a national policy concerning cable
    communications"; "assur\[ing\] that cable communications provide and
    are encouraged to provide the widest possible diversity of
    information sources and services to the public"; and "promot\[ing\]
    competition in cable communications."[^11] The inability of
    alternative MVPDs to access existing wiring in MDUs at the end of
    incumbent service providers' service contracts tends to undermine
    competition in the MDU marketplace and thereby deprive MDU tenants
    of choice. Accordingly, by facilitating competitive entry by
    providers offering diverse information sources and services, our
    home run wiring rules serve the statutory goals set forth in the
    1992 Cable Act.

8.  Nor are our home run wiring rules "inconsistent" with other
    provisions of the Act, as some petitioners assert.[^12] Those
    commenters note that section 624(i) expressly grants the Commission
    authority to regulate the disposition of cable home wiring but is
    silent regarding its authority to regulate cable MDU home run
    wiring.[^13] We responded to these arguments in the *Report and
    Order* and see no need to do so again here.[^14] Petitioners have
    made no new arguments or presented new evidence. As we previously
    stated, by permitting subscribers to use their existing home wiring
    to receive an alternative video programming service, the
    Commission's home run wiring rules promote Section 624(i)'s
    underlying purpose of promoting consumer choice.

## Application of Building-by-Building Disposition Procedures

9.  The *Report and Order* adopted procedures for two categories of home
    run wiring disposition: building-by-building and unit-by-unit. An
    MDU owner may invoke the building-by-building disposition procedures
    when the incumbent MVPD owns the home run wiring, but no longer has
    a legally enforceable right to remain in the building, and the MDU
    owner wants to use that wiring for service from another provider.
    Under the building-by-building procedures, the MDU owner must give
    the incumbent MVPD a minimum of 90 days written notice that the
    provider's access to the entire building will be terminated. An MDU
    owner may invoke the unit-by-unit disposition procedures when the
    incumbent MVPD owns the home run wiring, but no longer has a legally
    enforceable right to maintain its home run wiring dedicated to a
    particular unit or units, and the MDU owner wants to permit multiple
    service providers to compete to serve individual units in the
    building and to use the existing wiring. Under the unit-by-unit
    procedures, the MDU owner must provide the incumbent with at least
    60 days written notice that it wishes to permit multiple service
    providers to compete to serve individual units.

10. Time Warner suggests that the Commission's home run wiring
    disposition procedures should only apply where an MDU owner agrees
    to allow unit-by-unit competition and not where the owner seeks to
    contract with a new MVPD to serve the entire building.[^15]
    According to Time Warner, building-by-building conversions from one
    MVPD to another do not empower MDU residents to choose between
    competing providers.[^16] Time Warner asserts that by limiting the
    home run wiring rules to unit-by-unit dispositions, the Commission
    would create incentives for MDU owners to allow unit-by-unit
    competition and thereby foster expanded choice for MDU residents
    among competing providers.

11. We reject Time Warner's proposal that the home run wiring rules
    should apply only where an MDU owner allows unit-by-unit
    competition, as opposed to selecting a new MVPD to service the
    entire building.[^17] We addressed the competitive merit of
    building-by-building dispositions in the *Report and Order* and
    disagreed with the argument that the building-by-building procedural
    mechanism does not benefit consumer choice because it merely
    substitutes one MVPD for another.[^18] This argument, we concluded,
    wrongly assumes that any MVPD that serves the entire building has
    the ability to act like an entrenched monopolist, without regard to
    the quality and quantity of the video service provided.[^19] We
    observed, however, that MVPDs competing for the right to serve the
    building generally will have to offer the mix of video service
    quality, quantity and price that will best help the MDU owner
    compete in the marketplace.[^20] The petitioners have presented us
    with no new arguments that might warrant a reversal of our view in
    the *Report and Order.*

12. Our building-by-building disposition procedures enhance competition
    by facilitating competitive entry in the MDU market, including where
    the market could only support another competitor that serves the
    entire building. The record indicates that some alternative video
    service providers may not be able to serve a building at all if they
    must compete on a unit-by-unit basis with other providers.[^21] As
    one commenter observed, in many cases, the only way an alternative
    MVPD can justify undertaking the expenses associated with replacing
    the cable incumbent is to obtain exclusive access to the
    building.[^22] That commenter also suggested that the
    building-by-building procedures facilitate switching to alternative
    MVPDs because they provide MDU owners with flexibility in
    determining the best way in which to offer their residents video
    programming services and thereby make their buildings more
    attractive to prospective residents.[^23]

## Control of Home Run Wiring

13. Both the building-by-building and unit-by-unit home run wiring
    disposition procedures allow the MDU owner, rather than individual
    subscribers, the option to acquire the home run wiring of a
    departing MVPD. MAP/CFA submits that Section 624(i) expresses
    Congressional intent to give subscribers\--rather than landlords or
    condominium associations\--a right to choose among MVPDs.[^24]
    According to MAP/CFA, the Commission's inside wiring rules fail to
    recognize that "citizens have the primary First Amendment interest
    at issue here" and that "\[t\]heir right to choose among a diverse
    array of information sources is the 'paramount goal' of the public
    interest standard which governs the Commission's
    decision-making."[^25] MAP/CFA contends that by giving landlords and
    condominium associations the exclusive power to choose MVPDs for an
    MDU, the disposition procedures deprive MDU residents of the ability
    to participate equally in the new competitive video programming
    marketplace simply because they do not own free-standing homes.[^26]
    MAP/CFA argues further that the Commission's decision on this issue
    will cause an inequitable distribution of the benefits of
    competition because racial and ethnic minorities, lower income
    households, and single mothers make up a large part of the renting
    population.[^27] Even in those cases where the owner does allow an
    alternative MVPD to provide service, MAP/CFA believes that MDU
    residents will be subject to the owner's choice of providers.
    MAP/CFA also urges the Commission to consider the inside wiring
    rules in conjunction with Section 207 of the 1996 Act,[^28] which
    requires the Commission to "prohibit restrictions that impair a
    viewer's ability to receive video programming services" by means of
    antennas and DBS dishes.[^29]

14. The MAP/CFA argument is not new to this proceeding. In the *Report
    and Order,* the Commission addressed comments from at least six
    parties contending that MDU owners do not act in the best interest
    of residents and therefore should not have the authority to choose
    among service providers.[^30] The Commission concluded that many MDU
    owners are tenant-based condominium associations and cooperative
    boards that cannot be presumed to be non-representative of their
    tenants' interests.[^31] In promulgating the home run wiring rules,
    the Commission sought to enhance competition in the MDU market, and
    thereby to ensure that tenants in MDUs are offered a diverse choice
    among providers of video services. The Commission had to determine,
    from among a range of possible approaches, the method by which that
    result could be best achieved, in a way that is legal, fair to all
    interested parties, and efficient. The record contains no evidence
    that the decisions MDU owners make with regard to video providers
    are depriving their tenants of diverse sources of information. The
    Commission concluded in the *Report and Order* that the property
    owner should have the ability to control the wiring because the
    property owner is responsible for the common areas of a
    building.[^32] Property owners have safety and security
    responsibilities, maintain compliance with building and electrical
    codes, maintain the aesthetics of the building, and balance the
    concerns of the residents.[^33] Individual subscribers will not be
    disadvantaged by having the MDU owner own or control the home run
    wiring.[^34] Considerations of fairness and efficiency persuade us
    to leave this aspect of our rules intact, rather than adopting the
    petitioner's proposals.

15. We believe that market forces will, in most cases, provide
    incentives for MDU owners to recognize tenants' interests in
    selecting a provider. The building-by-building disposition
    procedures recognize that in some cases an acceptable alternative to
    the incumbent MVPD may be another MVPD to provide service to the
    entire building. Further, our decision with regard to MDU owner
    control of home run wiring is not inconsistent with the intent of
    Section 207. Section 207, as implemented by our over-the-air
    television reception devices ("OTARD") rules, enables MDU residents
    to install individual satellite or wireless antennas within their
    own leasehold. MDU owner control of home run wiring should not
    adversely impact that right.

## Removal of Wiring by Incumbent Providers

16. Under our current rules, when an incumbent MVPD does not have a
    legally enforceable right to remain on the premises of an MDU, the
    MDU owner may decide to permit alternative MVPDs to provide service,
    consider using the existing home run wiring, and/or terminate
    further right of access of the incumbent to the MDU.[^35] After the
    MDU owner provides the incumbent with the requisite notice of its
    intentions, the incumbent has the option to abandon, remove, or sell
    its home run wiring to the MDU owner or the alternative MVPD. If the
    incumbent elects to sell the wiring, the price is determined by
    negotiation, and if negotiations are unsuccessful, it may choose to
    submit the price determination to binding arbitration.[^36]

17. Several petitioners ask the Commission either to eliminate entirely
    an incumbent's option to remove its home run wiring or to qualify
    that option by requiring the incumbent first to offer to sell the
    wiring to the MDU owner or an alternative MVPD at replacement cost
    or salvage value.[^37] Petitioners indicate that an incumbent's
    removal of its home run wiring is disruptive, because of the
    demolition and restoration involved, with the result that MDU owners
    are reluctant to change MVPDs out of fear that the incumbent will
    choose to remove the wiring rather than abandon or sell it.[^38] One
    petitioner suggests that an incumbent's choice to remove the wiring
    is inherently anticompetitive, because the costs of demolition,
    removal, and restoration are significantly higher than the salvage
    value of the home run wiring.[^39] Petitioners thus urge the
    Commission to require incumbents to offer to sell their home run
    wiring at a predetermined price, such as replacement cost or salvage
    value, in order to prevent incumbents from demanding inflated prices
    and manipulating the negotiation and arbitration process.[^40] In
    opposition, some cable interests state that eliminating the right to
    remove home run wiring or qualifying it by requiring the incumbent
    first to offer to sell at replacement cost or salvage value would
    require the incumbent to transfer property involuntarily without
    just compensation and therefore result in an unlawful taking of
    property in violation of the Constitution.[^41]

18. We decline to eliminate or qualify an incumbent's right to remove
    its home run wiring. We appreciate Petitioners' concerns that, in
    many instances, incumbents may not have a *bona fide* business
    reason to elect to remove their wiring, given that the costs of
    exercising that option often significantly exceed the value of their
    property.[^42] An incumbent's actual removal of wiring, in lieu of
    abandonment or sale, would appear, in such cases, to be
    anti-competitive on its face and would appear, likewise, to be
    inconsistent with the pro-competitive policies behind the
    communications laws and implementing regulations. The record,
    however, reveals almost no concrete examples of incumbents removing
    their wiring rather than abandoning or selling it.[^43] We are not
    inclined to make such a decision to qualify or eliminate an
    incumbent's right to remove its property without a compelling record
    of the need to do so. Should such a record of abuses develop, we may
    reconsider our decision on this issue.

19. We likewise decline to require an incumbent that elects to sell its
    home run wiring to do so at replacement cost or salvage value. In
    the *Report and Order*, the Commission stated that it did not
    believe it was appropriate to establish a default price or formula
    for the sale price of home run wiring, due to widely varying
    circumstances throughout the country.[^44] The Commission stated
    that "market forces will provide adequate incentives for the parties
    to reach a reasonable price, particularly in these circumstances
    where the incumbent has no legally enforceable right to remain on
    the premises."[^45] Again, the record contains no concrete examples
    of incumbents engaging in pricing activities that the negotiation
    and arbitration process cannot accommodate. Accordingly, we find no
    reason to reconsider our prior decision, and therefore reaffirm it.

## Arbitration/ Independent Pricing Experts

20. Time Warner asks the Commission to require the MDU owner to agree to
    purchase the home run wiring at a price set through binding
    arbitration as a precondition to entering into negotiations with the
    incumbent regarding the sale price of the wiring in case those
    negotiations fail.[^46] Time Warner recommends that, upon
    notification to the MDU that the incumbent has elected to sell its
    home run wiring, the MDU owner should be required, within five days
    of the incumbent's election, to commit to purchasing the wiring at a
    price determined through negotiations or arbitration.[^47] Under
    this arrangement, Time Warner suggests, both sides would have an
    increased incentive to bargain in good faith during the 30-day
    negotiation period, because both parties would be committed to
    binding arbitration if negotiations are unsuccessful.[^48]

21. WCA supports the idea of requiring the MDU owner to purchase the
    wiring but in a different context.[^49] WCA argues that, under the
    Commission's current rules, if the MDU owner refuses to participate
    in binding arbitration, the cable operator is no longer subject to
    the Commission's procedures, and by implication, may remain on the
    property indefinitely or until the MDU owner submits to
    arbitration.[^50] WCA states that because the Commission has
    provided arbitrators no guidance on appropriate pricing of inside
    wiring, the Commission has created a significant disincentive for
    MDU owners or alternative service providers to agree to binding
    arbitration.[^51] WCA proposes that, after the MDU owner has invoked
    the home run wiring disposition procedures and the incumbent has
    elected to sell, the MDU owner should be required to purchase the
    wiring, but the purchase price should reflect the depreciated value
    of the wiring.[^52] Arbitration, if used at all, should be limited
    to deciding the depreciated value of the wiring. WCA argues that
    such a price would satisfy the just compensation requirements of the
    Fifth Amendment.[^53]

22. DIRECTV argues that under no circumstances should an MDU owner be
    required to purchase wiring that an incumbent has elected to sell;
    nor should an MDU owner that seeks to purchase wiring be forced to
    submit to arbitration to establish the purchase price.[^54] DIRECTV
    believes that an MDU owner will not invoke the inside wiring rules
    if it faces the prospect of being obligated to purchase wiring at a
    price established by a third party over which the owner has no
    control.[^55]

23. We decline to adopt the Time Warner proposal. The record provides no
    evidence that MDUs have not or would not bargain in good faith under
    the current rules. We question whether a commitment by the parties
    to engage in binding arbitration prior to the onset of negotiations
    will improve the chances for successful negotiations. Instead, such
    a requirement could act as a disincentive for MDU owners to invoke
    the inside wiring rules as asserted by DIRECTV.[^56] Accordingly, we
    will not amend our rules to require that the MDU owner commit to
    binding arbitration if negotiations are not successful. Similarly,
    we will not adopt WCA's proposal to impose upon the MDU owner an
    obligation to purchase home run wiring once an incumbent has elected
    to sell it. WCA's proposal is dependent on our establishing a
    default price, which WCA suggests should be depreciated value. We
    have already concluded not to reconsider our decision regarding a
    default price or formula for the sales price of the wiring.[^57] WCA
    provides no support for the suggestion that MDU owners have no
    incentive to enter into arbitration in the event negotiations
    between MDU owners and incumbents fail. MDU owners have neither more
    nor less "guidance" on the appropriate pricing of wiring than do the
    incumbent MVPDs. We continue to believe that market forces will
    provide adequate incentives. Finally, we reject WCA's suggestion
    that an incumbent will have a federally-created right to remain in
    an MDU if the MDU owner fails to agree to binding arbitration. If
    negotiations fail and the MDU owner refuses to enter into binding
    arbitration, the home run wiring disposition procedures no longer
    apply.[^58] Under such circumstances, the parties' rights are
    governed by their contract terms and state and local law.

## MDU Owner Compensation

24. In the *Report and Order,* the Commission declined to adopt the
    suggestion of several cable operators that the building-by-building
    home run wiring disposition procedures should not apply where the
    MDU owner receives compensation for allowing an alternative provider
    onto the premises.[^59] Two parties renew the argument that MDU
    owner decisions are improperly influenced by the level of
    consideration offered by an MVPD to the MDU owner, rather than by
    which MVPD offers the widest array of programming, most attractive
    prices, or best customer service.[^60] These petitioners contend
    that the Commission\'s home run wiring disposition rules should not
    apply in any situation where the MDU owner has received any form of
    "excess" consideration from the MVPD seeking entry, above and beyond
    the "just compensation" paid for allowing broadband distribution
    facilities to occupy the MDU property.[^61]

25. In contrast, the Building and Managers Association International
    ("BOMA"), along with several other real estate associations,
    disagree.[^62] BOMA maintains that such payments are not a material
    inducement to building owners in the vast majority of cases.[^63]
    BOMA states that in most cases, MVPDs make no such payment and that,
    even in those instances where MVPDs do make payments to MDU owners,
    the payments are relatively small, especially when compared to the
    MDU owners' rental incomes.[^64]

26. For the reasons discussed in the *Report and Order,*[^65] we reject
    the proposal that the building-by-building procedures should not
    apply to MDUs where the owner has accepted "excess" compensation. We
    note that the petitioners have not suggested definitions or even
    guidelines as to what payment amounts they consider "excessive." Nor
    have petitioners produced evidence that any such "excessive"
    payments have resulted in competitive harms. Accordingly, we are
    unable to conclude that such payments are anti-competitive and
    warrant exclusion of MDU owners who accept them from the protection
    of the home run wiring rules.

## Notice Period and Transition Period for the Unit-by-Unit Disposition Procedures

27. In the *Report and Order,* the Commission recognized that MDU owners
    may permit service providers to compete head-to-head in a building
    for the right to use the individual home run wires dedicated to each
    unit in an MDU.[^66] Our unit-by-unit disposition procedures apply
    when the incumbent service provider does not have (or will not have
    at the conclusion of the notice period) the right to maintain its
    home run wiring dedicated to a particular unit in an MDU. If the MDU
    owner wishes to permit alternative MVPDs to compete for the right to
    use the individual home run wires dedicated to each unit, the MDU
    owner must give the incumbent 60 days written notice that it intends
    to invoke the home run wiring procedures.[^67] The incumbent MVPD
    will then have, with respect to all of the incumbent's home run
    wiring in the MDU, 30 days to elect to remove, abandon, or sell the
    wiring dedicated to individual subscribers who may subsequently
    choose the alternative MVPD's service.[^68]

28. Several petitioners argue that the 60-day notice period is
    inordinately long.[^69] They suggest that the notice period will
    discourage vigorous unit-by-unit competition by allowing incumbents
    time to develop a "competitive counterattack" in response to the
    arrival of an alternative MVPD, to reprice or restructure their
    service offerings, and to lock individual subscribers into long-term
    service contracts.[^70] WCA and GTE urge the Commission to shorten
    the notice period to 15 days.[^71]

29. We are not convinced that a notice period for unit-by-unit
    transitions of less than 60 days would allow enough time to
    facilitate a smooth and timely transition when an alternative
    provider enters a building. Pursuant to the existing rules, after
    receiving notice, the incumbent must make its election within the
    following 30 days and, if the incumbent elects to sell its wiring,
    the price must be established within 30 days thereafter. The
    procedures adopted in the *Report and Order* are intended to provide
    all parties sufficient notice and certainty regarding how existing
    home run wiring will be made available to the alternative MVPD so
    that a change in service can be made efficiently. The suggestion
    that the incumbent could use part of the notice period to develop a
    "competitive counterattack" does not convince us to shorten the
    notice period. The home run wiring disposition rules were adopted
    for the purpose of facilitating competition between and among MVPDs.
    Competition is welcome. While a 60-day notice period may provide an
    opportunity for the incumbent to organize a competitive response to
    the alternative provider's service offering, we have no reason to
    believe the incumbent will necessarily have a market advantage over
    the alternative provider. The incumbent has an existing relationship
    with its subscribers, but that relationship may or may not be a
    positive one. Where subscribers are eager to obtain the services of
    an alternative provider, due in part to the failings of the
    incumbent, the existing relationship may hurt rather than help the
    incumbent. Where subscribers are more than satisfied with the
    service provided by the incumbent, that existing relationship should
    help the incumbent in its efforts to retain subscribers in the face
    of an alternative provider's competitive efforts. Beyond the fact of
    an existing relationship, an alternative provider possesses many of
    the same competitive tools available to the incumbent, such as
    pricing and designing service offerings attractively and attempting
    to induce subscribers to enter into long-term service contracts. We
    therefore decline to shorten the notice period.

