*Pages 1--63 from  J:INTERNETcc99141.PDF*
 Federal  Communications  Commission  FCC  99-  141 
 Before  the 
 Federal  Communications  Commission 
 Washington,  D.  C.  20554 

 ) 
 In  the  Matter  of  ) 
 ) 
 Promotion  of  Competitive  Networks  )  WT  Docket  No.  99-  217 
 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  ) 
 ) 

 Cellular  Telecommunications  Industry  ) 
 Association  Petition  for  Rule  Making  and  ) 
 Amendment  of  the  Commission's  Rules  ) 
 to  Preempt  State  and  Local  Imposition  of  ) 
 Discriminatory  And/  Or  Excessive  Taxes  ) 
 and  Assessments  ) 
 ) 
 Implementation  of  the  Local  Competition  )  CC  Docket  No.  96-  98 
 Provisions  in  the  Telecommunications  Act  ) 
 of  1996  ) 
 ) 

 NOTICE  OF  PROPOSED  RULEMAKING  AND  NOTICE  OF  INQUIRY 
 in  WT  Docket  No.  99-  217,  and  THIRD  FURTHER  NOTICE 
 OF  PROPOSED  RULEMAKING  in  CC  Docket  No.  96-  98 

 Adopted:  June  10,  1999  Released:  July  7,  1999 
 Comment  Date:  August  13,  1999 
 Reply  Comment  Date:  September  3,  1999 

 By  the  Commission:  Commissioner  Ness  issuing  a  statement;  Commissioner  Furchtgott-  Roth  concurring  in 
 part,  dissenting  in  part,  and  issuing  a  statement;  Commissioner  Powell  concurring  and  issuing  a  statement. 
1
 Federal  Communications  Commission  FCC  99-  141 
 2 
 TABLE  OF  CONTENTS 
 Paragraph  No. 
 I.  INTRODUCTION  AND  SUMMARY  ...........................................  1 
 II.  BACKGROUND  ...........................................................  8 
 III.  DISCUSSION  .............................................................  18 
 A.  The  Competitive  Networks  of  the  Future  ...................................  18 
 B.  Access  to  Buildings  and  Rooftops  ........................................  28 
 1.  Overview  ....................................................  29 
 2.  Access  Under  Section  224  .......................................  36 
 3.  Access  to  Unbundled  Network  Elements  .............................  49 
 4.  Nondiscriminatory  Access  to  Facilities  Controlled  by  the  Premises  Owner  ....  52 
 5.  Other  Building  Access  Issues  .....................................  64 
 C.  Notice  of  Inquiry  on  Access  to  Public  Rights-  of-  Way  and  Franchise  Fees  ..........  70 
 D.  Notice  of  Inquiry  on  State  and  Local  Taxes  .................................  81 
 E.  Other  Means  of  Promoting  Competitive  Networks  ............................  85 

 IV.  CONCLUSION  ...........................................................  86 
 V.  PROCEDURAL  MATTERS  ..................................................  87 
 A.  Regulatory  Flexibility  Act  ..............................................  87 
 B.  Ex  Parte  Rules  ......................................................  88 
 C.  Filing  Procedures  ....................................................  90 
 D.  Further  Information  ..................................................  95 

 VI.  ORDERING  CLAUSES.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  96 
 APPENDIX  Initial  Regulatory  Flexibility  Analysis 
 I.  INTRODUCTION  AND  SUMMARY 
 1.  This  item  represents  another  step  in  our  ongoing  efforts  to  foster  competition  in  local 
 telecommunications  markets.  We  believe  competitive  telecommunications  networks  will  provide 
 alternatives  to  local  services  provided  by  the  incumbent  wireline  local  exchange  carriers  (LECs)  and 
 provide  new  services  to  the  public.  This  item  initiates  a  rulemaking  proceeding  to  consider  certain  actions 
 to  facilitate  the  development  of  competitive  telecommunications  networks,  and  commences  an  inquiry  into 
 certain  other  issues  related  to  this  goal.  In  particular,  we  consider  actions  to  help  ensure  that  competitive 
 providers  will  have  reasonable  and  nondiscriminatory  access  to  rights-  of-  way,  buildings,  rooftops,  and 
 facilities  in  multiple  tenant  environments.  We  also  initiate  an  inquiry  in  order  to  compile  a  record  on  how 
 State  and  local  policies  regarding  telecommunications  service  providers'  access  to  public  rights-  of-  way  and 
2
 Federal  Communications  Commission  FCC  99-  141 
 1  Telecommunications  Act  of  1996,  Pub.  L.  No.  104-  104,  110  Stat.  56,  codified  at  47  U.  S.  C.    151  et  seq. 
 (1996  Act).  The  1996  Act  amended  the  Communications  Act  of  1934  (the  "Communications  Act"  or  the  "Act"). 

 2  S.  Conf.  Rep.  No.  104-  230,  104th  Cong.,  2d  Sess.  at  1  (1996)  (1996  Conference  Report).  See  also 
 Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  CC  Docket  No.  96- 
 98,  First  Report  and  Order,  11  FCC  Rcd.  15499,  15505    1  (1996)  (noting  that  the  1996  Act  "fundamentally 
 change[  d]  telecommunications  regulation"  by  replacing  protection  of  monopolies  with  encouragement  of  efficient 
 competition)  (Local  Competition  First  Report  and  Order),  aff'd  in  part  and  vacated  in  part  sub  nom.  Competitive 
 Telecommunications  Ass'n  v.  FCC,  117  F.  3d  1068  (8th  Cir.  1997),  aff'd  in  part  and  vacated  in  part  sub  nom.  Iowa 
 Utils.  Bd.  v.  FCC,  120  F.  3d  753  (8th  Cir.  1997),  aff'd  in  part,  rev'd  in  part,  and  remanded  sub  nom.  AT&  T  Corp. 
 v.  Iowa  Utils.  Bd.,  119  S.  Ct.  721  (1999)  (Iowa  Utilities  Board),  Order  on  Reconsideration,  11  FCC  Rcd.  13042 
 (1996),  Second  Order  on  Reconsideration,  11  FCC  Rcd.  19738  (1996),  Third  Order  on  Reconsideration  and 
 Further  Notice  of  Proposed  Rulemaking,  12  FCC  Rcd.  12460  (1997),  appeals  docketed,  Second  Further  Notice  of 
 Proposed  Rulemaking,  FCC  99-  70  (rel.  Apr.  16,  1999)  (UNE  Further  NPRM). 

 3  See  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  15505-  06,    3.  Thus,  in  section  251  of  the 
 Communications  Act,  Congress  imposed  special  duties  on  LECs  and  incumbent  LECs  to  take  actions,  including 
 making  their  facilities  and  services  available  to  competitors  on  reasonable  terms,  that  would  promote  competition. 
 47  U.  S.  C.    251.  In  section  271,  Congress  required  the  former  Bell  operating  companies  to  meet  a  competitive 
 checklist,  and  to  demonstrate  either  the  existence  of  facilities-  based  competition  in  the  local  exchange  or  the 
 absence  of  a  request  for  access  and  interconnection  to  provide  local  exchange  service,  before  they  are  allowed  to 
 provide  in-  region  interLATA  service.  47  U.  S.  C.    271. 

 4  See  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  15506,    4. 

 3 

 taxation  of  telecommunications  providers  and  services  may  be  affecting  competition.  While  focusing  on 
 these  particular  issues  in  this  proceeding,  we  do  not  mean  to  imply  that  we  view  these  issues  as  the 
 principal  impediments  to  facilities-  based  competition  in  local  telecommunications  markets.  Rather,  our 
 consideration  of  these  issues  here  is  part  of  our  ongoing  effort  to  examine  various  possible  impediments  to 
 such  competition  that  come  to  our  attention. 

 2.  In  the  Telecommunications  Act  of  1996,  1  Congress  sought  "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  by  opening  all 
 telecommunications  markets  to  competition."  2  In  particular,  among  other  things,  Congress  sought  to  open 
 the  traditionally  monopolistic  local  exchange  and  exchange  access  telecommunications  markets  to 
 competitive  entry.  3  Competition  in  the  local  exchange  market  is  desirable  not  only  because  of  the  benefits 
 competition  will  bring  to  consumers  of  local  services,  but  also  because  competition  will  eventually 
 eliminate  the  incumbent  LECs'  control  of  bottleneck  local  facilities  and  thereby  permit  freer  competition  in 
 other  telecommunications  services  that  must  interconnect  with  the  local  exchange.  4 

 3.  Moreover,  competition  to  the  incumbent  LECs  will  not  be  limited  to  traditional,  voice-  grade 
 telephone  service.  To  the  contrary,  consumers  are  increasingly  demanding  high-  speed  data  services  and 
 other  advanced  features  in  order  to  enhance  their  ability  to  access  the  vast  amounts  of  information, 
 electronic  commerce,  and  entertainment  that  are  rapidly  becoming  available  through  the  Internet  and  other 
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 Federal  Communications  Commission  FCC  99-  141 
 5  1996  Act,    706. 
 6  Inquiry  Concerning  the  Deployment  of  Advanced  Telecommunications  Capability  to  All  Americans  in  a 
 Reasonable  and  Timely  Fashion,  and  Possible  Steps  to  Accelerate  Such  Deployment  Pursuant  to  Section  706  of  the 
 Telecommunications  Act  of  1996,  CC  Docket  No.  98-  146,  Report,  14  FCC  Rcd.  2398  (1999)  (Section  706  Report). 

 7  See  47  U.  S.  C.    251(  c)(  2)  (requiring  incumbent  LECs  to  provide  interconnection  with  the  facilities  and 
 equipment  of  any  requesting  telecommunications  carrier  on  just,  reasonable,  and  nondiscriminatory  rates,  terms, 
 and  conditions),  251(  c)(  3)  (requiring  incumbent  LECs  to  provide  nondiscriminatory  access  to  network  elements  on 
 an  unbundled  basis  on  just,  reasonable,  and  nondiscriminatory  rates,  terms,  and  conditions),  251(  c)(  4)  (requiring 
 incumbent  LECs  to  offer  services  for  resale  at  wholesale  rates,  and  generally  forbidding  incumbent  LECs  from 
 prohibiting  or  imposing  unreasonable  or  discriminatory  conditions  or  limitations  on  resale). 

 8  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  15499. 

 9  See  id.  at  15509,    12. 
 10  See,  e.  g.,  UNE  Further  NPRM  (requesting  further  comment  on  implementation  of  requirement  that 
 incumbent  LECs  permit  unbundled  access  to  certain  network  elements  in  light  of  Supreme  Court  decision  striking 
 down  Commission  rules  implementing  this  requirement). 

 11  See  paras.  20-  23,  infra. 

 4 

 advanced  networks,  as  well  as  to  improve  communications  with  their  friends,  families,  and  colleagues.  In 
 the  1996  Act,  Congress  directed  the  Commission  to  encourage  the  deployment  on  a  reasonable  and  timely 
 basis  of  advanced  telecommunications  capability  to  all  Americans,  and  directed  us  regularly  to  inquire  into 
 the  progress  of  such  deployment.  5  We  have  recently  completed  our  initial  inquiry  under  this  provision.  6 
 We  believe  the  ability  of  competitive  providers  to  offer  accessible,  affordable,  advanced  capabilities  to 
 consumers  will  be  crucial  to  these  providers'  efforts  to  compete  with,  and  offer  different  services  from,  the 
 incumbent  LECs. 

 4.  In  the  1996  Act,  Congress  included  provisions  intended  to  facilitate  competition  to  the 
 incumbent  LECs  by  competitors  who  use  their  own  end-  to-  end  facilities,  providers  offering  service  using 
 unbundled  elements  of  the  incumbent's  network,  and  resellers  of  the  incumbent's  service.  7  The  Commission 
 adopted  regulations  implementing  these  provisions  in  the  Local  Competition  First  Report  and  Order.  8  We 
 continue  to  believe  that  carriers  who  provide  service  by  all  of  these  means  have  the  potential  to  bring  many 
 of  the  benefits  of  competition  to  local  exchange  markets,  and  we  further  observe  that  some  carriers  may  use 
 resale  and  unbundled  network  elements  as  entry  strategies  before  they  have  finished  constructing  their  own 
 facilities.  9  Thus,  we  remain  committed  to  remove  obstacles  to  competitive  entry  by  any  of  these  means.  10 
 As  discussed  more  fully  below,  however,  we  believe  that,  in  the  long  term,  the  most  substantial  benefits  to 
 consumers  will  be  achieved  through  facilities-  based  competition,  because  only  facilities-  based  competitors 
 can  break  down  the  incumbent  LECs'  bottleneck  control  over  local  networks  and  provide  services  without 
 having  to  rely  on  their  rivals  for  critical  components  of  their  offerings.  Moreover,  only  facilities-  based 
 competition  can  fully  unleash  competing  providers'  abilities  and  incentives  to  innovate,  both  technologically 
 and  in  service  development,  packaging,  and  pricing.  11 
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 Federal  Communications  Commission  FCC  99-  141 
 12  See  para.  19,  infra. 
 13  See  1996  Act,    706(  a);  1996  Conference  Report  at  1. 
 14  47  U.  S.  C.    224. 
 15  47  U.  S.  C.    251. 

 5 

 5.  Because  of  the  unique  benefits  that  facilities-  based  competition  can  confer  upon  the  public,  we 
 seek  to  eliminate  barriers  to  the  development  of  competitive  networks.  Although  facilities-  based  local 
 competition  in  this  country  is  still  in  its  incipient  stages,  there  is  reason  to  believe  that  such  competition  on 
 a  broad  basis  is  both  technically  and  economically  feasible.  As  discussed  below,  the  prospects  for 
 facilities-  based  competition  in  the  near  term  are  especially  great  from  providers  that  can  avoid  the  need  to 
 duplicate  the  incumbent  LECs'  costly  wireline  networks,  either  by  using  wireless  technology  or  by  using 
 existing  facilities  to  customer  locations.  12 

 6.  We  also  believe  it  is  important  to  bring  the  benefits  of  competition,  choice,  and  advanced 
 services  to  all  consumers  of  telecommunications,  including  both  businesses  and  residential  customers, 
 regardless  of  where  they  live  or  whether  they  own  or  rent  their  premises.  In  the  1996  Act,  Congress 
 emphasized  its  intent  to  bring  these  benefits  "to  all  Americans."  13  To  the  extent  that  any  class  of  consumers 
 is  unnecessarily  disabled  from  choosing  among  competing  telecommunications  service  providers,  the 
 achievement  of  this  Congressional  goal  is  placed  in  jeopardy.  Moreover,  the  fullest  benefits  of  competition, 
 including  the  widespread  availability  of  advanced  and  innovative  services  at  reasonable  prices,  cannot  be 
 achieved  unless  the  incumbent  carriers  are,  to  the  extent  feasible,  subject  to  competition  in  all  sectors  of 
 their  markets. 

 7.  We  begin  this  item  with  a  brief  background  section  discussing  the  current  status  of  facilities-based 
 competition  and  reviewing  certain  actions  we  have  taken  or  are  taking  to  promote  this  form  of 
 competition.  Following  that,  we  address  problems  of  access  to  multiple  tenant  environments,  such  as 
 apartment  and  office  buildings,  office  parks,  shopping  centers,  and  manufactured  housing  communities. 
 Specifically,  we  initiate  a  notice  of  proposed  rulemaking  regarding:  section  224  of  the  Communications 
 Act  14  and  its  application  to  riser  conduit  and  privately  granted  rights-  of-  way  in  multiple  tenant 
 environments  that  utilities  "own  or  control;"  Section  251's  15  unbundled  access  requirements  in  the  context 
 of  riser  cable  or  wiring  that  the  incumbent  LEC  owns  or  controls  in  these  environments;  and  certain  other 
 issues  related  to  facilitating  competitive  access  to  these  locations.  Next,  we  initiate  a  notice  of  inquiry 
 concerning:  reasonable  and  nondiscriminatory  State  and  local  public  rights-  of-  way  and  tax  policies  and 
 their  relationship  to  facilities-  based  competition;  and  other  means  of  promoting  the  development  of 
 competitive  facilities-  based  networks. 
5
 Federal  Communications  Commission  FCC  99-  141 
 16  See  Expanded  Interconnection  with  Local  Telephone  Company  Facilities,  CC  Docket  No.  91-  141,  First 
 Report  and  Order,  7  FCC  Rcd.  7369  (1992),  vacated  in  part  and  remanded  sub  nom.  Bell  Atlantic  Telephone  Cos. 
 v.  FCC,  24  F.  3d  1441  (D.  C.  Cir.  1994);  Expanded  Interconnection  with  Local  Telephone  Company  Facilities,  CC 
 Docket  No.  91-  141,  Second  Report  and  Order,  8  FCC  Rcd.  7374  (1993),  vacated  in  part  and  remanded  sub  nom. 
 Bell  Atlantic  Telephone  Cos.  v.  FCC,  24  F.  3d  1441  (D.  C.  Cir.  1994);  see  also  Expanded  Interconnection  with 
 Local  Telephone  Company  Facilities,  CC  Docket  No.  91-  141,  Memorandum  Opinion  and  Order,  9  FCC  Rcd.  5154 
 (1994)  (on  remand,  requiring  affected  LECs  to  offer  virtual  collocation  pursuant  to  tariff  unless  they  chose  to  offer 
 physical  collocation),  remanded  for  consideration  of  1996  Act  sub  nom.  Pacific  Bell  v.  FCC,  81  F.  3d  1147  (D.  C. 
 Cir.  1996).  The  1996  Act  expressly  requires  incumbent  LECs  to  offer  physical  collocation  under  just,  reasonable, 
 and  nondiscriminatory  rates,  terms,  and  conditions  unless  they  demonstrate  that  physical  collocation  is  not 
 practical  for  technical  reasons  or  because  of  space  limitations.  47  U.  S.  C.    251(  c)(  6);  see  also  Local  Competition 
 First  Report  and  Order,  11  FCC  Rcd.  at  15787,    565  (applying  requirements  previously  adopted  for  physical  and 
 virtual  collocation  to  physical  collocation  under  the  1996  Act,  with  some  modifications). 

 17  Implementation  of  the  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996,  CC  Docket  No. 
 96-  98,  Second  Report  and  Order  and  Memorandum  Opinion  and  Order,  11  FCC  Rcd.  19392  (1996)  (Local 
 Competition  Second  Report  and  Order),  rev'd  in  part  sub  nom.  People  of  the  State  of  California  v.  FCC,  124  F.  3d 
 934  (8th  Cir.  1997),  rev'd  in  part  sub  nom.  Iowa  Utilities  Board  v.  FCC,  119  S.  Ct.  721  (1999). 

 18  See,  e.  g.,  Cellular  Telecommunications  Industry  Association's  Petition  for  Forbearance  from  Commercial 
 Mobile  Radio  Services  Number  Portability  Obligations  and  Telephone  Number  Portability,  WT  Docket  No.  98-  229, 
 Memorandum  Opinion  and  Order,  FCC  99-  19  (rel.  Feb.  9,  1999)  (forbearing  from  requiring  CMRS  providers  to 
 supply  service  provider  number  portability  in  the  top  100  Metropolitan  Statistical  Areas  until  November  24,  2002); 

 6 

 II.  BACKGROUND 
 8.  Traditionally,  local  telecommunications  services  in  the  United  States  have  been  provided  almost 
 exclusively  by  a  single  carrier  in  any  given  geographic  area.  Although  the  Commission  made  some  efforts 
 prior  to  1996  to  introduce  facilities-  based  competition  to  the  incumbent  LECs,  the  Commission  then  had 
 few  tools  available  to  it.  For  example,  the  Commission  promulgated  rules  requiring  incumbent  LECs  to 
 permit  other  carriers  on  reasonable  and  nondiscriminatory  terms  and  conditions  to  collocate  their  equipment 
 at  incumbent  LECs'  facilities,  but  the  courts  held  that  the  Commission's  authority  at  that  time  did  not 
 encompass  the  power  to  order  such  physical  collocation.  16  While  some  carriers  did  begin  to  offer 
 competition  to  the  incumbent  LECs  --  for  example,  competitive  access  providers  (CAPs)  offering  services 
 to  certain  large  businesses  --  that  competition  was  quite  modest  during  this  period. 

 9.  Under  the  1996  Act,  we  have  been  able  to  act  far  more  effectively  to  promote  the  development 
 of  competition  in  local  telecommunications  markets.  For  example,  in  addition  to  our  actions  in  the  Local 
 Competition  First  Report  and  Order  implementing  the  interconnection,  unbundling,  and  resale  provisions 
 of  the  1996  Act,  we  promulgated  rules  in  the  Local  Competition  Second  Report  and  Order  governing  toll 
 and  local  dialing  parity;  nondiscriminatory  access  to  telephone  numbers,  operator  services,  directory 
 assistance,  and  directory  listings;  disclosure  of  network  information;  and  numbering  administration.  17  In 
 addition,  we  have  in  several  instances  forborne  under  section  10  of  the  Act  from  enforcing  against 
 competitive  service  providers  statutory  provisions  and  regulations  that  could  unnecessarily  inhibit  their 
 ability  to  compete.  18 
6
 Federal  Communications  Commission  FCC  99-  141 
 Personal  Communications  Industry  Association's  Broadband  Personal  Communications  Services  Alliance's  Petition 
 for  Forbearance  For  Broadband  Personal  Communications  Services,  WT  Docket  No.  98-  100,  Memorandum 
 Opinion  and  Order  and  Notice  of  Proposed  Rulemaking,  FCC  98-  134,    55-  88  (rel.  July  2,  1998)  (PCIA 
 Forbearance  Order)  (forbearing  from  applying  to  CMRS  providers  certain  international  tariffing  requirements  and 
 certain  provisions  of  the  Telephone  Operator  Consumer  Services  Improvement  Act),  recon.  pending;  Hyperion 
 Telecommunications,  Inc.,  Petition  Requesting  Forbearance,  Memorandum  Opinion  and  Order  and  Notice  of 
 Proposed  Rulemaking,  12  FCC  Rcd.  8596  (1997)  (forbearing  from  applying  tariffing  requirements  to  providers  of 
 interstate  exchange  access  services  other  than  incumbent  LECs). 

 19  See,  e.  g.,  Amendment  of  the  Commission's  Rules  to  Establish  New  Personal  Communications  Services,  GEN 
 Docket  No.  90-  314,  Second  Report  and  Order,  8  FCC  Rcd.  7700  (1993),  modified  on  recon.,  9  FCC  Rcd.  4957 
 (1994);  Amendment  of  Part  90  of  the  Commission's  Rules  to  Facilitate  Future  Development  of 
 SMR  Systems  in  the  800  MHz  Frequency  Band,  PR  Docket  No.  93-  144,  First  Report  and  Order,  Eighth  Report 
 and  Order,  and  Second  Further  Notice  of  Proposed  Rule  Making,  11  FCC  Rcd.  1463  (1995);  Amendment  of  Part 
 90  of  the  Commission's  Rules  to  Facilitate  Future  Development  of  SMR  Systems  in  the  800  MHz  Frequency  Band, 
 PR  Docket  No.  93-  144,  Second  Report  and  Order,  12  FCC  Rcd.  19079  (1997)  (800  MHz  Second  Report  and 
 Order);  Rulemaking  to  Amend  Parts  1,  2,  21,  and  25  of  the  Commission's  Rules  to  Redesignate  the  27.5-  29.5  GHz 
 Frequency  Band,  To  Reallocate  the  29.5-  30.0  GHz  Frequency  Band,  To  Establish  Rules  and  Policies  for  Local 
 Multipoint  Distribution  Service  And  for  Fixed  Satellite  Services,  CC  Docket  No.  92-  297,  First  Report  and  Order 
 and  Fourth  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd.  19005  (1996);  Rulemaking  to  Amend  Parts  1,  2,  21,  and 
 25  Of  the  Commission's  Rules  to  Redesignate  The  27.5-  29.5  GHz  Frequency  Band,  To  Reallocate  the  29.5-  30.0 
 GHz  Frequency  Band,  To  Establish  Rules  and  Policies  for  Local  Multipoint  Distribution  Service  And  for  Fixed 
 Satellite  Services,  CC  Docket  No.  92-  297,  Second  Report  and  Order,  Order  on  Reconsideration,  and  Fifth  Notice 
 of  Proposed  Rulemaking,  12  FCC  Rcd.  12545  (1997)  (LMDS  Second  Report  and  Order);  Amendment  of  the 
 Commission's  Rules  Regarding  the  37.0-  38.6  and  38.6-  40.0  GHz  Bands,  ET  Docket  No.  95-  183,  Report  and  Order 
 and  Second  Notice  of  Proposed  Rulemaking,  12  FCC  Rcd.  18600  (1997)  (39  GHz  Report  and  Order  and  Second 
 NPRM). 

 20  Amendment  of  Parts  1,  21,  and  74  to  Enable  Multipoint  Distribution  Service  and  Instructional  Television 
 Fixed  Service  Licensees  to  Engage  in  Fixed  Two-  Way  Transmission,  MM  Docket  No.  97-  217,  Report  and  Order, 
 13  FCC  Rcd.  19112  (1998),  petitions  for  recon.  pending. 

 21  Amendment  of  the  Commission's  Rules  To  Permit  Flexible  Service  Offerings  in  the  Commercial  Mobile 
 Radio  Services,  WT  Docket  No.  96-  6,  First  Report  and  Order  and  Further  Notice  of  Proposed  Rule  Making,  11 
 FCC  Rcd.  8965  (1996). 

 7 

 10.  Both  before  and  since  the  1996  Act,  we  have  also  taken  several  actions  that  specifically 
 promote  the  ability  of  service  providers  using  wireless  technology  to  compete  with  the  incumbent  LECs. 
 Thus,  we  have  made  spectrum  in  several  frequency  bands  available  in  a  form  that  is  usable  for  offerings 
 that  can  compete  with  wireline  local  service,  19  we  have  permitted  new  partnering  arrangements  between 
 Instructional  Television  Fixed  Service  (ITFS)  and  Multichannel  Multipoint  Distribution  Service  (MMDS) 
 licensees  to  offer  two-  way  services,  20  and  we  have  increased  CMRS  licensees'  flexibility  to  use  spectrum 
 for  competitive  purposes  by  allowing  them  to  offer  fixed  services  on  a  co-  primary  basis  with  mobile 
 services.  21  We  have  also  made  spectrum  more  usable,  and  promoted  opportunities  for  additional 
 competitors,  by  permitting  licensees  in  many  services  to  transfer  portions  of  their  spectrum  authorizations 
 to  other  parties,  with  Commission  approval,  by  partitioning  their  service  areas  and  disaggregating  their 
7
 Federal  Communications  Commission  FCC  99-  141 
 22  See,  e.  g.,  Geographic  Partitioning  and  Spectrum  Disaggregation  by  Commercial  Mobile  Radio  Services 
 Licensees,  WT  Docket  No.  96-  148,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd. 
 21831  (1996);  800  MHz  Second  Report  and  Order,  12  FCC  Rcd.  at  19127-  53,    138-  227;  39  GHz  Report  and 
 Order  and  Second  NPRM,  12  FCC  Rcd.  at  18634-  36,    70-  74;  LMDS  Second  Report  and  Order,  12  FCC  Rcd.  at 
 12606-  08,    140-  145. 

 23  See  Implementation  of  Sections  3(  n)  and  332  of  the  Communications  Act,  GN  Docket  No.  93-  252,  Second 
 Report  and  Order,  9  FCC  Rcd.  1411,  1463-  93,    124-  219  (1994)  (CMRS  Second  Report  and  Order),  recon. 
 pending. 

 24  See  Local  Competition  Report,  Common  Carrier  Bureau,  Industry  Analysis  Division,  December,  1998, 
 http://  www.  fcc.  gov/  ccb/  stats/  lcomp98.  pdf  at  1  (CCB  Local  Competition  Report). 

 25  Id.  at  2. 

 26  Section  706  Report,  14  FCC  Rcd.  at  2425,    51. 
 27  See  Implementation  of  Section  6002(  b)  of  the  Omnibus  Budget  Reconciliation  Act  of  1993,  Fourth  Report, 
 FCC  99-  136  at  11-  15  (rel.  June  24,  1999)  (Fourth  CMRS  Competition  Report). 

 28  See  id.,  Appendix  F  at  F-  2  to  F-  4. 

 29  See  id.,  Appendix  F  at  F-  4  to  F-  8. 

 8 

 spectrum.  22  In  addition,  even  before  we  were  granted  broadly  applicable  forbearance  authority  under 
 section  10,  we  forbore  from  applying  to  CMRS  providers  under  section  332(  c)(  1)  of  the  Act  several 
 provisions  of  Title  II  that  we  found  unnecessary  and  contrary  to  the  public  interest  as  applied  to  those 
 services.  23 

 11.  The  changes  wrought  by  the  1996  Act  have  helped  engender  significant  progress  toward 
 meaningful  competition  in  local  telecommunications  markets,  including  markets  for  advanced  services. 
 Competitive  LECs  are  rapidly  building  customer  base  and  gaining  market  share,  although  they  still  account 
 for  less  than  five  percent  of  local  market  revenues.  24  Competitive  LECs  are  deploying  fiber  in  their 
 networks  at  a  faster  rate  than  incumbent  LECs  and  are  rapidly  acquiring  numbering  resources  necessary  to 
 provide  switched  telephone  services  over  their  own  facilities.  25  Moreover,  we  have  recently  concluded  that 
 new  broadband  technologies  may  be  capable  of  creating  competition  for  incumbent  LECs  in  the 
 narrowband  telephone  market  that  incumbent  LECs  dominate  today.  26 

 12.  Incipient  and  potential  challenges  to  the  incumbent  LECs  may  come  from  several  sources.  For 
 example,  CMRS  providers  are  increasingly  marketing  their  services  as  substitutes  for  wireline  second  lines, 
 in  many  instances  by  offering  pricing  plans  that,  for  an  affordable  flat  price,  include  large  numbers  of 
 minutes  for  calls  placed  anywhere  in  the  country  or  unlimited  minutes  for  calls  within  the  subscriber's 
 immediate  home  area.  27  Fixed  wireless  telephony  services  are  also  being  offered  by  providers  using  cellular 
 and  PCS  frequencies,  28  frequencies  between  2  GHz  and  4  GHz,  29  and  upper  frequency  bands  between  24 
8
 Federal  Communications  Commission  FCC  99-  141 
 30  See  id.,  Appendix  F  at  F-  8  to  F-  11. 
 31  Section  706  Report,  14  FCC  Rcd.  at  2426-  30,    54-  61. 
 32  See,  e.  g.,  47  U.  S.  C.    621(  b)(  3)  (limiting  authority  of  local  franchising  authorities  to  reach  or  limit  the 
 provision  of  telecommunications  services  by  cable  operators  or  their  affiliates);  15  U.  S.  C.    79z-  5c  (authorizing 
 Commission  to  exempt  providers  of  telecommunications  and  information  services  from  certain  requirements  of  the 
 Public  Utility  Holding  Company  Act  of  1935). 

