Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 61193

Information Center, shall send a copy of 

this Notice of Proposed Rulemaking,

including the Initial Regulatory 

Flexibility Analysis, to the Chief 

Counsel for Advocacy of the Small 

Business Administration.

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary.

[FR Doc. 04–23192 Filed 10–14–04; 8:45 am] 

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 76 

[CS Docket No. 95–184; MM Docket No. 92–

260; FCC 04–228] 

Telecommunications Services Inside 

Wiring, Customer Premises Equipment 

and Implementation of the Cable 

Television Consumer Protection and 

Competition Act of 1992: Cable Home 

Wiring

AGENCY: Federal Communications 

Commission.

ACTION: Proposed rule.

SUMMARY: In this document, the 

Commission addresses an amendment 

to a Note in its rules to include wiring 

behind sheet rock as an example, along 

with wiring located behind brick, metal 

conduit or cinder blocks, as wiring 

considered to be ‘‘physically 

inaccessible’’ as that term is used 

regarding the Commission’s cable 

television inside wiring rules. The 

consequence of that conclusion is to 

move the point at which a competing 

multichannel video programming 

distributor (‘‘MVPD’’) can gain access to 

wiring located behind sheet rock closer 

to the incumbent cable operator’s 

junction box, thereby facilitating 

competition between MVPD providers 

to serve an MDU. The Court of Appeals 

found that the Commission offered no 

reasoned basis for the amendment to 

add sheet rock and remanded the case 

back to the Commission for further 

consideration. This document seeks 

additional comment from interested 

parties regarding the Commission’s 

conclusion that cable wiring located 

behind sheet rock is ‘‘physically 

inaccessible’’ as that term is used in our 

rules.

DATES: Comments are due November 15, 

2004 and reply comments are due 

December 6, 2004.

ADDRESSES: Federal Communications 

Commission, 445 12th Street, SW., 

Washington, DC 20554. See 

Supplementary Information for filing 

instructions.

FOR FURTHER INFORMATION CONTACT:

Karen A. Kosar, Media Bureau at (202) 

418–1053 or via internet at 

karen.kosar@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Further 

Notice of Proposed Rule Making 

(FNPRM), CS Docket No. 95–184 and 

MM Docket No. 92–260, adopted 

September 22, 2004 and released 

September 29, 2004. The full text is 

available for inspection and copying 

during normal business hours in the 

FCC Reference Center, Federal 

Communications Commission, 445 12th 

Street, SW, CY–A267, Washington, DC 

20554. Persons with disabilities who 

need assistance in the FCC Reference 

center may contact Bill Cline at (202) 

418–0267 (voice), (202) 418–7365 

(TTY), or bcline@fcc.gov. Documents are 

also available from the Commission’s 

Electronic Comment Filing System. 

Documents are available electronically 

in ASCII, Word 97, and Adobe Acrobat. 

Copies of documents also may be 

obtained from Best Copy and Printing, 

Inc., Portals II, 445 12th Street, SW., 

Room CY–B402, Washington, DC 20554, 

telephone (202) 488–5300 or (800) 378–

3160, e-mail fcc@bcpiweb.com, or via its 

Web site http:// www.bcpiweb.com. To 

request materials in accessible formats 

for people with disabilities (Braille, 

large print, electronic files, audio 

format), send an e-mail to 

fcc504@fcc.gov or call consumer and 

Governmental Affairs Bureau at 202–

418–0531 (voice), 202–418–7365 (TTY). 