30. On a related concern, Ameritech suggests that in cases where the
    incumbent has elected to sell or abandon its home run wire, our
    rules should be modified to eliminate an existing ambiguity with
    respect to when the incumbent provider will make the home run wiring
    accessible to the alternative provider.[^72] The current rule
    provides that such access will be provided to the alternative
    provider "within 24 hours of actual service termination."[^73]
    Ameritech states that it is unclear if access is required within 24
    hours before service termination or within 24 hours after service
    termination.[^74]

31. We agree with Ameritech that the requirement that an \"incumbent
    shall make the home wiring accessible to the alternative provider
    *within 24 hours* of actual service termination\" is ambiguous.[^75]
    Accordingly, we will amend the language of Section 76.804(b)(3) to
    provide that where the MDU owner or the alternate provider chooses
    to purchase the home run wiring, the incumbent must provide access
    during the 24-hour period prior to actual service termination to
    enable the new provider to avoid a break in service. We believe that
    this change makes the rule easier to understand and provides some
    assurance to MDU residents that, should they select a competing
    service provider, they will not be penalized by an extended
    interruption in service.

32. On a related issue, NCTA argues that where the incumbent has offered
    the home run wiring for sale and the MDU owner or the alternative
    provider has agreed to purchase the wiring and has agreed to a
    purchase price, the incumbent should receive the compensation for
    the home run wiring prior to the actual transfer of ownership of the
    wiring.[^76] Our rules provide that the sale of the home run wiring
    will become effective upon actual service termination or upon the
    requested termination date, whichever occurs first.[^77] It would
    seem that compensation should be paid at that time as well, or as
    otherwise agreed by the parties. NCTA offers no evidence that
    compensation is not being paid at the time of sale or as otherwise
    agreed. If the parties have agreed to the price, they should be able
    to agree to the time of payment. If the parties have not agreed to a
    price and have agreed to submit the question to binding arbitration,
    they should be able to agree to the timing of the purchase price
    payment. Accordingly, we reject NCTA's argument.

## Unauthorized Transfer of Customers

33. With regard to the unit-by-unit disposition procedures, Time Warner
    urges the Commission to amend its home run wiring rules to include
    an express prohibition against unauthorized customer transfers.[^78]
    The Commission, it argues, should not allow either the MDU owner or
    the competing MVPD to act as the agent of the MDU resident unless
    the incumbent MVPD and affected subscriber have expressly agreed to
    such an arrangement in writing.[^79] Ameritech contends that such
    rule modifications are not necessary because MVPD service does not
    present the same opportunities for "slamming," or the unauthorized
    transfer of customers, as telephone service transfers. Ameritech
    reasons that slamming is possible in the telephone business because
    a change in telephone providers is almost invisible to the end
    user.[^80] In the case of cable services, however, Ameritech
    contends that there is almost always a need for a visit to the
    customer\'s premises (primarily to change the converter box), and it
    is unlikely that an unauthorized change in cable providers would go
    unnoticed.[^81]

34. We decline to adopt Time Warner's proposals. The record does not
    contain allegations of unauthorized customer transfers. Nor is the
    Commission aware of any such complaints filed within the more than
    four years that the home run wiring disposition rules have been in
    effect. Absent such complaints, we find no basis for modifying our
    rules.

## Mandatory Access

35. Several states and the District of Columbia have enacted some form
    of "mandatory access" law.[^82] Mandatory access laws generally
    provide franchised cable operators with a legal right to install and
    maintain cable wiring in MDU buildings, even over MDU owners'
    objections. Mandatory access statutes were generally enacted to
    ensure that MDU tenants would have cable programming service and to
    prevent MDU owners from denying access based on aesthetic or other
    considerations.[^83] In states with such laws, however, the
    application of the Commission's home run wiring rules may be
    compromised because the incumbent provider may have a continuing
    "legally enforceable right to remain on the premises."[^84]
    Typically, mandatory access laws grant only the franchised cable
    operator the right of mandatory access.[^85]

36. The Commission has long recognized the anti-competitive effects of
    such discriminatory mandatory access statutes. In 1990, for example,
    the Commission stated that "discriminatory local mandatory access
    laws can operate to hinder the growth of alternative distribution
    services."[^86] More recently, in the *Report and Order*, the
    Commission acknowledged its concern about "disparate regulation of
    MVPDs that unfairly skews competition in the multichannel video
    programming marketplace."[^87] Nonetheless, the Commission declined
    to preempt state mandatory access laws, concluding that the record
    provided an insufficient basis for doing so.[^88] Accordingly, the
    Commission encouraged jurisdictions with mandatory access to
    consider and evaluate the competitive effects of their access
    statutes.[^89]

37. Several parties urge us to reconsider our decision not to preempt
    state mandatory access laws, while others (principally, cable
    operators) urge us not to do so.[^90] Many parties assert that less
    competition exists in the MDU marketplace in states that have
    mandatory access statutes, and the evidence we have on the record
    supports these assertions.[^91]

38. We continue to believe that mandatory access laws may impede
    competition in the MDU marketplace and that they tend to preclude
    alternative (non-cable) MVPDs from executing MDU contracts. This is
    due to the fact that most mandatory access laws give the franchised
    cable operator a legal right to wire and remain in an MDU.[^92] The
    predictable result is that competitive providers are less likely to
    take the financial risk of entering, or to secure the necessary
    financial backing to enter, the MDU marketplace in a mandatory
    access state.[^93]

39. Although we recognize the negative impact that mandatory access
    statutes can have, we cannot ignore the possibility that, but for
    the existence of mandatory access statutes, some MDU owners would
    refuse to allow their buildings to be wired for cable programming.
    Federal preemption of mandatory access laws could, conceivably,
    leave some MDU tenants without access to non-broadcast video
    programming altogether. States and local jurisdictions are
    well-positioned to decide whether the need for mandatory access laws
    outweighs the anti-competitive effects of such laws, as described
    above. Therefore, we urge states and municipalities that have
    mandatory access laws to carefully consider the level of effective
    competition among MVPDs in the MDU market place, and if competition
    is found to be lacking, to determine whether a repeal or reform of
    such laws might enhance such competition and thereby benefit
    consumers.

40. The Commission made no finding or determination in the *Report and
    Order* regarding which particular state statutes foreclose
    application of our home run wiring rules. Instead, the Commission
    adopted a presumption that the home run wiring disposition
    procedures will apply in each state "unless and until the incumbent
    obtains a court ruling or an injunction enjoining its
    displacement."[^94] The presumption was designed to allow the home
    run wiring rules to "apply in mandatory access states to the extent
    state law does not permit the incumbent to maintain its home run
    wiring . . . . against the will of the MDU owner."[^95] We received
    comments objecting to the presumption and to the assumption
    underlying it. Some commenters argue that the home run wiring rules
    should not apply at all in states with mandatory access statutes.
    NCTA argues that the Commission should not presume that an incumbent
    cable operator has no "legal right to remain" in an MDU located in a
    mandatory access state, and therefore it is wasteful of resources to
    require operators in right-of-access states to initiate court
    proceedings where they have a statutory right to remain on the
    premises.[^96] Yet, the presumption properly relies on the state
    courts to interpret the scope of the state statutes. As the
    Commission stated in the *Report and Order*, "we do not believe that
    this presumption interferes with the incumbent's state law rights. A
    court applying state law will continue to be the ultimate arbiter of
    whether the incumbent has a legally enforceable right to remain on
    the premises, and possesses the ability to take any necessary and
    appropriate steps to make the parties whole under the state
    law."[^97] Accordingly, we will retain the presumption.

41. Other commenters asked that the Commission reconsider the 45-day
    time period for obtaining an injunction following the initial notice
    period.[^98] In the *Report and Order* the Commission stated that it
    had no reason to believe that state courts would not respond
    expeditiously to requests by incumbents for determinations of
    whether it has a legally enforceable right to remain on the
    premises.[^99] We note that no commenters have introduced any
    evidence to the contrary. We will therefore maintain our decision to
    allow our home run wiring disposition procedures to apply in the
    absence of a state court ruling or injunction obtained within 45
    days of the initial notice.

## Signal Leakage

42. In the *Report and Order*, the Commission adopted a rule extending
    the signal leakage requirements to MVPD providers other than cable
    systems, including telephone companies and other telecommunications
    services providers that deliver video services. The Commission
    concluded that this change was necessary insofar as those broadband
    providers utilize the same aeronautical and public safety
    frequencies, at similar levels of power, as do cable systems.[^100]
    The Commission granted a five-year exemption from these
    requirements, however, for non-cable MVPDs that were "substantially
    built" as of January 1, 1998, in order to allow those MVPDs
    sufficient time to bring themselves into compliance.[^101]
    "Substantially built" was defined as having 75% of the distribution
    plant completed.[^102]

43. WCA challenges the terms of the exemption as it applies to wireless
    cable systems. Explaining that a wireless cable system delivers
    programming to subscribers via a direct microwave link between a
    transmitter and a rooftop antenna installed at the subscriber's
    home, WCA asserts that the "75%" criterion for "substantially built"
    is difficult to apply to wireless cable systems. WCA suggests that
    we adopt a rule providing that a wireless cable system is
    "substantially built," for purposes of the five-year exemption from
    our signal leakage testing and reporting requirements, when its
    headend/transmitter facilities are constructed and operational.

44. We note that the headend and transmitter of a wireless cable plant
    do not constitute distribution plant. The receiver and
    down-converter and associated cable strand, amplifiers, etc.,
    constitute distribution plant subject to signal leakage. It is the
    deployment of such equipment that is relevant for purposes of the
    exemption. Accordingly, we reject WCA's proposal that the definition
    of "substantially built" be applied to wireless systems' headend and
    transmitter facilities.

## Sharing of Molding

45. In the *Report and Order*, the Commission adopted a rule permitting
    an alternative MVPD to install its wiring within an incumbent cable
    operator's existing molding, even over the incumbent's objection,
    where the MDU owner agrees that there is adequate space in the
    molding and the MDU owner gives its affirmative consent. The
    Commission concluded that this new rule could promote head-to-head
    competition among MVPDs by overcoming the resistance of MDUs to the
    installation of redundant wiring.[^103]

46. Under our rule, the alternative provider is required to pay any and
    all installation costs, including the costs of restoring the
    property to its former condition and the costs of repairing any
    damage to the incumbent's wiring or other property.[^104] The rule
    does not apply where the incumbent has an exclusive contractual
    right to occupy the molding or where the incumbent has contracted
    for the right to maintain its molding on the MDU property without
    alteration by the MDU owner.[^105] If the MDU owner does not agree
    that there is sufficient space in the molding for the additional
    wiring, and the MDU owner is willing to permit the installation of
    larger molding, the MDU owner is permitted to remove the existing
    molding and replace it with larger molding at the cost of the
    alternative MVPD.[^106]

47. Time Warner argues that our rule effects an unconstitutional taking
    of private property "\[w\]here an incumbent provider owns the
    molding or has contracted with the MDU owner for the exclusive right
    to occupy the moldings or conduits."[^107] The Commission has
    explicitly said, however, that the rule does not apply where the
    incumbent retains an exclusive contractual right to occupy the
    molding or a right to maintain molding without alteration by the MDU
    owner.[^108] Accordingly, our rule does not interfere with the
    incumbent's property rights and does not constitute a taking, and,
    therefore, no compensation need be paid.

## MDU Demarcation Point

48. Our rules prohibit an incumbent MVPD from interfering with a
    competitor's access to existing MDU wiring at the demarcation
    point.[^109] The demarcation point for MDU installations is defined
    as "a point at (or about) twelve inches outside of where the cable
    wire enters the subscriber's dwelling unit, or, where the wire is
    physically inaccessible at such point, the closest practicable point
    thereto that does not require access to the individual subscriber's
    dwelling unit."[^110] A location is "physically inaccessible" when
    accessing the wire at that point "would require significant
    modification of, or significant damage to, preexisting structural
    elements, and would add significantly to the physical difficulty
    and/or cost of accessing the subscriber's home wiring."[^111] The
    rule provides examples of wiring that is "physically inaccessible,"
    such as, "wiring embedded in brick, metal conduit or cinder blocks
    with limited or without access openings."[^112]

49. In the *Report and Order*, the Commission considered and rejected
    various proposals to relocate the demarcation point.[^113] Location
    of the demarcation point is significant because, under our rules,
    the demarcation point is the place where competing providers may
    access existing home wiring in an MDU building.[^114] A demarcation
    point that allows relatively unimpeded access to existing wire is
    likely to foster competitive entry into the MDU marketplace.

50. The demarcation point issue was not raised in any petition seeking
    reconsideration of the *Report and Order*, but we received a Request
    for Letter Ruling from RCN-BeCoCom, L.L.C. ("RCN")[^115] raising the
    issue. Several parties filed replies to RCN's letter, and we address
    the matter herein.[^116]

51. RCN's letter describes difficulties RCN encountered when trying to
    provide service to MDU residents in the Boston, Massachusetts area.
    RCN reports that it typically installed all facilities necessary to
    provide service (except subscriber lines), including feeder or riser
    cables running vertically between floors and junction boxes located
    in the utility closets used by the incumbent cable operator. RCN
    states that, in most cases the incumbent operator's facilities were
    located behind sheet rock walls, ceilings or other structures. RCN
    asserts that from its own junction boxes, it theoretically could
    reach individual subscribers' units either by installing its own
    home run wiring and connecting to the individual units or by
    connecting with the existing wiring at the operator's junction
    boxes, but that neither of these options proved to be viable. RCN
    asserts that the overbuilding option was not feasible because MDU
    owners objected to the disruptions caused by installing a second
    wire.[^117] Nor was connecting to the operator's existing wire an
    option, according to RCN, because the operator refused to cooperate
    in allowing such a connection.[^118] RCN urges the Commission to
    find that 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.[^119] ICTA supports the RCN proposal.[^120]

52. We conclude that cable wiring behind sheet rock is "physically
    inaccessible," as that term is used in Section 47 C.F.R. §
    76.5(mm)(4) of the Commission's rules. As stated above, our rule
    defines "physically inaccessible" as "requir\[ing\] significant
    modification of, or significant damage to, preexisting structural
    elements."[^121] We believe that the term "structural elements"
    encompasses sheet rock, otherwise known as wallboard. The "Note"
    appended to Section 76.5(mm)(4), which helps define
    "inaccessibility," states that "wiring embedded in brick, metal
    conduit or cinder blocks with limited or without access openings
    would likely be physically inaccessible; wiring within hallway
    molding would not." Sheet rock and other similar materials are not
    identified specifically. In our view, sheet rock is more like "brick
    or cinder block," materials also commonly used to form ceilings and
    hallways, than molding, which is not.

53. The definition of "physically inaccessible" also requires that
    accessing the wiring at that point would "add significantly to the
    physical difficulty and/or cost" of connecting.[^122] While we
    acknowledge that cutting a hole through and repairing sheet rock is
    neither as physically difficult nor as costly as boring through
    brick, metal or cinder block, we are satisfied that it adds
    significantly to the physical difficulty and cost of wiring an MDU.
    For this reason we conclude that wiring that is hidden behind sheet
    rock in a MDU wall or ceiling is "physically inaccessible" as the
    term is used in the Commission's rule. Accordingly, we will amend
    the "Note" appended to Section 76.5(mm)(4) to include sheet rock.

## Open Video System Providers

54. In the 1996 Act, Congress recognized the open video system (OVS) as
    a means by which a local exchange carrier may provide cable service
    to subscribers within its telephone service area.[^123] The
    Commission concluded that Congress did not intend to restrict OVS
    service to telephone companies alone, and permitted non-local
    exchange carriers and cable operators to operate and to obtain
    carriage on open video systems.[^124] Although subject to
    streamlined regulation as compared to their cable counterparts, OVS
    operators have clearly defined obligations and responsibilities,
    such as offering up to two-thirds of their channel capacity to
    unaffiliated programmers on a non-discriminatory basis.[^125]

55. Time Warner argues that OVS operators should not be eligible to
    avail themselves of the home run wiring rules, concluding that OVS
    operators have no basis to claim a right to use pre-existing MDU
    home run wiring because they are legally required to construct
    end-to-end facilities all the way to end user MDU residents.[^126]
    Without such a restriction, Time Warner argues, unaffiliated
    programming providers would have no opportunity to provide
    programming to MDU residents without installing their own wiring
    because the existing home run wiring would likely be allocated
    exclusively to the OVS operator's affiliated programmer.[^127] OVS
    operators, concludes Time Warner, therefore have an obligation to
    construct end-to-end facilities to the demarcation point of each
    subscriber residence and MDU unit within its service area. [^128]

56. Bell Atlantic[^129] asserts that Time Warner's argument that OVS
    operators are legally required to construct end-to-end facilities
    all the way to end user MDU residents has no basis in law or
    policy.[^130] Bell Atlantic argues that the 1996 Act requires only
    that OVS operators carry the programming of both affiliated and
    nonaffiliated programmers on a non-discriminatory basis.[^131] As
    long as the home run wiring carries programming from affiliated and
    nonaffiliated programmers on a non-discriminatory basis, regardless
    whether the OVS operator uses existing wiring or wiring newly
    constructed by the OVS operator for this purpose, Bell Atlantic
    believes that the statutory requirements are met.[^132] GTE states
    that nothing in the statute prohibits an OVS operator from
    completing its delivery platform through the acquisition of home run
    wiring, and that Time Warner fails to explain how the statute
    supports its conclusion.[^133]

57. It is not clear how an OVS operator's obligation to carry affiliated
    and nonaffiliated programming on a non-discriminatory basis would
    interfere with the operator's eligibility to avail itself of the
    home run wiring rules. Time Warner assumes an OVS provider will
    consume all capacity with affiliated programming, and that, in some
    way, a requirement that OVS operators must install new home run
    wiring in MDUs will prevent that from happening. Yet the statute
    prohibits an OVS provider from consuming all capacity with
    affiliated programming, and whether the OVS operator acquires
    existing home run wiring in an MDU or installs the wiring itself is
    irrelevant to the question of statutory compliance.[^134]

# resolution of issues raised in the *Second Further notice*

58. The *Second Further Notice* sought comment on whether to: (1) limit
    the length of exclusive contracts between MVPDs and MDUs; (2)
    subject perpetual contracts to caps or fresh look windows; (3) apply
    the Commission's rules regarding the disposition of cable home
    wiring and subscriber termination rights to non-cable, in addition
    to cable, MVPDs; (4) exempt small MVPDs from the annual signal
    leakage reporting requirements; and (5) adopt DirectTV's proposal to
    establish a "virtual demarcation point" from which alternative
    providers could share cable wiring.[^135] The following discussion
    resolves these issues.

    **A. Exclusive and Perpetual MDU Contracts**

59. Exclusive and perpetual contracts between MDU owners and MVPDs grant
    incumbent MVPDs the legal right to remain on MDU properties and thus
    limit application of the Commission's inside wiring rules. For
    purposes of this discussion, exclusive contracts generally refer to
    those contracts that specify that, for a designated term, only a
    particular MVPD and no other provider may provide video programming
    and related services to residents of an MDU. Perpetual contracts
    generally refer to those contracts that grant the incumbent provider
    the right to maintain its wiring and provide service to the MDU for
    indefinite or very long periods of time, or for the duration of the
    cable franchise term, and any extensions thereof.

60. According to commenters, most long-term exclusive and perpetual MDU
    contracts were executed at a time when local competition for the
    provision of multi-channel video programming was scarce or
    non-existent.[^136] As the Commission has observed, recent
    advancements in video and communications technology have contributed
    toward a more dynamic, evolving marketplace with cable and new
    alternative providers competing for MDU subscribers.[^137] It
    appears that some property owners who might now prefer to choose
    other providers' services may be bound by exclusive or perpetual
    contracts.[^138] Given that MDUs represent a significant segment of
    the MVPD market,[^139] the *Second Further Notice* sought to examine
    whether exclusive and perpetual MDU contracts may thwart competition
    and ultimately may deprive tenants of the benefits that flow from
    such competition, such that regulatory action would be
    warranted.[^140] As discussed below, we find that the record is
    inconclusive regarding anti-competitive effects of exclusive and
    perpetual contracts and does not support government intervention
    with such privately negotiated contracts.