 33  See  CCB  Local  Competition  Report  at  2,  5,  6. 

 34  See  Application  of  BellSouth  Corporation,  et  al.  Pursuant  to  Section  271  of  the  Communications  Act  of 
 1934,  as  amended,  To  Provide  In-  Region,  InterLATA  Services  in  Louisiana,  CC  Docket  No.  97-  231,  Memorandum 
 Opinion  and  Order,  13  FCC  Rcd.  6245,  6290,    73  (1998);  Application  of  BellSouth  Corporation,  BellSouth 
 Telecommunications,  Inc.,  and  BellSouth  Long  Distance,  Inc.  for  Provision  of  In-  Region,  InterLATA  Services  in 
 Louisiana,  CC  Docket  No.  98-  121,  Memorandum  Opinion  and  Order,  FCC  98-  271,    25  (rel.  Oct.  13,  1998) 
 (holding  that  BellSouth  had  not  shown  that  "broadband  PCS  service  currently  competes  with  the  wireline 
 telephone  exchange  service  offered  by  BellSouth  in  Louisiana"). 

 35  Section  706  Report,  14  FCC  Rcd.  at  2402,    8. 

 9 

 GHz  and  39  GHz.  30  We  further  recently  observed  that,  in  addition  to  these  providers  using  terrestrial 
 wireless  technology,  companies  offering  or  planning  to  offer  two-  way  broadband  services  to  residential 
 consumers  include  cable  television  companies  using  "cable  modems,"  public  utilities  within  their  utility 
 service  territories,  wireline  competitive  LECs,  and  satellite-  based  service  providers.  31  We  note  that 
 Congress  apparently  contemplated  this  variety  when  it  included  provisions  in  the  1996  Act  to  promote 
 competition  to  the  incumbent  LECs  from  entities  that  have  not  traditionally  offered  telecommunications 
 services.  32 

 13.  While  we  are  encouraged  by  certain  progress  that  has  been  made  toward  local  competition, 
 however,  we  recognize  that  these  initial  steps  have  thus  far  had  little  practical  impact  in  terms  of  providing 
 most  customers  with  choices  of  service  providers  or  reducing  the  incumbent  LECs'  market  power.  We  are 
 also  concerned  that  the  growth  of  competition  has  been  uneven  and  appears  to  be  directly  benefitting  only 
 certain  classes  of  telecommunications  service  users,  for  example,  business  customers  in  more  urbanized 
 areas.  33  The  substitution  of  CMRS  for  wireline  local  exchange  service  similarly  appears  at  present  to  be 
 only  a  limited  phenomenon.  34  In  the  Section  706  Report,  we  emphasized  that,  despite  our  finding  of 
 reasonable  and  timely  deployment  of  advanced  telecommunications  capability,  we  would  continue  to 
 monitor  closely  the  deployment  of  broadband  capability  by  providers  using  all  technologies.  35  We  believe 
 that  a  similar  posture  of  vigilance,  and  of  readiness  to  take  action  where  necessary  to  remove  barriers  to 
 competition,  is  appropriate  with  respect  to  the  local  telecommunications  market  generally. 

 14.  Consistent  with  this  view,  we  are  considering  issues  relevant  to  the  development  of  local 
 competition  in  several  ongoing  proceedings.  One  major  set  of  issues  centers  around  ensuring  that  Federal 
 and  State  universal  service  support  is  provided  in  a  manner  that  does  not  impede  the  ability  of  competitive 
 telecommunications  carriers  to  seek  customers,  especially  in  rural  areas.  For  example,  the  provision  of 
9
 Federal  Communications  Commission  FCC  99-  141 
 36  See  Federal-  State  Joint  Board  on  Universal  Service,  Report  and  Order,  12  FCC  Rcd.  8776,  8801  (1997),  as 
 corrected  by  Errata,  CC  Docket  No.  96-  45  (rel.  June  4,  1997),  appeal  pending  sub  nom.  Texas  Office  of  Pub.  Util. 
 Counsel  v.  FCC,  No.  97-  60421  (5th  Cir.  argued  Dec.  1,  1998).  We  recently  reaffirmed  our  commitment  to  explicit 
 support  and  set  the  framework  to  have  non-  rural  carriers  receive  universal  service  support  based  on  forward-looking 
 economic  cost  starting  January  1,  2000.  See  Federal-  State  Joint  Board  on  Universal  Service,  Access 
 Charge  Reform,  Seventh  Report  and  Order  and  Thirteenth  Order  on  Reconsideration  in  CC  Docket  No.  96-  45, 
 Fourth  Report  and  Order  in  CC  Docket  No.  96-  262  and  Further  Notice  of  Proposed  Rulemaking,  FCC  99-  119  (rel. 
 May  28,  1999).  See  also  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  Nos.  96-  45,  97-  160,  Further 
 Notice  of  Proposed  Rulemaking,  FCC  99-  120  (rel.  May  28,  1999)  (seeking  comment  on  proposed  input  values  for 
 forward-  looking  economic  cost  model). 

 37  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Memorandum  Opinion  and  Order  and 
 Further  Notice  of  Proposed  Rulemaking,  13  FCC  Rcd.  21252  (1998). 

 38  UNE  Further  NPRM,  FCC  99-  70. 

 39  Calling  Party  Pays  Service  Option  in  the  Commercial  Mobile  Radio  Services,  WT  Docket  No.  97-  207, 
 Declaratory  Ruling  and  Notice  of  Proposed  Rulemaking,  FCC  99-  137  (adopted  June  10,  1999). 

 40  Amendment  of  the  Commission's  Rules  with  Regard  to  the  3650-  3700  MHz  Government  Transfer  Band,  ET 
 Docket  No.  98-  237,  Notice  of  Proposed  Rule  Making  and  Order,  14  FCC  Rcd.  1295  (1998). 

 41  See  Amendment  of  the  Commission's  Rules  to  Relocate  the  Digital  Electronic  Message  Service  from  the  18 
 GHz  Band  to  the  24  GHz  Band  and  to  Allocate  the  24  GHz  Band  for  Fixed  Service,  ET  Docket  No.  97-  99,  Order, 
 12  FCC  Rcd  3471  (1997),  as  corrected  by  Erratum,  12  FCC  Rcd  4990  (1997). 

 42  See  39  GHz  Report  and  Order  and  Second  NPRM,  12  FCC  Rcd.  18600;  39  GHz  Fact  Sheet,  Wireless 
 Telecommunications  Bureau,  <http://  www.  fcc.  gov/  wtb/  auctions/  39ghz/  39ghfact.  html>. 

 43  See  Local  Multipoint  Distribution  Service  Auction  Closes,  Public  Notice,  DA  99-  927  (rel.  May  14,  1999). 

 10 

 implicit  universal  service  support  through  geographically  averaged  incumbent  LEC  rates  artificially  lowers 
 the  revenues  available  to  competitors  who  might  seek  to  serve  rural  areas,  and  thereby  discourages  them 
 from  serving  these  areas.  We  are  currently  in  the  process  of  transitioning  from  implicit  to  explicit  high  cost 
 universal  service  support.  36  We  have  also  sought  comment  on  the  types  of  services  and  local  calling  plans 
 that  carriers  must  offer  to  qualify  for  universal  service  funding.  37 

 15.  In  areas  other  than  universal  service,  we  recently  sought  comment  on  the  definition  and 
 identification  of  network  elements  to  which  incumbent  LECs  must  afford  unbundled  access  in  light  of  the 
 Supreme  Court's  order  vacating  and  remanding  our  prior  decision  on  this  issue.  38  With  respect  to  wireless 
 service  providers  in  particular,  we  are  considering  whether  we  can  and  should  take  actions  to  facilitate 
 CMRS  carriers'  offering  of  "Calling  Party  Pays"  service  options  39  and  whether  to  allocate  spectrum  at 
 3650-  3700  MHz  to  non-  Government  radiocommunications  service  between  fixed  points.  40  We  also  will  be 
 adopting  service  rules  and  auctioning  licenses  in  the  24  GHZ  band  41  and  the  39  GHz  band,  42  which  together 
 with  the  recently  completed  reauction  of  licenses  in  Local  Multipoint  Distribution  Service  (LMDS)  43  should 
 promote  the  development  of  fixed  wireless  networks  as  competitive  alternatives  to  the  incumbent  LECs' 
10
 Federal  Communications  Commission  FCC  99-  141 
 44  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  15816,    628-  629;  see  also  Iowa  Utilities 
 Board,  119  S.  Ct.  at  729-  33  (upholding  Commission's  authority  to  prescribe  a  pricing  methodology). 

 45  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  15666-  71,    328-  340;  see  also  Iowa  Utilities 
 Board,  119  S.  Ct.  at  736  (upholding  this  decision). 

 46  See  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  15499;  see  also,  e.  g.,  "Common  Carrier 
 Bureau  Seeks  Recommendations  on  Commission  Actions  Critical  to  the  Promotion  of  Efficient  Local  Exchange 
 Competition,"  CCBPol  97-  9,  Public  Notice,  12  FCC  Rcd.  10343  (1997)  (seeking  comment  generally  on  actions  the 
 Commission  should  take  to  promote  rapid  and  efficient  entry  into  local  exchange  markets). 

 11 

 networks. 
 16.  Another  issue  arises  out  of  our  rules  for  access  to  unbundled  elements  of  the  incumbent  LECs' 
 networks.  In  the  Local  Competition  First  Report  and  Order,  we  decided  to  apply  the  Total  Element  Long 
 Run  Incremental  Cost  (TELRIC)  methodology  to  the  pricing  of  both  interconnection  and  access  to 
 unbundled  network  elements.  44  We  also  determined  that  a  carrier  may  provide  telephone  service  entirely 
 through  the  use  of  leased  elements  of  an  incumbent's  network.  45  We  believe  that  these  decisions  promote 
 competition  by  increasing  a  competitor's  options  for  obtaining  the  facilities  that  it  needs  to  provide  service 
 under  reasonable  and  nondiscriminatory  rates,  terms,  and  conditions.  At  the  same  time,  however,  these 
 rules  in  combination  arguably  reduce  the  incentives  for  competitors  to  make  the  investments  and  take  the 
 other  business  risks  necessary  to  provide  service  using  their  own  facilities.  Although  we  do  not  address  this 
 issue  here,  it  is  one  that  we  must  continue  to  consider  in  our  ongoing  review  of  how  our  rules  impact  the 
 development  of  competition. 

 17.  In  this  proceeding,  we  seek  comment  and  make  inquiry  in  several  specific  areas  relating  to  the 
 development  of  competitive  networks.  Specifically,  in  a  notice  of  proposed  rulemaking,  we  make  proposals 
 and  seek  comment  on  issues  relating  to  competitive  providers'  access  to  multiple  tenant  environments,  and 
 in  a  notice  of  inquiry  we  explore  issues  related  to  access  to  public  rights-  of-  way  and  State  and  local 
 taxation.  This  effort  is  complementary  to  our  past  actions  and  other  ongoing  proceedings  described  above. 

 III.  DISCUSSION 
 A.  The  Competitive  Networks  of  the  Future. 
 18.  The  most  immediate  beneficial  effect  of  the  introduction  of  competition  into  local 
 telecommunications  markets,  even  on  a  small  scale,  is  to  make  competitive  alternatives  available  to 
 individual  subscribers.  As  noted  above,  this  goal  can  be  achieved  in  a  number  of  ways:  through  resale, 
 leasing  of  unbundled  network  elements,  or  use  of  a  new  entrant's  own  facilities.  To  date,  our  efforts  to 
 facilitate  local  competition  have  generally  encompassed  all  three  of  these  means  of  entry,  both  separately 
 and  in  combination.  46  These  efforts  have  helped  eliminate  many  of  the  economic  inefficiencies  that 
 previously  characterized  local  telecommunications  markets  and  have  contributed  to  the  early  growth  of 
 competition  in  those  markets,  and  we  intend  to  continue  enforcing  our  rules  and  taking  other  necessary 
11
 Federal  Communications  Commission  FCC  99-  141 
 47  See,  e.  g.,  UNE  Further  NPRM,  FCC  99-  70. 
 48  See  para.  13,  supra. 
 49  See  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  CC  Docket 
 No.  96-  98,  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd.  14171,  14175-  76,    7  (1996). 

 50  See  Policy  and  Rules  Concerning  Rates  for  Dominant  Carriers,  CC  Docket  No.  87-  313,  Report  and  Order 
 and  Second  Further  Notice  of  Proposed  Rulemaking,  4  FCC  Rcd.  2873,  2889,    30  (1989)  (noting  "[  t]  he  distorted 
 incentives  created  by  rate  of  return  regulation"). 

 51  See  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  First  Report  and  Order,  12  FCC 
 Rcd.  8776,  8783-  85,    9-  12  (1997). 

 52  See  Fourth  CMRS  Competition  Report,  Appendix  F  at  F-  12  to  F-  14. 

 53  See  Applications  for  Consent  to  the  Transfer  of  Control  of  Licenses  and  Section  214  Authorizations  from 
 Tele-  Communications,  Inc.,  Transferor  to  AT&  T  Corp.,  Transferee,  CS  Docket  No.  98-  178,  Memorandum 
 Opinion  and  Order,  FCC  99-  24,    24-  30,  60-  96  (rel.  Feb.  18,  1999)  (AT&  T/  TCI  Order)  (declining  to  impose  open 
 access  conditions  on  merger  of  TCI  into  AT&  T). 

 12 

 actions  to  ensure  that  all  three  means  of  entry  are  available  on  economically  efficient  terms.  47  Nonetheless, 
 as  discussed  above,  our  broadly  directed  efforts  to  date  have  resulted  in  only  relatively  limited  competition 
 in  many  market  sectors.  48 

 19.  In  this  proceeding,  we  focus  specifically  on  eliminating  certain  barriers  to  facilities-  based 
 competition.  The  major  economic  obstacle  to  the  development  of  competitive  facilities-  based  networks,  at 
 least  if  pursued  through  a  traditional  wireline  model,  is  the  extensive  investment  necessary  to  duplicate  the 
 existing  wireline  networks.  49  The  incumbent  LECs'  networks  have  been  built  over  the  course  of  many 
 years,  generally  under  a  regime  of  rate  of  return  regulation,  50  and  have  been  supported  by  an  elaborate 
 system  of  explicit  and  implicit  subsidies.  51  Nonetheless,  some  facilities-  based  entry  strategies  show  promise 
 of  surmounting  the  competitive  advantages  inherent  in  the  incumbent  LECs'  control  of  in-  place  facilities  by 
 avoiding  the  need  to  construct  new,  costly  wireline  networks.  In  particular,  fixed  wireless  systems  can 
 often  be  constructed  in  less  time,  at  lower  cost,  and  in  smaller  increments  than  wireline  networks,  especially 
 in  areas  where  the  costs  of  wireline  links  may  be  especially  high.  52  Use  of  existing  facilities  that  already 
 reach  customer  premises,  such  as  those  controlled  by  cable  television  or  electric  utility  companies,  may  also 
 be  an  alternative  to  constructing  new  wireline  networks  from  scratch.  With  the  exception  of  access  to 
 certain  utility  facilities  under  section  224,  however,  we  do  not  address  in  this  proceeding  issues  of  whether, 
 and  the  conditions  under  which,  owners  of  existing  networks  other  than  LECs  should  be  required  to  make 
 access  to  those  networks  available  to  third  parties.  53 

 20.  By  focusing  in  this  proceeding  on  certain  actions  that  can  promote  facilities-  based  competition, 
 we  believe  we  can  accelerate  the  development  of  much  broader  and  more  effective  competition  in  local 
 telecommunications  markets  than  exists  today.  Indeed,  a  whole  system  of  competitive  networks  may 
 eventually  develop,  in  which  today's  incumbent  LEC  in  a  given  geographic  area  will  become  only  one  of 
12
 Federal  Communications  Commission  FCC  99-  141 
 54  See  CCB  Competition  Report  at  19. 
 55  We  do  not  here  decide  specifically  what  market  conditions,  or  other  factors,  would  establish  grounds  for  any 
 degree  of  deregulation.  For  example,  even  in  a  competitive  market  for  interconnection,  the  incumbent  LECs  might 
 exercise  market  power  over  termination  that  would  necessitate  some  form  of  regulation.  We  simply  observe  that 
 the  case  for  substantial  deregulation  is  stronger  to  the  extent  that  the  market  for  interconnection  becomes 
 competitive. 

 56  For  example,  under  some  conditions  wireless  systems  in  the  upper  frequency  bands,  including  24  GHz,  39 
 GHz,  and  LMDS  spectrum,  can  be  relatively  easily  used  to  provide  high-  speed  data  services  at  low  cost  and  to 
 bundle  a  variety  of  services  into  one  package.  See  Third  CMRS  Competition  Report,  Appendix  F  at  F-  11  to  F-  12. 

 13 

 several  competitors.  This  development  will  not  only  bring  competition  for  local  services,  but  will 
 fundamentally  change  the  nature  of  our  telecommunications  system. 

 21.  The  dominant  paradigm  for  the  provision  of  telephone  service  in  the  United  States  today  is  the 
 connection  of  every  call  through  the  incumbent  LECs.  Some  industry  observers  believe  that  competitive 
 LECs  today  serve  less  than  3  percent  of  nationwide  switched  access  lines,  and  that  only  about  a  quarter  of 
 these  are  served  through  the  competitive  LEC's  own  facilities.  54  Because  incumbent  LECs  still  serve  the 
 vast  majority  of  customers  and  originate  or  terminate  the  vast  majority  of  telephone  calls,  most  competing 
 carriers  obtain  interconnection  to  the  public  switched  telephone  network  through  the  incumbent  LECs. 
 Moreover,  when  two  competitive  carriers  need  to  transmit  calls  between  each  other,  they  frequently  do  so 
 by  interconnecting  indirectly  through  the  incumbent  LECs.  Thus,  as  a  practical  matter,  the  incumbent 
 LECs  exert  bottleneck  control  over  interconnection,  an  essential  input  to  the  carriage  of 
 telecommunications. 

 22.  In  order  for  competitive  networks  to  develop,  the  incumbent  LECs'  bottleneck  control  over 
 interconnection  must  dissipate.  As  the  market  matures  and  the  carriers  providing  services  in  competition 
 with  the  incumbent  LECs'  local  exchange  offerings  grow,  we  believe  these  carriers  may  establish  direct 
 routing  arrangements  with  one  another,  forming  a  network  of  networks  around  the  current  system.  In  time, 
 it  is  likely  that  the  incumbent  LECs  will  cease  to  be  viewed  as  the  presumptive  primary  providers  of 
 interconnection,  and  indeed  they  will  begin  to  seek  interconnection  and  other  arrangements  with  their 
 challengers.  These  circumstances  would  strengthen  the  case  for  substantial  deregulation  of  the  incumbent 
 LECs.  55 

 23.  The  current  dependence  of  most  carriers  on  the  incumbent  LECs  for  interconnection,  and  in 
 many  instances  for  other  inputs  as  well,  may  also  be  limiting  the  extent  of  publicly  beneficial  innovation  for 
 two  reasons.  First,  the  incumbent  LECs'  networks  may  be  technically  unable  to  support  certain  innovative 
 and  advanced  service  offerings.  Competitive  networks  may  have  the  potential  to  bring  these  benefits  to 
 American  homes  and  businesses  more  quickly  and  more  efficiently  than  can  the  existing  arrangements  built 
 around  the  incumbent  LECs.  56  More  fundamentally,  however,  in  the  absence  of  facilities-  based 
 competition  the  incumbents  may  lack  incentives  to  rapidly  develop  and  introduce  innovative  products. 
 Thus,  the  growth  of  competitive  networks  will  not  only  lead  to  innovation  by  the  new  competitors,  but 
 should  also  spur  the  incumbent  providers  to  upgrade  their  systems  and  offer  a  broader  array  of  desired 
13
 Federal  Communications  Commission  FCC  99-  141 
 57  See,  e.  g.,  AT&  T/  TCI  Order,    145-  148  (finding  that  merger  of  TCI  into  AT&  T  would  promote  public 
 interest  by  creating  entity  with  greater  ability  and  incentive  to  compete  with  incumbent  LECs  and  to  deploy 
 advanced  services);  Wireless  Cable  Selling  Spectrum  to  IXCs,  COMMUNICATIONS  DAILY,  Apr.  30,  1999  at  2-  3 
 (discussing  purchases  of  wireless  cable  operators  by  telecommunications  service  providers). 

 14 

 service  options  to  meet  customers'  demands.  For  example,  many  observers  believe  that  the  introduction  of 
 fiber  rings  by  CAPs  in  the  1980s  was  a  central  factor  in  causing  the  incumbent  LECs  to  adopt  this  network 
 architecture. 

 24.  In  order  for  competitive  facilities-  based  networks  to  develop  and  flourish,  several  conditions 
 are  necessary.  First,  competitive  service  providers  must  have  the  ability  to  access  their  potential 
 customers.  If  only  a  limited  class  of  consumers  can  be  accessed  by  competitive  facilities-  based  providers, 
 then  it  is  unlikely  that  competition  will  grow  to  the  point  where  it  will  effectively  eliminate  the  incumbent 
 LECs'  market  power. 

 25.  Second,  competitive  providers  must  be  free  to  provide  services  in  the  manner  that  will  enable 
 them  most  efficiently  to  offer  the  services,  or  combinations  of  services,  that  consumers  desire.  We 
 anticipate  that  the  most  successful  future  networks  may  be  those  that  are  most  highly  functional  and 
 flexible.  Achieving  this  functionality  and  flexibility  may  involve  the  use  of  a  variety  of  transmission 
 technologies.  For  example,  carriers  may  want  to  use  terrestrial  wireless  technology  in  lower  spectrum 
 bands  or  satellite  technology  to  offer  customers  mobility,  but  use  higher-  band  terrestrial  wireless  service  or 
 wireline  technology  for  other  features,  such  as  broadband  interconnectivity,  or  for  transport  and  termination 
 between  cell  sites  and  the  public  switched  network.  In  order  to  combine  technologies  in  the  most  efficient 
 fashion,  carriers  may  seek  to  acquire  different  technological  capabilities,  either  through  merger  and 
 acquisition  or  through  internal  development.  Thus,  some  recent  mergers  have  been  touted  as  promoting  the 
 incorporation  of  multiple  technologies  into  particular  carriers'  network  capabilities.  57  Alternatively, 
 independent  network  providers  with  different  technological  specialties  may  establish  cooperative 
 arrangements  among  themselves.  For  example,  CMRS  and  upper  frequency  band  fixed  wireless  service 
 providers  could  enter  into  productive  relationships  not  only  with  each  other,  but  with  other  alternative 
 providers,  including  wireline  competitive  LECs,  cable  television  providers,  and  public  utilities. 

 26.  Many  different  potential  approaches  exist  to  providing  services  and  developing  network 
 architectures  to  serve  the  local  telecommunications  market.  Demand  for  high-  speed  access  to  the  Internet, 
 which  was  only  dimly  foreseen  when  the  1996  Act  was  passed,  may  drive  many  of  the  competitive 
 offerings.  Some  competitors  may  focus  only  on  this  market  segment,  perhaps  by  providing  data-  only 
 services  using  unbundled  wireline  loops  or  unlicensed  spectrum.  Other  competitors  may  choose  to  offer 
 full  service  offerings  over  an  integrated  Internet  Protocol  (IP)  network.  Incumbents  may  offer  new  services 
 through  overlay  networks  that  share  facilities  with  their  existing  networks,  as  Asymmetric  Digital 
 Subscriber  Line  (ADSL)  technology  is  deployed.  In  order  for  competitive  networks  to  flourish  and  convey 
 the  greatest  benefits  to  consumers,  competitors  must  be  free  to  introduce  different  service,  architectural, 
 and  technological  approaches,  and  the  market  should  determine  which  of  these  approaches  succeed  for 
 different  purposes. 
14
 Federal  Communications  Commission  FCC  99-  141 
 58  Telecommunications  Services  Inside  Wiring,  CS  Docket  No.  95-  184,  Implementation  of  The  Cable 
 Television  Consumer  Protection  and  Competition  Act  of  1992:  Cable  Home  Wiring,  MM  Docket  No.  92-  260, 
 Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking,  13  FCC  Rcd.  3659  at  3679,    36,  3778-  82, 
   258-  271  (1997)  (Inside  Wiring  Report  and  Order  and  Second  Further  NPRM),  recon.  pending,  appeal  docketed 
 sub  nom.  Charter  Communications,  Inc.  v.  FCC,  No.  97-  4120  (8th  Cir.  1997). 

 59  See  Section  706  Report,  14  FCC  Rcd.  at  2450-  51,    104. 

 15 

 27.  Our  intent,  broadly  stated,  is  to  implement  policies  that  will  best  facilitate  the  efficient 
 development  of  competitive  networks.  In  addition  to  ensuring  that  our  own  rules  and  practices  do  not 
 unnecessarily  inhibit  carriers  from  developing  competitive  networks,  facilitating  competitive  networks  may 
 in  some  circumstances  require  us  to  take  proactive  measures  to  relieve  barriers  to  competition  created  by 
 third  parties.  In  this  item,  we  make  proposals  and  seek  comment  on  several  possible  actions,  and  initiate  an 
 inquiry  into  other  issues,  all  of  which  are  related  to  achieving  our  procompetitive  goals. 

 B.  Access  to  Buildings  and  Rooftops. 
 28.  In  this  section,  we  address  issues  that  bear  specifically  on  the  availability  of  facilities-  based 
 telecommunications  competition  to  customers  in  multiple  tenant  environments,  including,  for  example, 
 apartment  buildings  (rental,  condominium,  or  co-  op),  office  buildings,  office  parks,  shopping  centers,  and 
 manufactured  housing  communities.  We  begin  with  an  overview  of  the  problem  of  access  to  multiple 
 tenant  environments  generally.  We  then  propose  that,  under  section  224  of  the  Communications  Act, 
 utilities  must  permit  access  to  rooftop  and  similar  rights-  of-  way  and  riser  conduit  that  they  "own  or 
 control"  in  multiple  tenant  environments,  and  we  request  comment  on  issues  relating  to  the  implementation 
 of  this  requirement,  including  the  circumstances  under  which  utility  ownership  or  control  might  be  found  to 
 exist.  We  also  ask  whether  we  should  require  incumbent  LECs  to  make  available  unbundled  access  to  riser 
 cable  and  wiring  that  they  control  within  multiple  tenant  environments  pursuant  to  section  251(  c)(  3)  of  the 
 Act.  Finally,  we  request  comment  on  other  building  access  issues,  including  the  legal  and  policy  issues 
 raised  by  a  possible  requirement  that  building  owners  who  allow  any  telecommunications  carrier  access  to 
 facilities  that  they  control  make  comparable  access  available  to  other  carriers  on  a  nondiscriminatory  basis. 

 1.  Overview. 
 29.  Access  by  competing  telecommunications  service  providers  to  customers  in  multiple  tenant 
 environments  is  critical  to  the  successful  development  of  competition  in  local  telecommunications  markets. 
 As  of  1990,  approximately  28  percent  of  all  housing  units  nationwide  were  located  in  multiple  dwelling 
 units,  and  that  percentage  is  likely  growing.  58  In  addition,  many  businesses,  especially  small  businesses, 
 are  located  in  multiple  tenant  environments.  If  a  significant  portion  of  these  housing  units  and  businesses  is 
 not  accessible  to  competing  providers,  that  fact  could  seriously  detract  from  local  competition  in  general 
 and  from  the  availability  of  competitive  services  to  "all  Americans."  59 

 30.  In  order  to  serve  customers  in  multiple  tenant  environments,  telecommunications  carriers 
 typically  require  a  means  of  transporting  signals  across  facilities  located  within  the  building  or  on  the 
 landowner's  premises  to  individual  units.  In  the  case  of  a  reseller,  these  signals  are  typically  transported 
15
 Federal  Communications  Commission  FCC  99-  141 
 60  We  note  that  signals  could,  in  theory,  be  transported  within  multiple  tenant  environments  by  means  of 
 wireless  technology,  perhaps  using  unlicensed  spectrum.  We  are  not  aware,  however,  that  such  wireless  transport 
 is  in  fact  occurring  on  a  significant  scale.  Furthermore,  even  wireless  in-  building  transport  would  presumably 
 require  the  installation  of  some  facilities. 

 61  See  47  C.  F.  R.    68.3  (defining  several  different  options  by  which  the  demarcation  point  between  telephone 
 company  facilities  and  subscriber  facilities  may  be  determined).  The  rules  for  determining  control  over  telephone 
 wiring  are  to  be  distinguished  from  the  cable  inside  wiring  rules,  which  are  used  to  determine  the  disposition  of 
 cable  inside  wiring  when  a  provider  no  longer  has  a  legally  enforceable  right  to  remain  in  a  building,  and  which 
 are  based  on  different  definitions  and  principles.  See  para.  68,  infra. 

 62  Telecommunications  Services  Inside  Wiring,  CS  Docket  No.  95-  184,  Comments  of  WinStar 
 Communications,  Inc.  at  Exhibit  III  (filed  Aug.  5,  1997)  (WinStar  Inside  Wiring  Comments)  (attaching  chart 
 detailing  practices  encountered  in  various  geographic  markets);  see  also,  e.  g.,  Inquiry  Concerning  the  Deployment 
 of  Advanced  Telecommunications  Capability  to  All  Americans  in  a  Reasonable  and  Timely  Fashion,  and  Possible 
 Steps  to  Accelerate  Such  Deployment  Pursuant  to  Section  706  of  the  Telecommunications  Act  of  1996,  CC  Docket 
 No.  98-  146  (Section  706  Inquiry),  Comments  of  the  Association  for  Local  Telecommunications  Services  at  19 
 (filed  Sept.  14,  1998)  (building  owners  often  "insist  upon  very  high  non-  recurring  fees  or  some  sort  of  free  reduced 
 service  to  [Themselves]");  Commission  Actions  Critical  to  the  Promotion  of  Efficient  Local  Exchange 
 Competition,  CCBPol  97-  9,  Comments  of  Teligent,  L.  L.  C.  at  10  (filed  Aug.  11,  1997)  (Teligent  CCB  Inquiry 
 Comments)  (describing  riser  management  company's  brochure  promoting  riser  as  a  source  of  revenue)  . 

