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Multiple Dwelling Unit (MDU) owners seek to provide quality telecommunications services for residents. To do so owners must select providers and contract with them in ways that maximize the utilization of building resources including grounds, wiring, conduit, et cetera to assure quality service and financial return. Some providers increasingly seek to distribute services as they see fit, diminishing owner control, regardless of existing contracts or owner preference. Variations on this theme have been encountered nationwide and pursued by numerous franchised cable companies, MSOs. This memorandum seeks to address this situation and provide guidance to owners and Private Communications Providers (PCOs) to protect their rights and the interests of residents and clients.
Questions Raised By IMCC Members:
(IMCC Members are invited to submit additional questions that will be added to the list and addressed in further additions to this memorandum)
Table of Contents
1. I get confused, what are the types of wiring in MDUs and what are the laws/regulations governing their use?
Types of wiring in MDUs and regulation of their use
1. Video cable infrastructure for MDU service encompasses several elements:
First, MSO coaxial cable running from the street to one or more lockboxes or pedestals within an MDU building is commonly termed infrastructure or distribution wiring. That is also the term for cable laid between buildings in a complex. Distribution wiring is not addressed by FCC rules. Pursuant to state real property or fixture law it is owned by the entity that installed it, usually the MSO, unless ownership has been transferred to the MDU owner or an alternative provider. For new builds, MDUs should install and own this wiring, or at least negotiate a buy-out of the distribution wiring from the cable operator on any termination of the agreement. A reasonable buyout price should not exceed $50/unit. The installation of a shadow conduit in the joint trench is another method to protect the property from being held hostage for distribution wiring.
Second, home run wiring runs from the lock box/pedestal/junction box/drop box to the “demarcation point” located 12 inches outside of each individual unit. Its ownership is governed by FCC’s MDU Inside Wiring Rules, 47 C.F.R. § 76.804. (See IMCC-Online.org for the Rules and a Primer of explanation) Where this wiring is “physically inaccessible” at the 12-inch point, the demarcation point is located where the wiring first becomes accessible. See answer for Question M. The FCC rules allow ownership of cable home run wiring to transfer to an alternative provider or to the MDU owner on a building-by-building (47 C.F.R. §76.804(a)) or a unit-by-unit (47 C.F.R. § 76.804(b) basis when the incumbent MSO has no “legally enforceable right to remain on the premises,” meaning the service contract or right-of-entry (ROE) agreement has expired. Under the FCC rules the incumbent MSO is required to remove, sell or abandon the home run wiring, thereby making it available for use by an alternative provider for service to the entire building or to individual subscribers. The FCC rules are presumed to apply even when there is a mandatory access statute in the jurisdiction. See answer to Question E.
Third, home wiring runs from the demarcation point into and throughout the residential unit. The disposition of home wiring is also governed by the FCC’s Inside Wiring Rules (47 C.F.R. § 76.802). See answer for Question C.
2. MDU wiring for high-speed data and telephony.
See answer to Question 8
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2. OK, I got the drift on the difference between infrastructure/distribution wiring and home run wiring but what is the wiring between the buildings in my complex? Do the FCC rules apply to the wiring between buildings?
Wiring between buildings in an MDU complex. Wiring between MDU buildings is considered part of the “distribution” or “infrastructure” wiring, and is not addressed by FCC regulations. The ownership of between-building wiring is governed by state property law. In general, this wiring is owned by the entity that installed it, although it may be abandoned such that ownership is assumed by the MDU owner according to the state’s abandoned property statute. MSOs exploit their ownership of distribution wiring to suppress competition: Even where the FCC’s Inside Wiring Rules provide a PCO with access to in-building home run wiring, the MSO retains control over between-building distribution wiring. Therefore, in new builds, MDUs should install and own this distribution wiring.
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3. Some MSOs claim they own the home wiring; is that correct?
MSOs claim they own cable home wiring. According to FCC rules, cable home wiring is the internal wiring extending from the demarcation point 12 inches outside of an individual residence into and throughout the unit. Home wiring does not include active elements such as amplifiers and riser cable. Home wiring is usually owned by the company that installed it. FCC Inside Wiring Rules (47 C.F.R. § 76.802) provide that when an individual subscriber terminates service, the MSO must offer to sell the home wire to the subscriber or, if the subscriber declines, then to the MDU owner or an alternative provider. Only if none of these parties purchases the home wiring may the MSO remove it within seven days of termination. As long as the MSO is providing service to the subscriber, the MSO retains ownership over the home wiring. When service to the subscriber is terminated (for example, the subscriber vacates the premises or chooses service from a PCO), the MDU owner can gain control over the home wiring by: (1) offering to purchase that wiring at replacement cost; or (2) waiting seven days, at the end of which the home wiring is considered to be abandoned to the subscriber or (if the subscriber declines or vacates the premises) the MDU owner.