61. We note that the regulation of exclusive contracts has been
    considered by the Commission in the *Competitive Networks Order and
    NPRM.*[^141] In that Order, the Commission determined that a ban on
    exclusive contracts for telecommunications service in commercial
    multiple tenant environments (MTEs)[^142] would foster competition
    in that market. The Commission limited the ban to commercial
    properties because the record in that proceeding was insufficient to
    address a ban in residential properties.[^143] No party supported
    exclusive contracts in the commercial setting, yet parties did
    support such contracts in the residential setting.[^144] In that
    proceeding, the Commission has requested additional comment on
    whether the ban on exclusive telecommunications contracts should be
    extended to residential settings.[^145]

62. The market for MVPD video services is primarily in residential MTEs.
    In the *Competitive Networks* proceeding, the record was
    inconclusive regarding the anti-competitive effects of exclusive
    contracts in the residential setting versus their usefulness as an
    incentive for new entrants to expend capital on the construction or
    upgrade of distribution systems.[^146] Parties argued in that
    proceeding that the revenue stream generated from telecommunications
    services offered in residential buildings is not enough to attract
    competitive services without the added inducement of exclusive
    contracts.[^147] Also, the inherent differences in design between
    telecommunications and MVPD inside wire distribution systems create
    different market conditions and hence necessitate a separate
    examination. Thus, although we conclude here not to forbid exclusive
    contracts for MVPD service, market conditions may not compel the
    same result for residential telecommunications service. We will
    address whether to limit exclusive residential MTE contracts for
    telephony services in the *Competitive Networks* proceeding.[^148]

63. **Exclusive Contracts**: In the *Second Further Notice*, the
    Commission recognized that exclusive contracts for video services in
    MDUs may have competitive consequences.[^149] In this connection,
    the Commission noted arguments that exclusive contracts bar
    alternative MVPDs' access to, and thus inhibit competition for,
    MDUs.[^150] The Commission also noted arguments that exclusive
    contracts enable alternative providers to recoup the investment
    required to enter MDUs and thus to become or remain viable. The
    Commission asked commenters to address whether it would be
    appropriate to cap exclusive contracts to open up MDUs to potential
    competition on a building-wide or unit-to-unit basis, and, if so,
    what would represent a reasonable cap.[^151]

64. Commenters identified with real estate interests, private cable
    operators ("PCOs"), and some telecommunications entities tend to
    support exclusive contracts for video programming services as
    enabling alternative MVPDs to gain a foothold in the MDU market.
    Specifically, Community Associations Institute (CAI),[^152] WCA,
    ICTA, Real Access Alliance, BOMA, Intelicable Group, Inc.
    (Intelicable), and OpTel assert that exclusive contracts enable
    alternative and new MVPDs to procure financing, recoup their costs,
    expand operations, and enter in and compete for the MDU
    market.[^153] They also claim that exclusive contracts give property
    owners leverage, the opportunity to obtain better service options
    and rates, and the possibility of offering an alternative to the
    incumbent cable provider, which ultimately benefits residents.[^154]
    ICTA, Real Access Alliance and Intelicable contrast business models
    and statutory regulatory environments governing the provision of
    MVPD services in residential MDUs with that of the provision of
    telecommunications services in commercial multi-tenant environments
    ("MTEs"). They contend that the costs incurred in providing video
    services to MDUs exceed those incurred in providing
    telecommunications services in commercial MTEs, because MVPDs must
    construct each component of their systems, whereas telephony
    providers can interconnect with the incumbent provider and share
    access.[^155] Additionally, they contend that revenues generated
    from MDU video programming services are substantially lower than
    revenues generated from MTE telephony.[^156] These commenters assert
    that such differences justify allowing the use of exclusives for MDU
    video programming service contracts, while prohibiting such
    contracts for MTE telephony services.[^157] These commenters
    advocate long-term or no caps on exclusive contracts.

65. ICTA, OpTel, and WCA assert that caps generally are impractical
    because MVPDs' investments vary depending upon the services offered
    and the characteristics, location, and size of the buildings being
    served.[^158] They conclude that the term of exclusives should be
    determined by and negotiated between MDU owners and MVPDs.[^159] If
    caps are to be adopted, however, ICTA, OpTel, and WCA endorse
    long-term caps of ten to 15 years, which they assert are needed to
    ensure sufficient time for MVPDs to recoup and justify their
    investments.[^160] As discussed below, CAI and BOMA acknowledge that
    exclusive contracts may represent the only way other MVPDs may enter
    the MDU market and present a competitive alternative to the
    incumbent MVPD.[^161] CAI and BOMA do not favor government-imposed
    caps of any length. They contend that caps impinge upon free market
    negotiations and upon established rights of property ownership, and
    they urge government restraint.[^162]

66. Bell Atlantic, Cablevision, MAP/CFA, MCI, RCN and UTC are critical
    of exclusive contracts and, if they are permitted at all, support
    very short caps of three to five years on such contracts which, they
    claim, is sufficient time for MVPDs to recoup their investments in
    MDUs.[^163] Cox Communications (Cox) argues that exclusive contracts
    are inherently anti-competitive and discriminatory, because such
    contracts effectively lock up MDUs and favor incumbent
    providers.[^164] Cox cautions the Commission not to adopt
    regulations designed to protect the viability of certain niche
    providers, and urges the Commission to ban exclusive contracts. Cox
    challenges "the assertion that exclusive arrangements are critical
    if MDU service providers are to survive," saying it is "belied by
    Cox's own experience with non-exclusive contracts and by the
    experiences of other cable operators that offer service in direct
    competition with alternative providers in the same building."[^165]
    Ameritech and Winstar echo Cox's arguments by claiming that
    exclusive contracts are inappropriate and only serve to insulate
    certain niche providers from business risk.[^166] Winstar adds that
    exclusive MDU contracts defy the spirit of both the 1992 Cable Act
    and the 1996 Act, which were intended to promote competition.[^167]

67. Finally, BOMA, Charter Communications, Inc. (Charter),[^168] NCTA,
    Time Warner, Tele-Communications, Inc. (TCI), and US West contend
    that the Commission lacks statutory authority to abrogate or
    interfere with privately negotiated contracts.[^169] NCTA and TCI
    further contend that regulation of MDU contracts for video
    programming services is inconsistent with Section 301(b)(2) of the
    1996 Act, which excepted MDU bulk discounts from the uniform rate
    structure requirements.[^170] According to TCI, "far from finding
    any competitive problem with cable operators' MDU contracting
    practices, Congress afforded cable operators [greater]{.underline}
    flexibility (by removing the uniform rate structure requirement) to
    enable them to respond more effectively to the lower prices and
    sizable competitive pressure posed by alternative MVPDs."[^171]

68. As discussed above, in the *Competitive Networks Order and NPRM*,
    the Commission banned exclusive contracts between telecommunications
    providers and commercial MTE owners as anti-competitive.[^172] The
    Commission there noted that "most commenters on this issue,
    including both LECs and CLECs, support\[ed\] a ban on exclusive
    access contracts."[^173] In contrast, the record developed in this
    proceeding indicates little support for government interference with
    privately negotiated exclusive MDU contracts. As discussed below, we
    do not find a sufficient basis in this record to ban or cap the term
    of exclusive contracts.

69. The record does not indicate the extent to which exclusive contracts
    have been utilized, and, more importantly, does not demonstrate that
    such contracts have thwarted alternative providers' entrance into
    the MDU market, so as to warrant imposition of limits on such
    contracts. Although the 1990s witnessed the bankruptcy of several
    large SMATV operators, which may have weakened the competitive
    strength and viability of alternative MVPD providers,[^174] other
    new entrants have begun to compete with incumbent MVPD providers by
    offering bundled video, telephony and data services.[^175] Overall,
    the percentage of subscribers receiving their video programming from
    a franchised cable operator declined from 80% to 76.5% between 2000
    and 2002.[^176] It thus appears that marketplace forces, spurring
    incumbent and alternative providers to innovate and improve service
    offerings, may determine providers' viability, without the need for
    government action on exclusive contracts.

70. Additionally, we note that the current record is insufficient to
    justify government-sanctioned caps of any length. Proponents of
    allowing exclusive contracts of limited duration contend that caps
    would limit the anti-competitive effects of such contracts, while
    simultaneously affording alternative MVPDs the opportunity to enter
    into and recoup their investments from MDUs. Only ICTA and OpTel
    attempt to substantiate or justify a particular period of
    exclusivity needed for an alternative MVPD to recover costs.[^177]
    Other commenters merely make conclusory statements in support of
    particular time periods. ICTA argues that the Commission should not
    establish a particular cap on the length of exclusive contracts,
    because the appropriate period of exclusivity will vary by property,
    but that if a cap is deemed necessary, it should not be shorter than
    15 years.[^178] OpTel's data summary attempts to demonstrate that
    MVPDs need seven to 15-year exclusivity arrangements to recoup their
    costs of entering an MDU, depending on the level of penetration
    within a particular MDU and the availability of existing inside
    wiring.[^179] OpTel's submission, however, falls short of providing
    certain critical cost recovery information.[^180] In any event, the
    record suggests that specific cost recovery periods may vary and are
    tied to the unique attributes of MDU buildings, as well as MVPD
    providers.

71. In sum, we find that the record does not support a prohibition on
    exclusive contracts for video services in MDUs, nor a time limit, in
    the nature of a cap, for such contracts. The parties have identified
    both pro-competitive and anti-competitive aspects of exclusive
    contracts.[^181] We cannot state, based on the record, that
    exclusive contracts are predominantly anti-competitive. With respect
    to capping such contracts, there appears to be little agreement over
    the length of term. Again, based on the record, we cannot discern
    the "correct" length. We note that competition in the MDU market is
    improving, even with the existence of exclusive contracts.[^182]
    Accordingly, we decline to intervene. Because we are not banning or
    capping exclusive contracts, we also decline to address arguments
    pertaining to the Commission's authority to do so.

72. **Perpetual Contracts**: The *Second Further Notice* also sought
    comment regarding whether it would be appropriate to restrict
    perpetual contracts between MDU owners and MVPDs.[^183] Although
    several commenters question the Commission's authority to act in
    this area, most commenters addressing the issue assert that
    perpetual contracts effectively bar alternative and/or new MVPDs'
    entry into the MDU market and are inherently anti-competitive.[^184]
    Nonetheless, the record does not demonstrate the existence of
    widespread perpetual contracts nor support the need for government
    interference at this time.

73. MAP/CFA maintains that perpetual contracts are anti-competitive,
    because such contracts ensure incumbent MVPDs' right to remain and
    thus preclude operation of the Commission's building-to-building and
    unit-to-unit home run wiring rules.[^185] In this connection and as
    noted previously, the Commission's home run wiring rules only apply
    once the incumbent provider does not have a contractual, statutory
    or common law right to remain.[^186] RCN, ICTA, OpTel, WCA, and CAI
    urge the Commission to adopt a fresh look window, to enable MDU
    owners the opportunity to reassess and renegotiate their existing
    contracts.[^187] Bell Atlantic does not support a fresh look window,
    but instead favors an open access approach that would allow
    alternative providers access to MDUs contingent upon and following
    incumbent providers' recoupment of inside wiring costs.[^188]

74. BOMA claims that although perpetual contracts are anti-competitive,
    most real estate owners nevertheless prefer private marketplace
    negotiated solutions over government interference with
    contracts.[^189] Additionally, BOMA, along with NCTA, Time Warner
    and US West contend that the Commission is not authorized to
    regulate or interfere with privately negotiated contracts.[^190]
    NCTA, Time Warner, and Charter also argue that both a ban on
    perpetual contracts and a fresh look window would result in a
    "taking" of private property without just compensation in
    contravention of the Fifth Amendment.[^191]

75. As the Commission has noted, perpetual MDU contracts may discourage
    or limit alternative providers' entry in the MDU market[^192] and
    thus restrict head-to-head competition in and for MDU markets.
    Head-to-head competition has been shown to benefit both consumers
    and providers by constraining subscription rates and spurring
    innovative and diverse offerings.[^193] Since existing perpetual
    contracts grant incumbent providers the legal right to remain
    indefinitely or for very long periods of time, such contracts would
    therefore frustrate the pro-competitive goals of the Commission's
    home run wiring rules. As discussed below, however, it appears that
    perpetual contracts are neither prevalent nor currently being
    entered into. Accordingly, such contracts do not represent a
    significant barrier to competition in the MDU market warranting
    government-imposed restrictions.

76. The majority of commenters that urge the Commission to restrict
    perpetual MDU contracts offer only conclusory statements regarding
    the prevalence of such contracts in the marketplace.[^194] The
    limited evidence on the record suggests that perpetual contracts are
    not prevalent and, in fact, are no longer being widely negotiated.
    In an attempt to provide some empirical data, the RAA submitted the
    results of a survey conducted by the National Multi-Housing Council
    and the National Apartment Association, which attempts to quantify
    both the extent and nature of any problems posed by perpetual
    contracts ("RAA survey").[^195] The RAA survey solicited responses
    from a cross-section of MDU owners of large (100 and more units) and
    small (more than 5, but less than 100 units), high-end,
    middle-income and lower-income MDUs across the country. The RAA
    survey suggests that only a small percentage of MDUs are currently
    subject to perpetual contracts for video programming services.
    Specifically, the RAA survey results indicate that only between 3.8
    and 4.8 percent of the total properties surveyed are covered by
    perpetual contracts.[^196] Moreover, the RAA survey suggests that
    MDU contracts currently are not being negotiated. None of the
    property owners surveyed had entered into a perpetual contract in
    the last five years.[^197]

77. Given the results of RAA's survey and the lack of other data
    reflecting the prevalence of perpetual contracts, we cannot conclude
    that such contracts represent a significant barrier to competition
    in the MDU market. Accordingly, we do not find that the current
    record provides a basis for restricting perpetual contracts. Because
    we are not banning or otherwise restricting perpetual contracts, we
    decline to address arguments pertaining to the Commission's
    authority to do so. We note that remedies for MDU owners who seek to
    renegotiate or terminate existing perpetual contracts may lie in
    state court.[^198]

### B. Application of Cable Inside Wiring Rules to all MVPDs {#b.-application-of-cable-inside-wiring-rules-to-all-mvpds .unnumbered}

78. In the *Second Further Notice*, the Commission proposed to modify
    its rules governing home wiring for single-unit installations and
    subscribers' pre-termination rights,[^199] so that they would apply
    to non-cable MVPDs, in addition to cable MVPDs.[^200] The Commission
    suggested that such modifications "would promote competitive parity
    and facilitate the ability of a subscriber whose premises was
    initially wired by a non-cable MVPD to change providers." Moreover,
    the Commission opined that the modifications would "promote the same
    consumer benefits as in the cable context: increased competition and
    consumer choice, lower prices and greater technological
    innovation."[^201] The Commission sought comment on the proposal to
    extend its rules to all MVPDs and on its authority to do so.[^202]

79. The commenters that address this issue all support the Commission's
    proposal.[^203] US West and RCN maintain that the proposal will
    eliminate regulatory disparity between cable and non-cable providers
    and, more importantly, will protect subscribers whose termination
    rights would otherwise hinge on which entity initially installed
    their wiring.[^204] According to CAI, the proposal will enable
    residents and residents' associations to effectively negotiate and
    execute agreements with competing providers and, further, will
    "level the playing field and expedite the development of integrated
    telecommunications networks and infrastructures to deliver varied
    and competing services."[^205] In addition, CAI asserts that the
    proposal "will provide more certainty in the marketplace by
    establishing a uniform approach to the disposition of inside
    wiring."[^206] Finally, Ameritech states that, under Sections 4(i)
    and 303(r), the Commission has authority to modify its rules to
    apply to all MVPDs, and should do so because the same "competitive
    concerns that led the Commission to adopt these \[cable home
    wiring\] rules pertain regardless of who installed a subscriber's or
    MDU's inside wiring."[^207]

80. The Commission's home wiring rules for single-unit installations and
    subscriber pre-termination rules implement Section 624(i) of the
    Communications Act,[^208] the objective of which is to enable
    subscribers to subscribe to services offered by an alternative MVPD
    without incurring additional installation costs or experiencing
    disruption in programming.[^209] In 1993, at the time these rules
    were adopted, the Commission stated that although it was "rare" that
    subscribers terminated cable service in order to take service from
    an alternative video provider, it expected such instances to
    increase as competition to cable developed.[^210] The trend in
    recent years has been increased competition in the MVPD market. We
    anticipate this trend to continue with alternative MVPDs
    increasingly gaining market share, such that the entity responsible
    for the initial installation in a home could be a cable or a
    non-cable provider. We thus find it necessary to broaden our rules
    to ensure that a subscriber's ability to terminate existing service
    and accept alternative service is not contingent on whether the
    wiring was installed by a cable, as opposed to a non-cable,
    provider. We further find that the proposed rule modifications will
    promote regulatory parity and enhance competition among MVPDs.
    Accordingly, we will modify our rules governing the disposition of
    home wiring and subscriber pre-termination rights to apply uniformly
    to all MVPDs.

81. The Supreme Court has recognized that Sections 2(a), 4(i) and 303(r)
    of the Communications Act[^211] confer upon the Commission broad
    jurisdiction to adopt rules and regulations that are consistent with
    and further the goals of its specific grants of authority under the
    Act.[^212] As a threshold matter, the Commission's jurisdiction
    under Section 2(a) over "communication by wire or radio"[^213] is a
    broad grant of regulatory power, not limited to those activities and
    forms of communication that are specifically described by the Act's
    other provisions.[^214] If, as is the case with the non-cable MVPDs
    at issue, the subject of regulation falls within the broad
    parameters of Section 2(a), the Commission may impose regulations in
    the absence of an explicit statutory mandate if the regulations
    protect or promote objectives of the Act's substantive provisions.
    For example, in *Midwest Video I*, at a time before the Commission
    had received any express statutory grant of regulatory authority
    over cable television, the Supreme Court upheld -- as a proper
    exercise of the Commission's authority -- the adoption of
    regulations that prohibited cable carriage of local stations unless
    the cable operator locally originated some of its own programming.
    The Court stated that "the critical question in this case is whether
    the Commission has reasonably determined that its origination rule
    will 'further the achievement of long-established regulatory goals
    in the field of television broadcasting.'"[^215] The Court further
    explained that the Commission's authority over cable, as previously
    upheld in *Southwestern Cable*, permitted the agency "to regulate
    CATV with a view not merely to protect but to promote the objectives
    for which the Commission had been assigned jurisdiction over
    broadcasting."[^216] In a later decision, however, the Court made
    clear that any such regulation cannot be inconsistent with the other
    basic parameters of the Act.[^217]

82. For the reasons set forth above,[^218] we believe that modification
    of our rules to include all MVPDs is reasonably connected and
    necessary to effectuate the explicit mandate and underlying
    objective of Section 624(i) of the Communications Act to preserve
    subscribers' choice. Moreover, this modification will further the
    principles of the 1992 Cable Act by enhancing competition in the
    MVPD marketplace.[^219] Furthermore, our action here does not
    contravene any provision of the Communications Act. Accordingly, the
    modification of our rules to include all MVPDs is a proper exercise
    of our jurisdiction.

    **C. Exemption from Signal Leakage Reporting Requirements**

83. In the *Report and Order,* we extended the application of our signal
    leakage rules, which had applied only to traditional cable
    operators, to non-cable MVPDs such as satellite master antenna
    services ("SMATV"), multichannel multipoint distribution services
    ("MMDS"), and OVS operators.[^220] A transition period for
    compliance was established for certain non-cable MVPDs.[^221] In
    particular, all non-cable MVPDs were directed to comply with the
    reporting requirement set forth in 47 CFR § 76.1804(g) by January 1,
    2003.[^222] In the *Further Notice,* we sought comment on whether we
    should exempt small MVPDs, including small cable operators, from
    these requirements.[^223] Section 76.1804(g) of the Commission's
    rules requires cable operators to file annually with the Commission
    certain information relating to their use of the aeronautical radio
    frequency bands.[^224] We sought comments in an effort to determine
    whether the annual reporting requirement may impose undue burdens on
    small service providers, including small cable operators.