 63  Section  706  Inquiry,  Comments  of  WinStar  Communications,  Inc.  at  12-  13  (filed  Sept.  14,  1998)  (citing 
 comments  filed  by  Teligent,  Inc.,  with  Florida  PSC);  see  also  U.  S.  House  of  Representatives  Committee  on 
 Commerce,  Subcommittee  on  Telecommunications,  Trade,  and  Consumer  Protection,  Hearing  on  Access  to 
 Buildings  and  Facilities  by  Telecommunications  Providers,  May  13,  1999  (May  13,  1999  House 

 16 

 across  the  underlying  carrier's  facilities  as  part  of  the  resale  arrangement.  Similarly,  a  carrier  that  utilizes 
 the  incumbent  LEC's  local  loop  and  network  interface  device  (NID)  as  unbundled  network  elements  will 
 obtain  access  to  in-  building  facilities  pursuant  to  its  agreement  with  the  underlying  carrier  and  the 
 underlying  carrier's  arrangement  with  the  building  owner.  A  carrier  that  transports  signals  to  multiple 
 tenant  premises  by  means  of  its  own  facilities,  however,  must  then  either  install  its  own  equipment  on  the 
 premises  or  obtain  access  to  existing  facilities  in  order  to  transport  signals  to  individual  customers'  units.  60 
 Depending  on  State  law  and  local  practices,  some  or  all  of  the  locations  and  facilities  to  which  competing 
 carriers  may  require  access  may  be  controlled  by  the  incumbent  LEC,  the  building  owner,  or  both.  61 

 31.  In  several  proceedings  before  the  Commission,  a  number  of  parties  have  argued  that  both 
 building  owners  and  incumbent  LECs  have  obstructed  competing  telecommunications  carriers  from 
 obtaining  access  on  reasonable  and  nondiscriminatory  terms  to  necessary  facilities  located  within  multiple 
 unit  premises.  For  example,  WinStar's  Vice  President  for  Real  Estate  has  stated  in  an  affidavit  that  "many 
 building  owners  and/  or  building  management  are  requesting  non-  recurring  fees,  recurring  fees,  per  linear 
 foot  basis  charges,  and  a  variety  of  other"  charges  that  are  not  based  on  their  costs  and  are  not  imposed  on 
 incumbent  carriers.  62  WinStar  cites  as  an  example  a  building  manager  who  demanded  a  rooftop  access  fee 
 of  $1000  per  month  and  a  $100  per  month  fee  for  each  hookup  in  the  building,  which  fees  in  combination 
 would  amount  to  over  $100,000  per  year  for  a  competitive  provider  seeking  to  serve  the  building.  63  OpTel 
16
 Federal  Communications  Commission  FCC  99-  141 
 Telecommunications  Subcommittee  Hearing),  Written  Testimony  of  John  D.  Windhausen,  Jr.,  President, 
 Association  for  Local  Telecommunications  Services  at  2-  4  (Windhausen  House  Telecommunications  Subcommittee 
 Hearing  Testimony)  (citing  several  examples  of  charges  and  practices  ALTS  considers  unreasonable);  May  13, 
 1999  House  Telecommunications  Subcommittee  Hearing,  Written  Testimony  of  William  J.  Rouhana,  Jr.,  Chairman 
 and  Chief  Executive  Officer,  WinStar  Communications,  Inc.  at  2-  3  (Rouhana  House  Telecommunications 
 Subcommittee  Hearing  Testimony  ($  50,000  charge  upon  signing  of  access  contract  plus  $1200  per  month). 

 64  Section  706  Inquiry,  Comments  of  OpTel,  Inc.  at  3  (filed  Sept.  14,  1998)  (OpTel  Section  706  Inquiry 
 Comments);  see  also  id.  at  4-  6  (alleging  that  demarcation  point  practices  of  other  incumbent  LECs  unnecessarily 
 complicate  access);  Section  706  Inquiry,  Comments  of  Allegiance  Telecom,  Inc.  at  8  (filed  Sept.  14,  1998) 
 (discussing  formal  and  informal  exclusive  access  arrangements);  Section  706  Inquiry,  Reply  Comments  of  KMC 
 Telecom,  Inc.  at  4-  5  (filed  Oct.  8,  1998)  (similar). 

 65  See,  e.  g.,  Rouhana  House  Telecommunications  Subcommittee  Hearing  Testimony  at  2  (noting  that  WinStar 
 has  negotiated  access  rights  to  4800  buildings  nationwide). 

 66  Cf.  Eastman  Kodak  Co.  v.  Image  Technical  Services,  504  U.  S.  451,  474-  76  (1992)  (recognizing  "lock-  in" 
 effect  created  when  customers  encounter  high  costs  to  switch  suppliers). 

 67  We  note  our  previous  conclusion  that  the  record  in  the  Inside  Wiring  proceeding  did  not  provide  a  sufficient 
 basis  to  address  issues  of  access  requirements  for  either  video  or  telephony  service  providers.  Inside  Wiring  Report 
 and  Order  and  Second  Further  NPRM,  13  FCC  Rcd.  at  3742-  43,    178.  We  believe,  based  on  the  comments 
 discussed  above,  that  it  is  now  appropriate  to  initiate  a  proceeding  that  will  establish  a  more  complete  factual 
 record  regarding  the  current  building  access  situation  in  the  telecommunications  marketplace  and  provide  a  basis 
 for  us  to  take  appropriate  action,  if  any  is  shown  to  be  necessary. 

 68  See  MTS  and  WATS  Market  Structure,  CC  Docket  No.  78-  72,  Phase  III,  Report  and  Order,  100  FCC2d  860, 
 865-  80,    14-  65  (1983). 

 17 

 states  that  it  has  "lodged  numerous  complaints"  regarding  the  slowness  of  the  incumbent  LEC  in  Houston 
 and  Dallas,  Texas,  to  establish  demarcation  points.  64  At  the  same  time,  we  are  aware  that  competitive 
 telecommunications  carriers  have  successfully  negotiated  building  access  agreements  in  many  instances,  65 
 and  we  recognize  that  building  owners  may  have  an  incentive  to  offer  high  quality  telecommunications 
 services  and  choices  of  providers  in  order  to  attract  tenants.  On  the  other  hand,  long-  term  tenant  leases  and 
 high  relocation  costs  may  prevent  the  market  from  effectively  conveying  tenants'  preferences  to  building 
 owners.  66  We  request  parties,  including  competing  carriers,  building  owners,  incumbent  LECs,  and 
 customers,  to  provide  additional  evidence  of  their  experiences  regarding  the  provision  of 
 telecommunications  services  in  multiple  tenant  environments.  67 

 32.  The  Commission  has  a  long  history  of  concern  that  all  customers  have  access  to  their  choice  of 
 communications  service  providers  in  competitive  markets.  For  example,  in  the  1980s  we  imposed  equal 
 access  obligations  on  LECs,  including  presubscription  and  dial-  around  requirements,  in  order  to  ensure 
 consumer  choice  of  interexchange  service  providers.  68  Congress  subsequently  extended  the  principle  of 
 equal  access  to  operator  services,  requiring  that  every  aggregator  of  operator  services  allow  consumers  to 
17
 Federal  Communications  Commission  FCC  99-  141 
 69  47  U.  S.  C.    226(  c)(  1)(  B),(  C);  see  also  47  C.  F.  R.    64.703(  b),  64.705(  b).  We  have  since  forborne  from 
 enforcing  these  requirements  against  aggregators  of  CMRS  operator  services.  See  PCIA  Forbearance  Order,   
 76-  80. 

 70  47  C.  F.  R.    76.800-  76.806. 

 71  47  C.  F.  R.    25.104. 
 72  47  U.  S.  C.    251(  c)(  2)-(  4);  see  also  47  U.  S.  C.    251(  b)  (imposing  resale,  number  portability,  dialing  parity, 
 access  to  rights-  of-  way,  and  reciprocal  compensation  obligations  on  all  LECs). 

 73  See  Preemption  of  Local  Zoning  Regulation  of  Satellite  Earth  Stations,  IB  Docket  No.  95-  59,  Report  and 
 Order,  Memorandum  Opinion  and  Order,  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd.  19276 
 (1996);  Implementation  of  Section  207  of  the  Telecommunications  Act  of  1996,  CS  Docket  No.  96-  83,  Second 
 Report  and  Order,  13  FCC  Rcd.  23874  (1998)  (OTARD  Second  Report  and  Order),  recon.  pending,  appeal 
 pending  sub  nom.  Building  Owners  and  Managers  Association  International  v.  FCC,  No.  98-  1610  (D.  C.  Cir. 
 docketed  Dec.  23,  1998). 

 74  47  U.  S.  C.    332(  c)(  7). 

 75  1996  Conference  Report  at  1. 

 18 

 access  the  operator  services  provider  of  their  choice  at  no  additional  charge.  69  In  areas  other  than 
 telecommunications,  we  have  established  rules  for  the  disposition  of  cable  inside  wiring  that  enhance 
 subscribers'  ability  to  choose  alternative  providers  of  video  service.  70  In  addition,  we  have  preempted 
 zoning  and  similar  regulations  that  materially  limit  transmission  or  reception  by  satellite  earth  station 
 antennas,  or  impose  more  than  minimal  costs  on  users  of  such  antennas,  unless  a  regulation  is  demonstrated 
 to  be  reasonable.  71 

 33.  Several  provisions  of  the  1996  Act  evince  a  similar  Congressional  concern  that  customers 
 have  the  ability  to  choose  from  among  competing  providers  of  communications  services.  For  example,  the 
 interconnection,  unbundled  access,  and  resale  obligations  of  section  251,  as  well  as  the  provisions  for 
 access  to  pole  attachments  in  section  224,  are  intended  to  ensure  that  incumbent  LECs  will  not  be  able  to 
 obstruct  their  potential  competitors  from  offering  service  to  customers.  72  Section  207  of  the  1996  Act 
 directs  the  Commission  to  promulgate  regulations  to  prohibit  restrictions  that  impair  a  viewer's  ability  to 
 receive  video  programming  services  through  over-  the-  air  reception  devices,  and  we  have  implemented  that 
 provision  by  issuing  regulations  that  apply  to  all  entities,  including  homeowner  associations  and 
 landlords.  73  Section  706  establishes  a  policy  and  directs  the  Commission  to  undertake  actions  to  ensure 
 that  advanced  telecommunications  capability  is  deployed  on  a  reasonable  and  timely  basis  to  all  Americans. 
 In  addition,  section  332(  c)(  7)  of  the  Communications  Act  shields  providers  of  personal  wireless  services 
 from  prohibitory  or  unreasonably  discriminatory  regulation  of  the  construction  and  placement  of  their 
 service  facilities,  thereby  promoting  the  ability  of  all  such  carriers  to  serve  customers  at  all  locations.  74 
 This  concern  is  generally  reflected  in  the  preamble  to  the  1996  Act,  which  emphasizes  that  the  purpose  of 
 the  1996  Act  is  to  accelerate  the  competitive  deployment  of  advanced  services  "to  all  Americans."  75  We 
 further  note  that  on  May  13,  1999,  the  Subcommittee  on  Telecommunications,  Trade,  and  Consumer 
18
 Federal  Communications  Commission  FCC  99-  141 
 76  According  to  at  least  one  provider  of  fixed  wireless  services,  existing  inside  wire  in  the  top  floors  of  a 
 building  is  typically  too  thin  for  high  capacity  traffic  to  be  carried  directly  from  a  rooftop  antenna  to  facilities 
 located  on  the  upper  floors  through  that  wiring.  See  WinStar  Inside  Wiring  Comments  at  7. 

 77  47  U.  S.  C.    224(  f)(  1).  A  "utility"  is  defined  as  any  person  who  is  a  LEC  or  an  electric,  gas,  water,  steam,  or 
 other  public  utility,  and  who  owns  or  controls  poles,  ducts,  conduits,  or  rights-  of-  way  used,  in  whole  or  in  part,  for 
 any  wire  communications,  except  that  the  term  does  not  include  any  railroad,  any  person  who  is  cooperatively 
 organized,  or  any  person  owned  by  the  Federal  Government  or  any  State.  47  U.  S.  C.    224(  a)(  1).  An  electric 
 utility  is  permitted  to  deny  access  to  its  facilities  on  a  nondiscriminatory  basis  for  reasons  of  insufficient  capacity, 

 19 

 Protection  of  the  United  States  House  of  Representatives  Committee  on  Commerce  held  an  oversight 
 hearing  specifically  to  address  issues  regarding  access  to  buildings  and  facilities  by  telecommunications 
 service  providers. 

 34.  The  types  of  access  that  a  competing  telecommunications  carrier  needs  in  order  to  provide 
 telecommunications  service  within  multiple  tenant  environments  may  depend  in  part  upon  the  technology  a 
 provider  uses,  the  design  of  its  network,  and  the  nature  of  its  service  offerings.  In  general,  incumbent  LECs 
 provide  service  to  multiple-  unit  buildings  by  connecting  their  networks  to  a  NID,  which  is  typically  located 
 in  the  basement  or  on  the  ground  floor.  Signals  are  transported  from  the  NID  to  locations  on  each  story  of 
 the  building  by  means  of  riser  cable,  and  to  individual  units  by  inside  wire.  In  order  to  reach  individual 
 units,  competing  carriers  typically  need  access  either  to  the  existing  riser  cable  and  inside  wiring,  or  to  riser 
 conduit  and  other  building  space  in  which  to  place  their  own  facilities,  or  both.  Although  use  of  existing 
 cable  and  inside  wiring  is  typically  less  expensive  and  less  disruptive,  the  existing  facilities  in  many 
 buildings  may  be  technically  inadequate  to  support  some  providers'  services.  In  addition,  providers  using 
 wireless  technology  may  need  access  to  rooftops  on  which  to  place  their  antennas,  and  to  conduit  for  laying 
 cable  to  carry  signals  from  the  antenna  either  to  the  NID  or  directly  to  individual  units.  76  We  seek 
 comment  generally  both  on  competing  providers'  preferred  engineering  arrangements  within  multiple  tenant 
 environments  and  on  the  types  of  arrangements  that  they  can  feasibly  employ,  as  well  as  on  the  access 
 requirements  attendant  upon  each  form  of  engineering  arrangement.  We  further  seek  comment  on  whether 
 different  engineering  issues  are  implicated  in  accessing  multiple  tenant  environments  that  are  not  contained 
 within  a  single  structure,  such  as  campuses  and  manufactured  housing  communities. 

 35.  In  order  best  to  accommodate  the  varying  access  needs  of  different  competing 
 telecommunications  service  providers,  we  address  herein  several  potential  requirements  to  ensure  that 
 incumbent  LECs  and  property  owners  do  not  unreasonably  obstruct  the  availability  of  facilities-  based 
 competitive  telecommunications  services  to  customers  located  in  multiple  tenant  environments.  We  ask 
 commenters  to  address  specifically  how  each  potential  requirement  meets  or  fails  to  meet  the  access  needs 
 of  different  competing  providers. 

 2.  Access  Under  Section  224. 
 36.  Pursuant  to  section  224  of  the  Communications  Act,  utilities,  including  LECs,  must  provide 
 cable  television  systems  and  telecommunications  carriers  with  nondiscriminatory  access  to  any  pole,  duct, 
 conduit,  or  right-  of-  way  that  they  own  or  control.  77  In  addition,  section  224  requires  the  Commission  to 
19
 Federal  Communications  Commission  FCC  99-  141 
 safety,  reliability,  and  general  engineering  purposes.  47  U.  S.  C.    224(  f)(  2).  See  also  47  U.  S.  C.    251(  b)(  4) 
 (requiring  LECs  to  comply  with  section  224);  47  U.  S.  C.    271(  c)(  2)(  B)(  iii)  (requiring  Bell  Operating  Companies 
 to  comply  with  section  224  as  condition  for  obtaining  authorization  to  provide  interLATA  services). 

 78  47  U.  S.  C.    224(  b),(  c).  The  principles  governing  the  Commission's  rate  regulation  of  pole  attachments 
 utilized  to  provide  telecommunications  services  beginning  on  February  8,  2001,  are  set  out  in  section  224(  e). 
 Separate  pricing  principles  to  be  used  for  both  cable  and  telecommunications  services  until  February  8,  2001,  and 
 to  be  used  thereafter  for  pole  attachments  utilized  by  a  cable  television  system  not  providing  telecommunications 
 service,  are  set  out  in  section  224(  d). 

 79  Implementation  of  Section  703(  e)  of  the  Telecommunications  Act  of  1996,  CS  Docket  No.  97-  151,  Report 
 and  Order,  13  FCC  Rcd.  6777,  6798-  99,    39-  42  (1998)  (Telecommunications  Pole  Attachment  Pricing  Report 
 and  Order),  recon.  pending;  see  also  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  16085,    1186 
 ("[  t]  he  statute  does  not  describe  the  specific  type  of  telecommunications  or  cable  equipment  that  may  be  attached 
 when  access  to  utility  facilities  is  mandated"). 

 80  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  16084-  85,    1185. 

 81  Id.  at  16085,    1185. 
 82  Id.  at  16084,    1185. 

 20 

 regulate  the  rates,  terms,  and  conditions  for  attachments  to  poles,  ducts,  conduits,  or  rights-  of-  way  to 
 ensure  that  such  rates,  terms,  and  conditions  are  just  and  reasonable,  except  where  such  matters  are 
 regulated  by  a  State.  78  The  right  of  access  granted  under  section  224  includes  access  for  facilities  used  to 
 provide  wireless  telecommunications  services.  79  The  rights  and  obligations  created  under  section  224  run 
 between  utilities,  on  the  one  hand,  and  cable  television  systems  and  telecommunications  carriers,  on  the 
 other  hand. 

 37.  In  the  Local  Competition  First  Report  and  Order,  we  held  that  section  224  does  not  mandate 
 that  a  utility  make  space  available  on  the  roof  of  its  corporate  offices  for  the  installation  of  a 
 telecommunications  carrier's  transmission  tower,  although  access  of  this  nature  might  be  mandated 
 pursuant  to  a  request  for  interconnection  or  for  access  to  unbundled  network  elements  under  section 
 251(  c)(  6).  80  In  this  regard,  we  observed  that  Congressional  intent  was  to  permit  cable  operators  and 
 telecommunications  carriers  to  "piggyback"  along  distribution  networks  owned  or  controlled  by  utilities, 
 not  to  grant  access  to  every  piece  of  equipment  or  real  property  owned  or  controlled  by  the  utility.  81  We 
 further  observed  that  an  overly  broad  interpretation  of  section  224  could  impact  the  owners  and  managers 
 of  small  buildings,  as  well  as  small  incumbent  LECs,  by  requiring  additional  resources  to  effectively 
 control  and  monitor  rights-  of-  way  located  on  their  properties.  82 

 38.  WinStar  petitioned  for  clarification  or  reconsideration  of  this  holding,  requesting  a  ruling  that 
 a  LEC  must  allow  telecommunications  carriers  access  pursuant  to  section  224  to  rooftop  facilities  and 
20
 Federal  Communications  Commission  FCC  99-  141 
 83  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  CC  Docket  No. 
 96-  98,  WinStar  Communications,  Inc.  Petition  for  Clarification  or  Reconsideration  (filed  Sept.  30,  1996)  (WinStar 
 Petition). 

 84  Id.  at  6-  7. 

 85  Id.  at  8. 
 86  Relevant  oppositions  and  comments  were  filed  by  American  Electric  Power  Service  Corporation  et  al. 
 (AEPSC  et  al.),  Ameritech,  Duquesne  Light  Company  (Duquesne),  Edison  Electric  Institute  and  UTC  (EEI/  UTC), 
 Sprint  Corporation  (Sprint),  and  United  States  Telephone  Association  (USTA).  Replies  were  filed  by  AEPSC  et 
 al.,  Duquesne,  and  WinStar.  See  also  WinStar  Communications,  Inc.  Opposition  to  Petitions  for  Reconsideration 
 at  5-  10  (filed  Oct.  31,  1996)  (WinStar  Opposition)  (replying  to  Duquesne  Opposition). 

 87  See,  e.  g.,  Duquesne  Opposition  at  3-  6;  EEI/  UTC  Comments  at  2-  3;  Sprint  Opposition  at  22-  23;  USTA 
 Opposition  at  42-  44;  see  also  AEPSC  et  al.  Reply  at  19  (contending  that  WinStar's  argument,  if  taken  to  its  logical 
 conclusion,  "would  permit  a  telecommunications  carrier  to  site  its  facilities  in  the  lobby  of  a  utility's 
 headquarters"). 

 88  47  U.  S.  C.    224(  a)(  4). 

 21 

 related  riser  conduits  that  the  LEC  owns  or  controls.  83  In  particular,  WinStar  argues  that  for  wireless  local 
 exchange  carriers,  "access  to  roofs  and  risers  by  definition  is  access  to  the  critical  rights-  of-  way,"  and 
 therefore  that  failure  to  afford  such  access  would  amount  to  unreasonable  discrimination  against  providers 
 using  alternative  technologies.  84  WinStar  further  argues  that  because  some  incumbent  LECs  rely  on 
 microwave  transmission  facilities  as  an  integral  part  of  their  transmission  and  distribution  networks,  failure 
 to  grant  relief  would  enable  these  incumbents  to  favor  their  own  services  in  a  blatantly  discriminatory 
 fashion.  85  Six  parties  filed  oppositions  or  comments  addressing  the  WinStar  Petition,  and  three  parties  filed 
 replies.  86 

 39.  Based  on  the  WinStar  Petition  and  the  record  compiled  in  response  to  that  Petition,  it  appears 
 that  the  obligations  of  utilities  under  section  224  encompass  access  to  rights-  of-  way,  conduit,  and  risers  on 
 private  property,  including  end  user  premises  in  multiple  tenant  environments,  that  utilities  own  or  control. 
 Similarly,  section  224  appears  to  include  locations  on  a  utility's  own  property  that  are  used  by  the  utility  in 
 the  manner  of  a  right-  of-  way  in  connection  with  the  utility's  distribution  network.  Depending  on  the 
 definition  of  "ownership"  or  "control,"  however,  these  interpretations  may  raise  practical  and  constitutional 
 concerns  that  are  not  fully  addressed  in  the  record.  We  therefore  seek  further  comment  on  the  issues  raised 
 in  the  WinStar  Petition. 

 40.  Much  of  the  opposition  to  the  WinStar  petition  is  directed  at  refuting  the  proposition  that 
 section  224  encompasses  a  right  of  access  to  all  real  property  owned  or  controlled  by  a  utility.  These 
 commenters  argue  that  the  simple  fact  that  a  provider  may  find  it  convenient  to  utilize  a  piece  of  utility 
 property  in  constructing  its  network  does  not  justify  broadening  the  scope  of  section  224  to  include  that 
 property.  87  By  its  terms,  section  224  governs  attachments  to  "pole[  s],  duct[  s],  conduit[  s],  or  right[  s]-  of-way."  88 
 Unless  utility  property  falls  within  this  definition,  therefore,  it  is  not  within  the  plain  language  of 
21
 Federal  Communications  Commission  FCC  99-  141 
 89  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  16084-  85,    1185. 
 90  Indeed,  WinStar  expressly  disclaims  that  it  is  seeking  "access  to  every  piece  of  equipment  or  real  property 
 owned  or  controlled  by  the  utility."  WinStar  Opposition  at  9. 

 91  See  AEPSC  et  al.  Opposition  at  8;  Ameritech  Opposition  at  43;  Duquesne  Opposition  at  5;  Duquesne  Reply 
 at  2-  3. 

 92  Compare  47  U.  S.  C.    253(  c)  (governing  State  or  local  management  of  public  rights-  of-  way). 

 93  See  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  16080,    1173  ("  use  of  any  utility  pole,  duct, 
 conduit,  or  right-  of-  way  for  wire  communications  triggers  access  to  all  poles,  ducts,  conduits,  and  rights-  of-  way 
 owned  or  controlled  by  the  utility,  including  those  not  currently  used  for  wire  communications"). 

 94  See,  e.  g.,  Great  Northern  Ry.  Co.  v.  United  States,  315  U.  S.  262,  276-  79  (1942)  (construing  rights-  of-  way 
 granted  by  the  1875  Right  of  Way  Act  to  constitute  easements);  Joy  v.  City  of  Saint  Louis,  138  U.  S.  1,  44  (1890) 
 (Joy);  Board  of  County  Supervisors  of  Prince  William  County  v.  United  States,  48  F.  3d  520,  527  (Fed.  Cir.) 
 ("  'Rights-  of-  way'  are  another  term  for  easements"),  cert.  denied,  116  S.  Ct.  61  (1995). 

 22 

 section  224.  Thus,  we  held  in  the  Local  Competition  First  Report  and  Order  that  section  224  does  not 
 mandate  that  a  utility  make  space  available  on  the  roof  of  its  corporate  offices  for  the  installation  of  a 
 transmission  tower.  89  Nothing  in  the  present  record  persuades  us  to  reexamine  this  holding.  90  Thus,  we 
 tentatively  conclude  that  we  should  not  reconsider  our  prior  determination  that  section  224  does  not  confer 
 a  general  right  of  access  to  utility  property,  and  we  seek  comment  on  this  tentative  conclusion. 

 41.  At  the  same  time,  it  appears  that  where  a  rooftop  or  other  location  does  constitute  a  right-  of-way 
 owned  or  controlled  by  a  utility,  section  224  requires  the  utility  to  permit  cable  television  systems  and 
 telecommunications  service  providers  nondiscriminatory  access  to  such  rights-  of-  way  under  just  and 
 reasonable  rates,  terms,  and  conditions.  This  situation  may  occur,  for  example,  where  a  utility  has 
 obtained  the  right  to  place  an  antenna  or  other  facility  on  a  roof,  including  the  roof  of  an  end  user's 
 premises  in  a  multiple  tenant  environment,  in  connection  with  its  distribution  of  telecommunications  or 
 utility  services,  and  the  utility  exercises  the  requisite  ownership  or  control.  Contrary  to  the  arguments  of 
 some  commenters,  91  section  224  does  not  on  its  face  limit  the  definition  of  "right-  of-  way"  to  property  used 
 for  cabling  or  similar  equipment.  Similarly,  unlike  section  253,  nothing  in  section  224  limits  its  application 
 to  "public"  rights-  of-  way.  92  Indeed,  the  inclusion  within  section  224  of  rights-  of-  way  that  a  utility 
 "controls,"  as  well  as  "owns,"  suggests  that  rights-  of-  way  over  private  property  owned  by  a  third  party 
 were  intended  to  be  included.  Thus,  so  long  as  a  utility  uses  any  pole,  duct,  conduit,  or  right-  of-  way  for 
 wire  communications,  we  tentatively  conclude  that  all  rights-  of-  way  that  it  owns  or  controls,  whether 
 publicly  or  privately  granted,  and  regardless  of  the  purpose  for  which  a  particular  right-  of-  way  is  used,  are 
 subject  to  section  224.  93 

 42.  We  tentatively  conclude  that  the  definition  of  "right-  of-  way"  as  including  a  publicly  or 
 privately  granted  right  to  place  a  transmit  or  receive  antenna  on  public  or  private  premises  is  consistent 
 with  the  common  usage  of  the  term.  A  right-  of-  way  over  another  party's  property  has  been  understood  in 
 the  case  law  as  equivalent  to  an  easement;  that  is,  a  right  to  use  or  pass  over  property  of  another.  94  We 
22
 Federal  Communications  Commission  FCC  99-  141 
 95  AT&  T  Communications  of  Michigan,  Inc.,  Case  No.  U-  11151,  Decision  of  Arbitration  Panel  at  50-  52 
 (Mich.  P.  S.  C.  Oct.  28,  1996);  see  also  AT&  T  Communications  of  Ohio,  Inc.  's  Petition  for  Arbitration  of  Inter-Connection 
 Rates,  Terms  and  Conditions  and  Related  Arrangements  with  Ohio  Bell  Telephone  Company  dba 
 Ameritech  Ohio,  Case  No.  96-  752-  TP-  ARB,  Arbitration  Panel  Report  at  52-  53). 

 96  See  Joy,  138  U.  S.  at  44;  Black's  Law  Dictionary  at  1326  (6th  ed.  1990). 

 97  See  Ameritech  Opposition  at  42-  43;  AEPSC  et  al.  Reply  at  18. 
 98  See  AEPSC  et  al.  Opposition  at  7,  citing  S.  Rep.  No.  580,  95th  Cong.,  1st  Sess.  at  26. 
 99  See  Chevron,  U.  S.  A.,  Inc.  v.  Natural  Resources  Defense  Council,  Inc.,  et  al.,  467  U.  S.  837  (1984). 
 100  See  EEI/  UTC  Comments  at  3. 

 23 

 believe  that  a  right  to  place  an  antenna  on  private  property  fits  comfortably  within  this  definition.  We  seek 
 comment  on  this  analysis. 

 43.  We  also  tentatively  conclude  that  section  224  encompasses  a  utility's  obligation  to  provide 
 cable  television  systems  and  telecommunications  service  providers  with  access  to  property  that  it  owns 
 which  it  uses  as  part  of  its  distribution  network.  In  interpreting  section  224(  f),  an  arbitration  panel  of  the 
 Michigan  Public  Service  Commission  has  held  that  land  used  for  distribution  facilities  would  be  considered 
 a  "right-  of-  way"  even  if  it  were  held  by  the  utility  in  fee  simple  absolute.  95  We  believe  this  holding  is 
 consistent  with  the  common  use  of  the  term  "right-  of-  way"  to  denote  land  that  is  used  for  a  right-  of-  way.  96 
 Although  a  "right-  of-  way"  can  be  understood  in  some  contexts  as  limited  to  a  right  to  use  property 
 belonging  to  another,  97  we  tentatively  conclude  that  the  broader  definition,  which  is  equally  consistent  with 
 common  usage,  better  effectuates  the  procompetitive  intent  of  this  provision.  We  further  tentatively 
 conclude  that  this  definition  is  more  consistent  with  the  language  of  section  224,  which  encompasses  rights-of- 
 way  that  a  utility  "owns"  as  well  as  "controls."  Thus,  where  a  utility  uses  its  own  property  in  a  manner 
 equivalent  to  that  for  which  it  might  obtain  a  right-  of-  way  from  a  private  landowner,  we  tentatively 
 conclude  that  it  should  be  considered  to  own  or  control  a  right-  of-  way  within  the  meaning  of  section  224. 
 We  seek  comment  on  this  tentative  conclusion,  as  well  as  on  the  test  for  determining  when  a  utility  is  using 
 its  own  property  in  a  manner  equivalent  to  a  right-  of-  way. 

 44.  In  addition,  we  tentatively  conclude  that  the  obligations  of  utilities  under  section  224 
 encompass  in-  building  conduit,  such  as  riser  conduit,  that  may  be  owned  or  controlled  by  a  utility.  First, 
 we  believe  that  riser  conduit  used  by  a  utility  could  reasonably  be  interpreted  as  a  right-  of-  way.  In 
 addition,  section  224  on  its  face  provides  broadly  for  a  right  of  access  to  "conduit,"  without  any  limitation 
 on  the  term.  Although  legislative  history  dating  from  1978,  when  the  Pole  Attachments  Act  was  originally 
 enacted,  suggests  that  conduit  consists  of  "underground  reinforced  passages,"  98  we  are  not  currently 
 persuaded  that  this  legislative  history  legally  limits  the  plain  language  of  the  statute.  99  Moreover,  even  if, 
 as  has  been  argued,  electric  utilities  rarely  own  or  control  riser,  100  this  fact  does  not  necessarily  limit  the 
 application  of  section  224  to  any  situations  where  a  utility  does  exercise  such  ownership  or  control.  We 
 request  comment  on  this  analysis.  In  addition,  we  note  that  section  1.1402(  i)  of  our  rules  currently  defines 
23
 Federal  Communications  Commission  FCC  99-  141 
 101  47  C.  F.  R.    1.1402(  i). 
 102  WinStar  Petition  at  8  n.  5;  see  also  WinStar  Opposition  at  6  n.  7,  7-  8. 
 103  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  16083,    1181. 
 104  Id.  at  16082,    1179. 