1. This Further Notice of Proposed 

Rule Making (FNPRM) is issued in 

response to a decision issued by the 

United States Court of Appeals for the 

District of Columbia Circuit regarding 

amendment of the Commission’s cable 

television inside wiring rules. In the 

First Order on Reconsideration and 

Second Report and Order in the 

proceeding, the Commission, in part, 

modified its rules to provide that home 

run wiring located behind sheet rock is 

considered to be physically inaccessible 

for purposes of determining the 

demarcation point between home wiring 

and home run wiring. At issue in the 

Appeals Court decision is the 

Commission’s amendment of the Note to 

§ 76.5(mm)(4) of the Commission’s rules 

to indicate that wiring embedded in 

sheet rock would be considered 

physically inaccessible. Prior to its 

Reconsideration Order and amendment 

of the Note to § 76.5(mm)(4), the 

Commission determined under its 

definition of ‘‘physically inaccessible,’’

for example, that wiring embedded in 

brick, metal conduit or cinder blocks 

would likely be physically inaccessible; 

wiring simply enclosed within hallway 

molding would not. By expanding the 

Note to § 76.5(mm)(4) to include sheet 

rock in its Reconsideration Order, the 

Court of Appeals found that the 

Commission offered no reasoned basis 

for the amendment and remanded the 

case to the Commission for further 

consideration. 

2. In response to the Court’s decision, 

the FNPRM seeks additional comment 

on whether accessing inside wiring 

behind sheet rock (1) will involve 

significant modification of or damage to 

preexisting structural elements and (2) 

will add significantly to the difficulty 

and cost of wiring an MDU. The FNPRM 

seeks comment as to whether our 

conclusions in general as stated in the 

Reconsideration Order with regard to 

§ 76.5(mm)(4) of the rules and the 

applicable Note are correct. In addition, 

the FNPRM seeks comment as to 

whether there is an additional or more 

appropriate standard that would 

support the amendment of our rule in 

light of the Court’s remand. The FNPRM 

also seeks comment as to whether any 

specific language changes or 

eliminations should be made to our 

rule. 

I. Procedural Matters 

A. Initial Regulatory Flexibility Analysis 

3. As required by the Regulatory 

Flexibility Act, the Commission has 

prepared an Initial Regulatory 

Flexibility Analysis (IRFA) of the 

possible significant economic impact on 

a substantial number of small entities of 

the proposals addressed in this 

document. The IRFA is set forth in the 

below. Written public comments are 

requested on the IRFA. These comments 

must be filed in accordance with the 

same filing deadlines for comments on 

the FNPRM, and they should have a 

separate and distinct heading 

designating them as responses to the 

IRFA. 

B. Paperwork Reduction Act 

4. This FNPRM does not contain 

proposed information collections 

subject to the Paperwork Reduction Act 

of 1995 (‘‘PRA’’), Public Law 104–13. In 

addition, therefore, it does not contain 

any new or modified ‘‘information 

collection burden for small business 

concerns with fewer than 25 

employees,’’ pursuant to the Small 

Business Paperwork Relief Act of 2002, 

Public Law 107–198, see 44 U.S.C. 

3506(c)(4). 

61194 Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 

C. Ex Parte Rules—Permit-but-Disclose 

5. This is a permit-but-disclose notice 

and comment rulemaking proceeding. 

Ex parte presentations are permitted, 

except during the Sunshine Agenda 

period, provided that they are disclosed 

as provided in the Commission’s rules. 

See generally 47 CFR 1.1202, 1.1203, 

and 1.1206.

D. Comment Information 

6. Pursuant to §§ 1.415 and 1.419 of 

the Commission’s rules, 47 CFR 1.415, 

1.419, interested parties may file 

comments on or before November 15, 

2004 and reply comments on or before 

December 6, 2004. Comments may be 

filed using the Commission’s Electronic 

Comment Filing System (ECFS) or by 

filing paper copies. See Electronic Filing 

of Documents in Rulemaking 

Proceedings, 63 Fed. Reg. 24121 (1998). 

7. Comments filed through the ECFS 

can be sent as an electronic file via the 

Internet to http://www.fcc.gov/e-file/

ecfs.html. Generally, only one copy of 

an electronic submission must be filed. 