84. Commenters voiced both support and opposition to creating an
    exemption for small MVPDs. Supporters argue that an exemption would
    be consistent with congressional directives to reduce regulatory
    burdens on small MVPDs where feasible.[^225] They argue that there
    is no evidence that a small MVPD exemption will result in abuses of
    the signal leakage rules or otherwise prompt small MVPDs to be less
    attentive to their signal leakage obligations.[^226] They state that
    small MVPDs can ill-afford to violate the Commission's rules and
    risk assessment of forfeitures.[^227] They note that the testing
    requirements will continue to apply.[^228]

85. Opponents of an exemption argue that the proposal does not relieve
    MVPDs of the obligation to conduct tests and that the filing of
    signal leakage test results is a simple task once the testing is
    complete. [^229] They state that the signal leakage rules represent
    a Commission effort to protect life and property, and, if reporting
    is helpful in the oversight of signal leakage, then all MVPDs should
    report.[^230] NCTA notes, however, that if any small MVPDs are
    exempted, small cable operators should be included in that
    exemption.[^231]

86. After carefully considering the comments on the proposed relief for
    small MVPDs, we adopt a very limited exemption to the annual
    reporting requirement of 47 CFR § 76.1804(g) of our rules.[^232]
    This exemption will apply to non-cable MVPDs with less than 1000
    subscribers or serving less than 1000 units.[^233] Such an exemption
    furthers congressional directives to reduce the regulatory burden on
    small entities where feasible.[^234] We have no reason to believe
    that such an exemption will affect enforcement of the Commission's
    signal leakage rules. We are not exempting MVPDs subject to existing
    reporting requirements. The annual reporting requirement is
    scheduled to become effective for all non-cable MVPDs on January 1,
    2003.[^235] With this exemption, that requirement will not become
    effective for the smallest non-cable MVPDs. Relief from the annual
    reporting requirement will allow small non-cable MVPDs to focus on
    the prevention of leaks by devoting their scarce resources primarily
    to maintenance, leakage detection, and repair. The exempted systems
    will continue to perform all signal leakage tests required by our
    rules and must make the results of those tests available to
    Commission agents upon request. We believe it is sensible to treat
    small cable and non-cable MVPDs differently in this regard because
    of the different environments in which each is likely to operate.
    Small cable systems have wiring that connects individual residences,
    is strung on utility poles, and is subject to all of the stresses
    associated with the outside environment, including temperature
    fluctuations, wind loading, rain, and ice. Small non-cable MVPDs
    predominately serve MDUs and thus have their wiring and associated
    electronics protected from exposure to the weather and the risk of
    damage that could result in signal leakage.

87. Testing will remain an important part of our enforcement program. It
    is only the future obligation to report results by the smallest
    non-cable MVPDs which we are changing here. Our signal leakage
    monitoring and enforcement program, conducted pursuant to 47 CFR §
    76.613, which includes a vigorous program of field inspections and
    the imposition of forfeitures, remains unaffected. The Commission's
    field operations staff conducts routine monitoring for signal
    leakage and, of course, will continue to respond to aeronautical
    complaints to ensure the safe operation of aeronautical frequencies.

### D. Simultaneous Use of Cable Home Run Wiring {#d.-simultaneous-use-of-cable-home-run-wiring .unnumbered}

88. In the *Second Further Notice*, we solicited comments on whether we
    should adopt a proposal from DirecTV to give MDU owners the right to
    require that incumbent MVPDs allow competitors to share their home
    run wiring.[^236] Most of the comments we received on this issue
    agree that there are or may be significant unresolved technical
    problems with the DirecTV proposal, notwithstanding its merits from
    a public policy perspective.[^237] Most of the technical objections
    to the DirecTV proposal relate to the possibility of interference
    when amplified signals are transmitted on a single wire and the
    possible lack of bandwidth capacity in existing cable plant.[^238]
    We are unable to resolve this issue based on the record before
    us.[^239] Accordingly, we decline to adopt DirecTV's line-sharing
    proposal at this time.

# Procedural matters 

## Supplemental and Final Regulatory Flexibility Analyses 

89. A Supplemental Final Regulatory Flexibility Analysis and a Final
    Regulatory Flexibility Analysis, pursuant to the Regulatory
    Flexibility Act of 1980, 5 U.S.C. § 604, are attached as Appendix A.

## Paperwork Reduction Act Analysis

90. This *Report and Order* contains new or modified information
    collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
    Public Law 104-13. It will be submitted to the Office of Management
    and Budget (OMB) for review under Section 3507(d) of the PRA. OMB,
    the general public, and other Federal agencies are invited to
    comment on the new or modified information collection(s) contained
    in this proceeding.

    **C. Report to Congress**

91. The Commission will include a copy of this *First* *Order on
    Reconsideration and Second Report and Order*, including the
    Regulatory Flexibility Analyses, in a report to Congress pursuant to
    the Congressional Review Act. A copy of this *First* *Order on
    Reconsideration and Second Report and Order,* including the
    Regulatory Flexibility Analyses (or summaries thereof) will also be
    published in the Federal Register.[^240]

## Document Availability

92. This document is available for public inspection and copying during
    regular business hours at the FCC Reference Information Center,
    Portals II, 445 12^th^ Street, S.W., Room CY-A257, Washington,
    D.C. 20554. This document may also be purchased from the
    Commission's duplicating contractor, Qualex International, Portals
    II, 12^th^ Street, S.W., Room CY-B402, Washington, D.C. 20554,
    telephone 202-863-2893, facsimile 202-863-2898, or via e-mail
    <qualexint@aol.com>. This document is available in accessible
    formats (computer diskettes, large print, audio recording, and
    Braille) to persons with disabilities by contacting Brian Millin in
    the Consumer & Governmental Affairs Bureau at 202-418-7426, TTY
    202-418-7365, or at [bmillin@fcc.gov]{.underline}.

# ordering clauses

93. Accordingly, IT IS ORDERED that, pursuant to the authority granted
    in Sections 1, 4(i), 201-205, 214-215, 220 303, 623, 624 and 632 of
    the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 201-205, 214-215, 220, 303, 543, 544 and 552, the petitions
    for reconsideration filed in response to the *Report and Order* are
    GRANTED IN PART and DENIED IN PART, as provided herein.

94. IT IS FURTHER ORDERED that, pursuant to the authority granted in
    Sections 1, 4(i), 201-205, 214-215, 220, 303, 623, 624, and 632 of
    the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    154(i), 201-205, 214-215, 220, 303, 543, 544 and 552, the
    modifications to the Commission's rules, as described herein and in
    Appendix B, are HEREBY ADOPTED. These modifications shall become
    effective 60 days after publication of this *First Order on
    Reconsideration and Second Report and Order* in the Federal
    Register.

95. IT IS FURTHER ORDERED that the Commission's Consumer Information
    Bureau, Reference Information Center, SHALL SEND a copy of this
    *First Order on Reconsideration and Second Report and Order* (or
    summaries thereof) including the Supplemental Final Regulatory
    Flexibility Analysis and the Final Regulatory Flexibility Analysis
    to the Chief Counsel for Advocacy of the Small Business
    Administration

> FEDERAL COMMUNICATIONS COMMISSION
>
> Marlene H. Dortch
>
> Secretary
>
> **APPENDIX A**

**I. SUPPLEMENTAL FINAL REGULATORY FLEXIBILITY ANALYSIS**

96. As required by the Regulatory Flexibility Act of 1980, as amended, 5
    U.SC. § 603 ("RFA"), Initial Regulatory Flexibility Analyses
    ("IRFAs") were incorporated in the Inside Wiring Notice, the Cable
    Home Wiring Further Notice, and the Inside Wiring Further Notice.
    The Commission sought written public comments on the proposals in
    these notices, including comments on the IRFAs. A Final Regulatory
    Flexibility Analysis ("FRFA") was incorporated in the *Report and
    Order**. ***[^241] The Commission received eight petitions for
    reconsideration in response to the *Report and Order*. This
    supplemental FRFA analyzes the modifications adopted in the *First
    Order on Reconsideration* in response to the petitions for
    reconsideration and related filings received by the Commission. A
    FRFA for the *Second Report and Order* is contained in paragraphs
    112-134, *supra.*

    **A. Need for and objectives of the *First Order on
    Reconsideration***

97. The *First Order on Reconsideration* amends rules governing two
    procedural mechanisms to clarify ambiguities in the rules adopted in
    the preceding *Report and Order.* The amended rules provide that (1)
    in the event of sale, the home run wiring be made available to the
    MDU owner or alternative provider during the 24-hour period prior to
    actual service termination by the incumbent, and (2) 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. These changes to our rules are intended to
    allow alternative MVPDs greater access to existing cable wiring in
    MDU buildings, thereby enhancing competition in the MDU marketplace
    in accordance with our statutory mandate.

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

98. The RFA directs the Commission to provide a description of and,
    where feasible, an estimate of the number of small entities that
    will be affected by the rules. The RFA defines the term "small
    entity" as having the same meaning as the terms "small business,"
    "small organization," and "small governmental jurisdiction" and the
    same meaning as the term "small business concern" under Section 3 of
    the Small Business Act.[^242] Under the Small Business Act, a "small
    business concern" is one that: (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). The rules we adopt in this Order will affect
    video service providers and MDU owners.

99. **Small MVPDs**: SBA has developed a small business size standard
    for cable and other program distribution services, which includes
    all such companies generating \$12.5 million or less in revenue
    annually.[^243] This category includes, among others, cable
    operators, direct broadcast satellite ("DBS") services, home
    satellite dish ("HSD") services, multipoint distribution services
    ("MDS"), multichannel multipoint distribution service ("MMDS),
    Instructional Television Fixed Service ("ITFS"), local multipoint
    distribution service ("LMDS"), satellite master antenna television
    ("SMATV") systems and open video systems ("OVS"). According to the
    Bureau of Census, there were 1,311 total cable and other pay
    television service firms that operate throughout the year of which
    1,180 have less than \$10 million in revenue.[^244] We will address
    each service individually to provide as precise of an estimate of
    small entities as available data allows.

100. **Cable Operator:** The Commission has developed, with SBA's
     approval, its own definition of a small cable system operator for
     the purposes of rate regulation. Under the Commission's rules, a
     "small cable company," is one serving fewer than 400,000
     subscribers nationwide.[^245] Based on our most recent information,
     we last estimated that there were 1,439 cable operators that
     qualified as small cable companies.[^246] Since then, some of those
     companies may have grown to serve over 400,000 subscribers, and
     others may have been involved in transactions that caused them to
     be combined with other cable operators. Consequently, we estimate
     that there are fewer than 1,439 small entity cable system operators
     that may be affected by the decisions and rules adopted in this
     Order.

101. The Communications Act of 1934, as amended, also contains a
     definition of a small cable system operator, which is "a cable
     operator that, directly or through an affiliate, serves in the
     aggregate fewer than one 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."[^247]
     The Commission has determined that there are 68,500,000 subscribers
     in the United States.[^248] Therefore, we found that an operator
     serving fewer than 685,000 subscribers shall be deemed a small
     operator, if its annual revenues, when combined with the total
     annual revenues of all of its affiliates, do not exceed \$250
     million in the aggregate.[^249] Based on available data, we find
     that the number of cable operators serving 677,000 subscribers or
     less totals 1,450.[^250] Although it seems certain that some of
     these cable system operators are affiliated with entities whose
     gross annual revenues exceed \$250,000,000, we are unable at this
     time to estimate with greater precision the number of cable system
     operators that would qualify as small cable operators under the
     definition in the Communications Act.

102. **Direct Broadcast Satellite Service ("DBS"):** Because DBS
     provides subscription services, DBS falls within the SBA-recognized
     definition of cable and other program distribution services.[^251]
     This definition provides that a small entity is one with \$12.5
     million or less in annual receipts.[^252] There are four licensees
     of DBS services under Part 100 of the Commission's Rules. Three of
     those licenses are currently operational. Two of the licensees that
     are operational have annual revenues that may be in excess of the
     threshold for a small business.[^253] The Commission, however, does
     not collect annual revenue data for DBS and, therefore, is unable
     to ascertain the number of small DBS licensees that could be
     impacted by these proposed rules. DBS service requires a great
     investment of capital for operation, and we acknowledge, despite
     the absence of specific data on this point, that there are entrants
     in this field that may not yet have generated \$12.5 million in
     annual receipts, and therefore may be categorized as a small
     businesses.

103. **Home Satellite Dish ("HSD") Service.** Because HSD provides
     subscription services, HSD falls within the SBA-recognized
     definition of cable and other program distribution services.[^254]
     This definition provides that a small entity is one with \$12.5
     million or less in annual receipts.[^255] The market for HSD
     service is difficult to quantify. Indeed, the service itself bears
     little resemblance to other MVPDs. HSD owners have access to more
     than 265 channels of programming placed on C-band satellites by
     programmers for receipt and distribution by MVPDs, of which 115
     channels are scrambled and approximately 150 are unscrambled.[^256]
     HSD owners can watch unscrambled channels without paying a
     subscription fee. To receive scrambled channels, however, an HSD
     owner must purchase an integrated receiver-decoder from an
     equipment dealer and pay a subscription fee to an HSD programming
     package. Thus, HSD users include (1) viewers who subscribe to a
     packaged programming service, which affords them access to most of
     the same programming provided to subscribers of other MVPDs; (2)
     viewers who receive only non subscription programming; and (3)
     viewers who receive satellite programming services illegally
     without subscribing. Because scrambled packages of programming are
     most specifically intended for customers, these are the services
     most relevant to this discussion.[^257]

104. **Multipoint Distribution Service ("MDS), Multichannel Multipoint
     Distribution Service ("MMDS"), Instructional Television Fixed
     Service ("ITFS"), and Local Multipoint Distribution Service
     ("LMDS").** MMDS Systems, often referred to as "wireless cable,"
     transmit video programming to subscribers using the microwave
     frequencies of the MDS and ITFS.[^258] LMDS is a fixed broadband
     point-to-multipoint microwave service that provides for two-way
     video telecommunications.[^259]

105. In connection with the 1996 MDS auction, the Commission defined
     small businesses as entities that had annual average gross revenues
     of less than \$40 million in the previous three calendar
     years.[^260] This definition of a small entity in the context of
     MDS auctions has been approved by the SBA.[^261] The MDS auctions
     resulted in 67 successful bidders obtaining licensing opportunities
     for 493 Basic Trading Areas ("BTAs"). Of the 67 auction winners, 61
     met the definition of a small business. MDS also includes licensees
     of stations authorized prior to the auction. As noted, the SBA has
     developed a definition of small entities for pay television
     services, which includes all such companies generating \$12.5
     million or less in annual receipts.[^262] This definition includes
     multipoint distribution services, and thus applies to MDS licensees
     and wireless cable operators that did not participate in the MDS
     auction. Information available to us indicates that there are
     approximately 850 of these licensees and operators that do not
     generate revenue in excess of \$12.5 million annually. Therefore,
     we find that there are approximately 850 small MDS providers as
     defined by the SBA and the Commission's auction rules.

106. The SBA definition of small entities for cable and other program
     distribution services, which includes such companies generating
     \$12.5 million in annual receipts, seems reasonably applicable to
     ITFS.[^263] There are presently 2,032 ITFS licensees. All but 100
     of these licenses are held by educational institutions. Educational
     institutions are included in the definition of small
     business.[^264] However, we do not collect annual revenue data for
     ITFS licensees, and are not able to ascertain how many of the 100
     non-educational licensees would be categorized as small under the
     SBA definition. Thus, we tentatively conclude that at least 1,932
     licensees are small businesses.

107. Additionally, the auction of the 1,030 LMDS licenses began on
     February 18, 1998, and closed on March 25, 1998. The Commission
     defined "small entity" for LMDS licenses as an entity that has
     average gross revenues of less than \$40 million in the three
     previous calendar years.[^265] An additional classification for
     "very small business" was added and is defined as an entity that,
     together with its affiliates, has average gross revenues of not
     more than \$15 million for the preceding calendar years.[^266]
     These regulations defining "small entity" in the context of LMDS
     auctions have been approved by the SBA.[^267] There were 93 winning
     bidders that qualified as small entities in the LMDS auctions. A
     total of 93 small and very small business bidders won approximately
     277 A Block licenses and 387 B Block licenses. On March 27, 1999,
     the Commission re-auctioned 161 licenses; there were 40 winning
     bidders. Based on this information, we conclude 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.

108. In sum, there are approximately a total of 2,000 MDS/MMDS/LMDS
     stations currently licensed. Of the approximate total of 2,000
     stations, we estimate that there are 1,595 MDS/MMDS/LMDS providers
     that are small businesses as deemed by the SBA and the Commission's
     auction rules.

109. **Satellite Master Antenna Television ("SMATV") Systems**. The SBA
     definition of small entities for cable and other program
     distribution services includes SMATV services and, thus, small
     entities are defined as all such companies generating \$12.5
     million or less in annual receipts.[^268] Industry sources estimate
     that approximately 5,200 SMATV operators were providing service as
     of December 1995.[^269] Other estimates indicate that SMATV
     operators serve approximately 1.5 million residential subscribers
     as of July 2001.[^270] The best available estimates indicate that
     the largest SMATV operators serve between 15,000 and 55,000
     subscribers each. Most SMATV operators serve approximately
     3,000-4,000 customers. 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 SMATVs, we believe that a substantial
     number of SMATV operators qualify as small entities.

110. **Open Video Systems ("OVS").** Because OVS operators provide
     subscription services, OVS falls within the SBA-recognized
     definition of cable and other program distribution services. This
     definition provides that a small entity is one with \$1.25 million
     or less in annual receipts. The Commission has certified 25 OVS
     operators with some now providing service. Affiliates of
     Residential Communications Network, Inc. (RCN) received approval to
     operate OVS systems in New York City, Boston, Washington, D.C., and
     other areas. RCN has sufficient revenues to assure us that they do
     not qualify as small business entities. Little financial
     information is available for the other entities authorized to
     provide OVS service but have not yet begun to generate revenues, we
     conclude that at least some of the OVS operators qualify as small
     entities.

111. **MDU Operators:** The SBA has developed definitions of small
     entities for operators of nonresidential buildings, apartment
     buildings, and dwellings other than apartment buildings, which
     include all such companies generating \$6 million or less in
     revenue annually.[^271] According to the Census Bureau, there were
     31,584 operators of nonresidential buildings generating less than
     \$6 million in revenue that were in operation for at least one year
     at the end of 1997.[^272] Also according to the Census Bureau,
     there were 51,275 operators of apartment dwellings generating less
     than \$6 million in revenue that were in operation for at least one
     year at the end of 1997.[^273] The Census Bureau provides no
     separate data regarding operators of dwellings other than apartment
     buildings, and we are unable at this time to estimate the number of
     such operators that would qualify as small entities.

     **C. Description of Projected Reporting, Recordkeeping and other
     Compliance Requirements.**

112. At this time, we do not expect that the changes to our rules which
     provide (1) that in the event of sale, the home run wiring be made
     available to the MDU owner or alternative provider during the
     24-hour period prior to actual service termination by the incumbent
     and (2) 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 will result in
     additional reporting or recordkeeping requirements for small
     entities. The rule changes adopted are likely to result in a
     reduction of any such requirements because they were adopted with
     the intent of by making the transition of home run wiring a more
     orderly and predictable procedure and of decreasing barriers to
     home run wiring for small entities.

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

113. 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. In the *First Report and Order* we might have chosen to
     make no changes to our rule that in cases where the incumbent has
     elected to sell or abandon its home run wire, access to the
     alternative provider should be made "within 24 hours of actual
     service termination."[^274] We also could have elected to make no
     effort to clarify our rules as to whether cable wiring behind sheet
     rock is physically inaccessible.[^275] We believe that had we
     chosen either of these alternative positions we would have missed
     an opportunity to clarify our rules to facilitate MVPD access to
     existing cable wiring in MDU buildings, and thereby enhance
     competition in accordance with our statutory mandate.

## E. Federal Rules Which Duplicate, Overlap, or Conflict with the Commission's Proposals. None.  {#e.-federal-rules-which-duplicate-overlap-or-conflict-with-the-commissions-proposals.-none. .unnumbered}

**II. FINAL REGULATORY FLEXIBILITY ANALYSIS**

114. As required by the Regulatory Flexibility Act of 1980, as amended,
     an Initial Regulatory Flexibility Analysis ("IRFA") was
     incorporated in the *Second Further Notice of Proposed Rulemaking.*
     The Commission sought written public comment on the proposals in
     the *Further Notice,* including comment on the IRFA. This Final
     Regulatory Flexibility Analysis (FRFA) conforms to the RFA as to
     the changes made to the Commission's rules in the *Second Report
     and Order*.

## A. Need for and Objectives of the Second Report and Order {#a.-need-for-and-objectives-of-the-second-report-and-order .unnumbered}

115. The *Second Report and Order* changes the Commission's rules to
     provide that cable home wiring and cable home run wiring rules
     apply to all MVPDs in the same manner that they currently apply to
     cable operators. The *Second Report and Order* also adopts a
     limited exemption for small MVPDs from our signal leakage reporting
     requirements at 47 CFR § 76.1804.