 24 

 conduit  as  consisting  of  pipe  "placed  in  the  ground."  101  We  seek  comment  regarding  whether  this  definition 
 should  be  amended. 

 45.  At  the  same  time,  we  are  aware  that  an  interpretation  of  section  224  as  including  rights-  of-  way 
 and  conduits  on  end  user  premises  may  raise  difficult  issues  of  implementation.  In  particular,  although 
 section  224  on  its  face  imposes  obligations  only  on  utilities,  we  believe  it  is  important  to  consider  whether 
 application  of  that  provision  would  have  an  impact  on  underlying  property  owners.  We  therefore  seek 
 comment  on  several  issues  relating  to  the  implementation  of  our  interpretation  of  section  224.  First,  we 
 seek  comment  regarding  the  circumstances  under  which  a  utility  may  be  considered  to  own  or  control  a 
 right-  of-  way  or  conduit  within  the  meaning  of  section  224.  For  example,  a  utility  might  be  considered  to 
 "control"  a  right-  of-  way  when  it  has  actually  placed  a  distribution  facility  on  a  piece  of  property  with  the 
 agreement  of  the  owner,  when  it  has  obtained  a  right  from  the  owner  to  use  a  portion  of  its  property  in  that 
 manner,  or  when  it  has  taken  other  action  to  secure  the  right  to  place  distribution  facilities,  such  as  by 
 exercising  the  power  of  eminent  domain.  WinStar  further  argues  that  a  utility  might  own  or  control  a  right-of- 
 way,  and  thus  may  be  required  to  permit  access,  even  where  it  has  chosen  not  to  use  that  right-  of-  way 
 for  distribution  facilities.  102  Alternatively,  utility  control  might  be  construed  more  narrowly,  for  example 
 by  requiring  some  specific  cession  of  rights  by  the  underlying  property  owner.  We  seek  comment  on  these 
 and  other  possible  conditions  for  establishing  utility  ownership  or  control  of  a  right-  of-  way,  as  well  as  on 
 how  such  ownership  or  control  may  be  ascertained  by  a  competitive  service  provider.  Similarly,  we  seek 
 comment  regarding  what  circumstances  would  establish  utility  ownership  or  control  of  riser  conduit  for 
 purposes  of  section  224. 

 46.  Commenters  should  also  consider  how  to  measure  the  extent  of  the  right-  of-  way  that  a  utility 
 might  be  considered  to  own  or  control  under  specific  circumstances.  For  instance,  assuming  a  utility  leases 
 a  defined  amount  of  space  on  a  roof  under  circumstances  that  establish  ownership  or  control,  and  its 
 antenna  structure  entirely  fills  that  space,  we  seek  comment  regarding  the  extent  of  the  utility's  obligations. 
 Alternatively,  we  seek  comment  regarding  a  utility's  obligations  if  it  simply  contracts  for  the  right  to  place  a 
 facility  on  a  roof,  without  any  defined  space.  We  also  request  comment  on  the  scope  of  any  ownership  or 
 control  a  utility  may  establish  by,  for  example,  running  cable  through  riser  conduit.  In  this  regard,  we  note 
 that  a  utility  is  required  to  exercise  its  authority  of  eminent  domain  where  necessary  to  expand  an  existing 
 right-  of-  way  in  order  to  accommodate  a  request  for  access.  103  We  request  comment  as  to  whether  any 
 similar  principle  applies  where  a  utility  has  obtained  a  right-  of-  way  by  agreement  with  the  property  owner, 
 rather  than  by  the  exercise  of  eminent  domain. 

 47.  With  regard  to  these  questions  generally,  we  note  an  earlier  holding  that  "[  t]  he  scope  of  a 
 utility's  ownership  or  control  of  an  easement  or  right-  of-  way  is  a  matter  of  state  law."  104  Commenters 
24
 Federal  Communications  Commission  FCC  99-  141 
 105  U.  S.  Const.,  Amendment  V. 
 106  Cf.  Cable  Holdings  of  Georgia,  Inc.  v.  McNeil  Real  Estate  Fund  VI,  Ltd.,  953  F.  2d  600  (11th  Cir.  1992) 
 (narrowly  construing  section  621(  a)(  2)  of  the  Communications  Act,  which  grants  cable  companies  access  to 
 dedicated  easements,  in  order  to  avoid  constitutional  questions),  cert.  denied,  506  U.  S.  862  (1992);  see  also,  e.  g., 
 TCI  of  North  Dakota  v.  Schriock  Holding  Company,  11  F.  3d  812,  814-  15  (8th  Cir.  1993)  (similar);  Media  General 
 Cable  of  Fairfax  v.  Sequoyah  Condominium  Council  of  Co-  Owners,  991  F.  2d  1169,  1174  (4th  Cir.  1993)  (similar); 
 Cable  Investments  Inc.  v.  Woolley,  867  F.  2d  151,  159-  60  (3rd  Cir.  1989)  (similar).  We  note  that  in  an  analogous 
 situation,  we  have  held  that  the  Fifth  Amendment  did  not  prevent  us  from  requiring  a  building  owner  to  allow  a 
 tenant  to  place  an  antenna  on  property  that  the  tenant  controls.  See  OTARD  Second  Report  and  Order,  13  FCC 
 Rcd.  at  23882-  85,    19-  23. 

 107  See  para.  61,  infra. 

 108  See  47  C.  F.  R.    76.804. 
 109  Specifically,  a  State  must  certify  that  in  regulating  pole  attachments  it  "has  the  authority  to  consider  and 
 does  consider  the  interests  of  the  subscribers  of  the  services  offered  via  such  attachments,  as  well  as  the  interests  of 
 the  consumers  of  the  utility  services."  47  U.  S.  C.    224(  c)(  2)(  B).  We  have  determined  that  under  section  224(  c),  a 
 State  need  not  make  any  certification  to  the  Commission  in  order  to  assert  exclusive  jurisdiction  over  access  to  pole 
 attachments,  as  opposed  to  the  rates,  terms,  and  conditions  of  such  access.  See  Local  Competition  First  Report  and 
 Order,  11  FCC  Rcd.  at  16107,    1240. 

 25 

 should  consider  whether,  in  light  of  this  principle,  it  is  useful  or  appropriate  for  us  to  offer  any  guidance 
 regarding  the  existence  and  scope  of  ownership  or  control  under  particular  circumstances,  or  whether  we 
 should  defer  entirely  to  state  law.  Commenters  should  also  consider  whether  any  interpretation  of  utility 
 ownership  or  control  might  result  in  the  taking  of  a  building  owner's  property  without  just  compensation 
 within  the  meaning  of  the  Fifth  Amendment  to  the  United  States  Constitution,  105  and  whether  any  such 
 construction  should  therefore  be  avoided.  106  Similarly,  commenters  should  consider  whether  an  overly 
 broad  construction  of  utility  ownership  or  control  would  impose  unreasonable  burdens  on  building  owners, 
 including  small  building  owners,  or  compromise  their  ability  to  ensure  the  safe  use  of  rights-  of-  way  or 
 conduit,  or  engender  other  practical  difficulties.  In  addition,  commenters  should  consider  whether  any 
 construction  would  effectively  limit  the  ability  of  property  owners  to  enter  into  exclusive  service  contracts 
 with  telecommunications  service  providers  or  multichanel  video  programming  distributors  (MVPDs),  and, 
 if  so,  whether  this  result  is  appropriate.  107  We  also  note  that  our  rules  governing  the  disposition  of  cable 
 home  run  wiring  apply  only  where  the  incumbent  MVPD  no  longer  has  a  legally  enforceable  right  to  remain 
 on  the  premises.  108  We  seek  comment  on  whether  and  how  our  proposed  interpretation  of  section  224, 
 under  any  definition  of  "own"  or  "control",  might  affect  the  application  of  the  rules  governing  home  run 
 wiring  by  expanding  a  cable  television  system's  ability  to  remain  on  multiple  unit  premises,  and  on  what 
 action  we  should  take  to  account  for  any  such  effects. 

 48.  Finally,  section  224(  c)  of  the  Act  provides  that  the  Commission  shall  not  have  jurisdiction 
 with  respect  to  rates,  terms,  and  conditions  of  access  to  pole  attachments  if  a  State  regulates  such  matters 
 and  certifies  to  the  Commission  that  it  does  so  and  that  it  meets  certain  conditions.  109  We  request  comment 
 as  to  whether  any  additional  certification  or  other  Commission  action  is  necessary  to  ascertain  whether  a 
25
 Federal  Communications  Commission  FCC  99-  141 
 110  In  addition  to  requiring  nondiscriminatory  access  and  directing  the  Commission  to  ensure  by  regulation  that 
 the  rates,  terms,  and  conditions  for  pole  attachments  are  just  and  reasonable,  section  224  directs  the  Commission  to 
 prescribe  regulations  to  govern  the  charges  for  pole  attachments  used  by  telecommunications  carriers  when  the 
 parties  fail  to  resolve  a  dispute  over  such  charges.  47  U.  S.  C.    224(  e).  In  the  Telecommunications  Pole 
 Attachment  Pricing  Report  and  Order,  we  determined  that  the  record  did  not  permit  us  to  establish  detailed 
 standards  for  the  pricing  of  access  to  rights-  of-  way,  and  accordingly  that  we  would  consider  allegations  of  unjust, 
 unreasonable,  or  discriminatory  rates,  terms,  and  conditions  or  denials  of  access  on  a  case-  by-  case  basis. 
 Telecommunications  Pole  Attachment  Pricing  Report  and  Order,  13  FCC  Rcd.  at  6832,    120-  121.  Teligent  has 
 petitioned  for  reconsideration  of  this  decision,  requesting  that  specific  guidelines  be  developed.  Implementation  of 
 Section  703(  e)  of  the  Telecommunications  Act  of  1996,  CS  Docket  No.  97-  151,  Petition  for  Reconsideration  and 
 Clarification  of  Teligent,  Inc.  (filed  Apr.  13,  1998).  We  do  not  request  comments  on  this  issue  here.  Similarly,  we 
 do  not  here  request  comment  regarding  any  formula  for  determining  the  pricing  of  access  to  riser  conduit.  See 
 Telecommunications  Pole  Attachment  Pricing  Report  and  Order,  13  FCC  Rcd.  at  6830,    116  (establishing 
 formula  for  determining  maximum  price  for  access  to  conduit  under  section  224(  e)). 

 111  47  U.  S.  C.    251(  c)(  3);  see  also  47  U.  S.  C.    252(  d)(  1)  (establishing  basis  for  State  commissions  to  determine 
 just  and  reasonable  rates  in  arbitration  proceedings). 

 112  47  U.  S.  C.    251(  d)(  2). 

 113  Local  Competition  First  Report  and  Order,  11  FCC  Rcd.  at  15697-  99,    392-  396;  see  47  C.  F.  R.   
 51.319(  b)  (1997). 

 26 

 State  is  regulating  the  rates,  terms,  and  conditions  of  access  to  facilities  and  rights-  of-  way  on  multiple  unit 
 premises  within  the  meaning  of  this  provision.  110 

 3.  Access  to  Unbundled  Network  Elements. 
 49.  Pursuant  to  section  251(  c)(  3)  of  the  Communications  Act,  an  incumbent  LEC  must  make 
 available  to  any  requesting  carrier  nondiscriminatory  access  to  network  elements  on  an  unbundled  basis  at 
 any  technically  feasible  point  under  just,  reasonable,  and  nondiscriminatory  rates,  terms,  and  conditions.  111 
 In  determining  what  network  elements  should  be  made  available  under  this  provision,  the  Commission  is 
 directed  to  consider,  at  a  minimum,  (a)  whether  access  to  such  network  elements  as  are  proprietary  in 
 nature  is  necessary,  and  (b)  whether  the  failure  to  provide  access  would  impair  the  ability  of  the 
 telecommunications  carrier  seeking  access  to  provide  the  services  that  it  seeks  to  offer.  112  In  the  Local 
 Competition  First  Report  and  Order,  we  required  incumbent  LECs  to  make  available  pursuant  to  these 
 provisions  unbundled  access  to  the  NID  in  multi-  tenant  buildings,  finding  that  a  competitor  that  deploys  its 
 own  loops  must  have  access  to  this  facility  in  order  to  provide  service  and  that  such  access  is  technically 
 feasible.  113  This  decision,  however,  did  not  mandate  unbundled  access  to  subloop  facilities  located  on 
 multiple  tenant  premises. 

 50.  The  Supreme  Court  in  Iowa  Utilities  Board  vacated  our  rule  identifying  the  minimum  set  of 
 network  elements  that  incumbent  LECs  must  make  available  on  an  unbundled  basis,  holding  that  we  had 
26
 Federal  Communications  Commission  FCC  99-  141 
 114  Iowa  Utilities  Board,  119  S.  Ct.  at  734-  36. 
 115  UNE  Further  NPRM,  FCC  99-  70. 
 116  Id.  at    17-  28. 
 117  Id.  at    33. 
 118  Id.  We  note  that  prior  to  the  Supreme  Court's  decision,  we  requested  comment  on  whether  incumbent  LECs 
 should  be  required  under  section  251(  c)  to  provide  sub-  loop  unbundling  and  permit  collocation  at  the  remote 
 terminal,  and  we  tentatively  concluded  that  such  requirements  should  be  imposed.  See  Deployment  of  Wireline 
 Services  Offering  Advanced  Telecommunications  Capability,  CC  Docket  No.  98-  147,  Memorandum  Opinion  and 
 Order,  and  Notice  of  Proposed  Rulemaking,  13  FCC  Rcd  24012,  24086-  88,    173-  176  (1998). 

 119  Cf.  Inside  Wiring  Report  and  Order  and  Second  Further  NPRM,  13  FCC  Rcd.  at  3781-  82,    270-  271 
 (seeking  comment  on  technical  feasibility  of  sharing  wire  between  two  video  service  providers). 

 120  See,  e.  g.,  Teligent  CCB  Inquiry  Comments  at  22-  24;  Section  706  Inquiry,  Reply  Comments  of  WinStar 
 Communications,  Inc.  at  9-  10  (filed  Oct.  8,  1998)  (WinStar  Section  706  Inquiry  Reply  Comments). 

 121  See  Joint  Complaint  of  AT&  T  Communications  of  New  York,  Case  95-  C-  0657,  Opinion  and  Order  in 
 Phase  2,  Opinion  No.  97-  19,  1997  N.  Y.  PUC  LEXIS  709  at  *107-  26  (N.  Y.  P.  S.  C.  Dec.  22,  1997). 

 27 

 not  adequately  considered  the  "necessary"  and  "impair"  standards  of  section  251(  d)(  2).  114  Following  this 
 decision,  we  requested  further  public  comment  regarding  how  sections  251(  c)(  3)  and  251(  d)(  2)  should  be 
 applied.  115  In  addition  to  requesting  comment  on  how  the  "necessary"  and  "impair"  standards  should  be 
 interpreted  in  light  of  the  Supreme  Court's  decision,  116  we  also  asked  commenters  to  apply  their  proposed 
 criteria  to  the  seven  network  elements  that  had  previously  been  identified  in  the  rule  that  the  Supreme  Court 
 had  vacated,  as  well  as  to  any  other  network  elements  they  contended  should  be  unbundled.  117  We 
 specifically  suggested  that  commenters  might  want  to  address  whether  we  should  require  unbundling  of 
 facilities  owned  by  the  incumbent  LEC  on  the  end  user's  side  of  the  demarcation  point,  as  well  as  sub-  loop 
 unbundling  at  the  remote  terminal  or  at  other  points  within  the  incumbent  LEC's  network.  118 

 51.  We  seek  comment  on  the  potential  treatment  of  in-  building  cable  and  wiring  owned  or 
 controlled  by  an  incumbent  LEC  as  an  unbundled  network  element  under  section  251(  c)(  3).  We  will 
 establish  criteria  for  applying  the  "impair"  and  "necessary"  standards  of  section  251(  d)(  2),  and  apply  those 
 criteria  to  the  previously  identified  minimum  set  of  network  elements,  including  the  NID,  based  on  the 
 record  compiled  in  response  to  our  recent  Further  Notice  of  Proposed  Rulemaking.  We  request  comment 
 on  whether  unbundled  access  to  riser  cable  and  wiring  within  multiple  tenant  environments  is  technically 
 feasible.  119  We  note  that  facilities-  based  competitive  LECs  have  advanced  arguments  that,  in  many 
 instances,  it  is  difficult  for  them  to  provide  service  without  access  to  these  facilities,  120  and  that  at  least  one 
 State  commission  has  required  incumbent  LECs  to  unbundle  house  and  riser  cable  within  multiple  tenant 
 environments.  121  We  seek  comment,  in  particular,  from  a  technical  standpoint,  on  whether  sharing  of  wire 
 may  lead  to  problems  due  to  insufficient  power  or  electromagnetic  incompatibility.  Commenters  should 
 address  whether  any  obligation  to  allow  unbundled  access  to  cable  and  wiring  should  be  limited,  or  whether 
27
 Federal  Communications  Commission  FCC  99-  141 
 122  If  radiofrequency  signals  are  applied  to  the  wiring,  the  systems  must  comply  with  the  standards  contained  in 
 Part  15  of  the  Commission's  rules.  See  47  C.  F.  R.  Part  15,  esp.    15.107  and  15.109(  e). 

 123  We  note  that  the  issue  of  whether  to  unbundle  facilities  owned  by  the  incumbent  LEC  on  the  end  user's  side 
 of  the  network  demarcation  point  under  section  251(  c)(  3)  is  pending  in  the  UNE  Further  NPRM,  FCC  99-  70.  To 
 the  extent  commenters  have  previously  addressed  the  unbundling  of  in-  building  cable  and  wiring  in  their 
 Comments  and  Reply  Comments  on  the  UNE  Further  NPRM,  they  may  incorporate  those  pleadings  by  reference  in 
 this  proceeding.  Commenters  should  supplement  these  pleadings  as  appropriate  to  address  the  more  specific 
 questions  posed  herein.  We  note  that  the  issue  of  whether  to  unbundle  facilities  owned  by  the  incumbent  LEC  on 
 the  end  user's  side  of  the  network  demarcation  point  under  section  251(  c)(  3)  is  pending  in  the  UNE  Further 
 NPRM,  FCC  99-  70. 

 124  We  note  that  we  are  considering  in  another  proceeding  certain  issues  relating  to  the  determination  of  the 
 demarcation  point  between  facilities  controlled  by  the  telephone  company  and  by  the  property  owner  under  Part  68, 
 and  that  we  request  comment  below  regarding  how  the  definition  of  the  demarcation  point  affects  competitive 
 access  and  whether  we  should  take  action  to  address  any  such  impact.  See  paras.  65-  67,  infra.  For  purposes  of  this 
 section,  we  assume  that  control  over  facilities  will  be  determined  according  to  existing  law,  and  we  seek  comment 
 on  whether  building  owners  should  be  subject  to  obligations  regarding  whatever  facilities  they  may  control  on  any 
 particular  premises  under  such  law. 

 125  Inside  Wiring  Report  and  Order  and  Second  Further  NPRM,  13  FCC  Rcd.  at  3742,    178. 

 126  Id. 

 28 

 any  additional  rules  should  be  adopted,  to  avoid  these  problems.  122  We  also  seek  comment  regarding  how 
 this  network  element  should  be  defined,  whether  any  other  facilities  controlled  by  incumbent  LECs  within 
 multiple  tenant  environments  should  be  included,  whether  and  to  what  extent  these  facilities  must  be 
 unbundled  from  each  other,  and  any  other  issues  relating  to  the  implementation  of  this  potential 
 requirement.  For  example,  commenters  may  wish  to  address  whether,  in  addition  to  or  instead  of  the 
 network  unbundling  obligation  discussed  above,  we  should  require  incumbent  LECs  to  permit  unbundled 
 access  to  a  remote  terminal  or  other  point  outside  the  walls  of  a  multiple  tenant  building.  Commenters 
 should  consider  to  what  extent  alternative  proposals  would  satisfy  the  needs  of  all  classes  of  competing 
 providers.  123 

 4.  Nondiscriminatory  Access  to  Facilities  Controlled  by  the  Premises  Owner. 
 52.  The  potential  actions  discussed  above  under  sections  224  and  251(  c)(  3)  would  help  ensure  that 
 utilities,  including  LECs,  provide  competitive  telecommunications  carriers  with  reasonable  and 
 nondiscriminatory  access  to  rights-  of-  way  and  facilities  in  multiple  tenant  premises  that  they  own  or 
 control.  These  provisions,  however,  do  not  provide  access  to  areas  or  facilities  controlled  by  the  premises 
 owner.  124  In  the  Inside  Wiring  Report  and  Order  and  Second  Further  NPRM,  we  observed  that 
 nondiscriminatory  access  to  facilities  for  video  and  telephony  service  providers  would  enhance 
 competition.  125  We  declined,  however,  to  adopt  a  Federal  mandatory  access  requirement,  finding  that  the 
 record  in  that  proceeding  did  not  provide  a  sufficient  basis  for  addressing  the  issues.  126 
28
 Federal  Communications  Commission  FCC  99-  141 
 127  See  para.  31,  supra. 
 128  See  para.  61,  infra. 
 129  See  Conn.  Gen.  Stats.    16-  2471;  Tex.  Util.  Code    54.259;  Commission's  Investigation  into  the  Detariffing 
 of  the  Installation  and  Maintenance  of  Simple  and  Complex  Inside  Wire,  Case  No.  86-  927-  TP-  COI,  Supplemental 
 Finding  and  Order,  1994  Ohio  PUC  LEXIS  778  (Pub.  Util.  Comm.  of  Ohio  Sept.  29,  1994).  A  number  of  other 
 States  have  similar  rules  for  providers  of  video  services.  See  Inside  Wiring  Report  and  Order  and  Second  Further 
 NPRM,  13  FCC  Rcd.  at  3744,    182. 

 130  "Resolution  Regarding  Nondiscriminatory  Access  to  Buildings  for  Telecommunications  Carriers"  (adopted 
 July  29,  1998). 

 131  May  13,  1999  House  Telecommunications  Subcommittee  Hearing,  Testimony  of  Brent  W.  Bitz,  Executive 
 Vice  President,  Charles  E.  Smith  Commercial  Realty  L.  P.  at  10. 

 29 

 53.  Consistent  with  our  statement  in  the  Inside  Wiring  Report  and  Order  and  Second  Further 
 NPRM,  we  now  seek  comment  on  whether  building  owners  who  allow  access  to  their  premises  to  any 
 provider  of  telecommunications  services  should  make  comparable  access  available  to  all  such  providers 
 under  nondiscriminatory  rates,  terms,  and  conditions.  In  light  of  the  information  discussed  above  that  a 
 number  of  building  owners  may  be  imposing  unreasonable  and  discriminatory  charges  on  competitive 
 carriers,  127  we  seek  comment  on  whether  adoption  of  this  principle  may  be  necessary  to  ensure  that 
 consumers  in  multiple  tenant  environments  have  the  ability  to  access  the  service  provider  of  their  choice. 
 We  also  seek  comment  on  whether  there  are  circumstances  in  which  exclusive  contracts  may  promote 
 competition  and  serve  the  public  interest  (e.  g.,  where  the  service  provider  lacks  market  power  or  when  the 
 period  of  exclusivity  is  reasonably  related  to  the  time  needed  for  the  provider  to  recoup  its  investment  in  the 
 property).  128 

 54.  We  note  that  several  States  have  enacted  legislation  or  taken  regulatory  action  to  prevent 
 building  owners  from  discriminating  or  demanding  unreasonable  payments  or  conditions  with  respect  to 
 access  by  telecommunications  service  providers.  129  Furthermore,  the  National  Association  of  Regulatory 
 Utility  Commissioners  (NARUC)  has  resolved  that  it  "supports  legislative  and  regulatory  policies  that 
 allow  customers  to  have  a  choice  of  access  to  properly  certificated  telecommunications  providers  in  multi-tenant 
 buildings,"  and  that  it  "supports  legislative  and  regulatory  policies  that  will  allow  all 
 telecommunications  service  providers  to  access,  at  fair,  nondiscriminatory  and  reasonable  terms  and 
 conditions,  public  and  private  property  in  order  to  serve  a  customer  that  has  requested  service  of  the 
 provider."  130  We  seek  comment  on  the  effectiveness  of  existing  State  statutes  and  regulations  governing 
 building  access.  Furthermore,  we  note  that  the  Building  Owners  and  Managers  Association,  International 
 (BOMA)  has  stated  that  it  offers  its  members  model  license  agreements  that  do  not  discriminate  between 
 incumbent  and  competitive  providers.  131 

 55.  In  addition  to  continuing  to  work  with  State  and  local  governments,  industry,  and  building 
 owners,  we  seek  comment  here  on  the  necessity  and  prospects  for  adopting  a  national  nondiscriminatory 
 access  requirement.  If  we  were  to  consider  such  a  national  requirement,  we  seek  comment  on  how  it  could 
29
 Federal  Communications  Commission  FCC  99-  141 
 132  47  U.  S.  C.    1,  2(  a). 
 133  47  U.  S.  C.    3(  33),  3(  51). 
 134  See  Louisiana  Public  Service  Commission  v.  FCC,  476  U.  S.  355,  375  n.  4  (1986);  see  also,  e.  g.,  People  of 
 the  State  of  California  v.  FCC,  39  F.  3d  919,  933  (9th  Cir.  1994),  cert.  denied,  115  S.  Ct.  1497  (1995);  Public 
 Service  Commission  of  Maryland  v.  FCC,  909  F.  2d  1510  (D.  C.  Cir.  1990);  Public  Utility  Commission  of  Texas  v. 
 FCC,  886  F.  2d  1325  (D.  C.  Cir.  1989);  Illinois  Bell  Telephone  Co.  v.  FCC,  883  F.  2d  104  (D.  C.  Cir.  1989). 

 135  Detariffing  the  Installation  and  Maintenance  of  Inside  Wiring,  CC  Docket  No.  79-  105,  Memorandum 
 Opinion  and  Order,  1  FCC  Rcd.  1190,  1192-  93,    13-  18  (1986). 

 136  47  U.  S.  C.    154(  i). 

 30 

 be  tailored  to  ensure  that  consumers  in  all  parts  of  the  country  will  in  fact  have  a  choice  of  competitive 
 service  providers  without  infringing  on  the  rights  of  property  owners  and  the  authority  of  other  regulating 
 jurisdictions. 

 56.  Specifically,  we  seek  comment  on  whether  the  imposition  of  a  nondiscrimination  requirement 
 on  building  owners  would  be  within  our  statutory  authority.  First,  we  seek  comment  on  whether  the  use  of 
 in-  building  facilities  to  provide  interstate  and  foreign  communication  is  within  our  subject  matter 
 jurisdiction  to  regulate  under  Title  I  of  the  Communications  Act.  Sections  1  and  2(  a)  of  the  Act,  read 
 together,  give  the  Commission  jurisdiction  to  enforce  the  Act  with  respect  to  "all  interstate  and  foreign 
 communication  by  wire  or  radio.  .  .  ."  132  Pursuant  to  section  3,  "radio  communication"  and  "wire 
 communication"  are  defined  to  include  "all  instrumentalities,  facilities,  apparatus,  and  services  .  .  . 
 incidental  to"  such  communication.  133  We  seek  comment  on  whether  or  not  the  use  of  inside  wire  for 
 interstate  and  foreign  communication  may  be  feasibly  severable  from  its  use  for  intrastate  communication 
 for  purposes  of  carrier  access,  and  whether  the  partial  intrastate  usage  of  these  facilities  would  obstruct  our 
 jurisdiction.  134  Thus,  for  example,  in  connection  with  the  Commission's  decision  to  detariff  the  LECs' 
 provision  of  inside  wiring,  the  Commission  also  preempted  the  States  from  tariffing  this  service,  and  the 
 Commission  found  that  such  preemption  was  consistent  with  its  statutory  authority  under  Title  I.  135  We 
 seek  comment  on  whether  our  subject  matter  jurisdiction  for  purposes  of  imposing  a  nondiscriminatory 
 access  requirement  is  subject  to  a  similar  analysis,  and  whether  any  other  grants  of  authority  are 
 applicable. 

 57.  To  the  extent  that  in-  building  facilities  are  within  our  subject  matter  jurisdiction,  we  further 
 seek  comment  on  whether  we  have  authority  to  impose  a  nondiscriminatory  access  requirement  on  building 
 owners  pursuant  to  the  provisions  of  the  Communications  Act  and  the  doctrine  of  ancillary  jurisdiction. 
 Section  4(  i)  of  the  Act  authorizes  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."  136  Section  303(  r)  of  the  Act  authorizes  the  Commission  to  "[  m]  ake  such  rules  and 
 regulations  and  prescribe  such  restrictions  and  conditions,  not  inconsistent  with  law,  as  may  be  necessary 
30
 Federal  Communications  Commission  FCC  99-  141 
 137  47  U.  S.  C.    303(  r). 
 138  See,  e.  g.,  47  U.  S.  C.    201(  b)  (authorizing  the  Commission  to  "prescribe  such  rules  and  regulations  as  may 
 be  necessary  in  the  public  interest  to  carry  out  the  provisions  of  this  Act"). 

 139  See,  e.  g.,  United  States  v.  Southwestern  Cable  Co.,  392  U.  S.  157  (1968)  (Southwestern  Cable)  (upholding 
 the  Commission's  authority  to  regulate  cable  television);  National  Broadcasting  Co.  v.  United  States,  319  U.  S.  190, 
 219  (1943)  (Congress  "did  not  frustrate  the  purposes  for  which  the  Communications  Act  of  1934  was  brought  into 
 being  by  attempting  an  itemized  catalogue  of  the  specific  manifestations  of  the  general  problems  for  the  solution  of 
 which  it  was  establishing  a  regulatory  agency");  United  Video,  Inc.  v.  FCC,  890  F.  2d  1173,  1183  (D.  C.  Cir.  1989) 
 (upholding  Commission's  authority  to  reinstate  syndicated  exclusivity  rules  for  cable  television  companies  as 
 ancillary  to  the  Commission's  authority  to  regulate  television  broadcasting). 

 140  Southwestern  Cable,  392  U.  S.  at  178;  see  also  Iowa  Utilities  Board,  119  S.  Ct.  at  731  (noting  that  "'ancillary' 
 jurisdiction  .  .  .  could  exist  even  where  the  Act  does  not  'apply'"). 

 141  See,  e.  g.,  47  U.  S.  C.    224,  251,  332(  c)(  7);  1996  Act,    207,  706. 

 142  See  1996  Conference  Report  at  1  (purpose  of  the  1996  Act  is  to  accelerate  the  competitive  deployment  of 
 services  to  all  Americans). 