If multiple docket or rulemaking 

numbers appear in the caption of this 

proceeding, however, commenters must 

transmit one electronic copy of the 

comments to each docket or rulemaking 

number referenced in the caption. In 

completing the transmittal screen, 

commenters should include their full 

name, U.S. Postal Service mailing 

address, and the applicable docket or 

rulemaking number. Parties may also 

submit an electronic comment by 

Internet e-mail. To get filing instructions 

for e-mail comments, commenters 

should send an e-mail to ecfs@fcc.gov, 

and should include the following words 

in the body of the message, ‘‘get form 

<your e-mail address>.’’ A sample form 

and directions will be sent in reply. 

Parties who choose to file by paper must 

file an original and four copies of each 

filing. If more than one docket or 

rulemaking number appears in the 

caption of this proceeding, commenters 

must submit two additional copies for 

each additional docket or rulemaking 

number. Filings can be sent by hand or 

messenger delivery, by commercial 

overnight courier, or by first-class or 

overnight U.S. Postal Service mail 

(although we continue to experience 

delays in receiving U.S. Postal Service 

mail). The Commission’s contractor, 

Natek, Inc., will receive hand-delivered 

or messenger-delivered paper filings for 

the Commission’s Secretary at 236 

Massachusetts Avenue, NE., Suite 110, 

Washington, DC, 20002. The filing 

hours at this location are 8 a.m. to 7 

p.m. All hand deliveries must be held 

together with rubber bands or fasteners. 

Any envelopes must be disposed of 

before entering the building. 

Commercial overnight mail (other than 

U.S. Postal Service Express Mail and 

Priority Mail) must be sent to 9300 East 

Hampton Drive, Capitol Heights, MD 

20743. U.S. Postal Service first-class 

mail, Express Mail, and Priority Mail 

should be addressed to 445 12th Street, 

SW., Washington, DC, 20554. All filings 

must be addressed to the Commission’s 

Secretary, Office of the Secretary, 

Federal Communications Commission. 

8. Parties also must serve either one 

copy of each filing via e-mail or two 

paper copies to Best Copy and Printing, 

Inc., Portals II, 445 12th Street, SW., 

Room CY–B402, Washington, DC, 

20554, telephone (202) 488–5300 or 

(800) 378–3160, e-mail 

fcc@bcpiweb.com, or via its Web site at 

http://www.bcpiweb.com. In addition, 

parties should serve one copy of each 

filing via e-mail or one paper copy to 

Karen Kosar, Media Bureau, 445 12th 

Street, SW., 4–C453, Washington, DC, 

20554. Washington, DC, 20554. 

II. Initial Regulatory Flexibility 

Analysis 

9. As required by the Regulatory 

Flexibility Act of 1980, as amended 

(‘‘RFA’’), the Commission has prepared 

this Initial Regulatory Flexibility 

Analysis (‘‘IRFA’’) of the possible 

significant economic impact on small 

entities by the policies and rules 

addressed in the Further Notice of 

Proposed Rulemaking (‘‘FNPRM’’). 

Written comments are requested on this 

IRFA. Comments must be identified as 

responses to the IRFA and must be filed 

in accordance with the same filing 

deadlines for comments on the FNPRM.

A. Need for and Objectives of the 

Further Notice of Proposed Rulemaking 

10. This FNPRM is initiated in 

response to a decision issued by the 

United States Court of Appeals for the 

District of Columbia regarding 

amendment of the Commission’s cable 

television inside wiring rules. In its 

First Order on Reconsideration and 

Second Report and Order in this 

proceeding, the Commission modified 

its rules to provide that home run 

wiring located behind sheet rock is 

considered to be physically inaccessible 

for purposes of determining the 

demarcation point between home wiring 

and home run wiring in multiple 

dwelling units (‘‘MDUs’’). Specifically, 

the Commission amended the Note to 

§ 76.5(mm)(4) of the rules to include 

wiring behind sheet rock as an example, 

along with wiring located behind brick, 

metal conduit or cinder blocks, as 

wiring considered to be ‘‘physically 

inaccessible’’ as that term is used in 

§ 76.5(mm)(4) of the rules and the 

appended Note. The consequence of 

that conclusion is to move the point at 

which a competing multichannel video 

programming distributor (‘‘MVPD’’) can 

gain access to wiring located behind 

sheet rock closer to the incumbent cable 

operator’s junction box, thereby 

facilitating competition between MVPD 

providers to serve an MDU. The Court 

of Appeals found that the Commission 

offered no reasoned basis for the 

amendment to add sheet rock as an 

example of material to be considered as 

a ‘‘preexisting structural element’’ in 

defining physical inaccessibility and 

remanded the case to the Commission 

for further consideration. 