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B.  **Summary of Significant Issues Raised by Public Comments in
    Response to the IRFA.**

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116. There were no comments filed that specifically addressed the rules
     and policies proposed in the IRFA.

## C. Description and Estimate of the Number of Small Entities to Which Rules Apply. {#c.-description-and-estimate-of-the-number-of-small-entities-to-which-rules-apply. .unnumbered}

117. The RFA directs the Commission to provide a description of and,
     where feasible, an estimate of the number of small entities that
     will be affected by the rules. The RFA defines the term "small
     entity" as having the same meaning as the terms "small business,"
     "small organization," and "small governmental jurisdiction" and the
     same meaning as the term "small business concern" under Section 3
     of the Small Business Act.[^276] Under the Small Business Act, a
     "small business concern" is one that: (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). The rules we adopt in this Order will affect
     video service providers and MDU owners.

118. **Small MVPDs**: SBA has developed a small business size standard
     for cable and other program distribution services, which includes
     all such companies generating \$12.5 million or less in revenue
     annually.[^277] This category includes, among others, cable
     operators, direct broadcast satellite ("DBS") services, home
     satellite dish ("HSD") services, multipoint distribution services
     ("MDS"), multichannel multipoint distribution service ("MMDS),
     Instructional Television Fixed Service ("ITFS"), local multipoint
     distribution service ("LMDS"), satellite master antenna television
     ("SMATV") systems and open video systems ("OVS"). According to the
     Bureau of Census, there were 1,311 total cable and other pay
     television service firms that operate throughout the year of which
     1,180 have less than \$10 million in revenue.[^278] We will address
     each service individually to provide as precise of an estimate of
     small entities as available data allows.

119. **Cable Operator:** The Commission has developed, with SBA's
     approval, its own definition of a small cable system operator for
     the purposes of rate regulation. Under the Commission's rules, a
     "small cable company," is one serving fewer than 400,000
     subscribers nationwide.[^279] Based on our most recent information,
     we last estimated that there were 1,439 cable operators that
     qualified as small cable companies.[^280] Since then, some of those
     companies may have grown to serve over 400,000 subscribers, and
     others may have been involved in transactions that caused them to
     be combined with other cable operators. Consequently, we estimate
     that there are fewer than 1,439 small entity cable system operators
     that may be affected by the decisions and rules adopted in this
     Order.

120. The Communications Act of 1934, as amended, also contains a
     definition of a small cable system operator, which is "a cable
     operator that, directly or through an affiliate, serves in the
     aggregate fewer than one 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."[^281]
     The Commission has determined that there are 68,500,000 subscribers
     in the United States.[^282] Therefore, we found that an operator
     serving fewer than 685,000 subscribers shall be deemed a small
     operator, if its annual revenues, when combined with the total
     annual revenues of all of its affiliates, do not exceed \$250
     million in the aggregate.[^283] Based on available data, we find
     that the number of cable operators serving 677,000 subscribers or
     less totals 1,450.[^284] Although it seems certain that some of
     these cable system operators are affiliated with entities whose
     gross annual revenues exceed \$250,000,000, we are unable at this
     time to estimate with greater precision the number of cable system
     operators that would qualify as small cable operators under the
     definition in the Communications Act.

121. **Direct Broadcast Satellite Service ("DBS"):** Because DBS
     provides subscription services, DBS falls within the SBA-recognized
     definition of cable and other program distribution services.[^285]
     This definition provides that a small entity is one with \$12.5
     million or less in annual receipts.[^286] There are four licensees
     of DBS services under Part 100 of the Commission's Rules. Three of
     those licenses are currently operational. Two of the licensees that
     are operational have annual revenues that may be in excess of the
     threshold for a small business.[^287] The Commission, however, does
     not collect annual revenue data for DBS and, therefore, is unable
     to ascertain the number of small DBS licensees that could be
     impacted by these proposed rules. DBS service requires a great
     investment of capital for operation, and we acknowledge, despite
     the absence of specific data on this point, that there are entrants
     in this field that may not yet have generated \$12.5 million in
     annual receipts, and therefore may be categorized as a small
     businesses.

122. **Home Satellite Dish ("HSD") Service.** Because HSD provides
     subscription services, HSD falls within the SBA-recognized
     definition of cable and other program distribution services.[^288]
     This definition provides that a small entity is one with \$12.5
     million or less in annual receipts.[^289] The market for HSD
     service is difficult to quantify. Indeed, the service itself bears
     little resemblance to other MVPDs. HSD owners have access to more
     than 265 channels of programming placed on C-band satellites by
     programmers for receipt and distribution by MVPDs, of which 115
     channels are scrambled and approximately 150 are unscrambled.[^290]
     HSD owners can watch unscrambled channels without paying a
     subscription fee. To receive scrambled channels, however, an HSD
     owner must purchase an integrated receiver-decoder from an
     equipment dealer and pay a subscription fee to an HSD programming
     package. Thus, HSD users include (1) viewers who subscribe to a
     packaged programming service, which affords them access to most of
     the same programming provided to subscribers of other MVPDs; (2)
     viewers who receive only non subscription programming; and (3)
     viewers who receive satellite programming services illegally
     without subscribing. Because scrambled packages of programming are
     most specifically intended for customers, these are the services
     most relevant to this discussion.[^291]

123. **Multipoint Distribution Service ("MDS), Multichannel Multipoint
     Distribution Service ("MMDS"), Instructional Television Fixed
     Service ("ITFS"), and Local Multipoint Distribution Service
     ("LMDS").** MMDS Systems, often referred to as "wireless cable,"
     transmit video programming to subscribers using the microwave
     frequencies of the MDS and ITFS.[^292] LMDS is a fixed broadband
     point-to-multipoint microwave service that provides for two-way
     video telecommunications.[^293]

124. In connection with the 1996 MDS auction, the Commission defined
     small businesses as entities that had annual average gross revenues
     of less than \$40 million in the previous three calendar
     years.[^294] This definition of a small entity in the context of
     MDS auctions has been approved by the SBA.[^295] The MDS auctions
     resulted in 67 successful bidders obtaining licensing opportunities
     for 493 Basic Trading Areas ("BTAs"). Of the 67 auction winners, 61
     met the definition of a small business. MDS also includes licensees
     of stations authorized prior to the auction. As noted, the SBA has
     developed a definition of small entities for pay television
     services, which includes all such companies generating \$12.5
     million or less in annual receipts.[^296] This definition includes
     multipoint distribution services, and thus applies to MDS licensees
     and wireless cable operators that did not participate in the MDS
     auction. Information available to us indicates that there are
     approximately 850 of these licensees and operators that do not
     generate revenue in excess of \$12.5 million annually. Therefore,
     for purposes of the IRFA, we find that there are approximately 850
     small MDS providers as defined by the SBA and the Commission's
     auction rules.

125. The SBA definition of small entities for cable and other program
     distribution services, which includes such companies generating
     \$12.5 million in annual receipts, seems reasonably applicable to
     ITFS.[^297] There are presently 2,032 ITFS licensees. All but 100
     of these licenses are held by educational institutions. Educational
     institutions are included in the definition of small
     business.[^298] However, we do not collect annual revenue data for
     ITFS licensees, and are not able to ascertain how many of the 100
     non-educational licensees would be categorized as small under the
     SBA definition. Thus, we tentatively conclude that at least 1,932
     licensees are small businesses.

126. Additionally, the auction of the 1,030 LMDS licenses began on
     February 18, 1998, and closed on March 25, 1998. The Commission
     defined "small entity" for LMDS licenses as an entity that has
     average gross revenues of less than \$40 million in the three
     previous calendar years.[^299] An additional classification for
     "very small business" was added and is defined as an entity that,
     together with its affiliates, has average gross revenues of not
     more than \$15 million for the preceding calendar years.[^300]
     These regulations defining "small entity" in the context of LMDS
     auctions have been approved by the SBA.[^301] There were 93 winning
     bidders that qualified as small entities in the LMDS auctions. A
     total of 93 small and very small business bidders won approximately
     277 A Block licenses and 387 B Block licenses. On March 27, 1999,
     the Commission re-auctioned 161 licenses; there were 40 winning
     bidders. Based on this information, we conclude 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.

127. In sum, there are approximately a total of 2,000 MDS/MMDS/LMDS
     stations currently licensed. Of the approximate total of 2,000
     stations, we estimate that there are 1,595 MDS/MMDS/LMDS providers
     that are small businesses as deemed by the SBA and the Commission's
     auction rules.

128. **Satellite Master Antenna Television ("SMATV") Systems**. The SBA
     definition of small entities for cable and other program
     distribution services includes SMATV services and, thus, small
     entities are defined as all such companies generating \$12.5
     million or less in annual receipts.[^302] Industry sources estimate
     that approximately 5,200 SMATV operators were providing service as
     of December 1995.[^303] Other estimates indicate that SMATV
     operators serve approximately 1.5 million residential subscribers
     as of July 2001.[^304] The best available estimates indicate that
     the largest SMATV operators serve between 15,000 and 55,000
     subscribers each. Most SMATV operators serve approximately
     3,000-4,000 customers. 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 SMATVs, we believe that a substantial
     number of SMATV operators qualify as small entities.

129. **Open Video Systems ("OVS").** Because OVS operators provide
     subscription services, OVS falls within the SBA-recognized
     definition of cable and other program distribution services. This
     definition provides that a small entity is one with \$1.25 million
     or less in annual receipts. The Commission has certified 25 OVS
     operators with some now providing service. Affiliates of
     Residential Communications Network, Inc. (RCN) received approval to
     operate OVS systems in New York City, Boston, Washington, D.C. and
     other areas. RCN has sufficient revenues to assure us that they do
     not qualify as small business entities. Little financial
     information is available for the other entities authorized to
     provide OVS service but have not yet begun to generate revenues, we
     conclude that at least some of the OVS operators qualify as small
     entities.

130. **MDU Operators:** The SBA has developed definitions of small
     entities for operators of nonresidential buildings, apartment
     buildings, and dwellings other than apartment buildings, which
     include all such companies generating \$6 million or less in
     revenue annually.[^305] According to the Census Bureau, there were
     31,584 operators of nonresidential buildings generating less than
     \$6 million in revenue that were in operation for at least one year
     at the end of 1997.[^306] Also according to the Census Bureau,
     there were 51,275 operators of apartment dwellings generating less
     than \$6 million in revenue that were in operation for at least one
     year at the end of 1997.[^307] The Census Bureau provides no
     separate data regarding operators of dwellings other than apartment
     buildings, and we are unable at this time to estimate the number of
     such operators that would qualify as small entities.

     **D. Description of Projected Reporting, Recordkeeping and Other
     Compliance Requirements for Small Entities.**

131. At this time, we do not anticipate that the adoption in the *Second
     Report and Order* of a limited exemption for small MVPDs from our
     signal leakage reporting requirements[^308] will impose any
     additional reporting or recordkeeping requirements. The exemption
     is intended to further congressional directives to reduce the
     regulatory burden on small entities where feasible. The *Second
     Report and Order* also modifies the Commission's rules to require
     that the cable home wiring and cable home run wiring rules should
     apply to all MVPDs in the same manner that they currently apply to
     cable operators.[^309] The *Second Report and Order* also requires
     that all non-cable MVPDs comply with the cable home wiring and
     cable home run wiring rules in the same manner as cable operators.

     **E**. **Steps Taken to Minimize the Significant Economic Impact on
     Small Entities and Significant Alternatives Considered.**

132. The RFA requires an agency to describe any significant alternatives
     that it has considered in developing its approach, which may
     include the following four alternatives (among others): "(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 and reporting requirements under the rule for such
     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 such small entities.[^310]

133. The *Second Further Notice* sought comment on whether to 1) limit
     the length of exclusive contracts between MVPDs and MDUs; (2)
     subject perpetual contracts to caps or fresh look windows; (3)
     apply the Commission's rules regarding the disposition of cable
     home wiring and subscriber termination rights to non-cable, in
     addition to cable MVPDs; (4) exempt small MVPDs from the annual
     signal leakage reporting requirements; and adopt DirecTV's proposal
     to establish a "virtual demarcation point" from which alternative
     providers could share cable wiring.[^311] In the *Second* *Report
     and Order* we decline to restrict exclusive contracts for the
     provision of video services in MDUs. We considered the pros and
     cons of limiting exclusives noting that some commenters supported
     restricting exclusive contracts to enable alternative MVPDs to gain
     a foothold in the market.[^312] Other commenters argued that while
     exclusive contracts are necessary for at least some period of time
     to allow MVPDs sufficient time to recoup and justify their
     investments, their terms should be determined and negotiated
     between MDU owners and the MVPDs. Ultimately, we concluded that the
     record does not demonstrate a need for government intervention with
     marketplace forces and privately negotiated contracts.

134. Similarly, we decline to ban perpetual contracts for the provision
     of video services in MDUs or subject such contracts to a fresh look
     window. We are aware that the Commission has already noted that
     perpetual MDU contracts may discourage or limit an alternative
     providers' entry in the MDU market.[^313] We conclude that because
     it appears that perpetual contracts are neither prevalent nor
     currently being entered into, such contracts do not represent a
     significant barrier to competition in the MDU market warranting
     government imposed restrictions. The record does not demonstrate
     that banning these contracts would significantly improve the
     competitive situation.

135. We also conclude that the cable home wiring and cable home run
     wiring rules should apply to all MVPDs in the same manner that they
     currently apply to cable operators. We considered that if we
     allowed our current rules to go unchanged, a subscriber's ability
     to terminate existing service and accept alternative service could
     be contingent on whether the wiring was installed by a cable, as
     opposed to a non-cable provider. Accordingly, we found that
     modifying the rule so that it applies uniformly to all MVPDs
     promotes regulatory parity and enhances competition among MVPDs.

136. We also adopt a limited exemption for small MVPDs from our signal
     leakage reporting requirements (47 CFR § 76.1804). Section
     76.1804(g) of the Commission's rules requires cable operators to
     file annually with the Commission certain information relating to
     their use of the aeronautical radio frequency bands. The limited
     reporting exemption adopted herein applies only to MVPDs with less
     than 1000 subscribers. We conclude that an exemption is consistent
     with congressional directives to reduce regulatory burdens on small
     MVPDs where feasible.

     **APPENDIX B**

     **Revised rules**

     **\[CHANGES MARKED IN BOLD\]**

     Part 76 of title 47 of the Code of Federal Regulations is amended
     as follows:

     PART 76 -- MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

### The authority citation for Part 76 continues to read as follows:

AUTHORITY: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 307, 308,
309, 312, 315, 317, 325, 338, 339, 503, 521, 522, 531, 532, 533, 534,
535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 558, 560,
561, 571, 572, 573.

### Section 76.5 is amended by revising the "Note" appended to paragraph (mm)(4) to read as follows:

Sec. 76.5 Definitions.

\* \* \* \* \* \*

\(mm\) \* \* \*

\(4\) \* \* \*

NOTE TO PARAGRAPH (mm)(4): For example, wiring embedded in brick, metal
conduit, **\[~~or~~\]** cinder blocks, **or sheet rock** with limited or
without access openings would likely be physically inaccessible; wiring
enclosed within hallway molding would not.

### Section 76.620 is amended by revising subsection (a) to read as follows:

Sec. 76.620 Non-cable multichannel video programming distributors.

\(a\) Sections 76.605(a)(12), 76.610, 76.611, 76.612, 76.614, 76.1804(a)
through (f), 76.616, and 76.617 shall apply to all non-cable MVPDs.
However, non-cable MVPD systems that are substantially built as of
January 1, 1998 shall not be subject to these sections until January 1,
2003. "Substantially built" shall be defined as having 75 percent if the
distribution plant completed. As of January 1, 2003, §76.1804(g) shall
apply to all non-cable MVPDs **serving 1000 or more subscribers or 1000
or more units**.

### Section 76.802 is amended by revising subsection (l) to read as follows:

Sec. 76.802 Disposition of cable home wiring.

\* \* \* \* \*

\(l\) The provisions of § 76.802 **\[~~except for § 76.802(a)(1)~~,\]**
shall apply to all MVPDs in the same manner that they apply to cable
operators.

### Section 76.804 is amended by revising paragraph (b)(3) to read as follows:

Sec. 76.804 Disposition of home run wiring.

> \* \* \* \* \* \*

\(b\) \* \* \*

\(3\) When an MVPD that is currently providing service to a subscriber
is notified either orally or in writing that that subscriber wishes to
terminate service and that another service provider intends to use the
existing home run wire to provide service to that particular subscriber,
a provider that has elected to remove its home run wiring pursuant to
paragraph (b)(1) or (b)(2) of this section will have seven days to
remove its home run wiring and restore the building consistent with
state law. If the subscriber has requested service termination more than
seven days in the future, the seven-day removal period shall begin on
the date of actual service termination (and, in any event, shall end no
later than seven days after the requested date of termination). If the
provider has elected to abandon or sell the wiring pursuant to paragraph
(b)(1) or (b)(2) of this section, the abandonment or sale will become
effective upon actual service termination or upon the requested date of
termination, whichever occurs first. For purposes of abandonment,
passive devices, including splitters, shall be considered part of the
home run wiring. The incumbent provider may remove its amplifiers or
other active devices used in the wiring if an equivalent replacement can
easily be reattached. In addition, an incumbent provider removing any
active elements shall comply with the notice requirements and other
rules regarding the removal of home run wiring. If the incumbent
provider intends to terminate service prior to the end of the seven-day
period, the incumbent shall inform the party requesting service
termination, at the time of such request, of the date on which service
will be terminated. The incumbent provider shall make the home run
wiring accessible to the alternative provider within **\[~~twenty-four
(24 hours of~~\]** **the 24-hour period prior to** actual service
termination.

6\. Section 76.806 is amended by adding a new subsection (d) to read as
follows:

Section 76.806 Pre-termination access to cable home wiring.

\* \* \* \* \*

**(d) Section 76.806 shall apply to all MVPDs.**

**APPENDIX C**

**Petitions for Reconsideration of the *Report and Order* were filed
by:**

Ameritech New Media

Consumer Electronics Manufacturers Association (CEMA)

DIRECTV, Inc.

Media Access Project and Consumer Federation of America (MAP/CFA)

National Cable Television Association (NCTA)

Time Warner Cable

North Carolina Cable Telecommunications Association

Wireless Cable Association

**Responses/Oppositions to the Petitions for Reconsideration were filed
by:**

Ameritech New Media

Bell Atlantic

Building Owners and Managers Association Int. (BOMA)

DIRECTV, Inc.

GTE Service Corporation

National Cable Television Association

OpTel, Inc.

RCN Telecom Services, Inc.

Time Warner Cable

Wireless Cable Association (WCA)

**APPENDIX D**

**Comments to the *Second Further Notice of Proposed Rulemaking* were
filed by:**

Ameritech New Media

Bell Atlantic

Building Owners and Managers Association, International (BOMA)

Cable Telecommunications Association

CableVision Communications, Inc.; Comcast Cable & Tele-Media Corporation
of Delaware

Community Associations Institute (CAI)

Cox Communications

DIRECTV

GTE Service Corporation

Independent Cable and Telecommunications Association (ICTA, now known as
the Independent Multi-Family Communications Council )

Media Access Project and Consumer Federation of America (MAP/CFA)

MCI Telecommunications

National Cable Television Association (NCTA)

Optel, Inc.

RCN Telcom Services, Inc.

Summit Communications

Tele-Communications, Inc. (TCI)

**Reply Comments to the *Second Further Notice of Proposed Rulemaking*
were filed by:**

Ameritech New Media

Adelphia Cable Communications

CableVision Communications, Inc.

Charter Communications, *et al.*

DIRECTV

GTE Service Corporation

Independent Cable and Telecommunications Association (ICTA)

Media Access Project and Consumer Federation of America (MAP/CFA)

National Cable Television Association

OpTel, Inc.

RCN Telecom Services, Inc.

Tele-Communications, Inc. (TCI)

Time Warner

United States Satellite Broadcasting Co. (USSB)

UTC, the Telecommunications Assoc. (UTC)

Wireless Cable Association International, Inc. (WCA)

**Surreply Comments to the *Second Notice of Proposed Rulemaking* were
filed by:**

Ameritech New Media

Building Owners and Managers Assoc. Int. (BOMA)

Cox Communications

GTE Service Corporation

Independent Cable and Telecommunications Association (ICTA)

Charter Communications, *et. al*.