 143  U.  S.  Const.,  Amendment  V. 

 144  Loretto  v.  TelePrompter  Manhattan  CATV  Corp.,  458  U.  S.  419  (1982)  (Loretto). 

 31 

 to  carry  out  the  provisions  of  this  Act  .  .  .  ."  137  These  provisions,  among  others,  138  have  been  understood  to 
 give  the  Commission  broad  flexibility  to  promulgate  regulations  that  may  not  fall  strictly  within  any 
 particularly  enumerated  statutory  power  where  necessary  to  carry  out  the  purposes  and  provisions  of  the 
 Act.  139  Indeed  the  Supreme  Court  held  that  the  Commission  may  exercise  authority  that  is  "reasonably 
 ancillary  to  the  effective  performance  of  the  Commission's  various  responsibilities.  .  .  ."  140  As  discussed 
 above,  several  provisions  of  the  Communications  Act,  as  amended  by  the  1996  Act,  are  designed  to 
 promote  consumers'  ability  to  choose  from  among  competing  providers  of  communications  services.  141  We 
 seek  comment  on  whether  the  addition  of  a  nondiscrimination  requirement  with  respect  to  access  to 
 facilities  used  to  provide  interstate  and  foreign  telecommunications  services  owned  or  controlled  by 
 premises  owners  is  sufficiently  closely  related  to  the  regulation  of  those  services  under  Title  II  as  to  confer 
 jurisdiction.  Would  such  an  exercise  of  Commission  authority  be  sufficiently  necessary  to  carry  out  the 
 provisions  and  intent  of  the  1996  Act  to  promote  competition  and  consumer  choice?  142  In  addition,  we  seek 
 comment  on  any  other  potential  sources  of  or  conflicts  with  Commission  jurisdiction. 

 58.  We  also  ask  for  comment  on  whether  there  would  be  any  constitutional  impediment  to  our 
 adoption  and  enforcement  of  a  nondiscrimination  requirement.  Under  the  Fifth  Amendment  to  the  United 
 States  Constitution,  government  may  not  effect  a  taking  of  private  property  without  just  compensation.  143 
 In  the  Loretto  case,  the  United  States  Supreme  Court  considered  a  challenge  to  a  New  York  statute  that 
 required  building  owners  to  permit  cable  television  service  providers  to  install  facilities  on  their  premises  in 
 exchange  for  compensation  determined  by  a  State  regulatory  commission  to  be  reasonable.  144  The  Court 
31
 Federal  Communications  Commission  FCC  99-  141 
 145  Id.  at  426,  436-  37. 
 146  Id.  at  441. 
 147  Bell  Atlantic  Telephone  Cos.  v.  FCC,  24  F.  3d  1441  (D.  C.  Cir.  1994)  (Bell  Atlantic). 
 148  Id.  at  336-  39. 
 149  OTARD  Second  Report  and  Order,  13  FCC  Rcd.  at  23880-  81,    12-  15. 
 150  Id.  at  23882-  85,    19-  23,  distinguishing  Loretto  and  FCC  v.  Florida  Power  Corp.,  480  U.  S.  245  (1987). 
 151  Id.  at  23886-  88,    24-  28,  applying  Pennsylvania  Central  Transportation  Co.  v.  City  of  New  York,  438  U.  S. 
 104  (1978). 

 152  Id.  at  23894-  96,    39-  43. 

 153  Id.  at  23893,    35. 

 32 

 held  that  because  the  installation  of  these  facilities  constituted  a  permanent  physical  occupation  of  the 
 landlord's  property,  it  amounted  to  a  per  se  taking  for  which  just  compensation  is  constitutionally  required, 
 regardless  of  the  minimal  extent  of  the  occupation  or  the  importance  of  the  public  interest  served.  145  The 
 Court  therefore  remanded  the  matter  to  State  court  to  determine  whether  the  nominal  compensation 
 prescribed  by  regulation  was  just.  146  In  Bell  Atlantic,  the  United  States  Court  of  Appeals  for  the  D.  C. 
 Circuit  narrowly  construed  the  Commission's  pre-  1996  statutory  authority  to  overturn  a  requirement  that 
 LECs  offer  physical  collocation  to  competing  telecommunications  carriers.  147  The  Court  held  that  because 
 the  Commission's  order  created  an  identifiable  class  of  cases  in  which  application  of  the  regulation  would 
 necessarily  constitute  a  taking,  it  could  not  be  sustained  in  the  absence  of  express  statutory  authority.  148 

 59.  We  recently  applied  Loretto  and  Bell  Atlantic  in  the  OTARD  Second  Report  and  Order, 
 where  we  considered  our  authority  under  section  207  of  the  1996  Act  to  require  building  owners  to  allow 
 devices  for  the  reception  of  over-  the-  air  video  signals  to  be  placed  on  their  premises.  We  concluded  that 
 section  207  authorizes  the  Commission  to  prohibit  restrictions  on  the  placement  of  such  antennas  in  areas 
 within  a  tenant's  exclusive  use  and  control,  149  and  that  such  a  prohibition  does  not  constitute  a  per  se  taking 
 of  private  property  within  the  meaning  of  the  Fifth  Amendment  because  it  does  not  result  in  a  new  physical 
 occupation  of  the  landowner's  property,  but  only  affects  the  use  of  areas  that  the  landlord  has  voluntarily 
 allowed  the  tenant  to  occupy.  150  We  further  concluded,  upon  balancing  the  character  of  the  governmental 
 action,  its  economic  impact,  and  its  interference  with  reasonable  investment-  backed  expectations,  that  such 
 regulation  does  not  effect  a  regulatory  taking.  151  With  respect  to  common  and  restricted  access  areas, 
 however,  we  were  concerned  that  a  prohibition  on  restrictions  on  the  placement  of  antennas  would 
 constitute  a  per  se  taking  because  it  would  authorize  a  permanent  physical  occupation  of  the  landlord's 
 property.  152  In  addition,  we  found  that  section  207  did  not  explicitly  authorize  us  to  permit  a  tenant  to 
 install  a  device  on  common  or  restricted  access  property,  over  which  the  tenant  did  not  otherwise  have 
 exclusive  use  or  control,  over  the  property  owner's  objection.  153  Under  these  circumstances,  and  in  light  of 
 case  law  indicating  that  an  agency's  authority  is  construed  narrowly  not  to  authorize  a  per  se  taking  unless 
32
 Federal  Communications  Commission  FCC  99-  141 
 154  Id.  at  23882,    17,  citing  Bell  Atlantic. 
 155  Id.  at  23897,    44.  We  note  that  two  petitions  are  pending  asking  us  to  reconsider  our  decision  not  to  extend 
 the  section  207  rules  to  placement  of  antennas  in  common  and  restricted  access  areas.  Implementation  of  Section 
 207  of  the  Telecommunications  Act  of  1996,  CS  Docket  No.  96-  83,  Petition  for  Reconsideration  of  the  Personal 
 Communications  Industry  Association,  et  al.  (filed  Jan.  22,  1999);  Petition  for  Reconsideration  of  the  Association 
 for  Maximum  Service  Television  and  National  Association  of  Broadcasters  (filed  Jan.  22,  1999).  Nothing  herein  is 
 intended  to  prejudice  our  consideration  of  these  petitions  or  any  other  petitions  relating  to  the  OTARD  Second 
 Report  and  Order. 

 156  See,  e.  g.,  May  13,  1999  House  Telecommunications  Subcommittee  Hearing,  Testimony  of  Jodi  Case, 
 Manager  of  Ancillary  Services,  AvalonBay  Communities,  Inc.  at  5. 

 33 

 such  authority  is  expressly  granted  or  must  necessarily  be  implied  in  order  not  to  defeat  a  grant  of 
 substantive  authority  to  the  agency,  154  we  declined  to  extend  our  rules  implementing  section  207  to  cover 
 the  placement  of  antennas  in  common  and  restricted  access  areas.  155 

 60.  We  seek  comment  on  the  extent  to  which  a  nondiscrimination  requirement  on  private  property 
 owners  can  be  sustained  consistent  with  Loretto  and  Bell  Atlantic,  and  with  the  application  of  those 
 decisions  in  the  OTARD  Second  Report  and  Order.  For  example,  would  constitutional  problems  be 
 mitigated  if  a  requirement  were  tailored  to  apply  only  if  the  property  owner  has  already  permitted  another 
 carrier  physically  to  occupy  its  property,  if  it  enabled  a  property  owner  to  obtain  from  a  new  entrant  the 
 same  compensation  that  it  has  voluntarily  agreed  to  accept  from  an  incumbent  LEC,  or  if  a  property  owner 
 could  satisfy  a  nondiscrimination  obligation  in  many  instances  simply  by  allowing  transport  of  a  competing 
 carrier's  signals  over  existing  wire  that  the  building  owner  owns  and  controls?  Under  the  last  of  these 
 circumstances,  the  competing  carrier  would  not  physically  occupy  the  building  owner's  property.  We 
 therefore  seek  comment  on  whether  either  a  per  se  or  regulatory  taking  would  be  involved  under  any  of 
 these  situations,  or  any  combination  of  these  situations.  We  further  request  comment  regarding  whether 
 such  arrangements  will  be  sufficient  to  allow  competing  providers  to  offer  telecommunications  service,  and 
 on  whether  providers  utilizing  such  arrangements  will  also  require  additional  access  to  premises  facilities, 
 such  as  physical  connection  to  the  existing  wire. 

 61.  If  we  decide  to  adopt  any  nondiscrimination  requirement,  we  seek  additional  comment  on  how 
 that  requirement  should  be  structured  to  achieve  our  procompetitive  objectives.  In  particular,  commenters 
 should  consider  whether  it  is  sound  policy,  and  would  promote  competition,  to  permit  exclusive  contracts 
 between  property  owners  and  service  providers  under  some  circumstances.  On  the  one  hand,  an  exclusive 
 contract  prevents  carriers  from  competing  to  serve  customers  on  the  covered  premises  during  the  period 
 that  the  contract  is  in  effect.  On  the  other  hand,  it  has  been  argued  that  new  entrants  often  need  exclusive 
 contracts  for  a  limited  period  of  time  in  order  to  recoup  their  investment,  and  that  if  exclusive  contracts  are 
 not  permitted  incumbents  might  face  no  competition  at  all.  156  We  seek  comment  on  the  extent  to  which,  and 
 under  what  circumstances,  the  ability  to  enter  into  exclusive  contracts  materially  advances  the  ability  of 
 competitive  carriers  to  serve  customers  in  multiple  tenant  environments.  We  also  seek  comment  on  whether 
 end  users  may  benefit  from  a  property  owner's  ability  to  enter  into  an  exclusive  contract,  for  example  by 
 negotiating  a  discount  with  the  carrier.  Commenters  that  favor  permitting  exclusive  contracts  should 
33
 Federal  Communications  Commission  FCC  99-  141 
 157  See,  e.  g.,  47  U.  S.  C.    224(  c). 
 158  See  Regulatory  Flexibility  Act,  5  U.  S.  C.    601  et  seq. 
 159  See  Conn.  Gen.  Stats.    16-  2471(  c);  Tex.  Util.  Code    54.259(  a)(  1),(  2). 

 34 

 address  the  circumstances  under  which  such  contracts  should  be  allowed.  For  example,  a  rule  might  permit 
 only  exclusive  contracts  that  are  limited  to  some  defined  period  of  time,  or  contracts  between  building 
 owners  and  carriers  that  do  not  exercise  market  power.  Commenters  should  also  consider  whether  any  rule 
 should  be  applied  in  a  manner  that  abrogates  existing  contracts,  and  whether  doing  so  would  raise 
 constitutional  concerns.  For  example,  commenters  should  consider  whether  any  unfairness  might  arise,  and 
 whether  the  effectiveness  of  any  rule  might  be  compromised,  if  the  compensation  provided  for  in  a  contract 
 that  contemplated  exclusivity  were  to  become  the  nondiscriminatory  standard  for  non-  exclusive  contracts. 

 62.  In  addition,  we  invite  commenters  to  address  whether  we  should  establish  any  special 
 mechanism  for  enforcing  any  nondiscrimination  obligation  on  private  premises  owners.  We  also  invite 
 comment  on  whether,  and  under  what  circumstances,  we  should  preempt  any  State  regulation  of  access  that 
 may  be  inconsistent  with  any  regulations  that  we  may  adopt,  or  whether  our  regulations  should  apply  only 
 in  States  that  do  not  enforce  their  own  nondiscriminatory  access  rules.  157  In  addition,  commenters  should 
 consider  whether  we  should  limit  the  scope  of  any  obligation  in  order  to  avoid  imposing  unreasonable 
 regulatory  burdens  on  building  owners.  158  For  example,  both  the  Texas  and  Connecticut  nondiscriminatory 
 access  statutes  require  a  property  owner  to  afford  nondiscriminatory  access  to  a  carrier  only  after  a 
 customer  has  requested  that  carrier's  service.  159  In  addition,  a  rule  could  exempt  buildings  that  house  fewer 
 than  a  certain  number  of  tenants  or  are  under  a  certain  size. 

 63.  Finally,  we  request  comment  on  any  practical  issues  that  a  nondiscrimination  requirement  may 
 engender.  For  example,  we  request  comment  on  any  technical  issues  that  may  be  raised  by  requiring 
 nondiscriminatory  access  to  existing  wire,  such  as  power  or  electromagnetic  compatibility  problems,  and 
 what  rules,  if  any,  we  should  adopt  to  address  those  issues.  Commenters  should  particularly  consider  any 
 different  issues  that  may  arise  depending  on  whether  a  building  is  wired  by  means  of  dedicated  facilities  to 
 each  unit  or  shared  media.  We  further  request  comment  on  how  any  rule  should  address  situations  in  which 
 space  constraints  may  prevent  the  addition  of  new  facilities.  Commenters  should  further  consider  safety 
 questions,  insurance  and  liability  issues,  and  any  other  relevant  factors. 

 5.  Other  Building  Access  Issues. 
 64.  In  addition  to  the  proposals  discussed  above,  we  seek  comment  on  several  other  potential 
 actions  that  might  help  to  ensure  that  customers  located  in  multiple  tenant  environments  have  access  to 
 their  choice  of  telecommunications  service  providers.  First,  if  we  do  not  adopt  a  nondiscrimination 
 requirement,  or  adopt  a  nondiscrimination  rule  that  applies  only  under  some  circumstances,  we  request 
 comment  on  whether,  as  an  alternative,  we  should  forbid  telecommunications  service  providers,  under  some 
34
 Federal  Communications  Commission  FCC  99-  141 
 160  We  have  previously  requested  comment  on  a  similar  proposal  in  the  context  of  MVPDs.  Inside  Wiring 
 Report  and  Order  and  Second  Further  NPRM,  13  FCC  Rcd.  3778-  80,    258-  266. 

 161  See  para.  61,  supra. 

 162  Id.  We  note  that  the  Nebraska  Public  Service  Commission  has  prohibited  exclusive  contracts  and  marketing 
 agreements  between  telecommunications  companies  and  property  owners,  except  for  contracts  and  agreements 
 involving  condominiums,  cooperatives,  and  homeowners'  associations.  Commission  Motion  to  Determine 
 Appropriate  Policy  Regarding  Access  to  Residents  of  Multiple  Dwelling  Units  (MDUs)  in  Nebraska  by  Competitive 
 Local  Exchange  Telecommunications  Providers,  Application  No.  C-  1878/  PI-  23,  Order  Establishing  Statewide 
 Policy  for  MDU  Access  at  6  (March  2,  1999)  (Nebraska  MDU  Order). 

 163  We  note  that  the  definition  of  the  demarcation  point  for  telephone  company  communications  facilities  is  not 
 identical  to  the  demarcation  point  definition  for  cable  television  facilities  for  purposes  of  the  cable  inside  wiring 
 rules.  47  C.  F.  R.    76.6(  mm);  see  para.  68,  infra.  In  1997,  we  declined  to  establish  the  same  rules  to  govern  the 
 demarcation  point  for  cable  and  telephone  service  providers.  See  Inside  Wire  Report  and  Order  and  Second 
 Further  NPRM,  13  FCC  Rcd.  at  3719-  30,    129-  151. 

 164  Petitions  Seeking  Amendment  of  Part  68  of  the  Commission's  Rules  Concerning  Connection  of  Telephone 
 Equipment,  Systems,  and  Protective  Apparatus  to  the  Telephone  Network,  CC  Docket  No.  81-  216,  Report  and 
 Order,  97  F.  C.  C.  2d  527  (1984),  stay  denied,  FCC  84-  5684  (rel.  Nov.  20,  1984),  recon.  granted  in  part,  50  Fed. 
 Reg.  29384  (1985);  Detariffing  the  Installation  and  Maintenance  of  Inside  Wiring,  CC  Docket  No.  79-  105,  Second 
 Report  and  Order,  51  Fed.  Reg.  8498  (1986),  recon.  granted  in  part,  1  FCC  Rcd.  1190  (1986);  see  47  C.  F.  R.   
 68.213,  68.215. 

 35 

 or  all  circumstances,  from  entering  into  exclusive  contracts  with  building  owners.  160  We  also  request 
 comment  on  whether  we  should  adopt  any  such  rule  in  addition  to  any  building  owner  nondiscriminatory 
 access  requirement.  We  seek  comment  on  whether  we  have  the  authority  to  forbid  common  carriers  from 
 entering  into  exclusive  contracts  with  building  owners  or  managers  under  section  201  of  the 
 Communications  Act,  which  prohibits  unjust  and  unreasonable  practices.  In  addition,  we  request  comment 
 on  the  appropriate  scope  of  any  rule  against  exclusive  contracts,  and  how  such  a  rule  should  be 
 implemented.  Commenters  should  particularly  address  whether  a  ban  on  exclusive  contracts  would  be  an 
 effective  means  of  securing  nondiscriminatory  access,  and  whether  such  a  rule  should  apply  to  all 
 telecommunications  carriers  and  contracts  or  only  in  some  situations,  such  as  unreasonably  long  contracts 
 or  contracts  involving  carriers  with  market  power.  161  We  also  request  comment  on  the  legal  and  policy 
 issues  and  practical  implications  of  either  abrogating  existing  exclusive  contracts  or  allowing  them  to 
 remain  in  force,  including  any  constitutional  issues.  162 

 65.  Second,  we  request  comment  on  how  our  rules  governing  determination  of  the  demarcation 
 point  between  facilities  controlled  by  the  telephone  company  and  by  the  property  owner  on  multiple  unit 
 premises  under  Part  68  of  our  rules  impact  competitive  provider  access,  and  whether  any  modification  or 
 clarification  of  those  rules  is  appropriate  to  promote  access.  163  In  1984  and  1986,  in  order  to  foster 
 competition  in  the  market  for  telecommunications  inside  wiring,  the  Commission  acted  to  detariff  the 
 provision  of  inside  wiring  by  the  LECs  and  permit  subscribers  and  premises  owners  to  install  and  connect 
 their  own  inside  wiring.  164  The  "demarcation  point"  establishes  the  division,  for  purposes  of  these  rules, 
35
 Federal  Communications  Commission  FCC  99-  141 
 165  47  C.  F.  R.    68.3  (definition  of  "demarcation  point"  at  (b)(  1));  see  also  Review  of  Sections  68.104  and 
 68.213  of  the  Commission's  Rules  Concerning  Connection  of  Simple  Inside  Wiring  to  the  Telephone  Network,  CC 
 Docket  No.  88-  57,  Order  on  Reconsideration,  Second  Report  and  Order  and  Second  Further  Notice  of  Proposed 
 Rulemaking,  12  FCC  Rcd.  11897,  11914-  15,    26  (1997)  (1997  Telephone  Inside  Wiring  Order). 

 166  The  minimum  point  of  entry  is  defined  as  "either  the  closest  practicable  point  to  where  the  wiring  crosses  a 
 property  line  or  the  closest  practicable  point  to  where  the  wiring  enters  a  multiunit  buidling  or  buildings."  47 
 C.  F.  R.    68.3  (definition  of  demarcation  point). 

 167  Id.  (definition  of  demarcation  point  at  (b)(  2)).  Under  all  circumstances,  if  there  are  multiple  demarcation 
 points  within  a  multiunit  premises,  the  demarcation  point  for  a  customer  shall  not  be  further  inside  the  customer's 
 premises  than  a  point  12  inches  from  where  the  wiring  enters  the  customer's  premises,  or  as  close  thereto  as 
 practical.  Id.  at  (b)(  1)  and  (b)(  2). 

 168  See  Deployment  of  Wireline  Services  Offering  Advanced  Telecommunications  Capability,  CC  Docket  No. 
 98-  147,  Joint  Reply  Comments  of  Teligent,  Inc.  and  Net2000  Group,  Inc.  at  8-  9  (filed  Oct.  16,  1998). 

 169  See,  e.  g.,  Optel  Section  706  Inquiry  Comments  at  3-  7;  WinStar  Section  706  Inquiry  Reply  Comments  at  6-  9. 
 We  note  that  Nebraska,  while  declining  to  require  a  uniform  demarcation  point,  has  required  incumbent  LECs, 
 upon  request,  to  establish  a  minimum  point  of  entry  at  the  property  line  and  permit  access  at  that  location  at  a 
 specified  rate.  Nebraska  MDU  Order  at  3-  5. 

 36 

 between  wiring  and  other  equipment  that  is  under  the  control  and  responsibility  of  the  carrier  and  that 
 which  is  under  the  control  and  responsibility  of  the  subscriber  or  premises  owner.  Under  our  current  rules, 
 the  demarcation  point  in  multiple  unit  premises  may  be  established  at  any  number  of  places  depending  on 
 the  date  the  inside  wiring  was  installed,  the  local  carrier's  reasonable  and  nondiscriminatory  practices,  and 
 the  property  owner's  preferences.  Specifically,  in  multiple  unit  premises  existing  as  of  August  13,  1990, 
 the  demarcation  point  shall  be  determined  in  accordance  with  the  local  carrier's  reasonable  and 
 nondiscriminatory  standard  operating  practices  as  of  August  13,  1990.  165  In  multiple  unit  premises  in 
 which  wiring  is  installed,  or  major  additions  or  rearrangements  of  wiring  are  made,  after  August  13,  1990, 
 the  telephone  company  may  establish  a  reasonable  and  nondiscriminatory  practice  of  placing  the 
 demarcation  point  at  the  minimum  point  of  entry,  166  or,  if  the  telephone  company  does  not  establish  such  a 
 practice,  the  premises  owner  shall  establish  one  or  more  demarcation  points.  167 

 66.  In  various  recent  pleadings,  several  parties  have  argued  that  modification  of  our  Part  68  rule 
 governing  determination  of  the  demarcation  point  would  facilitate  competitive  access  to  multiple  tenant 
 environments.  For  example,  it  has  been  argued  that  fixing  the  demarcation  point  in  all  multiple  unit 
 premises  at  the  minimum  point  of  entry,  in  combination  with  a  nondiscriminatory  access  obligation  on 
 building  owners,  would  constitute  an  effective  alternative  to  requiring  access  to  inside  wiring  as  an 
 unbundled  network  element.  168  Other  parties  advocate  a  uniform  demarcation  point  independent  of  this 
 issue  in  order  to  prevent  incumbent  LECs  from  obstructing  competition  by  designating  demarcation  points 
 that  are  inconvenient  to  access  or  difficult  to  determine.  169 

 67.  We  seek  comment  on  how  the  definition  of  the  demarcation  point  under  Part  68  affects  access 
 to  multiple  tenant  environments  by  competitive  telecommunications  service  providers,  and  whether  any 
36
 Federal  Communications  Commission  FCC  99-  141 
 170  We  note  that  certain  issues  regarding  the  existing  definition  of  the  demarcation  point  are  currently  pending, 
 and  we  do  not  seek  additional  comment  on  those  issues  herein.  See  1997  Telephone  Inside  Wiring  Order,  12  FCC 
 Rcd.  at  11925-  27,    49-  52  (requesting  further  comment  on  applying  a  single  definition  of  the  demarcation  point 
 to  simple  and  complex  wiring  and  on  whether  the  demarcation  point  may  be  located  away  from  a  building);  see 
 also  Review  of  Sections  68.104  and  68.213  of  the  Commission's  Rules  Concerning  Connection  of  Simple  Inside 
 Wiring  to  the  Telephone  Network,  CC  Docket  No.  88-  57,  Petition  for  Clarification  and  Reconsideration  of 
 BellSouth  (filed  Aug.  7,  1997);  Review  of  Sections  68.104  and  68.213  of  the  Commission's  Rules  Concerning 
 Connection  of  Simple  Inside  Wiring  to  the  Telephone  Network,  CC  Docket  No.  88-  57,  Petition  for  Clarification  or 
 Partial  Reconsideration  of  Bell  Atlantic  and  NYNEX  (filed  Aug.  7,  1997). 

 171  47  C.  F.  R.    76.800-  76.806. 

 172  47  C.  F.  R.    76.804. 
 173  See  47  U.  S.  C.    522(  13);  47  C.  F.  R.    76.800(  c)  (defining  "MVPD"). 
 174  See  Section  706  Inquiry,  Comments  of  the  Wireless  Communications  Association  International,  Inc.  at  27- 
 29  (filed  Sept.  14,  1998);  WinStar  Section  706  Inquiry  Reply  Comments  at  15-  17. 

 37 

 Commission  action  is  appropriate.  170  First,  we  request  comment,  accompanied  by  specific  evidence, 
 regarding  whether,  and  how,  the  definition  of  the  demarcation  point  is  in  fact  affecting  competitive 
 providers'  access.  To  the  extent  there  is  a  deleterious  effect,  we  further  request  commenters  to  consider 
 what  actions  can  be  taken  to  remedy  the  situation.  For  example,  commenters  may  consider  whether  the 
 person  who  controls  wire  and  related  facilities  for  purposes  of  installation  and  maintenance  must 
 necessarily  be  the  same  person  who  exercises  control  for  purposes  of  competitive  access,  and,  if  not, 
 whether  we  should  apply  different  standards  for  each  of  these  purposes.  Commenters  may  also  consider 
 whether,  as  suggested  in  the  comments  described  above,  they  believe  we  should  adopt  a  uniform 
 demarcation  point  for  purposes  of  competitive  access,  either  at  the  minimum  point  of  entry  or  at  some  other 
 point,  for  all  or  some  class  of  multiple-  unit  premises  owners.  Among  other  things,  commenters  should 
 address  the  need  for  and  benefits  of  any  regime  that  they  propose,  any  costs  for  incumbent  providers  and 
 building  owners,  any  effects  on  the  competitive  installation  and  maintenance  of  inside  wiring,  and  how  any 
 rule  should  be  drafted  and  implemented. 

 68.  Third,  we  ask  commenters  to  consider  whether  our  rules  governing  access  to  cable  inside 
 wiring  for  MVPDs  171  should  be  extended  so  as  to  afford  similar  access  to  providers  of  telecommunications 
 services.  Section  76.804  of  our  rules  sets  forth  procedures  governing  the  disposition  of  home  run  wiring 
 (i.  e.,  the  wiring  from  the  demarcation  point  to  the  point  at  which  the  MVPD's  wiring  becomes  devoted  to  an 
 individual  subscriber  or  individual  loop)  owned  by  an  MVPD  when  the  MVPD  ceases  to  provide  service  to 
 a  building,  and  governing  access  to  that  wiring  by  other  MVPDs  after  its  disposition.  172  In  order  to  take 
 advantage  of  these  procedures,  however,  a  provider  must  offer  multichannel  video  programming  services.  173 
 Commenters  in  other  proceedings  have  argued  that  this  rule  offers  benefits  to  providers  of  video  services 
 that  are  not  currently  available  to  telecommunications  service  providers,  and  that  this  distinction  not  only  is 
 arbitrary  but  creates  uneconomic  incentives  for  providers  to  incorporate  video  services  into  their  offerings 
 simply  to  take  advantage  of  the  more  favorable  rules.  174  Indeed,  in  a  world  increasingly  marked  by 
 technological  convergence  and  interchangeable  services,  we  believe  a  strong  argument  can  be  made  for 
37
 Federal  Communications  Commission  FCC  99-  141 
 175  See  47  C.  F.  R.    76.802  (disposition  of  cable  home  wiring);  47  C.  F.  R.    76.805  (access  to  molding). 
 176  47  C.  F.  R.    1.4000. 
 177  See  1996  Act,    207. 
 178  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  Service  (filed  May  26,  1999). 

 179  Specifically,  WCAI  asserts  that  Wireless  Communications  Service  ("  WCS"),  Digital  Electronic  Message 
 Service  ("  DEMS"),  and  services  using  the  38  GHz  band  provide  video  services  but  are  not  covered  by  section 
 1.4000.  Id.  at  2  and  note  28. 

 38 

 applying  uniform  rules  governing  access  to  inside  wiring  regardless  of  a  provider's  service  technology  or 
 the  form  of  its  authorization.  Commenters  should  accordingly  address  the  advantages  and  disadvantages  of 
 extending  the  MVPD  home  run  wiring  rule  to  benefit  telecommunications  service  providers.  In  particular, 
 commenters  should  consider  whether  extension  of  the  rule  in  this  manner  would  present  practical 
 difficulties  for  administration,  for  example,  if  a  telecommunications  service  provider  and  an  MVPD  both 
 seek  to  use  the  same  wire.  We  further  request  comment  on  whether  other  of  our  cable  inside  wiring  rules 
 should  also  be  extended  to  benefit  telecommunications  service  providers.  175 

 69.  Finally,  we  request  comment  on  whether  we  should  adopt  rules  similar  to  those  adopted  in  the 
 video  context  under  section  207  of  the  1996  Act  that  would  protect  the  ability  to  place  antennas  to  transmit 
 and  receive  telecommunications  signals  and  other  fixed  wireless  signals  that  are  not  covered  by  section  207. 
 Section  1.4000  of  our  rules  prohibits,  with  limited  exceptions,  any  State  or  local  law  or  regulation,  private 
 covenant,  contract  provision,  lease  provision,  homeowners'  association  rule,  or  similar  restriction  that 
 impairs  the  installation,  maintenance,  or  use  of  certain  antennas  designed  to  receive  video  programming 
 services  on  property  within  the  exclusive  use  or  control  of  the  antenna  user  where  the  user  has  a  direct  or 
 indirect  ownership  or  leasehold  interest  in  the  property.  176  Section  1.4000  was  adopted  pursuant  to  section 
 207  of  the  1996  Act,  which  applies  only  to  certain  video  programming  services.  177  The  Wireless 
 Communications  Association  International,  Inc.  (WCAI)  has  very  recently  filed  a  Petition  for  Rulemaking 
 asking  us  to  extend  the  principles  embodied  in  section  1.4000  to  the  placement  of  antennas  used  for  any 
 fixed  wireless  service.  178  Although  section  1.4000  applies  only  to  antennas  used  to  receive  certain  video 
 programming  services  pursuant  to  section  207,  we  believe  we  may  have  the  authority  to  adopt  similar  rules 
 pertaining  to  telecommunications  services,  services  delivered  via  telecommunications,  and  other  fixed 
 wireless  services  pursuant  to  section  4(  i)  and  other  provisions,  including  sections  201(  b)  and  303(  r), 
 granting  us  general  authority  to  effectuate  the  provisions  and  purposes  of  the  Communications  Act.  We 
 seek  comment  on  whether  it  is  necessary  to  apply  any  or  all  of  the  principles  embodied  in  section  1.4000  to 
 the  placement  of  antennas  for  receiving  and  transmitting  telecommunications  signals  and  other  fixed 
 wireless  signals  that  are  not  encompassed  within  section  207.  We  seek  comment  on  the  nature  and  extent 
 of  any  video  services  that  are  not  included  within  section  1.4000  or  section  207,  179  and  how  the  exclusion  of 
 these  services  can  best  be  addressed.  We  also  seek  comment  on  whether  the  Commission's  authority  to 
 promulgate  rules  that  preempt  governmental  and  nongovernmental  restrictions  on  antennas  used  for 
38
 Federal  Communications  Commission  FCC  99-  141 
 180  1996  Act,    207.  We  note  that  we  have  previously  invoked  similar  authority  to  preempt  certain  State  and 
 local  government  restrictions  on  the  placement  of  satellite  earth  station  antennas.  See  Preemption  of  Local  Zoning 
 and  Other  Regulation  of  Receive-  Only  Satellite  Earth  Stations,  CC  Docket  No.  85-  87,  Report  and  Order,  51  Fed. 
 Reg.  5119  (Feb.  14,  1986);  see  also  Preemption  of  Local  Zoning  and  Other  Regulation  of  Receive-  Only  Satellite 
 Earth  Stations,  IB  Docket  No.  195-  59,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC 
 Rcd.  5809,  5812,    16  (1996)  (section  207  does  not  limit  Commission's  preexisting  authority  in  this  area). 