B. Description and Estimate of the 

Number of Small Entities Impacted 

11. The RFA directs agencies to 

provide a description of, and where 

feasible, an estimate of the number of 

small entities that may be affected by 

the proposed rules and policies, if 

adopted. The RFA generally defines the 

term ‘‘small entity’’ as having the same 

meaning as the terms ‘‘small business,’’

‘‘small organization,’’ and ‘‘small 

governmental jurisdiction.’’ In addition, 

the term ‘‘small business’’ has the same 

meaning as the term ‘‘small business 

concern’’ under the Small Business Act. 

A ‘‘small business concern’’ is one 

which: (1) Is independently owned and 

operated; (2) is not dominant in its field 

of operation; and (3) satisfies any 

additional criteria established by the 

SBA. 

12. Cable and Other Program 

Distribution. This category includes 

cable systems operators, closed circuit 

television services, direct broadcast 

satellite services, multipoint 

distribution systems, satellite master 

antenna systems, and subscription 

television services. The SBA has 

developed a small business size 

standard for this census category, which 

includes all such companies generating 

$12.5 million or less in revenue 

annually. According to Census Bureau 

data for 1997, there were a total of 1,311 

firms in this category, total, that had 

operated for the entire year. Of this 

total, 1,180 firms had annual receipts of 

under $10 million and an additional 52 

firms had receipts of $10 million or 

more but less than $25 million. 

Consequently, the Commission 

estimates that the majority of providers 

in this service category are small 

businesses that may be affected by the 

rules and policies involved herein. 

13. Cable System Operators (Rate 

Regulation Standard). The Commission 

has developed its own small business 

Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 61195

size standard for cable system operators, 

for purposes of rate regulation. Under 

the Commission’s rules, a ‘‘small cable 

company’’ is one serving fewer than 

400,000 subscribers nationwide. The 

most recent estimates indicate that there 

were 1,439 cable operators who 

qualified as small cable system 

operators at the end of 1995. Since then, 

some of those companies may have 

grown to serve over 400,000 subscribers, 

and others may have been involved in 

transactions that caused them to be 

combined with other cable operators. 

Consequently, the Commission 

estimates that there are now fewer than 

1,439 small entity cable system 

operators that may be affected by the 

rules and policies involved herein. 

14. Cable System Operators (Telecom 

Act Standard). The Communications 

Act of 1934, as amended, also contains 

a size standard for small cable system 

operators, which is ‘‘a cable operator 

that, directly or through an affiliate, 

serves in the aggregate fewer than 1 

percent of all subscribers in the United 

States and is not affiliated with any 

entity or entities whose gross annual 

revenues in the aggregate exceed 

$250,000,000.’’ The Commission has 

determined that there are 67,700,000 

subscribers in the United States. 

Therefore, an operator serving fewer 

than 677,000 subscribers shall be 

deemed a small operator, if its annual 

revenues, when combined with the total 

annual revenues of all its affiliates, do 

not exceed $250 million in the 

aggregate. Based on the available data, 

the Commission estimates that the 

number of cable operators serving 

677,000 subscribers or fewer, totals 

1,450. The Commission neither requests 

nor collects information on whether 

cable system operators are affiliated 

with entities whose gross annual 

revenues exceed $250 million, and 

therefore are unable, at this time, to 

estimate more accurately the number of 

cable system operators that would 

qualify as small cable operators under 

the size standard contained in the 

Communications Act of 1934. 