The developer should install their own home and home run wiring during construction. If at all possible.
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4. Ah, my MSO says it will vacate the building at the end of the ROE period but it refuses to give up use of the home run wiring because it says they own it and it intends to use the wiring for other telecommunications uses in the future. What's the deal?
MSO will vacate at end of ROE period, but refuses to give up control over inside wiring on ground that it intends to use the wiring for other telecommunications services in the future. Several MSOs have used this argument in an obvious attempt to block application of the FCC’s pro-competitive Inside Wiring Rules. We do not believe that this argument has merit. FCC Inside Wiring Rules are presumed to apply in all situations, even in states that have a mandatory access statute, unless the MSO gets a court injunction within 45 days after initial notice to terminate service, or the state’s highest court has ruled that the MSO has a legal right to maintain control over inside wiring. See 47 C.F.R. § 76.804(b)(6). The Inside Wiring Rules are intended to enhance competition in MDUs by making inside wiring available to alternative providers on a timely, efficient basis. Obviously, an MSO’s claimed right to maintain exclusive control over dormant wiring infrastructure based on an intended “future usage” is completely contrary to both the letter and the spirit of FCC regulations.
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5. My MDU is in a mandatory access state and the MSO says it has a absolute right to be on the premises, the FCC MDU inside wiring rules do not apply, and there is no way an alternative provider can use the home run wiring. Is that correct?
MSO claims that the state mandatory access statute gives it an absolute right to maintain control over inside wiring despite FCC regulations. FCC Inside Wiring Rules are presumed to apply in all situations unless the MSO gets a court injunction within 45 days after initial notice from the MDU owner to terminate service, or the state’s highest court has ruled that the MSO has a legal right to maintain control over inside wiring. See 47 C.F.R. § 76.804(b)(6). This presumption was added to the regulations specifically to address MSO arguments that the Inside Wiring Rules do not apply in mandatory access states. MSOs that refuse to comply with the Inside Wiring Rules are also in violation of 47 C.F.R. § 76.804(b)(5), which states, “The parties shall cooperate to avoid disruption in service to subscribers to the extent possible.” See Answer to A (and the IMCC website) regarding application of the Inside Wiring Rules.
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6. Yeah, I know there are 15 states that have mandatory access laws, but I've heard California, Massachusetts and Texas have unique, some say very strange, laws. What's that about?
Texas, California and Massachusetts mandatory access laws/regulations give certain telecommunications providers the right to provide services to MDU residents without MDU owner’s consent.
1. Texas: 16 Texas Administrative Code § 129 provides that any requesting telecommunications utility must be provided non-discriminatory access (for a reasonable fee) to any conduit located within or between MDU buildings with four or more units for the purpose of providing telecommunications services to MDU residents. A “telecommunications utility” includes any communications carrier that transmits, conveys or receives “communications wholly or partly over a telephone system.” Texas. Utilities Code 51.002(11). Although the term “telecommunications utility” does not include cable operators, the term “communications” is not defined by statute or regulation, and does not appear to exclude video signals. Thus, in Texas, an MDU owner must permit any communications provider to utilize in- or between-building conduits for the provision of telephone, DSL Internet and/or, conceivably, video services to residents.
2. Massachusetts: 220 Code of Massachusetts Regulations § 45.02 defines the term “utility” (in the context of the federal Pole Attachments Act) to include any MDU building (excluding condominiums) with four or more units. The Pole Attachments Act, as interpreted by the FCC and by the U.S. Supreme Court, provides that any cable operator or telecommunications carrier must be given non-discriminatory access to “conduits, ducts and rights-of-way” owned or controlled by a utility for the provision of cable, telephone or high-speed data services. Therefore, in Massachusetts, an MDU owner must permit any cable operator or telephone company to utilize in-building conduits, ducts and rights-of-way for the provision of video, telephone or high-speed data services. Note that Massachusetts also has a mandatory access statute allowing MSOs to provide video service to MDU residents over the owner’s objection.