 181  See  OTARD  Second  Report  and  Order,  13  FCC  Rcd.  at  23883-  88,    19-  28. 

 182  47  U.  S.  C.    332(  c)(  7)  (providing  that,  except  as  provided  in  section  332(  c)(  7),  nothing  in  the 
 Communications  Act  shall  limit  or  affect  the  authority  of  a  State  or  local  government  over  decisions  regarding  the 
 placement,  construction,  or  modification  of  personal  wireless  service  facilities). 

 39 

 telecommunications  and  video  services  is  limited  to  those  antennas  and  services  specified  in  section  207,  or 
 whether  the  Commission  has  authority  pursuant  to  other  sections  of  the  Act,  including  sections  4(  i),  201(  b), 
 253(  d),  303(  r),  705,  and  706(  a),  to  preempt  State,  local,  community  association  and  lease  restrictions  on 
 such  antennas.  We  note  that  section  207  by  its  terms  directs  the  Commission  to  promulgate  regulations 
 "pursuant  to  section  303  of  the  Communications  Act  of  1934."  180  We  further  seek  comment  on  whether 
 rules  similar  to  section  1.4000  but  applying  to  services  that  are  not  within  the  scope  of  section  207  would 
 be  constitutional,  consistent  with  the  analysis  in  the  OTARD  Second  Report  and  Order.  181  In  addition,  to 
 the  extent  commenters  advocate  restrictions  on  State  or  local  regulation  of  the  placement  on  end  user 
 premises  of  antennas  used  to  receive  and  transmit  personal  wireless  services,  they  should  address  whether 
 our  adoption  of  such  rules  would  be  consistent  with  section  332(  c)(  7).  182 

 C.  Notice  of  Inquiry  on  Access  to  Public  Rights-  of-  Way  and  Franchise  Fees. 
 70.  In  order  to  serve  any  customers,  whether  they  are  in  a  fixed  location  or  mobile,  a 
 telecommunications  service  provider  must  have  a  means  of  transporting  signals  between  calling  and  called 
 parties'  locations.  This  transport  of  signals  may  be  accomplished  using  either  wireline  or  wireless 
 technology.  Where  wireline  technology  is  used,  it  is  often  most  efficient  to  place  the  necessary  facilities 
 within  the  public  rights-  of-  way.  The  incumbent  LECs  have  long  been  granted  authority  to  use  public 
 rights-  of-  way  for  this  purpose,  and  they  have  extensive  facilities  in  place. 

 71.  Full  and  fair  competition  in  the  provision  of  local  telecommunications  service  requires  that 
 competing  providers  have  comparable  access  to  the  means  of  transporting  signals.  For  competitive  carriers 
 using  wireline  technology,  this  may  involve  the  ability  to  utilize  public  rights-  of-  way  in  a  manner,  on  a 
 scale,  and  under  terms  and  conditions  similar  to  those  applicable  to  the  incumbent  LECs'  use  of  public 
 rights-  of-  way.  Providers  of  wireless  telecommunications  services,  by  contrast,  do  not  need  access  to  public 
 rights-  of-  way  to  transport  signals  between  their  transmitting  and  receiving  facilities  and  their  customers' 
 locations.  However,  wireless  service  providers  do  need  to  connect  their  antenna  facilities  to  each  other  and 
 to  central  switches,  and  these  connections  are  often  most  efficiently  accomplished  by  means  of  wireline 
 facilities  that  traverse  the  public  rights-  of-  way.  Often,  wireless  carriers  lease  capacity  on  facilities  owned 
 by  other  communications  providers,  but  in  some  instances  they  install  their  own  cables.  Thus,  providers  of 
 wireless  telecommunications  services  sometimes  require  access  to  public  rights-  of-  way  in  connection  with 
39
 Federal  Communications  Commission  FCC  99-  141 
 183  47  U.  S.  C.    253(  a)  ("  No  State  or  local  statute  or  regulation,  or  other  State  or  local  legal  requirement,  may 
 prohibit  or  have  the  effect  of  prohibiting  the  ability  of  any  entity  to  provide  any  interstate  or  intrastate 
 telecommunications  service)." 

 184  47  U.  S.  C.    253(  c).  Section  253(  b)  permits  States  to  impose  competitively  neutral  requirements  necessary  to 
 preserve  and  advance  universal  service,  protect  the  public  safety  and  welfare,  ensure  the  continued  quality  of 
 telecommunications  services,  and  safeguard  the  rights  of  consumers.  47  U.  S.  C.    253(  b). 

 40 

 the  provision  of  service.  These  carriers  will,  however,  typically  impose  far  less  burden  on  public  rights-  of-way 
 than  carriers  that  offer  service  primarily  by  means  of  wireline  technology. 

 72.  Public  rights-  of-  way  generally  are  controlled  and  managed  by  local  governments  and,  to  a 
 lesser  extent,  State  governments.  These  governments  are  responsible  for,  among  other  things,  ensuring  that 
 the  rights-  of-  way  are  used  in  a  manner  that  benefits  the  public  and,  in  particular,  that  neither  threatens 
 public  safety,  unnecessarily  inconveniences  the  public,  nor  imposes  uncompensated  costs.  One  challenge 
 for  State  and  local  governments  in  the  era  of  competitive  telecommunications  service  is  to  administer  the 
 public  rights-  of-  way  in  a  manner  that  serves  these  ends  and  at  the  same  time  does  not  unfairly  favor 
 incumbent  carriers  or  obstruct  other  providers'  ability  to  compete  effectively  in  the  provision  of  service. 
 We  are  confident  that  the  majority  of  State  and  local  governments  recognize  the  advantages  to  their  citizens 
 of  encouraging  new  telecommunications  competitors  and  that  they  are  managing  their  rights-  of-  way  in  a 
 competitively  neutral  way.  Nevertheless,  we  are  aware  of  claims  that  this  is  not  the  case  in  all  jurisdictions, 
 as  well  as  of  arguments  by  State  and  local  governments  that  carriers  are  making  unreasonable  and 
 unfounded  complaints.  In  this  section,  we  initiate  an  inquiry  into  the  management  of  public  rights-  of-  way 
 as  it  relates  to  the  development  of  facilities-  based  competition.  We  begin  by  reviewing  the  principal 
 provisions  of  the  Communications  Act  that  are  relevant  to  management  of  the  public  rights-  of-  way,  as  well 
 as  Commission  and  judicial  precedent  interpreting  those  provisions.  We  then  seek  comment  regarding 
 carriers'  and  governments'  experiences  with  respect  to  rights-  of-  way  management.  Our  aim  is  to  compile  a 
 record  on  the  basis  of  which  we,  together  with  representatives  of  State  and  local  governments  and  the 
 affected  industry,  can  evaluate  whether,  and  in  what  form,  further  action  is  appropriate. 

 73.  Statutory  Background.  Section  253  of  the  Communications  Act  addresses  State  and  local 
 government  authority  to  manage  the  public  rights-  of-  way.  Section  253(  a),  considered  alone,  generally 
 proscribes  State  and  local  governments  from  imposing  legal  requirements  that  either  directly  prohibit  the 
 ability  of  any  entity  to  provide  any  interstate  or  intrastate  telecommunications  service  or  have  the  effect  of 
 prohibiting  any  entity's  ability  to  provide  such  service.  183  Sections  253(  b)  and  253(  c),  however,  permit 
 State  and  local  governments  to  take  certain  actions  that  meet  the  requirements  of  those  subsections 
 notwithstanding  section  253(  a).  Specifically,  section  253(  c)  provides  that  "[  n]  othing  in  this  section  affects 
 the  authority  of  a  State  or  local  government  to  manage  the  public  rights-  of-  way  or  to  require  fair  and 
 reasonable  compensation  from  telecommunications  providers,  on  a  competitively  neutral  and 
 nondiscriminatory  basis,  for  use  of  the  public  rights-  of-  way  on  a  nondiscriminatory  basis,  if  the 
 compensation  required  is  publicly  disclosed  by  such  government."  184  Under  section  253(  d),  the 
 Commission  is  directed,  after  notice  and  an  opportunity  for  public  comment,  to  preempt  the  enforcement  of 
 any  statute,  regulation,  or  legal  requirement  that  "violates  subsection  (a)  or  (b),"  to  the  extent  necessary  to 
40
 Federal  Communications  Commission  FCC  99-  141 
 185  47  U.  S.  C.    253(  d).  Thus,  when  presented  with  a  petition  to  preempt  under  section  253(  d),  the  Commission 
 first  asks  whether  the  regulation  or  requirement  in  question  violates  the  terms  of  section  253(  a)  standing  alone.  If 
 so,  we  then  ask  whether  it  is  permissible  under  section  253(  b).  We  will  preempt  enforcement  of  a  regulation  or 
 legal  requirement  only  if  it  is  impermissible  under  subsection  (a)  and  does  not  satisfy  the  requirements  of 
 subsection  (b).  See  Public  Utility  Commission  of  Texas,  et  al.,  Petitions  for  Declaratory  Ruling  and/  or  Preemption 
 of  Certain  Provisions  of  the  Texas  Public  Utility  Regulatory  Act  of  1995,  CCBPol  96-  13,  Memorandum  Opinion 
 and  Order,  13  FCC  Rcd.  3460,  3480  at    42  (1997),  recon.  pending,  aff'd  sub  nom.  City  of  Abilene  v.  FCC,  164 
 F.  3d  49  (D.  C.  Cir.  1999). 

 186  47  U.  S.  C.    332(  c)(  3).  Section  332(  c)(  3)  permits  a  State  to  regulate  CMRS  rates,  but  not  entry,  if  the  State 
 demonstrates  in  a  petition  to  the  Commission  that  certain  conditions  are  met.  Id.  To  date,  the  Commission  has  not 
 granted  any  State's  petition  under  section  332(  c)(  3).  See,  e.  g.,  Petition  of  the  Connecticut  Department  of  Public 
 Utility  Control  to  Retain  Regulatory  Control  of  the  rates  of  Wholesale  Cellular  Service  Providers  in  the  State  of 
 Connecticut,  Report  and  Order,  10  FCC  Rcd.  7025  (1995),  aff'd  sub  nom.  Connecticut  Department  of  Public 
 Utility  Control  v.  FCC,  78  F.  3d  842  (2d  Cir.  1996). 

 187  47  U.  S.  C.    332(  c)(  3). 

 188  TCI  Cablevision  of  Oakland  County,  Inc.,  Memorandum  Opinion  and  Order,  FCC  97-  331  at    105  (rel. 
 Sept.  19,  1997)  (TCI),  recon.  denied,  FCC  98-  216  (rel.  Sept.  4,  1998);  see  also,  e.  g.,  Classic  Telephone,  Inc., 
 Memorandum  Opinion  and  Order,  11  FCC  Rcd.  13082,  13104  at    39  (1996)  (Classic)  (citing  141  Cong.  Rec. 

 41 

 correct  such  violation  or  inconsistency.  185  Section  253(  d)  does  not,  however,  on  its  face  grant  the 
 Commission  any  direct  authority  over  section  253(  c). 

 74.  Where  a  CMRS  provider  seeks  to  use  public  rights-  of-  way  for  its  facilities,  the  permissible 
 exercise  of  State  and  local  authority  may  also  be  affected  by  section  332(  c)(  3).  Under  section  332(  c)(  3),  in 
 general,  "no  State  or  local  government  shall  have  any  authority  to  regulate  the  entry  of  or  the  rates  charged 
 by  any  commercial  mobile  service  or  any  private  mobile  service."  186  However,  section  332(  c)(  3)  does  not 
 "prohibit  a  State  from  regulating  the  other  terms  and  conditions  of  commercial  mobile  services."  187  Thus,  a 
 State  or  local  rights-  of-  way  management  procedure  or  requirement,  as  applied  to  CMRS  providers,  is 
 permissible  under  section  332(  c)(  3)  if  it  constitutes  regulation  of  terms  and  conditions  of  service  other  than 
 rates  or  entry.  Any  requirement  that  functions  as  an  entry  regulation,  however,  is  not  permissible  as 
 applied  to  CMRS  providers. 

 75.  Commission  and  Judicial  Precedent.  During  the  period  since  the  1996  Act  became  law,  the 
 Commission  and  the  courts  have  discussed  or  applied  section  253(  c)  on  several  occasions.  These  decisions 
 recognize  that  State  and  local  governments  have  an  important  interest  in  managing  the  public  rights-  of-  way 
 to  promote  the  public  good,  and  in  obtaining  fair  and  nondiscriminatory  compensation  for  use  of  the  rights-of- 
 way.  Thus,  for  example,  we  have  stated  that  "[  l]  ocal  governments  must  be  allowed  to  perform  the  range 
 of  vital  tasks  necessary  to  preserve  the  physical  integrity  of  streets  and  highways,  to  control  the  orderly 
 flow  of  vehicles  and  pedestrians,  [and]  to  manage  .  .  .  facilities"  in  the  rights-  of-  way,  including  such 
 activities  as  "coordination  of  construction  schedules,  determination  of  insurance,  bonding  and  indemnity 
 requirements,  establishment  and  enforcement  of  building  codes,  and  keeping  track  of  the  various  systems 
 using  the  rights-  of-  way  to  prevent  interference  between  them."  188  At  the  same  time,  the  cases  consistently 
41
 Federal  Communications  Commission  FCC  99-  141 
 S8172  (daily  ed.  June  12,  1995)  (statement  of  Sen.  Feinstein),  petition  for  emergency  relief,  sanction  and 
 investigation  denied,  12  FCC  Rcd.  16577  (1997);  Bell  Atlantic-  Maryland  v.  Prince  George's  County,  1999  WL 
 343646  at  *9  (D.  Md.  May  24,  1999)  (Prince  George's  County). 

 189  See  TCI,  FCC  97-  331  at    107. 

 190  Classic,  11  FCC  Rcd.  at  13104,  42. 
 191  TCI,  FCC  97-  331  at  105. 
 192  Id. 
 193  AT&  T  Communications  of  the  Southwest,  Inc.  v.  City  of  Dallas,  1999  WL  324668  at  *5  (N.  D.  Tex.  May  17, 
 1999)  (Dallas  III);  AT&  T  Communications  of  the  Southwest,  Inc.  v.  City  of  Dallas,  8  F.  Supp.  2d  582,  592-  93 
 (N.  D.  Tex.  1998)  (Dallas  I). 

 194  Dallas  III,  1999  WL  324668  at  *5-  6;  Dallas  I,  8  F.  Supp.  2d  at  593. 

 42 

 recognize  that  certain  types  of  practices  are  inimical  to  competition  and  are  not  consistent  with  section  253. 
 For  one  thing,  section  253(  c)  plainly  requires  that  compensation  requirements  for  use  of  the  public  rights-of- 
 way  must  be  imposed  "on  a  competitively  neutral  and  nondiscriminatory  basis."  Thus,  we  have  made 
 clear  that  we  are  troubled  by  any  rights-  of-  way  regulations  that,  either  explicitly  or  in  practical  effect,  favor 
 incumbent  LECs  over  competing  carriers.  189 

 76.  We  have  also  expressed  concern  about  requirements  imposed  on  carriers  that  use  the  public 
 rights-  of-  way  that  are  unrelated  to  their  rights-  of-  way  usage.  Thus,  where  the  record  was  "inadequate  to 
 establish  that  the  Cities'  actions  reflect[  ed]  an  exercise  of  public  rights-  of-  way  management  authority  or  the 
 imposition  of  compensation  requirements  for  the  use  of  such  rights-  of-  way,"  we  have  held  that  the  cities' 
 actions  did  "not  trigger  section  253(  c)."  190  Furthermore,  we  have  expressed  concern  that  local  regulation 
 should  not  "reach[  ]  beyond  traditional  rights-  of-  way  matters  and  seek[  ]  to  impose  a  redundant  'third  tier' 
 of  telecommunications  regulation  which  aspires  to  govern  the  relationships  among  telecommunications 
 providers,  or  the  rates,  terms  and  conditions  under  which  telecommunications  service  is  offered  to  the 
 public."  191  In  particular,  while  recognizing  local  governments'  continued  authority  to  manage  the  public 
 rights-  of-  way,  we  noted  that  regulation  of  matters  such  as  interconnection,  fees,  and  provision  of  services 
 would  be  "difficult  to  justify  under  section  253(  c)."  192  In  addition,  the  United  States  District  Court  for  the 
 Northern  District  of  Texas  has  held  that  although  a  municipality  may  require  a  provider  of  local  telephone 
 service  to  obtain  a  franchise  in  order  to  use  its  rights-  of-  way,  the  franchise  may  not  be  conditioned  on 
 anything  other  than  the  carrier's  agreement  to  comply  with  the  city's  reasonable  regulations  of  its  rights-  of-way 
 and  the  fees  for  use  of  those  rights-  of-  way.  193  Thus,  the  court  held,  the  carrier  may  not  be  required  to 
 complete  a  wide-  ranging  franchise  application  including  matters  unrelated  to  use  of  the  rights-  of-  way,  or  to 
 comply  with  conditions  that  are  unrelated  to  its  use  of  the  rights-  of-  way.  194  Similarly,  the  United  States 
 District  Court  for  the  District  of  Maryland  has  struck  down  a  franchise  ordinance  that  required  a  franchise 
 applicant  to  supply  broad-  ranging  information  that  was  not  directly  related  to  the  county's  right-  of-  way 
 management,  including  undefined  "financial  information"  and  information  about  "technical  standards,"  and 
42
 Federal  Communications  Commission  FCC  99-  141 
 195  Prince  George's  County,  1999  WL  343646  at  *9-  10;  see  also  BellSouth  Telecommunications,  Inc.  v.  City  of 
 Coral  Springs,  1999  WL  149769  at  *3-  4  (S.  D.  Fla.  Jan.  25,  1999)  (similar). 

 196  See  Prince  George's  County,  1999  WL  343646  at  *12-  13  (carriers  that  use  facilities  owned,  installed,  and 
 maintained  by  others);  Dallas  III,  1999  WL  324668  at  *6-  9;  AT&  T  Communications  of  the  Southwest,  Inc.  v.  City 
 of  Dallas,  1998  WL  386168  (N.  D.  Tex.  July  7,  1998)  (Dallas  II)  (wireless  service  provider);  AT&  T 
 Communications  of  the  Southwest,  Inc.  v.  City  of  Austin,  975  F.  Supp.  928  (W.  D.  Tex.  1997)  (carrier  that  provided 
 service  only  by  means  of  resale  and  use  of  unbundled  network  elements). 

 197  Dallas  II,  1998  WL  386186  at  *4-  5. 

 198  Id.  at  *5  &  n.  22. 
 199  Dallas  I,  8  F.  Supp  2d  at  593;  see  also  Dallas  II,  1998  WL  386186  at  *5  and  n.  22;  Dallas  III,  1999  WL 
 324668  at  *5. 

 200  Prince  George's  County,  1999  WL  343646  at  *10-  11;  but  see  TCG  Detroit  v.  City  of  Dearborn,  1998  WL 
 493128  (E.  D.  Mich.  Aug.  14,  1998)  (holding  that  franchise  fee  of  4  percent  of  gross  revenues  did  not  violate 

 43 

 that  conferred  on  the  franchising  authority  complete  discretion  to  grant  or  deny  a  franchise  application, 
 including  authority  to  consider  such  factors  as  managerial,  technical,  financial,  and  legal  qualifications  and 
 the  public  interest.  195 

 77.  The  courts  have  also  held  that  local  governments  may  not  impose  fees,  conditions,  and 
 franchise  requirements  on  service  providers,  such  as  resellers,  purchasers  of  unbundled  network  elements, 
 and  wireless  service  providers,  that  do  not  use  any  public  rights-  of-  way  for  their  own  facilities.  196  In 
 Dallas  II,  in  particular,  the  court  specifically  rejected  arguments  that  the  city  had  jurisdiction  over  the 
 carrier  because  calls  made  over  the  carrier's  network  would  traverse  the  city's  rights-  of-  way  after  being 
 transferred  to  other  carriers'  networks  or  because  some  calls  on  the  carrier's  network  might  travel  in  part 
 over  wireline  facilities  in  the  rights-  of-  way  leased  from  other  carriers,  holding  that  local  authority  to 
 manage  the  rights-  of-  way  extends  only  to  regulation  of  physical  facilities  located  in  the  rights-  of-  way.  197  In 
 addition,  the  court  held  that  the  principle  of  competitive  neutrality  did  not  require  that  carriers  that  use  the 
 rights-  of-  way  differently,  or  do  not  use  the  rights-  of-  way  at  all,  be  charged  the  same  fees;  indeed,  the  court 
 noted  that  charging  usage  fees  to  a  carrier  that  leases  facilities  in  the  rights-  of-  way  from  another  carrier 
 would  amount  to  discrimination  against  that  carrier,  because  it  would  likely  have  to  pay  both  its  own  fees 
 directly  to  the  city  and  the  underlying  carrier's  fees  passed  on  through  its  rates.  198 

 78.  Also,  some  courts  have  struck  down  compensation  schemes  that  they  found  were  not 
 reasonably  related  to  a  carrier's  rights-  of-  way  usage  and  the  costs  that  use  imposes  on  the  local  government 
 and  its  citizens.  Thus,  for  example,  the  court  in  Dallas  I  held  that  the  city  could  not  require  a  carrier  to  pay 
 four  percent  of  its  revenues  from  all  services  provided  with  the  city.  199  Similarly,  the  Prince  George's 
 County  court  held  that  rights-  of-  way  fees  must  be  based  on  a  government's  cost  of  maintaining  and 
 improving  the  rights-  of-  way  and  on  a  provider's  rights-  of-  way  use,  not  on  the  "value"  of  the  "privilege"  of 
 using  the  rights-  of-  way,  and  it  therefore  struck  down  a  fee  of  three  percent  of  gross  revenues,  broadly 
 defined.  200 
43
 Federal  Communications  Commission  FCC  99-  141 
 requirement  that  fees  be  fair  and  reasonable). 
 201  See,  e.  g.,  Fla.  Stats.    337.401;  Ill.  Stats.  ch.  35,    635/  25,  635/  30;  La.  Rev.  Stats.  title  48,    381.2;  Minn. 
 Stats.    237.163. 

 202  See  Guidelines  for  Facilities  Siting  Implementation  and  Informal  Dispute  Resolution  Process, 
 http://  www.  fcc.  gov/  statelocal/  agreement. 

 203  See  FCC  Local  and  State  Government  Advisory  Committee  Advisory  Recommendation  No.  1,  "Policy 
 Statement  on  State  and  Local  Rights-  of-  Way  and  Telecommunications  Service  Competition"  (June  27,  1997). 

 44 

 79.  Inquiry.  Notwithstanding  the  case  law  discussed  above,  several  carriers  and  their  associations 
 have  alleged  that  many  State  and  local  governments  continue  to  engage  in  rights-  of-  way  management  and 
 compensation  practices  that  the  carriers  believe  are  unreasonable,  anticompetitive,  and  contrary  to  federal 
 law.  While  these  carriers  state  that  they  have  generally  been  successful  in  challenging  such  regulations  in 
 court,  they  believe  Commission  action  could  help  reduce  the  incidence  of  those  regulations  and  the  need  for 
 litigation.  At  the  same  time,  State  and  local  governments  assert  that  the  carriers'  complaints  are 
 unreasonable,  unfounded,  and  merely  designed  to  impede  local  jurisdictions'  legitimate  exercise  of  their 
 public  rights-  of-  way  authority.  We  note  that  the  rights-  of-  way  regulations  that  have  been  brought  to  our 
 attention,  either  formally  or  informally,  cover  only  a  relatively  small  number  of  communities,  and  we 
 believe  most  communities  and  carriers  have  arrived  at  solutions  that  both  protect  State  and  local 
 governments'  authority  to  manage  the  public  rights-  of-  way  and  avoid  imposing  unreasonable  or 
 discriminatory  burdens  on  competitive  service  providers.  Nonetheless,  in  light  of  the  persistent  assertions 
 of  concern  expressed  in  this  area,  we  believe  it  is  appropriate  to  compile  a  record  regarding  local  rights-  of-way 
 management  as  it  affects  telecommunications  service  providers.  We  therefore  seek  comment  from 
 both  service  providers  and  State  and  local  governments  regarding  their  rights-  of-  way  management 
 experiences,  including  examples  of  problems  they  have  encountered,  successful  solutions  to  problems,  and 
 information  regarding  the  prevalence  of  each  of  these  types  of  experience.  In  addition,  we  note  that  several 
 States  have  enacted  guidelines  to  govern  the  requirements  that  local  governments  may  impose  on 
 telecommunications  rights-  of-  way  users.  201  We  seek  comment  on  the  success  or  failure  of  these  efforts. 

 80.  We  particularly  welcome  the  participation  in  this  process  of  our  Local  and  State  Government 
 Advisory  Committee  (Advisory  Committee).  The  Advisory  Committee  has  been  an  important  vehicle  for 
 facilitating  constructive  cooperation  among  the  Commission,  carriers,  and  State  and  local  governments. 
 For  example,  in  August  1998,  following  an  extensive  period  of  discussions,  the  Advisory  Committee  and 
 several  trade  associations  entered  into  an  agreement  on  voluntary,  non-  binding  guidelines  and  informal 
 dispute  resolution  procedures  for  disputes  involving  local  government  moratoria  on  personal  wireless 
 services  facilities  siting.  202  The  Advisory  Committee  has  expressed  a  consistent  interest  in  rights-  of-  way 
 issues  and  a  willingness  to  participate  in  finding  appropriate  solutions.  203  Through  the  participation  of  the 
 Advisory  Committee  as  well  as  industry  representatives,  one  outcome  of  this  inquiry  could  be  a  greater 
 agreement  on  principles  that  could  be  broadly  accepted  both  by  carriers  and  by  State  and  local 
 governments. 

 D.  Notice  of  Inquiry  on  State  and  Local  Taxes. 
44
 Federal  Communications  Commission  FCC  99-  141 
 204  See  "Commission  Seeks  Comment  on  Petition  for  Preemption  and  Motion  for  Declaratory  Ruling  filed  by 
 Western  PCS  I  Corporation,"  Public  Notice,  DA  96-  1211  (July  30,  1996). 

 205  Western  PCS  I  Corporation  Request  for  Dismissal  Without  Prejudice,  File  No.  WTB/  POL  96-  3  (dated  Dec. 
 9,  1997). 

 206  Western  PCS  I  Corporation  Petition  for  Preemption  of  the  Oregon  Department  of  Revenue  Notice  of 
 Proposed  Assessment  and  Request  for  Declaratory  Ruling,  File  No.  WTB/  POL  96-  3,  Order,  DA  99-  203  (CWD  rel. 
 Jan.  20,  1999). 

 207  Amendment  of  the  Commission's  Rules  To  Preempt  State  and  Local  Imposition  of  Discriminatory  and/  or 
 Excessive  Taxes  and  Assessments,  Petition  for  Rule  Making  of  the  Cellular  Telecommunications  Industry 
 Association  (filed  Sept.  26,  1996)  (CTIA  Petition). 

 208  Id.,  Attachment  at  2-  3. 

 45 

 81.  The  assessment  and  collection  of  taxes  and  other  fees  is  a  vital  function  of  State  and  local 
 governments,  indeed  a  necessary  one  to  support  all  of  those  governments'  other  functions.  Virtually  all 
 businesses  are  subject  to  a  wide  array  of  State  and  local  taxes,  and  there  is  no  reason  that 
 telecommunications  businesses  should  be  any  exception.  At  the  same  time,  State  and  local  tax  policies  that 
 impose  excessive  or  unequal  burdens  on  competitive  service  providers  have  the  potential  to  inhibit  the 
 development  of  competitive  facilities-  based  networks  in  local  telecommunications  markets.  In  this  section, 
 we  commence  an  inquiry  concerning  these  issues. 

 82.  We  believe  that  State  and  local  governments  share  our  goal  of  ensuring  that  tax  burdens  on 
 telecommunications  providers  are  imposed  fairly  so  as  not  to  impede  competition.  Carriers  have  alleged, 
 however,  that  some  State  and  local  taxes  are  excessive  or  are  applied  in  a  discriminatory  manner.  For 
 example,  in  July  1996,  Western  PCS  I  Corporation  (Western)  filed  a  petition  seeking  preemption  under 
 sections  253  and  332(  c)(  3)  of  the  Communications  Act  of  the  State  of  Oregon's  assessment  of  property  tax 
 on  Western.  204  Western  alleged  that  Oregon  had  calculated  the  value  of  Western's  property  by  including 
 the  amount  Western  had  paid  at  auction  for  its  license  to  serve  the  Portland  Major  Trading  Area,  and  that 
 this  method  of  assessment  resulted  in  Western's  bearing  a  substantially  higher  tax  burden  than  other 
 telecommunications  service  providers  that  had  not  purchased  licenses  at  auction.  Subsequently,  Western 
 and  the  Oregon  Department  of  Revenue  reached  a  settlement  of  most  of  the  issues  that  were  the  subject  of 
 Western's  petition,  and  Western  moved  to  dismiss  its  petition  without  prejudice.  205  We  granted  Western's 
 motion  on  January  20,  1999.  206 

 83.  Other  allegations  of  unfair  State  and  local  taxes  surfaced  in  a  petition  for  rulemaking  filed  by 
 the  Cellular  Telecommunications  Industry  Association  (CTIA).  207  The  CTIA  Petition  asks  the  Commission 
 to  preempt  State  and  local  governments  from  imposing  discriminatory  or  excessive  taxes  or  similar  burdens 
 on  CMRS  providers  and  services  and  other  telecommunications  providers  and  services.  By  way  of 
 example  of  the  taxes  that  CTIA  finds  objectionable,  the  petition  cites  the  Oregon  tax  challenged  by  Western 
 PCS  and  other  property  taxes  in  West  Virginia  and  Kentucky,  208  as  well  as  an  excise  tax  imposed  on 
45
 Federal  Communications  Commission  FCC  99-  141 
 209  Id.,  Attachment  at  2  n.  2. 
 210  M.  Katz  and  J.  Hayes,  "Unintended  Consequences:  Public  Policy  and  Wireless  Competition"  (Oct.  1,  1998), 
 filed  as  an  Attachment  to  Letter  from  Mary  McDermott,  Chief  of  Staff  and  Senior  Vice  President,  Government 
 Relations,  Personal  Communications  Industry  Association  to  John  Berresford,  Industry  Analysis  Division, 
 Common  Carrier  Bureau  in  CC  Docket  No.  98-  146  (dated  Nov.  12,  1998). 