15. Cable Television Relay Service.

This service includes transmitters 

generally used to relay cable 

programming within cable television 

system distribution systems. The SBA 

has defined a small business size 

standard for Cable and other Program 

Distribution, consisting of all such 

companies having annual receipts of no 

more than $12.5 million. According to 

Census Bureau data for 1997, there were 

1,311 firms in the industry category 

Cable and Other Program Distribution, 

total, that operated for the entire year. 

Of this total, 1,180 firms had annual 

receipts of $10 million or less, and an 

additional 52 firms had receipts of $10 

million or more but less than $25 

million. Thus, under this standard, we 

estimate that the majority of providers 

in this service category are small 

businesses that may be affected by the 

rules and policies involved herein. 

16. Local Multipoint Distribution 

Service. Local Multipoint Distribution 

Service (LMDS) is a fixed broadband 

point-to-multipoint microwave service 

that provides for two-way video 

telecommunications. The auction of the 

986 Local Multipoint Distribution 

Service (LMDS) licenses began on 

February 18, 1998 and closed on March 

25, 1998. The Commission established a 

small business size standard for LMDS 

licenses as an entity that has average 

gross revenues of less than $40 million 

in the three previous calendar years. An 

additional small business size standard 

for ‘‘very small business’’ was added as 

an entity that, together with its affiliates, 

has average gross revenues of not more 

than $15 million for the preceding three 

calendar years. The SBA has approved 

these small business size standards in 

the context of LMDS auctions. There 

were 93 winning bidders that qualified 

as small entities in the LMDS auctions. 

A total of 93 small and very small 

business bidders won approximately 

277 A Block licenses and 387 B Block 

licenses. On March 27, 1999, the 

Commission re-auctioned 161 licenses; 

there were 32 small and very small 

businesses winning that won 119 

licenses. 

17. Multipoint Distribution Service, 

Multichannel Multipoint Distribution 

Service, and Instructional Television 

Fixed Service. Multichannel Multipoint 

Distribution Service (MMDS) systems, 

often referred to as ‘‘wireless cable,’’

transmit video programming to 

subscribers using the microwave 

frequencies of the Multipoint 

Distribution Service (MDS) and 

Instructional Television Fixed Service 

(ITFS). In connection with the 1996 

MDS auction, the Commission defined 

‘‘small business’’ as an entity that, 

together with its affiliates, has average 

gross annual revenues that are not more 

than $40 million for the preceding three 

calendar years. The SBA has approved 

of this standard. The MDS auction 

resulted in 67 successful bidders 

obtaining licensing opportunities for 

493 Basic Trading Areas (BTAs). Of the 

67 auction winners, 61 claimed status as 

a small business. At this time, we 

estimate that of the 61 small business 

MDS auction winners, 48 remain small 

business licensees. In addition to the 48 

small businesses that hold BTA 

authorizations, there are approximately 

392 incumbent MDS licensees that have 

gross revenues that are not more than 

$40 million and are thus considered 

small entities. 

18. In addition, and as noted supra, 

the SBA has developed a small business 

size standard for Cable and Other 

Program Distribution, which includes 

all such companies generating $12.5 

million or less in annual receipts. 

According to Census Bureau data for 

1997, there were a total of 1,311 firms 

in this category, total, that had operated 

for the entire year. Of this total, 1,180 

firms had annual receipts of under $10 

million, and an additional 52 firms had 

receipts of $10 million or more but less 

than $25 million. Consequently, we 

estimate that the majority of providers 

in this service category are small 

businesses that may be affected by the 

proposed rules and policies. 

19. Finally, while SBA approval for a 

Commission-defined small business size 

standard applicable to ITFS is pending, 

educational institutions are included in 

this analysis as small entities. There are 

currently 2,032 ITFS licensees, and all 

but 100 of these licenses are held by 

educational institutions. Thus, we 

tentatively conclude that at least 1,932 

ITFS licensees are small businesses.