Optel, Inc.

Wireless Cable Association, International (WCA)

> **Ex Parte Filings by:**

+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Astrovision         |                       |   |   |   |   |         |    |
| > Technologies        |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Broadband Service   |                       |   |   |   |   |         |    |
| > Providers           |                       |   |   |   |   |         |    |
| > Association         |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Building Owners and |                       |   |   |   |   |         |    |
| > Managers            |                       |   |   |   |   |         |    |
| > Association         |                       |   |   |   |   |         |    |
| > International       |                       |   |   |   |   |         |    |
| > (BOMA)              |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Carolina Broadband  |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Charter             |                       |   |   |   |   |         |    |
| > Communications      |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Choice Media Group  |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Community           |                       |   |   |   |   |         |    |
| > Associations        |                       |   |   |   |   |         |    |
| > Institute           |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Direct Digital      |                       |   |   |   |   |         |    |
| > Communications      |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Fore Property       |                       |   |   |   |   |         |    |
| > Company             |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Grande              |                       |   |   |   |   |         |    |
| > Communications      |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Independent Cable & |                       |   |   |   |   |         |    |
| > Telecommunications  |                       |   |   |   |   |         |    |
| > Association (ICTA)  |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Independent         |                       |   |   |   |   |         |    |
| > Multi-Family        |                       |   |   |   |   |         |    |
| > Communications      |                       |   |   |   |   |         |    |
| > Alliance (IMCC)     |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Institute of Real   |                       |   |   |   |   |         |    |
| > Estate Management   |                       |   |   |   |   |         |    |
| > (IREM)              |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > InteliCable Group,  |                       |   |   |   |   |         |    |
| > LLC                 |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > National Apartment  |                       |   |   |   |   |         |    |
| > Association (NAAA)  |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > National            |                       |   |   |   |   |         |    |
| > Multi-Housing       |                       |   |   |   |   |         |    |
| > Council (NMHC)      |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > OpTel, Inc.         |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Real Access         |                       |   |   |   |   |         |    |
| > Alliance            |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Satellite           |                       |   |   |   |   |         |    |
| > Broadcasting and    |                       |   |   |   |   |         |    |
| > Communications      |                       |   |   |   |   |         |    |
| > Association (SBCA)  |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Star Com Satellite  |                       |   |   |   |   |         |    |
| > Technologies, LLC   |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Sunrise Lakes Condo |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Telecommunications  |                       |   |   |   |   |         |    |
| > Research & Action   |                       |   |   |   |   |         |    |
| > Center              |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > United Homeowners   |                       |   |   |   |   |         |    |
| > Association         |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Winstar             |                       |   |   |   |   |         |    |
| > Communications      |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Wireless Cable      |                       |   |   |   |   |         |    |
| > Association         |                       |   |   |   |   |         |    |
| > International (WCA) |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+
| > Worldgate           |                       |   |   |   |   |         |    |
| > Condominium Unit    |                       |   |   |   |   |         |    |
| > Owners Association  |                       |   |   |   |   |         |    |
+-----------------------+-----------------------+---+---+---+---+---------+----+

**Separate Statement of**

**Commissioner Michael J. Copps**

*Re: In the Matter of Telecommunications Services, Inside Wiring and
Customer Premises Equipment, and In the Matter of 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*

This proceeding involves thorny issues, and it may be that we've taken
so long to resolve it because there are compelling arguments on both
sides and no easy answers. Despite threats of litigation by cable
operators when the rules were adopted, the industry has refrained from
actively pursuing legal challenge, which has given us time to see how
the rules work in practice.

Some argue that the "home run" wiring disposition procedures affirmed in
this *Order* will deprive renters of the benefits of the competitive
video programming marketplace, simply because they do not own their
homes. I, for one, would welcome the ability to treat renters and
homeowners more alike than we presently do. Cable provision is not
generally a competitive environment, and it would benefit both cable and
consumers if it were more competitive. Nevertheless, the Commission is,
at present, constrained in what it can do by significant legal
considerations, including landowners' property rights.

Under the circumstances, I believe the order strikes a rational balance.
I therefore support the decision.

**SEPARATE STATEMENT OF**

**COMMISSIONER KEVIN J. MARTIN**

**APPROVING IN PART, DISSENTING IN PART**

*Re: 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*

Although I understand the importance of the concerns we address in this
Order, I am not persuaded that we have the statutory authority to
regulate "home run" wiring.

This Order relies on three statutory provisions for jurisdiction:
Sections 4(i), 303(r), and 623 of the Communications Act of 1934.
Sections 4(i) and 303(r) confer broad, general authority. Section 4(i)
permits the Commission to "perform any and all acts, make such rules and
regulations, and issue such orders, not inconsistent with this chapter,
as may be necessary in the execution of its functions." 47 U.S.C. §
154(i). Similarly, Section 303(r) authorizes the Commission "from time
to time, as public convenience, interest, or necessity requires" to
"make such rules and regulations and prescribe such restrictions and
conditions, not inconsistent with law, as may be necessary to carry out
the provisions of this chapter." 47 U.S.C. § 303(r). I question whether
these general provisions authorize the Commission to regulate the
disposition of that part of a cable wire that runs from the demarcation
point in a multiple dwelling unit to the point at which the wiring
becomes devoted to an individual subscriber. Moreover, the
interpretation of these provisions in this item offers no limitation on
our authority, and thus I am not sure what this interpretation would
*not* allow us to do. I am not as comfortable interpreting these
provisions so broadly.[^314]

The Order also relies on Section 623, which instructs the Commission to
ensure that basic cable rates are reasonable. Primary responsibility for
these rates lies with the local franchise authorities, which set the
local rates consistent with FCC rules. We ensure rates are reasonable by
accepting cable operators' appeals of local rate orders. Again, I am not
sure that we can rely on this provision as a basis for regulating the
disposition of home run wiring inside an MDU.

Accordingly, I dissent in part from this Order.

[^1]: *In the Matter of Telecommunications Services, Inside Wiring,
    Customer Premises Equipment; In the Matter of 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,
    *Report and Order and Second Further Notice of Proposed Rulemaking*,
    13 FCC Rcd 3659 (1997); appeal docketed sub nom. *Charter
    Communications, Inc. v. FCC*, No.97-4120 (8^th^ Cir. 1997).

[^2]: 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.

[^3]: ^?^ 47 C.F.R. § 76.800(d). Cable home run wiring in an MDU is the
    wiring that runs from the demarcation point to the point at which
    the MVPD's wiring becomes devoted to an individual subscriber or
    individual loop. 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. The demarcation point is the
    point at (or about) twelve inches outside of where the cable wire
    enters the subscriber's premises, or where the wire is physically
    inaccessible at such point, the closest practicable point that does
    not require access to the subscriber's dwelling unit. *See* 47
    C.F.R. § 76.5(mm)(2). Cable home wiring does not include active
    elements such as amplifiers, converters or remote control units. See
    *Report and Order*, 13 FCC Rcd at 3712-13, ¶ 113.

[^4]: *See* 1996 Conference Report at 1, Telecommunications Act of 1996,
    Pub. L. No. 104-104, 110 Stat. 56, *codified at* 47 U.S.C. §§ 151 et
    seq. The 1996 Act amended the Communications Act of 1934.

[^5]: Generally, in non-loop-through configurations, each cable
    subscriber in an MDU has a dedicated line or "home run" line running
    to his or her premises from a common "feeder line" or "riser cable"
    that serves as the source of video programming signals for the
    entire MDU. The riser cable typically runs vertically in a
    multi-story building (e.g. up a stairwell) and connects to the
    dedicated home run wiring at a "tap" or "multi-tap." In loop-through
    configurations, a single cable provides service to multiple
    subscribers, and every subscriber on the loop receives the same
    cable service. *In the Matter of Telecommunications Services Inside
    Wiring*, CS Docket No.95-184, *Customer Premises Equipment, In the
    Matter of Implementation of the Cable Television Consumer Protection
    and Competition Act of 1992*:MM Docket No. 92-260 ("*Cable Home
    Wiring Order*"), 8 FCC Rcd 1435 (1993).

[^6]: *Report and Order*, 13 FCC Rcd at 3742, ¶ 178.

[^7]: Parties submitting petitions for reconsideration, responses, and
    oppositions to petitions for reconsideration are listed in Appendix
    C. Parties submitting comments, replies, and surreplies to the
    *Report and Order* and *Second Further Notice* and *ex* parte
    filings are listed in Appendix D.

[^8]: *See also* *Promotion of Competitive Networks in Local
    Telecommunications Markets, Wireless Communications Association
    International, Inc. Petition for Rulemaking to Amend Section 1.4000
    of the Commission's Rules to Preempt Restrictions on Subscriber
    Premises Reception or Transmission Antennas Designed to Provide
    Fixed Wireless Services, Implementation of the Local Competition
    Provisions in the Telecommunications Act of 1996, Review of Sections
    68.104 and 68.213 of the Commission's Rules Concerning Connection of
    Simple Inside Wiring to Telephone Networks*, First Report and Order
    and Further Notice of Proposed Rulemaking, WT Docket No. 99-217, CC
    Docket Nos. 96-98, 88-57, 15 FCC Rcd 22983 (2000)("*Competitive
    Networks Order and NRPM"*). The *Competitive Networks Order and
    NPRM* adopted measures to ensure that competing telecommunications
    providers are able to provide services to customers in multiple
    tenant environments ("MTEs") and raised issues similar to those
    discussed herein. Areas of overlap include the regulation of
    exclusive contracts and mandatory or equal access to buildings. We
    briefly address the relationship between these two proceedings where
    relevant below. In addition, the *Competitive Networks Order and
    NPRM* sought comment on whether the rules should be amended to
    permit an MDU owner to designate a telecommunications carrier to
    negotiate cable home run wiring when the incumbent no longer has a
    legally enforceable right to remain on the premises. *Id.* at
    23056-58, ¶¶ 171-175.

[^9]: Tele-Communications, Inc. ("TCI"), for example, argues that the
    Commission may not undertake any regulatory initiative for which it
    lacks specific statutory authority. TCI Comments at 1-2 (filed prior
    to TCI's acquisition by AT&T). The North Carolina Cable Television
    Association ("NCCTA") believes that the Commission lacks
    jurisdiction to adopt rules regulating home run wiring because it
    does not constitute wiring "within the premises" of a subscriber
    pursuant to Section 624(i) of the Communications Act. NCCTA Petition
    for Reconsideration at 7-8. Section 624(i) directs the Commission to
    "prescribe rules concerning the disposition, after a subscriber to a
    cable system terminates service, of any cable installed by the cable
    operator within the premises of subscriber." 47 U.S.C. § 544(i).

[^10]: *Report and Order*, 13 FCC Rcd at 3700-3709, ¶¶ 83-101. Section
    4(i) of the Communications Act, 47 U.S.C. § 154(i), permits the
    Commission to "perform any and all acts, make such rules and
    regulations, and issue such orders, not inconsistent with this Act,
    as may be necessary in the execution of its functions." Likewise,
    Section 303(r) of the Act, 47 U.S.C.§ 303(r), gives the Commission
    authority to "\[m\]ake such rules and regulations and prescribe such
    restrictions and conditions, not inconsistent with law, as may be
    necessary to carry out the provisions of this Act." Section 623, 47
    U.S.C. § 543, requires the Commission to ensure, by regulation, that
    the rates for the basic service tier are reasonable. Our home run
    wiring disposition procedures, by facilitating MVPD competition, are
    an appropriate and reasonable method of fulfilling Section 623's
    mandate.

[^11]: 47 U.S.C. § 521(1), (4), (6).

[^12]: *See* NCCTA Petition for Reconsideration at 7-8; Time Warner
    Cable Opposition to Petitions for Reconsideration at 12.

[^13]: 47 U.S.C. § 544(i) (Stating that "\[w\]ithin 120 days after the
    date of enactment of this subsection, the Commission shall prescribe
    rules concerning the disposition, after a subscriber to a cable
    system terminates service, of any cable installed by the cable
    operator within the premises of such subscriber").

[^14]: *See* *Report and Order*, 13 FCC Rcd at 3705-3708 ¶ 92-99
    (concluding that Section 624(i) of the Communications Act mandates
    that the Commission adopt rules regarding the disposition of wiring
    installed within the subscriber's premises, but does not limit the
    Commission's existing authority with respect to wiring outside those
    premises).

[^15]: Time Warner Petition for Reconsideration at 12.

[^16]: *Id*.

[^17]: *Id*.

[^18]: *Report and Order*, 13 FCC Rcd at 3682, ¶ 42.

[^19]: *Id*.

[^20]: *Id*.

[^21]: *See, e.g.*, DIRECTV Opposition and Comments at 4-6; GTE Service
    Corporation ("GTE") Opposition and Comments at 9-10.

[^22]: DIRECTV Opposition and Comments at 4-5.

[^23]: *Id*. at 5.

[^24]: *See* 47 U.S.C. § 544 (i); Media Access Project and Consumer
    Federation of America ("MAP/CFA") Petition for Reconsideration at 7.

[^25]: MAP/CFA Petition for Reconsideration at 3.

[^26]: *Id*. *See also* Letter dated December 22, 1999 from Jordan
    Clark, President, United Homeowners Association to William E
    Kennard, Chairman, FCC, filed *Ex Parte* in CS Docket No. 95-184 at
    1-2.

[^27]: MAP/CFA Petition for Reconsideration at 18, and notes 13, 14, and
    15.

[^28]: 47 U.S.C. § 303 note.

[^29]: MAP/CFA Petition for Reconsideration at 12-13.

[^30]: *Report and Order*, 13 FCC Rcd at 3689-3690, ¶ 60, n. 159.

[^31]: *Id*. at 3690-3691, ¶ 61.

[^32]: *Report and Order,* 13 FCC Rcd at 3689, ¶ 58.

[^33]: *Id.*

[^34]: *Id.* at ¶ 59.

[^35]: 47 C.F.R. § 76.804. In the *Competitive Networks Order and NPRM*,
    the Commission sought comment on whether, as an additional
    alternative, an MDU owner should be permitted to designate a
    telecommunications carrier to negotiate the purchase of the home run
    wiring. *See* n. 8, *supra.*

[^36]: 47 C.F.R. § 76.804(a)(2).

[^37]: DIRECTV Petition for Reconsideration at 2-5; MAP/CFA Petition for
    Reconsideration at 16-17; Wireless Cable Association International,
    Inc. ("WCA") Petition for Reconsideration at 5-8. *See also*
    Ameritech Comments in Response to Petitions for Reconsideration at
    2, 5-6; GTE Opposition & Comments at 14-15. As some petitioners
    explain, *see, e.g.,* DIRECTV Petition for Reconsideration at 3-5,
    such a change would conform our home run wiring rules to our home
    wiring rules, where we require incumbents to offer to sell their
    home wiring to their subscribers at replacement cost before they may
    remove it. 47 C.F.R. § 76.802. *See also* 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 at 1437-1438, ¶¶ 16-20

[^38]: DIRECTV Petition for Reconsideration at 3; MAP/CFA Petition for
    Reconsideration at 16-17; WCA Petition for Reconsideration at 5-6.
    *See also* Ameritech Comments in Response to Petitions for
    Reconsideration at 5-6; GTE Opposition & Comments at 15.

[^39]: WCA Petition for Reconsideration at 6-7.

[^40]: DIRECTV Petition for Reconsideration at 4-5; WCA Petition for
    Reconsideration at 8-10. *See also* Ameritech Comments in Response
    to Petitions for Reconsideration at 6-7.

[^41]: National Cable & Telecommunications Association ("NCTA")
    Opposition to Petitions for Reconsideration at 3-6; Time Warner
    Petition for Reconsideration at 9-12.

[^42]: *See, e.g.,* WCA Petition for Reconsideration at 6.

[^43]: None of the petitions for reconsideration cited actual examples
    of incumbents removing their wiring; indeed, WCA indicated that it
    was not aware of *any* example of an incumbent removing its wiring
    in order to use it in another building. *See* WCA Petition for
    Reconsideration at 6. At least two parties subsequently filed
    letters with the Commission providing concrete, though limited,
    examples of incumbents effectively removing their wiring or
    threatening to remove it. *See, e.g.,* Letter from James T.
    Davenport, President, Worldgate Condominium Unit Owners Association,
    to William E. Kennard, Chairman, FCC, at 2-3 (February 15, 2000);
    Letter from Jean L. Kiddoo, Counsel for Grande Communications, to
    William Caton, Acting Secretary, FCC at 2-3 (January 29, 2002).

[^44]: *Report and Order*, 13 FCC Rcd at 3684, ¶ 46
    (building-by-building context); *id*. at 3687-3688, ¶ 53
    (unit-by-unit context).

[^45]: *Id*. at 3682, ¶ 43.

[^46]: Time Warner Petition for Reconsideration at 18.

[^47]: *Id*. at 19.

[^48]: *Id*.

[^49]: WCA Petition for Reconsideration at 8-11.

[^50]: WCA Petition for Reconsideration at 8.

[^51]: *Id*. at 9.

[^52]: *Id.* at 10.

[^53]: *Id*. at 9-10.

[^54]: DIRECTV Opposition and Comments at 15, note 34. DIRECTV advocates
    a Commission-established purchase price for home run wiring based on
    depreciated value, salvage value, or replacement cost of the wiring.

[^55]: *Id*.

[^56]: *Id.*

[^57]: *See* ¶ 19, *supra.*

[^58]: *See* 47 C.F.R. § 76.804(a)(3).

[^59]: *Report and Order,* 13 FCC Rcd at 3685, ¶ 48.

[^60]: ^?^ *See* *e.g*., Time Warner Petition for Reconsideration at 13;
    NCCTA Petition for Reconsideration at 5.

[^61]: *Id.*

[^62]: BOMA Opposition to Petitions for Reconsideration at 3.

[^63]: *Id.*

[^64]: *Id.*

[^65]: *Report and Order,* 13 FCC Rcd at 3685, ¶ 48.

[^66]: *Id.* at 3685-3686, ¶ 49.

[^67]: *Id. See* 47 C.F.R. § 76.804(b)

[^68]: *Report and Order,* 13 FCC Rcd at 3685-3686, ¶ 49.

[^69]: The petitions and oppositions received by the Commission raised
    the length of the notice period as an issue only as it relates to
    unit-by-unit conversions. *See* Ameritech Petition for Partial
    Reconsideration at 4; WCA Petition for Reconsideration at 16; GTE
    Opposition and Comments at 13.

[^70]: Ameritech Petition for Partial Reconsideration at 4 (noting that,
    in contrast, under the Commission\'s single dwelling-unit rules, if
    the occupant of a single family home calls to cancel cable service,
    the incumbent must make its election while the caller is still on
    the line). *See* 47 C.F.R. § 76.802.

[^71]: WCA Petition for Reconsideration at 17; GTE Opposition and
    Comments at 13.

[^72]: Ameritech Petition for Partial Reconsideration at 6-9.

[^73]: 47 C.F.R. § 76.804(b)(3).

[^74]: Ameritech Petition for Partial Reconsideration at 6-9.

[^75]: *See* 47 C.F.R. § 76.804(b)(3) (emphasis added).

[^76]: NCTA Petition for Reconsideration at 7.

[^77]: 47 C.F.R. § 76.804(b)(3).

[^78]: Time Warner Petition for Reconsideration at 24.

[^79]: *Id.*

[^80]: Ameritech Comments in Response to Petitions for Reconsideration
    at 7-9.

[^81]: *Id*.