 211  1996  Act,    602(  c)(  2),  published  as  a  note  to  47  U.  S.  C.    152. 

 46 

 mobile  telephone  use  by  Montgomery  County,  Maryland.  209  The  Personal  Communications  Industry 
 Association  also  has  recently  filed  with  us  a  study  detailing  what  it  considers  to  be  the  excessive  cumulative 
 burden  of  Federal,  State,  and  local  taxes  and  fees  on  wireless  telecommunications  service  providers.  210 

 84.  In  recognition  of  the  limits  on  our  expertise  and  out  of  respect  for  principles  of  federalism,  we 
 conclude  that  it  is  not  appropriate  for  us  to  initiate  a  rulemaking  proceeding  at  this  time,  and  we  therefore 
 deny  CTIA's  petition.  Indeed,  we  note  that  our  legal  authority  to  preempt  State  and  local  tax  policies  is 
 extremely  limited.  In  particular,  section  601(  c)(  2)  of  the  1996  Act  provides,  with  limited  exceptions,  that 
 "nothing  in  [the  1996]  Act  or  the  amendments  made  by  [the  1996]  Act  shall  be  construed  to  modify,  impair, 
 or  supersede,  or  authorize  the  modification,  impairment,  or  supersession  of,  any  State  or  local  law 
 pertaining  to  taxation."  211  Nonetheless,  we  are  concerned  about  the  potential  discriminatory  and 
 anticompetitive  effects  of  certain  State  and  local  tax  policies,  and  we  are  therefore  initiating  an  inquiry  on 
 this  issue.  We  seek  comment  generally  on  the  nature  and  prevalence  of  unreasonable  or  discriminatory  tax 
 burdens  on  competitive  telecommunications  service  providers,  whether  most  tax  schemes  have  successfully 
 avoided  these  shortcomings,  and  what  tax  regimes  have  best  promoted  the  interests  of  all  parties.  We  also 
 seek  comment  regarding  the  availability  of  State  remedies  to  correct  any  harmful  inequities.  We  are  eager 
 to  work  closely  with  those  State  and  local  government  bodies  that  are  most  responsible  for  the  formulation 
 of  tax  policy,  such  as  the  Multistate  Tax  Commission  and  the  Federation  of  Tax  Administrators,  on  these 
 issues. 

 E.  Other  Means  of  Promoting  Competitive  Networks. 
 85.  We  also,  through  means  of  a  notice  of  inquiry,  seek  comment  regarding  any  other  actions  that 
 we  should  take  to  facilitate  the  development  of  competitive  networks  not  already  being  considered  in 
 another  proceeding.  As  discussed  above,  the  rapid  development  of  competition  requires  that  competing 
 carriers  be  free  to  innovate,  enter  into  business  arrangements,  and  offer  the  services  of  their  choice  through 
 the  means  of  their  choice  without  incurring  unnecessary  costs.  In  this  item  and  in  other  proceedings,  we 
 have  identified  and  requested  comment  regarding  several  potential  obstacles  to  this  freedom,  including 
 obstacles  that  may  arise  both  from  our  own  rules  and  from  the  actions  of  third  parties.  However,  there  may 
 be  additional  extraneous  factors  impeding  the  development  of  competition  that  we  have  not  identified.  We 
 ask  commenters  to  identify  any  such  impediments  with  as  much  specificity  as  possible,  discuss  with 
 particularity  the  nature  and  extent  of  the  impediment,  and  suggest  specific  remedial  actions. 

 IV.  CONCLUSION 
46
 Federal  Communications  Commission  FCC  99-  141 
 212  See  5  U.  S.  C.    603.  The  RFA,  see  5  U.  S.  C.    601  et.  seq.,  has  been  amended  by  the  Contract  With  America 
 Advancement  Act  of  1996,  Pub.  L.  No.  104-  121,  110  Stat.  847  (1996)  (CWAAA).  Title  II  of  the  CWAAA  is  the 
 Small  Business  Regulatory  Enforcement  Fairness  Act  of  1996  (SBREFA). 

 213  See  5  U.  S.  C.    603(  a). 

 214  See  id. 
 215  See  Amendment  of  47  C.  F.  R.    1.1200  et  seq.  Concerning  Ex  Parte  Presentations  in  Commission 
 Proceedings,  GC  Docket  No.  95-  21,  Report  and  Order,  12  FCC  Rcd  7348,  7356-  57,    27,  citing  47  C.  F.  R.   

 47 

 86.  Over  the  last  several  years,  legal  and  market  developments  have  come  a  long  way  toward 
 bringing  competition  to  all  United  States  communications  markets.  In  the  1996  Act,  Congress  established 
 a  national  policy  in  favor  of  competition  and  made  legal  changes  that  are  essential  to  achieving  this  policy 
 goal.  Nonetheless,  much  remains  to  be  achieved.  In  particular,  most  local  telecommunications  markets 
 have  not  yet  experienced  the  type  of  facilities-  based  competition  that  will  bring  innovative  services  and 
 service  choices  to  all  Americans,  and  will  eliminate  the  market  power  of  the  incumbent  LECs.  We  believe 
 that  the  proposals  we  explore  and  the  inquiry  we  initiate  here  are  a  useful  step  towards  promoting  the  rapid 
 and  efficient  development  of  competitive  networks  in  local  telecommunications  markets.  In  this  way,  we 
 hope  to  advance  the  goals  of  the  1996  Act  and  advance  the  public  interest  in  competitive 
 telecommunications. 

 V.  PROCEDURAL  MATTERS 
 A.  Regulatory  Flexibility  Act. 
 87.  As  required  by  the  Regulatory  Flexibility  Act  (RFA),  212  the  Commission  has  prepared  an 
 Initial  Regulatory  Flexibility  Analysis  (IRFA)  of  the  possible  significant  economic  impact  on  small  entities 
 of  the  proposals  suggested  in  this  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed 
 Rulemaking.  The  IRFA  is  set  forth  in  the  attached  Appendix.  Written  public  comments  are  requested  on 
 the  IRFA.  These  comments  must  be  filed  in  accordance  with  the  same  filing  deadlines  for  comments  on  the 
 rest  of  this  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking,  as  set  forth 
 in  Section  V.  C  infra,  and  they  must  have  a  separate  and  distinct  heading  designating  them  as  responses  to 
 the  IRFA.  The  Commission's  Office  of  Public  Affairs,  Reference  Operations  Division,  will  send  a  copy  of 
 this  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking,  including  the 
 IRFA,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration,  in  accordance  with  the 
 RFA.  213  In  addition,  this  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed 
 Rulemaking,  including  the  IRFA  (or  summaries  thereof),  will  be  published  in  the  Federal  Register.  214 

 B.  Ex  Parte  Rules. 
 88.  This  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking 
 initiate  and  constitute  a  "permit-  but-  disclose"  proceeding  in  accordance  with  the  Commission's  ex  parte 
 rules.  215  Persons  making  oral  ex  parte  presentations  relating  to  the  Notice  of  Proposed  Rulemaking  and 
47
 Federal  Communications  Commission  FCC  99-  141 
 1.1204(  b)(  1)  (1997). 
 216  See  47  C.  F.  R.    1.1206(  b)(  2),  as  revised. 

 217  See  47  C.  F.  R.    1.1204(  b)(  1). 

 48 

 Third  Further  Notice  of  Proposed  Rulemaking  are  reminded  that  memoranda  summarizing  the  presentations 
 must  contain  summaries  of  the  substance  of  the  presentations  and  not  merely  a  listing  of  the  subjects 
 discussed.  More  than  a  one  or  two  sentence  description  of  the  views  and  arguments  presented  is  generally 
 required.  216  Other  rules  pertaining  to  oral  and  written  presentations  are  set  forth  in  Section  1.1206(  b)  as 
 well.  Interested  parties  are  to  file  with  the  Secretary,  FCC,  and  serve  International  Transcription  Services 
 (ITS)  with  copies  of  any  written  ex  parte  presentations  or  summaries  of  oral  ex  parte  presentations  in  these 
 proceedings  in  the  manner  specified  below  for  filing  comments. 

 89.  This  Notice  of  Inquiry  commences  an  exempt  proceeding  in  accordance  with  the  Commission's 
 ex  parte  rules.  217 

 C.  Filing  Procedures. 
 90.  Pursuant  to  Sections  1.415  and  1.419  of  the  Commission's  rules,  47  C.  F.  R.    1.415,  1.419, 
 interested  parties  may  file  comments  on  or  before  August  13,  1999,  and  reply  comments  on  or  before 
 September  3,  1999.  Comments  may  be  filed  using  the  Commission's  Electronic  Comment  Filing  System 
 (ECFS)  or  by  filing  paper  copies.  See  Electronic  Filing  of  Documents  in  Rulemaking  Proceedings,  63 
 Fed.  Reg.  24,121  (1998). 

 91.  Comments  filed  through  the  ECFS  can  be  sent  as  an  electronic  file  via  the  Internet  to 
 <http://  www.  fcc.  gov/  e-  file/  ecfs.  html>.  Generally,  only  one  copy  of  an  electronic  submission  must  be  filed. 
 If  multiple  docket  or  rulemaking  numbers  appear  in  the  caption  of  this  proceeding,  however,  commenters 
 must  transmit  one  electronic  copy  of  the  comments  to  each  docket  or  rulemaking  number  referenced  in  the 
 caption.  In  completing  the  transmittal  screen,  commenters  should  include  their  full  name,  Postal  Service 
 mailing  address,  and  the  applicable  docket  or  rulemaking  number.  Parties  may  also  submit  an  electronic 
 comment  by  Internet  e-  mail.  To  get  filing  instructions  for  e-  mail  comments,  commenters  should  send  an  e-mail 
 to  ecfs@  fcc.  gov,  and  should  include  the  following  words  in  the  body  of  the  message,  "get  form  <your 
 e-  mail  address>."  A  sample  form  and  directions  will  be  sent  in  reply. 

 92.  Parties  who  choose  to  file  by  paper  must  file  an  original  and  four  copies  of  each  filing.  If 
 more  than  one  docket  or  rulemaking  number  appear  in  the  caption  of  this  proceeding,  commenters  must 
 submit  two  additional  copies  for  each  additional  docket  or  rulemaking  number.  All  filings  must  be  sent  to 
 the  Commission's  Secretary,  Magalie  Roman  Salas,  Office  of  the  Secretary,  Federal  Communications 
 Commission,  445  Twelfth  Street,  S.  W.;  TW-  A325;  Washington,  D.  C.  20554. 

 93.  Regardless  of  whether  parties  choose  to  file  electronically  or  by  paper,  parties  should  also  file 
 one  copy  of  any  documents  filed  in  this  docket  with  the  Commission's  copy  contractor,  International 
48
 Federal  Communications  Commission  FCC  99-  141 
 49 
 Transcription  Services,  Inc.,  445  Twelfth  Street,  S.  W.,  Room  CY-  B402,  Washington,  D.  C.  20554. 
 Comments  and  reply  comments  will  be  available  for  public  inspection  during  regular  business  hours  in  the 
 FCC  Reference  Center,  445  12th  Street,  S.  W.,  Washington,  D.  C.  20554. 

 94.  Comments  and  reply  comments  must  include  a  short  and  concise  summary  of  the  substantive 
 arguments  raised  in  the  pleading.  Comments  and  reply  comments  must  also  comply  with  section  1.49,  47 
 C.  F.  R.    1.49,  and  all  other  applicable  sections  of  the  Commission's  rules.  We  also  direct  all  interested 
 parties  to  include  the  name  of  the  filing  party  and  the  date  of  the  filing  on  each  page  of  their  comments  and 
 reply  comments.  All  parties  are  encouraged  to  utilize  a  table  of  contents,  regardless  of  the  length  of  their 
 submission. 

 D.  Further  Information. 
 95.  For  further  information  about  this  proceeding,  contact  Jeffrey  Steinberg  at  202-  418-  0896, 
 jsteinbe@  fcc.  gov,  or  Joel  Taubenblatt  at  202-  418-  1513,  jtaubenb@  fcc.  gov. 

 VI.  ORDERING  CLAUSES 
 96.  Accordingly,  IT  IS  ORDERED,  pursuant  to  sections  1,  2(  a),  4(  i),  4(  j),  201(  b),  224,  251(  c)(  3), 
 251(  d),  253,  303(  r),  332,  and  403  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151, 
 152(  a),  154(  i),  154(  j),  201(  b),  224,  251(  c)(  3),  251(  d),  253,  303(  r),  332,  and  403,  and  sections  1.411  and 
 1.412  of  the  Commission's  rules,  47  C.  F.  R.    1.411  and  1.412,  this  Notice  of  Proposed  Rulemaking  and 
 Notice  of  Inquiry,  and  Third  Further  Notice  of  Proposed  Rulemaking  is  ADOPTED. 

 97.  IT  IS  FURTHER  ORDERED,  pursuant  to  sections  1,  4(  i),  201(  b),  and  303(  r)  of  the 
 Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  154(  i),  201(  b),  and  303(  r),  and  section 
 1.401(  e)  of  the  Commission's  rules,  47  C.  F.  R.    1.401(  e),  that  the  Petition  for  Rulemaking  filed  by  the 
 Wireless  Communications  Association  International,  Inc.  on  May  26,  1999,  is  GRANTED. 

 98.  IT  IS  FURTHER  ORDERED,  pursuant  to  sections  1,  4(  i),  253,  and  332(  c)(  3)  of  the 
 Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  154(  i),  253,  and  332(  c)(  3),  and  section 
 1.401(  e)  of  the  Commission's  rules,  47  C.  F.  R.    1.401(  e),  that  the  Petition  for  Rulemaking  filed  by  the 
 Cellular  Telecommunications  Industry  Association  on  September  26,  1996,  is  DENIED. 

 99.  IT  IS  FURTHER  ORDERED  that  the  Commission's  Office  of  Public  Affairs,  Reference 
 Operations  Division,  SHALL  SEND  a  copy  of  this  Notice  of  Proposed  Rulemaking  and  Notice  of  Inquiry, 
 and  Third  Further  Notice  of  Proposed  Rulemaking,  including  the  Initial  Regulatory  Flexibility  Analysis,  to 
 the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration. 

 FEDERAL  COMMUNICATIONS  COMMISSION 

 Magalie  Roman  Salas 
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 Federal  Communications  Commission  FCC  99-  141 
 50 
 Secretary 
50
 Federal  Communications  Commission  FCC  99-  141 
 218  See  5  U.  S.  C.    603.  The  RFA,  see  5  U.  S.  C.    601  et  seq.,  has  been  amended  by  the  Contract  With  America 
 Advancement  Act  of  1996,  Pub.  L.  No.  104-  121,  110  Stat.  847  (1996)  (CWAAA).  Title  II  of  the  CWAAA  is  the 
 Small  Business  Regulatory  Enforcement  Fairness  Act  of  1996  (SBREFA). 

 219  See  5  U.  S.  C.    603(  a). 

 220  See  id. 

 51 

 APPENDIX 
 INITIAL  REGULATORY  FLEXIBILITY  ANALYSIS 
 1.  As  required  by  the  Regulatory  Flexibility  Act  (RFA),  218  the  Commission  has  prepared  this 
 Initial  Regulatory  Flexibility  Analysis  (IRFA)  of  the  possible  significant  economic  impact  on  small  entities 
 of  the  policies  and  rules  proposed  in  this  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of 
 Proposed  Rulemaking.  Written  public  comments  are  requested  on  this  IRFA.  These  comments  must  be 
 filed  in  accordance  with  the  same  filing  deadlines  for  comments  on  the  rest  of  this  Notice  of  Proposed 
 Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking,  as  set  forth  in  Section  V.  C  supra,  and  they 
 must  have  a  separate  and  distinct  heading  designating  them  as  responses  to  the  IRFA.  The  Commission's 
 Office  of  Public  Affairs,  Reference  Operations  Division,  will  send  a  copy  of  this  Notice  of  Proposed 
 Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking,  including  the  IRFA,  to  the  Chief  Counsel 
 for  Advocacy  of  the  Small  Business  Administration,  in  accordance  with  the  RFA.  219  In  addition,  this 
 Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking,  including  the  IRFA  (or 
 summaries  thereof),  will  be  published  in  the  Federal  Register.  220 

 I.  Need  for  and  Objectives  of  the  Proposed  Rules 
 2.  We  are  issuing  this  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed 
 Rulemaking  to  seek  comment  on  proposals  to  facilitate  competition  to  the  incumbent  local  exchange 
 carriers  (LECs)  by  competitors  who  use  their  own  end-  to-  end  facilities.  Extensive  facilities-  based 
 competition  will  provide  consumers  with  a  choice  of  telecommunications  providers  that  will  compete  to 
 offer  traditional,  voice-  grade  telephone  service,  as  well  as  high-  speed  data  and  other  advanced  services,  at 
 reasonable  prices  and  conditions  --  a  major  goal  of  the  Telecommunications  Act  of  1996.  We  particularly 
 expect  this  proceeding  to  further  the  availability  of  competition  to  the  many  consumers  and  businesses  that 
 are  located  in  multiple  tenant  environments,  such  as  apartment  and  office  buildings. 

 3.  Specifically,  this  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed 
 Rulemaking  seeks  comment  on  the  following  issues:  (1)  the  tentative  conclusion  that,  to  the  extent  that 
 LECs  or  other  utilities  own  or  control  rooftop  and  other  rights-  of-  way  or  riser  conduit  in  multiple  tenant 
 environments,  section  224  of  the  Communications  Act,  47  U.  S.  C.    224,  requires  that  they  permit 
 competing  providers  access  to  such  rights-  of-  way  or  conduit  under  just,  reasonable  and  nondiscriminatory 
 rates,  terms,  and  conditions;  (2)  whether  we  should  require  incumbent  LECs  to  make  available  to  any 
 requesting  telecommunications  carrier  unbundled  access  to  riser  cable  and  wiring  that  they  control  within 
 multiple  tenant  environments,  subject  to  the  Commission's  future  interpretation  of  the  "necessary"  and 
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 Federal  Communications  Commission  FCC  99-  141 
 221  See  47  C.  F.  R.    68.3. 
 222  See  47  C.  F.  R.    76.800-  76.806. 
 223  See  Section  1.4000  of  the  Commission's  rules,  47  C.  F.  R.    1.4000,  which  prohibits,  with  limited  exceptions, 
 any  State  or  local  law  or  regulation,  private  covenant,  contract  provision,  lease  provision,  homeowners'  association 
 rule,  or  similar  restriction  that  impairs  the  installation,  maintenance,  or  use  of  certain  antennas  designed  to  receive 
 video  programming  services  on  property  within  the  exclusive  use  or  control  of  the  antenna  user  where  the  user  has 
 a  direct  or  indirect  ownership  or  leasehold  interest  in  the  property. 

 224  5  U.  S.  C.    605(  b). 

 225  5  U.  S.  C.    601(  6). 

 52 

 "impair"  standards  of  section  251,  47  U.  S.  C.    251;  (3)  whether  we  should  require  building  owners  who 
 allow  access  to  their  premises  to  any  telecommunications  provider  to  make  comparable  access  available  to 
 all  such  providers  on  a  nondiscriminatory  basis;  (4)  whether  we  should  forbid  telecommunications  service 
 providers,  under  some  or  all  circumstances,  from  entering  into  exclusive  contracts  with  building  owners, 
 and  abrogate  any  existing  exclusive  contracts  between  these  parties;  (5)  whether  we  should  modify  our 
 rules  governing  determination  of  the  demarcation  point  between  facilities  controlled  by  the  telephone 
 company  and  by  the  landowner  on  multiple  unit  premises;  221  (6)  whether  the  rules  governing  access  to  cable 
 home  wiring  for  multichannel  video  program  distribution  should  be  extended  to  benefit  providers  of 
 telecommunications  services;  222  and  (7)  whether  we  should  adopt  rules  similar  to  those  adopted  in  the  video 
 context  under  section  207  of  the  1996  Act  223  protecting  the  ability  to  place  antennas  to  transmit  and  receive 
 telecommunications  signals  and  other  signals  that  are  not  covered  under  section  207. 

 II.  Legal  Basis 
 4.  The  potential  actions  on  which  comment  is  sought  in  this  Notice  of  Proposed  Rulemaking 
 and  Third  Further  Notice  of  Proposed  Rulemaking  would  be  authorized  under  sections  1,  2(  a),  4(  i),  4(  j), 
 201(  b),  224,  251(  c)(  3),  251(  d),  253,  303(  r),  and  332  of  the  Communications  Act  of  1934,  as  amended,  47 
 U.  S.  C.    151,  152(  a),  154(  i),  154(  j),  201(  b),  224,  251(  c)(  3),  251(  d),  253,  303(  r),  and  332,  and  sections 
 1.411  and  1.412  of  the  Commission's  rules,  47  C.  F.  R.    1.411  and  1.412. 

 III.  Description  and  Estimate  of  the  Number  of  Small  Entities  to  which  the  Proposed  Rules  Will 
 Apply 

 5.  The  RFA  requires  that  an  initial  regulatory  flexibility  analysis  be  prepared  for  notice-  and-comment 
 rulemaking  proceedings,  unless  the  agency  certifies  that  "the  rule  will  not,  if  promulgated,  have  a 
 significant  economic  impact  on  a  substantial  number  of  small  entities."  224  The  RFA  generally  defines 
 "small  entity"  as  having  the  same  meaning  as  the  terms  "small  business,"  "small  organization,"  and  "small 
 governmental  jurisdiction."  225  In  addition,  the  term  "small  business"  has  the  same  meaning  as  the  term 
52
 Federal  Communications  Commission  FCC  99-  141 
 226  5  U.  S.  C.    601(  3)  (incorporating  by  reference  the  definition  of  "small  business  concern"  in  Small  Business 
 Act,  15  U.  S.  C.    632).  Pursuant  to  5  U.  S.  C.    601(  3),  the  statutory  definition  of  a  small  business  applies  "unless 
 an  agency,  after  consultation  with  the  Office  of  Advocacy  of  the  Small  Business  Administration  and  after 
 opportunity  for  public  comment,  establishes  one  or  more  definitions  of  such  term  which  are  appropriate  to  the 
 activities  of  the  agency  and  publishes  such  definition(  s)  in  the  Federal  Register." 

 227  Small  Business  Act,  15  U.  S.  C.    632. 

 228  See  13  C.  F.  R.    121.201,  SIC  Code  4813. 
 229  13  C.  F.  R.    121.201.  See  Executive  Office  of  the  President,  Office  of  Management  and  Budget,  Standard 
 Industrial  Classification  Manual  (1987)  (1987  SIC  Manual). 

 230  FCC,  Telecommunications  Industry  Revenue:  TRS  Fund  Worksheet  Data,  Figure  2  (Number  of  Carriers 
 Paying  Into  the  TRS  Fund  by  Type  of  Carrier)  (Nov.  1997)  (Telecommunications  Industry  Revenue). 

 53 

 "small  business  concern"  under  the  Small  Business  Act.  226  A  small  business  concern  is  one  which:  (1)  is 
 independently  owned  and  operated;  (2)  is  not  dominant  in  its  field  of  operation;  and  (3)  satisfies  any 
 additional  criteria  established  by  the  Small  Business  Administration  (SBA).  227  For  many  of  the  entities 
 described  below,  the  SBA  has  defined  small  business  categories  through  Standard  Industrial  Classification 
 ("  SIC")  codes. 

 6.  This  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking 
 could  result  in  rule  changes  that,  if  adopted,  would  impose  requirements  on  local  exchange  carriers  and 
 other  utilities,  building  owners  and  managers,  multichannel  video  program  distributors,  neighborhood 
 associations,  and  small  governmental  jurisdictions.  To  assist  the  Commission  in  analyzing  the  total  number 
 of  potentially  affected  small  entities,  commenters  are  requested  to  provide  estimates  of  the  number  of  small 
 entities  that  may  be  affected  by  any  rule  changes  resulting  from  this  Notice  of  Proposed  Rulemaking  and 
 Third  Further  Notice  of  Proposed  Rulemaking. 

 a.  Local  Exchange  Carriers 
 7.  Many  of  the  potential  rules  on  which  comment  is  sought  in  this  Notice  of  Proposed 
 Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking,  if  adopted,  would  affect  small  LECs. 
 Neither  the  Commission  nor  the  SBA  has  developed  a  small  business  definition  specifically  for  small 
 LECs.  The  closest  applicable  definition  under  the  SBA  rules  is  for  telephone  communications  companies 
 other  than  radiotelephone  (wireless)  companies.  228  The  SBA  has  defined  establishments  engaged  in 
 providing  "Telephone  Communications,  Except  Radiotelephone"  to  be  small  businesses  when  they  have  no 
 more  than  1,500  employees.  229  According  to  November,  1997  Telecommunications  Industry  Revenue  data, 
 1,371  carriers  reported  that  they  were  engaged  in  the  provision  of  local  exchange  services.  230  We  do  not 
 have  data  specifying  the  number  of  these  carriers  that  are  either  dominant  in  their  field  of  operations,  are 
 not  independently  owned  and  operated,  or  have  more  than  1,500  employees,  and  thus  are  unable  at  this  time 
 to  estimate  with  greater  precision  the  number  of  LECs  that  would  qualify  as  small  business  concerns  under 
 the  SBA's  definition.  Consequently,  we  estimate  that  fewer  than  1,371  providers  of  local  exchange  service 
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 Federal  Communications  Commission  FCC  99-  141 
 231  See  13  C.  F.  R.    121.201,  SIC  code  4813.  Since  the  time  of  the  Commission's  1996  decision, 
 Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  First  Report  and 
 Order,  11  FCC  Rcd  15499,  16144-  45  (1996),  61  FR  45476  (August  29,  1996),  the  Commission  has  consistently 
 addressed  in  its  regulatory  flexibility  analyses  the  impact  of  its  rules  on  such  incumbent  LECs. 

 232  1987  SIC  Manual. 

 233  13  C.  F.  R.    121.201. 
 234  U.  S.  Department  of  Commerce,  Bureau  of  the  Census,  1992  Economic  Census  Industry  and  Enterprise 
 Receipts  Size  Report,  Table  2D  (Bureau  of  Census  data  under  contract  to  the  Office  of  Advocacy  of  the  SBA)  (1992 
 Economic  Census  Industry  and  Enterprise  Receipts  Size  Report). 

 54 

 are  small  entities  or  small  incumbent  LECs  that  may  be  affected  by  the  potential  actions  discussed  in  this 
 Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking,  if  adopted. 

 8.  Above,  we  have  included  smaller  incumbent  LECs  in  our  analysis.  Although  some 
 incumbent  LECs  may  have  1,500  or  fewer  employees,  we  do  not  believe  that  such  entities  should  be 
 considered  small  entities  within  the  meaning  of  the  RFA  because  they  are  either  dominant  in  their  field  of 
 operations  or  are  not  independently  owned  and  operated,  and  therefore  by  definition  not  "small  entities"  or 
 "small  business  concerns"  under  the  RFA.  Accordingly,  our  use  of  the  terms  "small  entities"  and  "small 
 businesses"  does  not  encompass  small  incumbent  LECs.  Out  of  an  abundance  of  caution,  however,  for 
 regulatory  flexibility  analysis  purposes,  we  will  separately  consider  small  incumbent  LECs  within  this 
 analysis  and  use  the  term  "small  incumbent  LECs"  to  refer  to  any  incumbent  LECs  that  arguably  might  be 
 defined  by  the  SBA  as  "small  business  concerns."  231 

 b.  Other  Utilities 
 9.  The  proposal  in  this  Third  Further  Notice  of  Proposed  Rulemaking  with  respect  to  Section 
 224  of  the  Communications  Act,  47  U.  S.  C.    224,  if  adopted,  would  affect  utilities  other  than  LECs. 
 Section  224  defines  a  "utility"  as  "any  person  who  is  a  local  exchange  carrier  or  an  electric,  gas,  water, 
 steam,  or  other  public  utility,  and  who  owns  or  controls  poles,  ducts,  conduits,  or  rights-  of-  way  used,  in 
 whole  or  in  part,  for  any  wire  communications.  Such  term  does  not  include  any  railroad,  any  person  who  is 
 cooperatively  organized,  or  any  person  owned  by  the  Federal  Government  or  any  State."  The  Commission 
 anticipates  that,  to  the  extent  its  section  224  proposal  affects  non-  LEC  utilities,  the  effect  would  be 
 concentrated  on  electric  utilities. 

 (1)  Electric  Utilities  (SIC  4911,  4931  &  4939) 
 10.  Electric  Services  (SIC  4911).  The  SBA  has  developed  a  definition  for  small  electric  utility 
 firms.  232  The  Census  Bureau  reports  that  a  total  of  1,379  electric  utilities  were  in  operation  for  at  least  one 
 year  at  the  end  of  1992.  According  to  SBA,  a  small  electric  utility  is  an  entity  whose  gross  revenues  do  not 
 exceed  five  million  dollars.  233  The  Census  Bureau  reports  that  447  of  the  1,379  firms  listed  had  total 
 revenues  below  five  million  dollars  in  1992.  234 
54
 Federal  Communications  Commission  FCC  99-  141 
 235  1987  SIC  Manual. 
 236  13  C.  F.  R.    121.201. 
 237  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 238  1987  SIC  Manual. 
 239  13  C.  F.  R.    121.201. 
 240  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 241  1987  SIC  Manual. 
 242  13  C.  F.  R.    121.201. 
 243  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 244  1987  SIC  Manual. 