20. Open Video Services. Open Video 

Service (OVS) systems provide 

subscription services. The SBA has 

created a small business size standard 

for Cable and Other Program 

Distribution. This standard provides 

that a small entity is one with $12.5 

million or less in annual receipts. The 

Commission has certified approximately 

100 OVS operators to serve 75 areas, 

and some of these are currently 

providing service. Affiliates of 

Residential Communications Network, 

Inc. (RCN) received approval to operate 

OVS systems in New York City, Boston, 

Washington, D.C., and other areas. RCN 

has sufficient revenues to assure that 

they do not qualify as a small business 

entity. Little financial information is 

available for the other entities that are 

authorized to provide OVS and are not 

yet operational. Given that some entities 

authorized to provide OVS service have 

not yet begun to generate revenues, the 

Commission concludes that those OVS 

operators remaining might qualify as 

small businesses that may be affected by 

the rules and policies proposed herein. 

C. Description of Projected Recording, 

Recordkeeping, and Other Compliance 

Requirements 

21. The retention or deletion of the 

word ‘‘sheet rock’’ to the Note to 

§ 76.5(mm)(4) of the Commission’s rules 

would not impose any additional 

reporting or recordkeeping 

61196 Federal Register / Vol. 69, No. 199 / Friday, October 15, 2004 / Proposed Rules 

requirements. With regard to other 

compliance requirements, we note as 

indicated above, that the FNPRM is 

initiated in response to a decision 

issued by the United States Court of 

Appeals for the District of Columbia 

regarding amendment of the 

Commission’s cable television inside 

wiring rules. The Court seeks support 

for the Commission’s decision to add 

wiring behind sheet rock as an example 

of wiring considered to be ‘‘physically 

inaccessible’’ as that term is defined by 

§ 76.5(mm)(4) of the Commission’s rules 

and the appended Note. As stated, the 

consequence of the Commission’s 

underlying decision is to move the point 

at which a competing video provider 

can gain access to wiring located behind 

sheet rock closer to the incumbent cable 

operator’s junction box, thereby 

facilitating competition between video 

providers to serve an MDU. 

22. No alternatives to our proposal 

herein are mentioned because we do not 

anticipate a negative impact on smaller 

entities. However, we welcome 

comment on modifications of the 

Commission’s conclusions if based on 

evidence of potential differential 

impact. 

D. Steps Taken To Minimize Significant 

Impact on Small Entities and 

Significant Alternatives Considered 

23. The RFA requires an agency to 

describe any significant alternatives that 

it has considered in reaching its 

proposed approach, which may include 

the following four alternatives: (1) The 

establishment of differing compliance or 

reporting requirements or timetables 

that take into account the resources 

available to small entities; (2) the 

clarification, consolidation, or 

simplification of compliance or 

reporting requirements under the rule 

for small entities; (3) the use of 

performance, rather than design 

standards; and (4) an exemption from 

coverage of the rule, or any part thereof, 

for small entities. 

E. Federal Rules Which Duplicate, 

Overlap, or Conflict With the 

Commission’s Rules and Policies Herein 

24. None. 

III. Ordering Clauses 

25. It is ordered that, pursuant to 

sections 1, 4(i), 601, 623, 624, and 632 

of the Communications Act of 1934, as 

amended, 47 U.S.C. 151, 154(i), 521, 

543, 544 and 552 comment is hereby 

sought on the analysis, questions, 

discussions and statement of issues in 

this Further Notice of Proposed 

Rulemaking. 

26. It is further ordered that the 

Commission’s Consumer and 

Governmental Affairs Bureau, Reference 

Information Center, shall send a copy of 

the Further Notice of Proposed 

Rulemaking, including the IRFA, to the 

Chief Counsel for Advocacy of the Small 

Business Administration.

Federal Communications Commission. 

Marlene H. Dortch, 

Secretary.

[FR Doc. 04–23186 Filed 10–14–04; 8:45 am] 

BILLING CODE 6712–01–P