[^82]: *See, e.g.,* Connecticut (Conn. Gen. Stat. § 16-333a)(1975),
    Delaware (26 Del. C. § 613)(1983) (only if utility easements also
    exist), District of Columbia (D.C. Code § 43-1844.1)(1981), Florida
    (Fla. Stat. § 718.1232)(1982) (condos only), Illinois (55 ILCS
    5/5-1096)(1993), Kansas (K.S.A. § 58-2553)(1983), Maine (14 M.R.S.A.
    § 6041)(1987), Massachusetts (Mass. Ann. Laws ch. 166A, § 22)(1995),
    Minnesota (Minn. Stat. § 238.23)(1983), Nevada (Nev. Rev. Stat. Ann.
    § 711.255)(1987), New Jersey (N.J. Stat. § 48:5A-49)(1982), New York
    (NY Pub Ser § 228)(1995), Pennsylvania (68 P.S. § 250.503-B)(1993),
    Rhode Island (R. I. Gen. Laws, § 39-19-10)(1993), West Virginia (W.
    Va. Code § 5-18A-1)(1995), Wisconsin (Wis. Stat. § 66.0421)(2001),
    and Virginia (Va. Code Ann. § 55.248, 13:2)(1997). Several states
    have considered initiatives in the past few years relating to
    mandatory access issues. Although mandatory access laws are by no
    means uniform in structure or language, we quote relevant portions
    of Pennsylvania's mandatory access statute as an example of such
    laws:

    > The tenant has the right to request and receive CATV services from
    > an operator or a landlord provided that there has been an
    > agreement between a landlord and an operator through the
    > negotiation process outlined in section 504-B or through a ruling
    > of an arbitrator as provided for in this article. A landlord may
    > not prohibit or otherwise prevent a tenant from requesting or
    > acquiring CATV services from an operator of the tenant's choice
    > provided that there has been an agreement between a landlord and
    > operator through the negotiation process outlined in section 504-B
    > or through a ruling of an arbitrator as provided for in this
    > article. A landlord may not prevent an operator from entering such
    > premises for the purposes of constructing, reconstructing,
    > installing, servicing or repairing CATV system facilities or
    > maintaining CATV services if a tenant of a multiple dwelling
    > premises has requested such CATV services and if the operator
    > complies with this article. The operator shall retain ownership of
    > all wiring and equipment used in any installation or upgrade of a
    > CATV system in multiple dwelling premises. An operator shall not
    > provide CATV service to an individual dwelling unit unless
    > permission has been given by or received from the tenant occupying
    > the unit. PA Stat. 68 § 250.503-B (enacted December 20, 1990).

    The term "operator" as used in the Pennsylvania statute is defined
    as "the operator of a CATV system holding a franchise granted by the
    municipality or municipalities in which multiple dwelling premises
    to be served \[are\] located." PA Stat. 68 §250.501-B(5). Thus, the
    Pennsylvania mandatory access statute benefits only franchised MVPDs
    and not their unfranchised competitors.

[^83]: *See Report and Order*, 13 FCC Rcd at 3744, ¶ 182.

[^84]: *See* 47 CFR § 76.804(a).

[^85]: *See, e.g.,* n. 82, *supra,* (setting out the Pennsylvania
    statute and definition of "operator" as a franchised operator).

[^86]: *In the Matter of Competition, Rate Deregulation and the
    Commission's Policies Relating to the Provision of Cable Television
    Service*, 5 FCC Rcd 4962, 5034-5035 (1990), ¶¶ 137-140.

[^87]: *Report and Order*, 13 FCC Rcd at 3748, ¶ 190.

[^88]: *Id.*

[^89]: *Report and Order*, 13 FCC Rcd at 3748, ¶ 189.

[^90]: Arguments in favor of preemption can be found in the following
    filings: Independent Cable & Telecommunications Association ("ICTA")
    Reply Comments at 4 (ICTA, now known as the Independent Multi-Family
    Communications Council, conducted a survey of some of its members,
    demonstrating that those independent operators are significantly
    less likely to provide service to MDUs in states with mandatory
    access statutes than they are in states without such statutes); WCA
    Petition for Reconsideration at 12-14; CEMA Petition for
    Reconsideration at 2-4; GTE Opposition and Comments at 7, n. 10; RCN
    Comments at 8-10. Arguments against preemption can be found in the
    following filings: Adelphia Reply Comments at 2-3 (Adelphia asserts
    that mandatory access laws were intended to promote competition and
    increase consumer choice in the MDU market by preventing landlords
    from excluding franchised cable operators from their MDUs. Adelphia
    also points out that a mandatory access statute does not prevent
    alternative providers from accessing MDUs); Time Warner Reply
    Comments at 9-11; Time Warner Opposition to Petitions for
    Reconsideration at 2-9; Ameritech Comments in Response to Petitions
    for Reconsideration at 5; NCTA Petition for Reconsideration at 2-5;
    NCTA Opposition to Petitions for Reconsideration at 6-9.

[^91]: Certain commenters deny that there is a lack of competition in
    mandatory access states but offer no supporting evidence. *See* Time
    Warner Cable Opposition to Petitions for Reconsideration at 6; NCTA
    Opposition to Petitions for Reconsideration at 8.

[^92]: *See, e.g.,* PA St. § 250.503-B, *quoted, supra.* It follows that
    where there is mandatory access, only franchised cable operators
    have the practical ability to form exclusive MDU contracts.

[^93]: On this point, OpTel, Inc., states that apart from Illinois and
    Florida,

    > OpTel has no current intention of expanding its services into any
    > other mandatory access states. Indeed, OpTel has decided to avoid
    > certain otherwise attractive urban markets precisely because they
    > are located in mandatory access states. For example, within the
    > last two years, OpTel attempted to initiate cable service to MDUs
    > in Las Vegas, Nevada; a market that is currently underserved.
    > Largely in response to threats by the incumbent operators to
    > overbuild any properties served by OpTel and to sue OpTel and the
    > related property owner based on the state mandatory access statute
    > if OpTel displaced any incumbent operator or any existing MDU
    > wiring, OpTel withdrew from the market at a significant cost to
    > OpTel. Declaration of Louis Brunel, *Ex Parte* submission of
    > OpTel, filed June 22, 1999.

    ICTA relates similar experiences:

    > Property owners and associations have proven reluctant or
    > unwilling to contract with alternative multichannel video
    > programming distributors where forced access via condemnation is
    > available to the cable franchisee. Property owners and
    > associations simply will not suffer an overbuild of their
    > properties even under circumstances where the cable franchisee's
    > service and rates are less than optimal. Comments of ICTA at 50.

[^94]: *Report and Order*, 13 FCC Rcd at 3697-3698, ¶ 77.

[^95]: *Id.* at ¶ 79.

[^96]: NCTA Petition for Reconsideration at 3-4.

[^97]: *Report and Order*, 13 FCC Rcd at 3697-3698, ¶ 77.

[^98]: Time Warner concludes that the requirement that an incumbent
    obtain an injunction within 45 days effectively destroys any
    presumption of the validity of an incumbent's legal rights, and only
    serves to increase the likelihood of litigation. Time Warner
    Petition for Reconsideration at 15. NCTA argues that if a state
    court rules in favor of the incumbent more than 45 days after the
    initial notice, it should be presumed that the incumbent had a right
    to maintain its wiring on the premises and no further steps to
    transfer control should be implemented, pending a final outcome of
    the litigation. NCTA Petition for Reconsideration at 5-6. In
    response to NCTA, if the incumbent were to obtain a ruling from a
    state court establishing its right of mandatory access more than 45
    days after the initial notice, under our rules the MDU owner would
    no longer have the right to exercise the home run wiring disposition
    procedures, unless or until the court ruling were changed. *See* 47
    C.F.R. § 76.804(a)(1), (b)(1), and (c). Pursuant to such a state
    court ruling, the incumbent would then control the wiring.

[^99]: *Report and Order*, 13 FCC Rcd at 3697-3698, ¶ 77.

[^100]: *Report and Order,* 13 FCC Rcd at 3766, ¶ 231.

[^101]: WCA Petition for Reconsideration at 21.

[^102]: *Report and Order,* 13 FCC Rcd at 3770, ¶ 239.

[^103]: *Report and Order*, 13 FCC Rcd at 3712, ¶ 109.

[^104]: *See* 47 C.F.R § 76.805(c).

[^105]: 47 C.F.R. § 76.805(a) and (b).

[^106]: 47 C.F.R. § 76.805(b).

[^107]: Time Warner Petition for Reconsideration at 20-21.

[^108]: *See* 47 C.F.R. § 76.805(a) and (b). And to the extent that
    state law provides that an incumbent's outright ownership of molding
    carries with it the right to exclude others (absent a contrary
    agreement), we would consider such provision to be part of the
    exclusive contractual rights held by the incumbent MVPD.

[^109]: *See* 47 C.F.R. § 76.802(j) ("\[I\]ncumbent cable operators must
    take reasonable steps within their control to ensure that an
    alternative service provider has access to the home wiring at the
    demarcation point").

[^110]: 47 C.F.R. § 76.5(mm).

[^111]: 47 C.F.R. § 76.5(mm)(4).

[^112]: *Id*.

[^113]: *Report and Order*, 13 FCC Rcd at 3721-3722, ¶ 133, 134.
    Proposed alternate locations for the demarcation point included the
    "minimum point of entry" (such as is used in the telephony context);
    a location near the entry to the building, such as a basement,
    telephone vault, or frame room; and a location within the MDU's
    common areas where existing wiring is first readily accessible to
    competitors. 47 C.F.R. § 68.105(b) defines "minimum point of entry"
    as the "closest practicable point to where the wiring crosses a
    property line or the closest practicable point to where the wiring
    enters a multiunit building or buildings.

[^114]: *See*, e.g., 47 C.F.R. § 76.802(j) (incumbent cable operator
    must take reasonable steps to ensure that competitors have access to
    home wiring at the demarcation point). In addition, the operation of
    our rules governing the disposition of cable home wiring (47 CFR §
    76.802) and home run wiring (47 CFR § 76.804) is in part determined
    with reference to the demarcation point.

[^115]: Letter dated September 23, 1998 from Attorney William L. Fishman
    (Counsel for RCN) to Deborah A. Lathen, Chief, Cable Services
    Bureau, FCC, CSR-5311 ("RCN Letter").

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

[^117]: RCN Letter at 3 (stating that "\[t\]he MDU owners and managers
    will not allow RCN to cut, open, plug, spackle, tape, sand and paint
    the ceilings and walls in order to install new lines because it is
    disruptive and eventually could require the replacement of entire
    ceilings and walls").

[^118]: *Id.*

[^119]: RCN Letter at 4.

[^120]: ICTA December 13, 2000 *Ex Parte* at 2. ICTA states that MDU
    owners frequently object to competitive MVPDs removing sections of
    walls in order to access wiring at the demarcation point, as
    currently defined, because of the disruption and possible damage to
    walls. The result, claims ICTA, is that competition is suppressed,
    which is directly contrary to the goals of the Commission's rules.

[^121]: 47 C.F.R. § 76.5(mm)(4).

[^122]: *Id.*

[^123]: Section 653 of the Communications Act, 47 U.S.C. § 573.

[^124]: *Implementation of Section 302 of the Telecommunications Act of
    1996, Open Video Systems,* Order on Remand, CS Docket No. 96-46, 14
    FCC Rcd 19,700 (1999).

[^125]: *Id.* at 19,701, ¶ 3.

[^126]: Time Warner Petition for Reconsideration at 21.

[^127]: *Id*.

[^128]: *Id.*

[^129]: Bell Atlantic and GTE combined to create Verizon Communications
    in 2000, but we will continue to refer to the commenter as Bell
    Atlantic.

[^130]: Opposition of Bell Atlantic at 1.

[^131]: *Id*. at 2.

[^132]: *Id.*

[^133]: GTE Opposition and Comments at 11-12.

[^134]: In support of its argument, Time Warner cites *Metropolitan
    Fiber Systems,* 12 FCC Rcd 6901 (1997), which involved an entity
    claiming to be providing video dialtone service as a basis to
    transition to an open video system. In that order, the Commission
    discussed two aspects of video dialtone service (i.e., a common
    carrier platform and sufficient capacity to serve multiple customer
    programmers) and concluded that the petitioner provided insufficient
    evidence to permit the Commission to conclude the petitioner was
    operating a video dialtone service in the first place.^?^ The
    Commission's OVS rules were not at issue.

[^135]: *Second Further Notice*, 13 FCC Rcd at 3778-82, ¶¶ 258-71.

[^136]: *See e.g.,* Declaration of Lyn C. Lansdale, Director of Resident
    Services for Avalon Properties, Inc., in support of the Joint
    Surreply of Building Owners and Managers Association International,
    Institute of Real Estate Management, the International Council of
    Shopping Centers, the National Apartment Association, the National
    Multi-Housing Council, and the National Realty Committee (BOMA) ¶ 4
    ("Most of the video programming providers serving our existing
    properties are franchised cable operators. Our agreements with these
    companies generally date back to when owners had no choice and
    therefore no leverage with franchise providers; as a result, our
    contracts typically grant exclusive easements, in perpetuity,
    concurrent with franchise renewals."). *See also* Michael D.
    Whinston, Report on the Competitive Effects of Exclusive Contracting
    for Video Programming Services in Multiple Dwelling Units (March 2,
    1998), in support of Reply Comments of ICTA, Attachment A ¶ 24
    ("*Whinston Report"*) ("\[F\]ranchised cable operators signed many
    MDUs to very long-term, and even perpetual, exclusive contracts well
    before any alternative providers were on the scene. At the time
    these contracts were signed, the owners of these MDUs may well not
    have foreseen *any* possibility of future competition in the video
    programming distribution, and so it would have been particularly
    easy for the franchised cable operator to induce an MDU owner to
    accept an anti-competitive agreement.").

[^137]: *Annual Assessment of the Status of Competition in the Market
    for the Delivery of Video Programming,* CS Docket No. 01-129, Eighth
    Annual Report ("*Eighth Annual Report"),* 17 FCC Rcd 1244,
    1301-1302, ¶¶ 124, 126.

[^138]: *See* Letter from Matthew C. Ames, Esq. to William Caton, Acting
    Secretary, FCC, "*Ex Parte* Presentation in CS Docket No. 95-184,"
    (February 6, 2002) (enclosing "The National Multi-Housing
    Council/National Apartment Association Joint Legislative Program,
    Apartment (MDU) Video Survey, The Extent of Perpetual Video
    Contracts in an Apartment Market") ("RAA survey").

[^139]: There are an estimated 21.4 million MDUs currently in the United
    States, with 23.3 million projected by 2005. *Eighth Annual Report*,
    17 FCC Rcd at 1301, ¶ 123.

[^140]: 13 FCC Rcd at 3754, ¶ 203.

[^141]: *See* n. 8, *supra*.

[^142]: MTEs, or multiple tenant environments, include both multi-unit
    residences and multi-establishment commercial buildings. MDUs, or
    multiple dwelling units, include multi-unit residences only.

[^143]: *Competitive Networks Order and NRPM, 15 FCC Rcd* at 22999, ¶
    33.

[^144]: *Id.* Real Access Alliance argued that potential revenue streams
    in residential MTEs are not enough to attract competitors without
    exclusive contracts, and that commercial customers generally demand
    higher levels of service than do residential customers, thereby
    generating higher revenue per customer in commercial MTEs. This
    permits telecommunications providers to recoup their facilities'
    investments even if they serve only a subset of tenants within a
    property, allowing multiple providers to exist viably in the
    building.

[^145]: *Id.* at 33052, ¶¶ 161-162.

[^146]: *Id.* at 22998-22999, ¶¶ 32-34

[^147]: *Id.*

[^148]: *Id.* at 22999, ¶ 33.

[^149]: *Second Further Notice*, 13 FCC Rcd at 3754 and 3778, ¶¶ 203 and
    258.

[^150]: *Id.* at 3748-50, ¶¶ 191-202.

[^151]: *Id.* at 3778-79, ¶¶ 259-60.

[^152]: CAI represents more than 160,000 community associations,
    cooperatives and planned communities throughout the United States.

[^153]: CAI Comments at 2; WCA Comments at 1-8; Real Estate Alliance *Ex
    Parte*, May 24, 2000 at 1-3; BOMA Further Joint Comments at 2-6;
    Intelicable *Ex Parte,* June 16, 2000 at 1-3; OpTel Comments at 4-6;
    GTE at 3. *See* ICTA Comments at 2, 9, 13 (asserting that long-term
    exclusive contracts are not anti-competitive and that such contracts
    are necessary to protect high-cost alternative MVPDs that cannot
    effectively compete either in the current or future overbuild
    environment). *See also Whinston Report* (referring to, but not
    providing, the results of a survey conducted by ICTA, which
    presumably served as a basis for the Report's conclusions that
    absent exclusives, PCOs cannot compete with incumbents or
    overbuilders; that overbuilding is inefficient because it might
    discourage PCOs' investment in MDUs; and that PCOs' costs exceed
    cable operators' costs, but that nevertheless PCOs' service is more
    competitive than cable operators' service).

[^154]: *Id.*

[^155]: ICTA *Ex Parte*, June 6, 2000 at 1-5; Real Access Alliance *Ex
    Parte,* May 24, 2000 at 2-5; Intelicable *Ex Parte,* June 16, 2000,
    at 1-3.

[^156]: *Id.*

[^157]: *Id*. *See Competitive Networks Order and NRPM,* 15 FCC Rcd at
    22998-23000*, ¶¶* 30-36*.*

[^158]: ICTA Comments at 4-9; OpTel Comments at 6-7; WCA Comments at
    3-11. *See also* Time Warner Comments at 2-4.

[^159]: *Id.*

[^160]: ICTA Comments at 4-9; OpTel Comments at 6-7; WCA Comments at
    3-11.

[^161]: CAI Comments at 2-4; BOMA Comments at 2-4.

[^162]: *Id.*

[^163]: *See* Comments of Bell Atlantic at 3-4; Cablevision at 4;
    MAP/CFA at 4-6; RCN at 3-4; UTC Reply Comments at 2-3.

[^164]: Cox Comments at 2-8.

[^165]: Cox Comments at 5.

[^166]: Ameritech Comments at 2-3; Winstar Comments at 5-10.

[^167]: Winstar Comments at 4-7.

[^168]: Charter filed joint comments with Greater Media, Inc., Jones
    Intercable, Inc., Marcus Cable Operating Company, L.P., Benchmark
    Communications, and Century Communications Corp.

[^169]: *See* BOMA Further Joint Comments at 5-6; Charter Reply Comments
    at 13-16; NCTA Comments at 1-5; Time Warner Comments at 2-4; TCI
    Reply Comments at 1-4.

[^170]: Section 301(b)(2) of the 1996 Act amended section 623(d) of the
    Communications Act, codified at 47 U.S.C. § 543(d), which provides,
    in pertinent part:

    > A cable operator shall have a rate structure, for the provision of
    > cable service, that is uniform throughout the geographic area in
    > which cable service is provided over its cable system. This
    > subsection does not apply to . . . . a cable operator with respect
    > to the provision of cable service over its cable system in any
    > geographic area in which the video programming services offered by
    > the operator in that area are subject to effective competition . .
    > . . Bulk discounts to multiple dwelling units shall not be subject
    > to this subsection, except that a cable operator of a cable system
    > that is not subject to effective competition may not charge
    > predatory prices to a multiple dwelling unit.

[^171]: TCI Comments at 2.

[^172]: *See* ¶¶ 62-63, *supra.*

[^173]: *Competitive* *Networks Order and NPRM*, 15 FCC Rcd at 22996, ¶
    26.

[^174]: *See Eighth Annual Report*, 17 FCC Rcd at 1301-1302, ¶¶ 125-26.

[^175]: *Id.*

[^176]: *Eighth Annual Report,* 17 FCC Rcd at 1248, ¶ 5, and *Annual
    Assessment of the Status of Competition in the Market for the
    Delivery of Video Programming,* MB Docket No. 02-145, Ninth Annual
    Report (*"Ninth Annual Report"),* FCC 02-338 (released December 31,
    2002), ¶ 4.

[^177]: ICTA Comments at 4; OpTel Further Reply, Attachment B.

[^178]: ICTA Comments at 4.

[^179]: *See* OpTel Further Reply, Attachment B.

[^180]: For example, OpTel's submission does not account for
    depreciation of tangible assets and does not address the fact that
    private cable operators' investments are short, compared to cable
    operators' "long-lived" investments. Moreover, it appears that
    OpTel's cost recovery estimates exceed recovery periods afforded
    cable operators, which cover the costs involved in serving an entire
    franchise area, not select MDUs within a franchise area. *See Media
    General Cable of Fairfax County,* 11 FCC Rcd 3655 (1996) (finding
    through a cost of service filing, that a cable operator justified
    and thus was allowed to recover start-up losses incurred during the
    first [eight]{.underline} years of operation); *se*e *also* Comments
    of CATA and Carolina Broadband. Both CATA and Carolina Broadband
    claim that, unlike PCOs that are able to "cream skim" desirable
    MDUs, cable operators are obligated to serve entire franchise areas
    and further are subjected to additional regulatory restraints, such
    as must carry, PEG and leased access, and franchise fees. Indeed,
    Carolina Broadband characterizes the need for exclusives to
    recoup/realize a sufficient return on investments as a myth, noting
    that exclusives are neither advocated nor required for single-family
    residences where the costs per subscriber are far greater.