 55 

 11.  Electric  and  Other  Services  Combined  (SIC  4931).  The  SBA  has  classified  this  entity  as  a 
 utility  whose  business  is  less  than  95%  electric  in  combination  with  some  other  type  of  service.  235  The 
 Census  Bureau  reports  that  a  total  of  135  such  firms  were  in  operation  for  at  least  one  year  at  the  end  of 
 1992.  The  SBA's  definition  of  a  small  electric  and  other  services  combined  utility  is  a  firm  whose  gross 
 revenues  do  not  exceed  five  million  dollars.  236  The  Census  Bureau  reported  that  45  of  the  135  firms  listed 
 had  total  revenues  below  five  million  dollars  in  1992.  237 

 12.  Combination  Utilities,  Not  Elsewhere  Classified  (SIC  4939).  The  SBA  defines  this  type  of 
 utility  as  providing  a  combination  of  electric,  gas,  and  other  services  which  are  not  otherwise  classified.  238 
 The  Census  Bureau  reports  that  a  total  of  79  such  utilities  were  in  operation  for  at  least  one  year  at  the  end 
 of  1992.  According  to  SBA's  definition,  a  small  combination  utility  is  a  firm  whose  gross  revenues  do  not 
 exceed  five  million  dollars.  239  The  Census  Bureau  reported  that  63  of  the  79  firms  listed  had  total  revenues 
 below  five  million  dollars  in  1992.  240 

 (2)  Gas  Production  and  Distribution  (SIC  4922,  4923,  4924,  4925  &  4932) 
 13.  Natural  Gas  Transmission  (SIC  4922).  The  SBA's  definition  of  a  natural  gas  transmitter 
 is  an  entity  that  is  engaged  in  the  transmission  and  storage  of  natural  gas.  241  The  Census  Bureau  reports 
 that  a  total  of  144  such  firms  were  in  operation  for  at  least  one  year  at  the  end  of  1992.  According  to 
 SBA's  definition,  a  small  natural  gas  transmitter  is  an  entity  whose  gross  revenues  do  not  exceed  five 
 million  dollars.  242  The  Census  Bureau  reported  that  70  of  the  144  firms  listed  had  total  revenues  below  five 
 million  dollars  in  1992.  243 

 14.  Natural  Gas  Transmission  and  Distribution  (SIC  4923).  The  SBA  has  classified  this  type 
 of  entity  as  a  utility  that  transmits  and  distributes  natural  gas  for  sale.  244  The  Census  Bureau  reports  that  a 
55
 Federal  Communications  Commission  FCC  99-  141 
 245  13  C.  F.  R.    121.201. 
 246  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 247  1987  SIC  Manual. 
 248  13  C.  F.  R.    121.201. 
 249  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 250  1987  SIC  Manual. 
 251  13  C.  F.  R.    121.201. 
 252  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 253  1987  SIC  Manual. 
 254  13  C.  F.  R.    121.201. 

 56 

 total  of  126  such  entities  were  in  operation  for  at  least  one  year  at  the  end  of  1992.  The  SBA's  definition  of 
 a  small  natural  gas  transmitter  and  distributer  is  a  firm  whose  gross  revenues  do  not  exceed  five  million 
 dollars.  245  The  Census  Bureau  reported  that  43  of  the  126  firms  listed  had  total  revenues  below  five  million 
 dollars  in  1992.  246 

 15.  Natural  Gas  Distribution  (SIC  4924).  The  SBA  defines  a  natural  gas  distributor  as  an 
 entity  that  distributes  natural  gas  for  sale.  247  The  Census  Bureau  reports  that  a  total  of  478  such  firms 
 were  in  operation  for  at  least  one  year  at  the  end  of  1992.  According  to  the  SBA,  a  small  natural  gas 
 distributor  is  an  entity  whose  gross  revenues  do  not  exceed  five  million  dollars.  248  The  Census  Bureau 
 reported  that  267  of  the  478  firms  listed  had  total  revenues  below  five  million  dollars  in  1992.  249 

 16.  Mixed,  Manufactured,  or  Liquefied  Petroleum  Gas  Production  and/  or  Distribution  (SIC 
 4925).  The  SBA  has  classified  this  type  of  entity  as  a  utility  that  engages  in  the  manufacturing  and/  or 
 distribution  of  the  sale  of  gas.  250  These  mixtures  may  include  natural  gas.  The  Census  Bureau  reports  that 
 a  total  of  43  such  firms  were  in  operation  for  at  least  one  year  at  the  end  of  1992.  The  SBA's  definition  of 
 a  small  mixed,  manufactured  or  liquefied  petroleum  gas  producer  or  distributor  is  a  firm  whose  gross 
 revenues  do  not  exceed  five  million  dollars.  251  The  Census  Bureau  reported  that  31  of  the  43  firms  listed 
 had  total  revenues  below  five  million  dollars  in  1992.  252 

 17.  Gas  and  Other  Services  Combined  (SIC  4932).  The  SBA  has  classified  this  entity  as  a  gas 
 company  whose  business  is  less  than  95%  gas,  in  combination  with  other  services.  253  The  Census  Bureau 
 reports  that  a  total  of  43  such  firms  were  in  operation  for  at  least  one  year  at  the  end  of  1992.  According 
 to  the  SBA,  a  small  gas  and  other  services  combined  utility  is  a  firm  whose  gross  revenues  do  not  exceed 
 five  million  dollars.  254  The  Census  Bureau  reported  that  24  of  the  43  firms  listed  had  total  revenues  below 
56
 Federal  Communications  Commission  FCC  99-  141 
 255  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 256  1987  SIC  Manual. 
 257  13  C.  F.  R.    121.201. 
 258  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 259  1987  SIC  Manual. 
 260  13  C.  F.  R.    121.201. 
 261  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 262  1987  SIC  Manual. 
 263  13  C.  F.  R.    121.201. 

 57 

 five  million  dollars  in  1992.  255 
 (3)  Water  Supply  (SIC  4941) 
 18.  The  SBA  defines  a  water  utility  as  a  firm  who  distributes  and  sells  water  for  domestic, 
 commercial  and  industrial  use.  256  The  Census  Bureau  reports  that  a  total  of  3,169  water  utilities  were  in 
 operation  for  at  least  one  year  at  the  end  of  1992.  According  to  SBA's  definition,  a  small  water  utility  is  a 
 firm  whose  gross  revenues  do  not  exceed  five  million  dollars.  257  The  Census  Bureau  reported  that  3,065  of 
 the  3,169  firms  listed  had  total  revenues  below  five  million  dollars  in  1992.  258 

 (4)  Sanitary  Systems  (SIC  4952,  4953  &  4959) 
 19.  Sewerage  Systems  (SIC  4952).  The  SBA  defines  a  sewage  firm  as  a  utility  whose 
 business  is  the  collection  and  disposal  of  waste  using  sewage  systems.  259  The  Census  Bureau  reports  that  a 
 total  of  410  such  firms  were  in  operation  for  at  least  one  year  at  the  end  of  1992.  According  to  SBA's 
 definition,  a  small  sewerage  system  is  a  firm  whose  gross  revenues  did  not  exceed  five  million  dollars.  260 
 The  Census  Bureau  reported  that  369  of  the  410  firms  listed  had  total  revenues  below  five  million  dollars 
 in  1992.  261 

 20.  Refuse  Systems  (SIC  4953).  The  SBA  defines  a  firm  in  the  business  of  refuse  as  an 
 establishment  whose  business  is  the  collection  and  disposal  of  refuse  "by  processing  or  destruction  or  in  the 
 operation  of  incinerators,  waste  treatment  plants,  landfills,  or  other  sites  for  disposal  of  such  materials."  262 
 The  Census  Bureau  reports  that  a  total  of  2,287  such  firms  were  in  operation  for  at  least  one  year  at  the 
 end  of  1992.  According  to  SBA's  definition,  a  small  refuse  system  is  a  firm  whose  gross  revenues  do  not 
 exceed  six  million  dollars.  263  The  Census  Bureau  reported  that  1,908  of  the  2,287  firms  listed  had  total 
57
 Federal  Communications  Commission  FCC  99-  141 
 264  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 265  1987  SIC  Manual. 
 266  13  C.  F.  R.    121.201. 
 267  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 268  1987  SIC  Manual. 
 269  13  C.  F.  R.    121.201. 
 270  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 
 271  1987  SIC  Manual. 
 272  13  C.  F.  R.    121.201. 
 273  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D. 

 58 

 revenues  below  six  million  dollars  in  1992.  264 
 21.  Sanitary  Services,  Not  Elsewhere  Classified  (SIC  4959).  The  SBA  defines  these  firms  as 
 engaged  in  sanitary  services.  265  The  Census  Bureau  reports  that  a  total  of  1,214  such  firms  were  in 
 operation  for  at  least  one  year  at  the  end  of  1992.  According  to  SBA's  definition,  a  small  sanitary  service 
 firm's  gross  revenues  do  not  exceed  five  million  dollars.  266  The  Census  Bureau  reported  that  1,173  of  the 
 1,214  firms  listed  had  total  revenues  below  five  million  dollars  in  1992.  267 

 (5)  Steam  and  Air  Conditioning  Supply  (SIC  4961) 
 22.  The  SBA  defines  a  steam  and  air  conditioning  supply  utility  as  a  firm  who  produces  and/  or 
 sells  steam  and  heated  or  cooled  air.  268  The  Census  Bureau  reports  that  a  total  of  55  such  firms  were  in 
 operation  for  at  least  one  year  at  the  end  of  1992.  According  to  SBA's  definition,  a  steam  and  air 
 conditioning  supply  utility  is  a  firm  whose  gross  revenues  do  not  exceed  nine  million  dollars.  269  The 
 Census  Bureau  reported  that  30  of  the  55  firms  listed  had  total  revenues  below  nine  million  dollars  in 
 1992.  270 

 (6)  Irrigation  Systems  (SIC  4971) 
 23.  The  SBA  defines  irrigation  systems  as  firms  who  operate  water  supply  systems  for  the 
 purpose  of  irrigation.  271  The  Census  Bureau  reports  that  a  total  of  297  firms  were  in  operation  for  at  least 
 one  year  at  the  end  of  1992.  According  to  SBA's  definition,  a  small  irrigation  service  is  a  firm  whose  gross 
 revenues  do  not  exceed  five  million  dollars.  272  The  Census  Bureau  reported  that  286  of  the  297  firms  listed 
 had  total  revenues  below  five  million  dollars  in  1992.  273 
58
 Federal  Communications  Commission  FCC  99-  141 
 274  13  C.  F.  R.    121.601  (SIC  6512,  SIC  6513,  SIC  6514). 
 275  1992  Economic  Census  of  Financial,  Insurance  and  Real  Estate  Industries,  Establishment  and  Firm  Size 
 Report,  Table  4,  SIC  6512  (U.  S.  Bureau  of  the  Census  data  under  contract  to  the  Office  of  Advocacy  of  the  U.  S. 
 Small  Business  Administration)  (1992  Economic  Census  of  Financial,  Insurance  and  Real  Estate  Industries, 
 Establishment  and  Firm  Size  Report). 

 276  1992  Economic  Census  of  Financial,  Insurance  and  Real  Estate  Industries,  Establishment  and  Firm  Size 
 Report,  Table  4,  SIC  6513. 

 277  1987  SIC  Manual. 

 278  13  C.  F.  R.    121.201. 
 279  13  C.  F.  R.    121.201  (SIC  4841). 

 59 

 c.  Building  Owners  and  Managers 
 24.  Several  of  our  inquiries  in  this  Notice  of  Proposed  Rulemaking  would  affect  multiple 
 dwelling  unit  operators  and  real  estate  agents  and  managers,  if  such  inquiries  lead  to  adopted  rules.  Such 
 inquiries  include  the  following  issues:  whether  we  should  require  building  owners  who  allow  access  to  their 
 premises  to  any  telecommunications  provider  to  make  comparable  access  available  to  all  such  providers  on 
 a  nondiscriminatory  basis;  whether  we  should  forbid  telecommunications  service  providers,  under  some  or 
 all  circumstances,  from  entering  into  exclusive  contracts  with  building  owners,  and  abrogate  any  existing 
 exclusive  contracts  between  these  parties;  and  whether  we  should  adopt  rules  similar  to  those  adopted  in  the 
 video  context  under  section  207  of  the  1996  Act  protecting  the  ability  to  place  antennas  to  transmit  and 
 receive  telecommunications  signals  and  other  signals  that  were  not  covered  under  section  207. 

 (1)  Multiple  Dwelling  Unit  Operators  (SIC  6512,  SIC  6513,  SIC  6514) 
 25.  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  $5  million  or  less  in  revenue  annually.  274  According  to  the  Census  Bureau,  there 
 were  26,960  operators  of  nonresidential  buildings  generating  less  than  $5  million  in  revenue  that  were  in 
 operation  for  at  least  one  year  at  the  end  of  1992.  275  Also  according  to  the  Census  Bureau,  there  were  39,903  operators  of  apartment  dwellings  generating  less  than  $5  million  in  revenue  that  were  in  operation  for  at  least  one  year  at  the  end  of  1992.276  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. 

 (2)  Real  Estate  Agents  and  Managers  (SIC  6531) 
 26.  The  SBA  defines  real  estate  agents  and  managers  as  establishments  primarily  engaged  in  renting,  buying,  selling,  managing,  and  appraising  real 
 estate  for  others.  277  According  to  SBA's  definition,  a  small  real  estate  agent  or  manager  is  a  firm  whose  revenues  do  not  exceed  1.5  million  dollars.  278 

 d.  Multichannel  Video  Program  Distributors  (SIC  4841) 
 27.  Our  inquiry  in  this  Notice  of  Proposed  Rulemaking  regarding  whether  the  rules  governing  access  to  cable  home  wiring  for  multichannel  video 
 program  distribution  should  be  extended  to  benefit  providers  of  telecommunications  services  would  affect  operators  of  cable  and  other  pay  television  services,  if  such  inquiry 
 leads  to  the  adoption  of  rules.  The  SBA  has  developed  a  definition  of  a  small  entity  for  cable  and  other  pay  television  services,  which  includes  all  such  companies  generating 
 $11  million  or  less  in  annual  receipts.  279  This  definition  includes  cable  system  operators,  closed  circuit  television  services,  direct  broadcast  satellite  services,  multipoint 
 distribution  systems,  satellite  master  antenna  systems  and  subscription  television  services.  According  to  the  Bureau  of  the  Census,  there  were  1423  such  cable  and  other  pay 
59
 Federal  Communications  Commission  FCC  99-  141 
 280  1992  Economic  Census  Industry  and  Enterprise  Receipts  Size  Report,  Table  2D,  SIC  4841. 
 281  See  Community  Associations  Institute  Comments  in  Implementation  of  Section  207  of  the 
 Telecommunications  Act  of  1996,  CS  Docket  No.  96-  83,  Report  and  Order,  Memorandum  Opinion  and  Order,  and 
 Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd  19276,  19337  (1996). 

 282  5  U.  S.  C.    601(  5). 

 283  U.  S.  Department  of  Commerce,  Bureau  of  the  Census,  "1992  Census  of  Governments." 
 284  Id. 
 285  See  Section  III.  B.  2  supra. 
 286  See  Section  III.  D  supra. 

 60 

 television  services  generating  less  than  $11  million  in  revenue  that  were  in  operation  for  at  least  one  year  at  the  end  of  1992.280 
 e.  Neighborhood  Associations 
 28.  Our  inquiry  in  this  Notice  of  Proposed  Rulemaking  regarding  whether  we  should  adopt  rules  similar  to  those  adopted  in  the  video  context  under 
 section  207  of  the  1996  Act  protecting  the  ability  to  place  antennas  to  transmit  and  receive  telecommunications  signals  and  other  signals  that  are  not  covered  under  section  207 
 would  affect  neighborhood  associations,  if  such  inquiry  leads  to  the  adoption  of  rules.  Section  601(  4)  of  the  Regulatory  Flexibility  Act,  5  U.  S.  C.    601(  4),  defines  "small 
 organization"  as  "any  not-  for-  profit  enterprise  which  is  independently  owned  and  operated  and  is  not  dominant  in  its  field."  This  definition  includes  homeowner  and 
 condominium  associations  that  operate  as  not-  for-  profit  organizations.  The  Community  Associations  Institute  estimates  that  there  were  150,000  such  associations  in  1993.281 

 f.  Municipalities 
 29.  Our  inquiry  in  this  Notice  of  Proposed  Rulemaking  regarding  whether  we  should  adopt  rules  similar  to  those  adopted  in  the  video  context  under 
 section  207  of  the  1996  Act  protecting  the  ability  to  place  antennas  to  transmit  and  receive  telecommunications  signals  and  other  signals  that  are  not  covered  under  section  207 
 may  affect  municipalities,  if  such  inquiry  leads  to  the  adoption  of  rules.  The  term  "small  governmental  jurisdiction"  is  defined  as  "governments  of  .  .  .  districts,  with  a 
 population  of  less  than  50,000."  282  As  of  1992,  there  were  approximately  85,006  governmental  entities  in  the  United  States.  283  This  number  includes  such  entities  as  states, 
 counties,  cities,  utility  districts  and  school  districts.  Of  the  85,006  governmental  entities,  38,978  are  counties,  cities  and  towns.  The  remainder  are  primarily  utility  districts, 
 school  districts,  and  states.  Of  the  38,978  counties,  cities  and  towns,  37,566,  or  96%,  have  populations  of  fewer  than  50,000.284  The  Census  Bureau  estimates  that  this  ratio 
 is  approximately  accurate  for  all  governmental  entities.  Thus,  of  the  85,006  governmental  entities,  we  estimate  that  81,606  (96%)  are  small  entities. 

 IV.  Description  of  Projected  Reporting,  Recordkeeping,  and  Other  Compliance  Requirements 
 30.  This  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking  proposes  no  additional  reporting,  recordkeeping  or  other 
 compliance  measures. 

 V.  Steps  Taken  to  Minimize  Significant  Economic  Impact  on  Small  Entities,  and  Significant  Alternatives  Considered 
 31.  This  Notice  of  Proposed  Rulemaking  and  Third  Further  Notice  of  Proposed  Rulemaking  seeks  comment  on  how  the  proposals  and  inquiries  set  forth 
 could  impact  regulated  entities,  including  small  entities.  For  example,  with  respect  to  our  Section  224  proposal,  we  seek  comment  on  whether  an  overly  broad  construction  of 
 utility  ownership  or  control  would  impose  unreasonable  burdens  on  building  owners,  including  small  building  owners,  or  compromise  their  ability  to  ensure  the  safe  use  of 
 rights-  of-  way  or  conduit,  or  engender  other  practical  difficulties.  285  In  addition,  with  respect  to  our  inquiry  into  building  owner  obligations,  we  seek  comment  on  whether  we 
 should  limit  the  scope  of  any  building  owner  obligation  in  order  to  avoid  imposing  unreasonable  regulatory  burdens  on  building  owners,  and  we  suggest  that  a  potential  rule 
 could  exempt  buildings  that  house  fewer  than  a  certain  number  of  tenants  or  are  under  a  certain  size.  286  Commenters  are  invited  to  address  the  economic  impact  of  all  of  our 
 proposals  on  small  entities  and  offer  any  alternatives. 

 VI.  Federal  Rules  that  May  Duplicate,  Overlap,  or  Conflict  with  the  Proposed  Rules 
 32.  None. 
60
 Federal  Communications  Commission  FCC  99-  141 
 61 
 June  10,  1999 
 Separate  Statement 
 of 
 Commissioner  Susan  Ness 

 Re:  Promotion  of  Competitive  Networks  in  Local  Telecommunications  Markets;  Implementation  of  the  Local  Competition  Provisions  in  the 
 Telecommunications  Act  of  1996;  Wireless  Communications  Association  International,  Inc.  Petition 
 For  Rulemaking  to  Amend  Section  1.4000  of  the  Commissions  Rules  to  Preempt  Restrictions  on  Subscriber  Premises  Reception  or  Transmission 
 antennas  Designed  to  Provide  Fixed  Wireless  Services 

 This  Notice  grapples  with  a  critical  component  of  the  competitive  landscape  --  the  ability  of  wireless  carriers  to  gain  access  to  essential  communications  facilities  to  serve 
 tenants  in  multi-  dwelling  buildings.  Multi-  dwelling  customers  represent  a  substantial  portion  of  the  residential  and  business  population.  Access  to  these  customers,  therefore, 
 is  a  pivotal  part  of  the  business  plan  of  many  competitive  carriers. 

 The  proposals  in  this  Notice  are  aggressive,  but  reflect  the  pro-  competitive  spirit  imbued  in  the  Telecommunications  Act  of  1996,  and  I  am  pleased  to  support  this  initiative.  I 
 write  separately,  however,  to  voice  my  concern  over  one  proposal:  imposing  a  nondiscrimination  building  access  requirement  on  building  owners.  Under  this  proposal,  once  a 
 building  owner  allows  a  telecommunications  provider  access  to  its  premises,  the  building  owner  must  make  comparable  access  available  to  all  other  telecommunications  carriers 
 under  nondiscriminatory  rates,  terms  and  conditions. 

 While  well  intended,  the  concept  would  impose  a  new  regulation  on  building  owners  --  a  class  of  persons  not  otherwise  regulated  by  the  Commission.  Less  than  a  year  ago, 
 the  Commission  considered  a  similar  issue.  In  the  OTARD  Second  Report  &  Order,  the  Commission  declined  to  impose  an  affirmative  obligation  on  building  owners  to  allow 
 a  tenant  access  to  building  common  and  rooftop  areas  for  the  placement  of  over  the  air  video  reception  devices.  In  that  proceeding,  the  Commission  expressed  its  reluctance  to 
 use  its  express  authority  under  Section  207  of  the  Telecommunications  Act  of  1996,  which  was  limited  to  prohibiting  regulations  that  impair  a  viewer's  ability  to  receive  video 
 programming  through  devices  designed  for  over  the  air  reception  as  a  basis  for  imposing  obligations  on  how  building  owners  should  use  their  private  property.  I  have  difficulty 
 distinguishing  that  precedent  from  the  instant  case. 

 Moreover,  where  constitutional  rights  are  at  stake,  judicial  precedent  informs  us  that  the  courts  do  not  favor  the  imposition  of  obligations  by  a  federal  administrative  agency 
 which  relies  on  ancillary  jurisdiction.  Rather,  this  may  be  one  area  that  is  better  served  by  a  legislative  solution.  Notwithstanding  these  reservations,  I  enthusiastically  support 
 this  Notice,  and  look  forward  to  a  spirited  debate  on  the  issue  of  the  Commissions  authority  to  impose  nondiscrimination  obligations  on  building  owners. 
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 Federal  Communications  Commission  FCC  99-  141 
 62  62 
 Statement  of  Commissioner  Harold  Furchtgott-  Roth, 
 Concurring  in  Part  and  Dissenting  in  Part 

 In  the  Matter  of  Promotion  of  Competitive  Networks  in  Local  Telecommunications  Markets  (WT  Docket  No.  99-  217);  Implementation  of  the 
 Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996  (CC  Docket  No.  96-  98);  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;  Cellular  Telecommunications  Industry 
 Association  Petition  for  Rule  Making  and  Amendment  of  the  Commission's  Rules  to  Preempt  State  and  Local  Imposition  of  Discriminatory 
 And/  Or  Excessive  Taxes  and  Assessments 

 Today's  decision  initiating  a  proceeding  to  promote  the  establishment  of  competitive  networks  in  local  telecommunications  networks  has  a  number  of 
 laudable  aspects.  In  particular,  I  applaud  our  efforts  to  develop  a  record  to  assist  us  in  determining  the  precise  contours  of  Section  224  of  the  Act,  47  U.  S.  C.    224, 
 which  requires  that  utilities  owning  or  controlling  poles,  ducts,  conduits  and  rights  of  way  provide  access  on  reasonable  and  non-  discriminatory  terms  to  cable 
 television  systems  and  telecommunications  carriers  (other  than  incumbent  local  exchange  carriers).  I  urge  this  Commission  to  take  prompt  action  on  this  issue  so  that 
 fixed  wireless  and  other  providers  attempting  to  enter  the  local  market  have  certainty  as  to  the  boundaries  of  that  provision. 

 I  am  deeply  troubled,  however,  by  two  aspects  of  this  proceeding.  First,  the  Commission  decides  today  to  seek  comment  on  whether  building  owners 
 permitting  access  to  any  telecommunications  provider  must  make  comparable  access  available  to  all  such  providers  under  nondiscriminatory  terms  and  conditions. 
 As  authority  for  such  action,  today's  decision  posits  that  most  slender  of  reeds:  the  Commission's  ancillary  jurisdiction  under  Sections  4(  i)  and  Sections  303(  r)  of  the 
 Act,  47  U.  S.  C.    154(  i),  303(  r).  But  as  Bell  Atlantic  v.  FCC,  24  F.  3rd  1441  (D.  C.  Cir.  1994)  instructs,  this  Commission  must  be  vigilant  in  overstepping  its 
 authority  where  private  property  rights  are  implicated,  being  careful  not  to  regulate  where  it  does  not  have  specific  statutory  authority  --  regardless  of  whether  such 
 regulation  constitutes  commendable  public  policy.  I  fear  that  today's  proposal,  if  ultimately  adopted  by  the  Commission,  may  stray  outside  this  agency's  jurisdictional 
 boundaries. 

 The  second  area  which  causes  me  great  concern  is  the  Commission's  apparent  inclination  to  deal  piecemeal  with  the  Supreme  Court's  recent  remand  of 
 our  rules  implementing  Section  251  of  the  Act,  47  U.  S.  C.    251.  The  Commission  recently  issued  a  further  notice  of  proposed  rulemaking  to  deal  with  the  issues 
 raised  by  the  remand.  Yet,  in  this  proceeding,  the  Commission  requests  comment  on  whether  unbundled  access  to  riser  cable  and  wiring  within  multiple  tenant 
 environments  meets  the  requirements  of  Section  251.  Although  we  do  state  that  we  will  apply  our  decisions  in  the  remand  proceeding  to  the  issue  of  riser  cable  and 
 wiring  in  multiple  tenant  environments  presented  here,  the  better  course  of  action  in  my  judgment  would  be  to  consider  all  issues  pertaining  to  unbundled  network 
 elements  in  one  proceeding. 
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 Federal  Communications  Commission  FCC  99-  141 
 63 
 SEPARATE  STATEMENT  OF  COMMISSIONER  MICHAEL  K.  POWELL,  CONCURRING 
 Re:  Promotion  of  Competitive  Networks  in  Local  Telecommunications  Markets;  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act 
 of  1996;  and  Cellular  Telecommunications  Industry  Association  Petition  for  Rule  Making  and  Amendment  of  the  Commission's  Rules  to  Preempt  State  and 
 Local  Imposition  of  Discriminatory  and/  or  Excessive  Taxes  and  Assessments  (CC  Docket  No.  96-  98) 

 I  whole-  heartedly  support  taking  all  appropriate  steps  to  promote  local  competition.  And,  I  commend  the  Wireless  Bureau  staff  for  their  initiative  in 
 identifying  the  specific  issues  in  this  item  and  commencing  this  proceeding  to  examine  them  further.  I  do,  however,  have  grave  concerns  about  a  couple  components 
 in  this  item. 

 First,  under  judicial  precedent,  this  agency  should  not  move  toward  rules  that  would  effectuate  a  per  se  taking  without  specific  authority  to  do  so.  See 
 Bell  Atlantic  Telephone  Co.  v.  FCC,  24  F.  3d  1441  (D.  C.  Cir.  1994).  Here,  it  seems  that  we  propose  to  do  just  that.  We  have  no  specific  statutory  provision  that 
 directs,  or  empowers,  us  to  assert  regulatory  authority  over  owners  of  private  property.  Instead,  this  item  proposes  to  rely  solely  on  ancillary  jurisdiction. 
 Assuming  one  believes  it  is  permissible  to  use  such  plenary  jurisdiction  to  regulate  a  building  owner  or  landlord,  those  powers  seem  to  lack  the  specificity  the  law 
 requires  before  treading  onto  constitutionally  protected  turf. 

 Moreover,  this  proposed  rulemaking  stands  in  stark  contrast  to  our  recent  consideration  of  the  limits  of  our  authority  when  the  rights  of  property  owners 
 are  involved.  Specifically,  we  refused  to  go  beyond  the  language  of  Section  207  of  the  Telecommunications  Act  of  1996  regarding  the  placement  of  over-  the-  air 
 reception  devices  on  common  and  restricted  access  property  because  of  constitutional  and  statutory  authority  concerns.  Implementation  of  Section  207  of  the 
 Telecommunications  Act  of  1996,  CS  Docket  No.  96-  83,  Second  Report  and  Order,  13  FCC  Rcd  23874,  23894-  97,    39-  45  (1998)  (OTARD  proceeding) 
 (  because  there  is  a  strong  argument  that  modifying  our  Section  207  rules  to  cover  common  and  prohibited  access  property  would  create  an  identifiable  class  of  per 
 se  takings,  and  there  is  no  compensation  mechanism  authorized  by  the  statute,  we  conclude  that  Section  207  does  not  authorize  us  to  make  such  a  modification 
 (relying  on  Loretto  v.  Teleprompter  Manhattan  CATV  Corp.,  458  U.  S.  419  (1982))).  Yet  here,  we  lack  a  provision  analogous  to  Section  207,  but  nevertheless 
 contemplate  requiring  nondiscriminatory  access  to  privately  owned  rooftops  and  other  areas  a  seemingly  greater  intrusion  into  the  rights  of  property  owners  than 
 we  could  stomach  in  the  OTARD  proceeding.  In  the  context  of  a  likely  takings  under  the  Fifth  Amendment,  this  is  not  an  area  where  we  should  be  pushing  the 
 envelope  of  our  ancillary  statutory  authority  without,  at  least,  being  certain  we  have  exhausted  other  alternatives. 

 Even  though  my  mind  remains  open  to  what  commenters  present,  the  door  is  open  only  a  sliver.  We  may  eventually  win  an  ancillary  jurisdiction 
 argument  in  court  against  the  building  owners  and  landlords,  but  it  does  not  seem  like  good  policy  to  propose  a  new  regulatory  dictate  on  these  entities  before  other 
 measures  to  evaluate  the  problem  or  pursue  other  non-  regulatory  initiatives  prove  inadequate.  Nevertheless,  I  will  concur  with  asking  the  questions  we  do  in  this 
 item,  anticipating  an  end  result    based  on  the  record    that  is  consistent  with  the  law. 

 My  second  area  of  concern  is  the  proposal  to  consider  requiring  incumbent  LECs  to  make  available  unbundled  access  to  riser  cable  and  wiring  they 
 control  within  multiple  tenant  environments  pursuant  to  section  251(  c)(  3)  of  the  1996  Act.  I  feel  strongly  about  our  duty  to  faithfully  and  quickly  implement  the 
 Supreme  Court's  remand  of  the  Commission's  unbundled  network  element  rule  (the  so-  called  Rule  319).  I  am  therefore  concerned  about  adding  yet  another  possible 
 network  element  to  a  list  that  the  Supreme  Court  struck  down  without  the  thorough  and  thoughtful  interpretation  and  application  of  the  "necessary"  and  "impair" 
 standards  of  section  251(  d)(  2). 

 I  will  not  object  to  the  inclusion  of  this  issue  in  this  item  since  it  basically  defers  to  the  UNE  remand  proceeding,  but  I  am  troubled  by  the  growing  list  of 
 UNEs  that  we  put  out  for  comment  before  we  implement  the  limiting  principle  as  Congress  and  the  Court  required. 
63