[^181]: *See* ¶¶ 65-67, *supra.*

[^182]: CAI Comments at 2-4; BOMA Comments at 2-4. *See also Eighth
    Annual Report*, 17 FCC Rcd at 1248 and 1301-1302, ¶¶ 5 and 125-126.

[^183]: *See Second Further Notice*, 13 FCC Rcd at 3780, ¶¶ 263-65.

[^184]: RCN Comments at 15-16; ICTA Comments at 11-15; OpTel Comments at
    7-9; WCA Comments at 11-17; CAI Comments at 5-6.

[^185]: MAP/CFA Comments at 9.

[^186]: *See* 47 C.F.R. § 76.804(a)(1) and (b)(1).

[^187]: RCN Comments at 15-16; ICTA Comments at 11-15; OpTel Comments at
    7-9; WCA Comments at 11-17; CAI Comments at 5-6. OpTel advocates a
    nationwide window of three to five years from the date of the Order.
    WCA and CAI did not endorse a single fresh look window, and instead
    advance a flexible approach triggered by the presence of competitive
    MVPD providers.

[^188]: Bell Atlantic Comments at 4-5.

[^189]: BOMA Comments at 7-8.

[^190]: BOMA Comments at 4-9; NCTA Comments at 2-5; Time Warner Comments
    at 5-8; US West Comments at 2-5.

[^191]: NCTA Comments at 2-5; Time Warner Comments at 5-8; Charter Joint
    Reply Comments at 16.

[^192]: *See Eighth Annual Report,* 17 FCC Rcd at 1250, 1282, ¶¶ 12, 77.

[^193]: *Id.* at 1324-1327, ¶¶ 196-207.

[^194]: For example, StarCom claims, without substantiation, that
    "approximately 30% - 40% of apartment properties are tied up in
    perpetual contracts today." Letter from Christopher L. Day, Chief
    Executive Officer, StarCom Satellite Technologies, LLC, to William
    E. Kennard, Chairman, FCC (December 13, 1999) (comparing the
    financial models of PCOs and cable operators, and discussing the
    impact of cable perpetual contracts on PCOs).

[^195]: *See* Letter from Matthew C. Ames, Esq. to William Caton, Acting
    Secretary, FCC, "*Ex parte* Presentation in CS Docket No. 95-184,"
    (February 6, 2002) (enclosing "The National Multi Housing
    Council/National Apartment Association Joint Legislative Program,
    Apartment (MDU) Video Survey, The Extent of Perpetual Video
    Contracts in an Apartment Market") ("RAA survey").

[^196]: The survey of large MDUs covered a total of 4,795 member
    properties, which represented a total of 1,207,184 units. Of those,
    only 241 properties, which represented 58,208 units or 4.8 percent
    of the total 1,207,184 units surveyed, were subject to perpetual
    contracts. The survey of small MDUs covered a total of 74 randomly
    selected properties. Of those properties, only 2 properties, or 3.8
    percent of the total properties surveyed, were subject to perpetual
    contracts. *See* RAA survey at 2-4. The RAA survey further indicated
    that approximately 75 percent of owners of large MDUs subject to
    perpetual contracts would renegotiate or terminate the contracts if
    given the opportunity. The RAA survey asked such owners also to rank
    the reasons they would want to renegotiate or terminate the
    contracts (ranging from "1" as least important to "5" as most
    important reason), and then weighted and averaged the responses (in
    terms of the number of units covered by the perpetual contracts).
    The responses indicated that the most important reason cited was the
    low level of MVPD compensation to the owner (4.6 ranking), the
    second most important reason was the incumbents' lack of new
    services or technology (3.8 ranking), and the third most important
    reason was poor programming options (3.2 ranking). Reasons of lesser
    importance included poor service (2.6 to 2.9 ranking), residents'
    expressed interest in competition (2.7 ranking), and high
    subscription rates (2.6 ranking). *See* RAA survey at 4.

[^197]: RAA survey at 5.

[^198]: Because perpetual contracts potentially could bind parties
    indefinitely and ultimately restrain and/or negatively impact
    commerce, such contracts generally have not been favored in law.
    *See, e.g.,* *Madisonville Boatyard, Ltd. v. Poole*, No, Civ. A.
    01-970, slip op. (E.D. La. 2001) (finding that a lease for realty
    that purported to grant unlimited renewal options took property out
    of commerce indefinitely and thus was void as against public
    policy); *Branch v. Mobil Oil Corp.*, 772 F. Supp. 570 (W.D. Ok
    1991) (finding that a contract that purported to release heirs and
    assignees from liability in perpetuity was void as against public
    policy).

[^199]: *See* 47 C.F.R. §§ 76.802(a)(1) and 76.806.

[^200]: *See Second Further Notice*, 13 FCC Rcd at 3780-81, ¶¶ 267-68.
    The proposed rule modifications only address extending the home
    wiring rules, which currently only apply to cable operators, to all
    MVPDs. For a definition of MVPDs, *see* 47 U.S.C. § 522(13).

[^201]: *Id.*

[^202]: *See* *Second Further Notice*, 13 FCC Rcd at 3780-3781, ¶¶
    267-268.

[^203]: *See* MCI Comments at 3; US West Comments at 3; CAI Comments at
    7; RCN Comments at 18; Time Warner Reply Comments at 11; Ameritech
    Comments at 12.

[^204]: US West Comments at 13 and RCN Comments at 18.

[^205]: CAI Comments at 7.

[^206]: *Id.*

[^207]: Ameritech Comments at 21.

[^208]: 47 U.S.C. § 544(i).

[^209]: *See Cable Home Wiring Order*, 8 FCC Rcd 1435, ¶ 2.

[^210]: *Id.*

[^211]: 47 U.S.C. §§ 152(a), 154(i) and 303(r).

[^212]: *See, e.g.*, *United States v. Midwest Video Corporation*, 406
    U.S. 649 (1972) ("*Midwest Video I*"). *See also United States v.
    Southwestern Cable Co.*, 392 U.S. 157 (1968) (upholding certain FCC
    regulations over cable television systems prior to the enactment of
    Title VI, where the regulations were deemed to be necessary to
    prevent the undermining of the Commission's explicitly authorized
    mandates in the broadcasting area). Moreover, Section 1 of the
    Communications Act, 47 U.S.C. § 151, specifically states that the
    Commission was created for the purpose of, *inter alia,* "regulating
    interstate and foreign commerce in communications by wire and radio
    so as to make available, so far as possible, to all the people of
    the United states, . . . a rapid, efficient, Nation-wide, and
    world-wide wire and radio communication service with adequate
    facilities at reasonable charges." Section 1 goes on to state that
    the Commission shall execute and enforce the provisions of the Act.
    *Id.*

[^213]: 47 U.S.C. § 152(a).

[^214]: *See Southwestern Cable*, 392 U.S. at 172 (stating that
    "\[n\]othing in the language of § 152(a), in the surrounding
    language, or in the Act's history or purposes limits the
    Commission's authority to those activities and forms of
    communication that are specifically described by the Act's other
    provisions"); *Midwest Video I*, 406 U.S. at 660 (explaining that
    *Southwestern Cable* stands for the proposition that "§ 2(a) is
    itself a grant of regulatory power and not merely a prescription of
    the forms of communication to which the Act's other provisions
    governing common carriers and broadcasters apply").

[^215]: *Midwest Video I*, 406 U.S. at 667-68 (quoting *First Report and
    Order*, 20 FCC 2d 201, 202 (1969)).

[^216]: *Midwest Video I,* 406 U.S. at 667.

[^217]: *See FCC v. Midwest Video Corporation*, 440 U.S. 689 (1979
    ("*Midwest Video II*") (holding that, in the absence of an express
    mandate under the Act, the Commission did not have the authority to
    impose common carrier-type obligations on cable systems because such
    regulation was antithetical to a basic parameter established for
    broadcasting under then-Section 3(h) (now 3(10)) of the Act, which
    barred common carrier treatment of broadcasters).

[^218]: *See, e.g.,* ¶ 80, *supra*.

[^219]: *See, e.g.,* 47 U.S.C. § 521(6) (stating that the purposes of
    Title VI include "promot\[ing\] competition in cable
    communications"). In addition, the Commission's action is supported
    by its Section 1 mandate to regulate wire and radio communications
    "so as to make available, so far as possible, to all the people of
    the United States, . . . a rapid, efficient, Nation-wide, and
    world-wide wire and radio communication service with adequate
    facilities at reasonable charges." 47 U.S.C. § 151.

[^220]: *Report and Order*, 13 FCC Rcd at 3765-3770, ¶¶ 231-237.

[^221]: *See* 47 CFR § 76.620.

[^222]: *Id.*

[^223]: The *Second Further Notice* used the term "broadband service
    providers" to mean all MVPDs. The *Report and Order* expanded
    application of the signal leakage testing and reporting applicable
    to all non-cable MVPDs, in addition to the cable MVPDs then subject
    to the regulations. 13 FCC Rcd at 3765-3770, ¶¶ 231-237. The *Second
    Further Notice* asked whether certain such providers should be
    exempted from complying with the reporting regulations. 13 FCC Rcd
    at 3781, ¶ 269.

[^224]: 47 CFR § 76.1804 was formerly 47 CFR § 76.615(b) - (g).

[^225]: WCA Comments at 19; ICTA Comments at 16; USWest Comments at 9.

[^226]: *Id.*

[^227]: *Id.*

[^228]: *Id.*

[^229]: Time Warner Comments at 18; NCTA Comments at 7; Summit
    Communications Comments at 2.

[^230]: *Id.*

[^231]: NCTA Comments at 7.

[^232]: The exemption is made effective through an amendment to 47
    C.F.R. § 76.620(a).

[^233]: MVPDs with less than 1000 subscribers are provided regulatory
    relief in other contexts as well. For example, cable operators with
    fewer than 1000 subscribers are not required to conduct semi-annual
    performance tests which are intended to ensure compliance with
    technical standards. *See* 47 C.F.R. §§ 76.601(d) and 76.605. The
    Commission also has provided certain regulatory rate relief to cable
    operators owning systems that averaged less than 1000 subscribers.
    *See* *Implementation of Sections of the Cable Television Consumer
    Protection and Competition Act of 1992: Rate Regulation,* MM Docket
    Nos. 92-266 and 93-215, *Sixth Report and Order and 11^th^ Order on
    Reconsideration ("Small Systems Order"),* 10 FCC Rcd 7393, 7396
    (1995), ¶ 7.

[^234]: *See Small Systems Order,* 10 FCC Rcd at 7395, ¶ 4.

[^235]: *See* 47 C.F.R. § 76.620(a).

[^236]: *Second Further Notice*, 13 FCC Rcd at 3781, ¶¶ 270-271.

[^237]: *See, e.g.,* Ameritech Reply Comments at 22-24; GTE Reply
    Comments at 13-15.

[^238]: *Id.*

[^239]: Parties also argue that the Commission lacks statutory authority
    to require shared use. Time Warner Comments at 22-23; NCTA Reply
    Comments at 8. Because the record points to unresolved technical
    problems which prevent us from implementing the DIRECTV proposal, we
    will not address possible legal impediments to the proposal.

[^240]: See 5 U.S.C. § 604(b).

[^241]: 13 FCC Rcd 3659.

[^242]: 5 U.S.C. § 601(3).

[^243]: 13 C.F.R. § 12.201 (NAICS Code 513220). This NAICS Code applies
    to all services listed in this paragraph.

[^244]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1997 Economic Census, Subject Series --
    Establishment and Firm Size, Information Sector 51, Table 4 at 50
    (2000). The amount of \$10 million was used to estimate the number
    of small business firms because the relevant Census categories
    stopped at \$9,999,999 and began at \$10,000,000. No category for
    \$12.5 million existed. Thus, the number is as accurate as it is
    possible to calculate with the available information.

[^245]: 47 C.F.R. § 76.901(e). The Commission developed this definition
    based on its determination that a small cable system operator is one
    with annual revenues of \$100 million or less. *Sixth Report and
    Order and Eleventh Order on Reconsideration*, 10 FCC Rcd 7393
    (1995).

[^246]: Paul Kagan Associates, Inc. Cable TV Investor, February 29, 1996
    (based on figures for December 30, 1995.)

[^247]: 47 U.S.C. § 543(m)(2).

[^248]: *See FCC Announces New Subscriber Count for the Definition of
    Small Cable Operator*, 16 FCC Rcd 2225 (2001).

[^249]: 47 C.F.R. § 76.1403(b).

[^250]: Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996
    (based on figures for Dec. 30,1995).

[^251]: 13 C.F.R. § 121.201 (NAICS Code 513220).

[^252]: *Id*.

[^253]: *Id.*

[^254]: 13 C.F.R. § 121.201 (NAICS Code 513220).

[^255]: *Id*.

[^256]: Annual Assessment of the Status of Competition in Markets for
    the Delivery of Video Programming, 12 FCC Rcd 4358, 4385 (1996)
    ("Third Annual Report").

[^257]: *Id.* at 4385.

[^258]: *Amendment of Parts 21 and 74 of the Commission's Rules with
    regard to Filing Procedures in the Multipoint Distribution Service
    and in the Instructional Television Fixed Service and Implementation
    of Section 309(j) of the Communications Act-Competitive Bidding*, 10
    FCC Rcd at 9589, 9593 (1995) ("ITFS Order").

[^259]: *See Local Multipoint Distribution Service* 12 FCC Rcd 12545
    (1997) ("*LMDS Order*").

[^260]: 47 C.F.R. § 21.961(b)(1).

[^261]: *See ITFS Order*, 10 FCC Rcd at 9589.

[^262]: 13 C.F.R. § 121.201 (NAICS Code 513220).

[^263]: *Id.*

[^264]: SBREFA also applies to nonprofit organizations and governmental
    organizations such as cities, counties, towns, townships, villages,
    school districts, or special districts, with populations of less
    than 50,000. 5 U.S.C. § 601(5).

[^265]: *See LMDS Order*, 12 FCC Rcd at 12545.

[^266]: *Id.*

[^267]: See Letter to Daniel Phythyon, Chief, Wireless
    Telecommunications Bureau (FCC) from A. Alvarez, Administrator, SBA
    (January 6, 1998).

[^268]: 13 C.F.R. § 121.201 (NCAIS Code 513220).

[^269]: *See Third Annual Report*, 12 FCC Rcd at 4403-4.

[^270]: *See Annual Assessment of the Status of Competition in Markets
    for the Delivery of Video Programming*, 17 FCC Rcd 1244, 1281 (2001)
    ("*Eighth Annual Report*").

[^271]: 13 C.F.R. § 121.601 (SIC 6512, SIC 6513, SIC 6514).

[^272]: 1997 Economic Census: Comparative Statistics for the United
    States; 1987 SIC Basis: Financial, Insurance, and Real Estate
    Industries, SIC 6512.

[^273]: 1997 Economic Census: Comparative Statistics for the United
    States; 1987 SIC Basis: Financial, Insurance, and Real Estate
    Industries, SIC 6513.

[^274]: *See* 47 C.F.R. § 76.804(b)(3).

[^275]: *See* 47 C.F.R. § 76.5(mm)(4).

[^276]: 5 U.S.C. § 601(3).

[^277]: 13 C.F.R. § 12.201 (NAICS Code 513220). This NAICS Code applies
    to all services listed in this paragraph.

[^278]: Economics and Statistics Administration, Bureau of Census, U.S.
    Department of Commerce, 1997 Economic Census, Subject Series --
    Establishment and Firm Size, Information Sector 51, Table 4 at 50
    (2000). The amount of \$10 million was used to estimate the number
    of small business firms because the relevant Census categories
    stopped at \$9,999,999 and began at \$10,000,000. No category for
    \$12.5 million existed. Thus, the number is as accurate as it is
    possible to calculate with the available information.

[^279]: 47 C.F.R. § 76.901(e). The Commission developed this definition
    based on its determination that a small cable system operator is one
    with annual revenues of \$100 million or less. *Sixth Report and
    Order and Eleventh Order on Reconsideration,* 10 FCC Rcd.
    7393(1995).

[^280]: Paul Kagan Associates, Inc. Cable TV Investor, February 29, 1996
    (based on figures for December 30, 1995.)

[^281]: 47 U.S.C. § 543(m)(2).

[^282]: *See FCC Announces New Subscriber Count for the Definition of
    Small Cable Operator*, 16 FCC Rcd 2225 (2001).

[^283]: 47 C.F.R. § 76.1403(b).

[^284]: Paul Kagan Associates, Inc., Cable TV Investor, Feb. 29, 1996
    (based on figures for Dec. 30, 1995).

[^285]: 13 C.F.R. § 121.201 (NAICS Code 513220).

[^286]: *Id*.

[^287]: *Id.*

[^288]: 13 C.F.R. § 121.201 (NAICS Code 513220).

[^289]: *Id*.

[^290]: Annual Assessment of the Status of Competition in Markets for
    the Delivery of Video Programming, 12 FCC Rcd 4358, 4385 (1996)
    ("Third Annual Report").

[^291]: *Id.* at 4385.

[^292]: *Amendment of Parts 21 and 74 of the Commission's Rules with
    regard to Filing Procedures in the Multipoint Distribution Service
    and in the Instructional Television Fixed Service and Implementation
    of Section 309(j) of the Communications Act-Competitive Bidding*, 10
    FCC Rcd at 9589, 9593 (1995) ("ITFS Order").

[^293]: *See Local Multipoint Distribution Service* 12 FCC Rcd 12545
    (1997) ("*LMDS Order*").

[^294]: 47 C.F.R. § 21.961(b)(1).

[^295]: *See ITFS Order*, 10 FCC Rcd at 9589.

[^296]: 13 C.F.R. § 121.201 (NAICS Code 513220).

[^297]: *Id.*

[^298]: SBREFA also applies to nonprofit organizations and governmental
    organizations such as cities, counties, towns, townships, villages,
    school districts, or special districts, with populations of less
    than 50,000. 5 U.S.C. § 601(5).

[^299]: *See LMDS Order*, 12 FCC Rcd at 12545.

[^300]: *Id.*

[^301]: See Letter to Daniel Phythyon, Chief, Wireless
    Telecommunications Bureau (FCC) from A. Alvarez, Administrator, SBA
    (January 6, 1998).

[^302]: 13 C.F.R. § 121.201 (NCAIS Code 513220).

[^303]: *See Third Annual Report*, 12 FCC Rcd at 4403-4.

[^304]: *See Annual Assessment of the Status of Competition in Markets
    for the Delivery of Video Programming*, 17 FCC Rcd 1244, 1281 (2001)
    ("*Eighth Annual Report*").

[^305]: 13 C.F.R. § 121.601 (SIC 6512, SIC 6513, SIC 6514).

[^306]: 1997 Economic Census: Comparative Statistics for the United
    States; 1987 SIC Basis: Financial, Insurance, and Real Estate
    Industries, SIC 6512.

[^307]: 1997 Economic Census: Comparative Statistics for the United
    States; 1987 SIC Basis: Financial, Insurance, and Real Estate
    Industries, SIC 6513.

[^308]: *See* para. 83-87.

[^309]: *See* para. 78-82.

[^310]: 5 U.S.C. § 603(c)(1)-(c)(4).

[^311]: *Second Further Notice*, 13 FCC Rcd at 3778-82, ¶¶ 258-71.

[^312]: *See* para. 63-71.

[^313]: *See Eighth Annual Report*, 17 FCC Rcd at 1250, 1292, ¶¶ 12, 77.

[^314]: My reluctance to use our general rulemaking authority to
    regulate wiring within a MDU is also due to the fact that Congress
    addressed this general issue in Title VI, expressly instructing the
    Commission to regulate the cable wiring *inside* a customer's
    premises. *See* 47 U.S.C. § 544(i). That Congress did not similarly
    authorize us to proscribe rules regulating cable wiring *outside*
    the customer's premises is notable.