3. California: [to be completed]
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7. Can my PCO lay cable under or over Public Rights of Way? Can we go to the Local Franchising Authority (LFA) or somebody to get permission to do that?
Can a PCO lay cable over or under a public right-of-way (PROW)? Can a PCO get permission from a Local Franchising Authority or Local Department of Public Works to lay cable under or over a public right-of-way? There are several legal issues to be considered in answering this question. First, a PCO can lay cable over or under a public right-of-way. However, prior permission must be obtained from the Local Franchise Authority and/or the state or local Department of Public Works. Second, the PCO will probably be required to obtain a franchise from the Local Franchise Authority. The reasons for the franchise requirement are as follows: Federal law (47 U.S.C. § 522(7)) exempts private cable systems from franchise requirements provided the system does not “use” any public right-of-way. The question of whether a PCO “uses” a public right-of-way when its infrastructure crosses under or over that right-of-way has not been clearly answered by either the FCC or the courts. The Eighth Circuit Court of Appeals has concluded that a PCO may cross under a public right-of-way and still be exempt from franchising requirements (Guidry Cablevision v. City of Ballwin, 117 F.3d 383 (8th Cir. 1997)). This is binding law throughout the Eighth Circuit, including South Dakota, North Dakota, Nebraska, Missouri, Minnesota, Iowa and Arkansas. To our knowledge, no other federal court has ruled on this issue. Thus, the answer to the question is: Yes, a PCO can lay cable over or under a public right-of way, but it may be required to obtain a franchise from the Local Franchising Authority. Experience indicates that many local Departments of Public Works will allow PCOs to lay cable under A PROW if it is of a limited use, such as from an MDU building on one side of a street to a building on the other side of the street.
8. This is a tough one. What are the MDU owner’s rights and responsibilities with respect to an MSO that wants to utilize its existing cable infrastructure to provide other services, including data and telephony?
MSO wants to utilize existing cable infrastructure to provide other services, including data and telephony. Technology now allows multiple services (video, data, telephony) to be provided by means of a single coaxial or fiber cable infrastructure. Because applicable laws and regulations remain service-specific, cable MSOs and telephone companies are increasingly apt to claim legal rights to provide multiple services over their existing infrastructure based on laws and regulations that specifically address only discrete services. Communications laws, regulations, and applications are evolving, unclear and damn confusing. Below find relevant information that helps address the question.
MSOs providing high-speed data services. High-speed data services are usually delivered over the same infrastructure used to provide cable video (by means of a cable modem) or that used to provide telephony services (by means of a digital subscriber line (DSL)). MSOs assert that their rights of ownership over or utilization of all or part of these infrastructure wiring provides a right to provide high-speed data services in MDUs despite the owner’s objection.
MSOs providing telephone services. Incumbent telephone companies (the Regional Bell Operating Company (RBOC) or Local Exchange Carrier (LEC)) wire MDUs by laying twisted pair copper wire from the street to the Minimum Point Of Entry (MPOE) and then to and into the individual unit. Under FCC regulations (47 C.F.R. §§ 51.305, 51.319), a Competitive LEC (CLEC) may utilize the incumbent’s wiring from the MPOE to and into the individual unit of a customer who chooses the CLEC. Cable MSOs, which have installed coaxial cable wiring from the street to various lockboxes/pedestals, argue that they are legally entitled to connect existing cable wiring from the lockbox/pedestal to the telephone company's MPOE, utilizing a Network Interface Device (NID), and then use the existing copper wiring running to individual units in order to provide telephony and high-speed data services to MDU residents. See 1.a.i below.
When the MSO claims the right to provide multiple services over existing cable infrastructure, MDU owners should consider the following:
- Is there a ROE Agreement and/or Service Contract in effect? If there is no agreement in place, the MSO is providing service based on an implied month-to-month contract. In this situation, the MSO’s service may be terminated by means of a 30-day notice, and the MSO will have no right to provide any service to MDU residents, unless that right is conferred by federal law (FCC regulation) or state statute or regulation (mandatory access). Possible sources of MSO rights are as follows:
a. FCC Regulations
i. Telephony and data. Incumbent LECs, usually the Regional Bell Operating Company (RBOC), are required to allow non-discriminatory interconnection with the incumbent’s facilities by any requesting telecommunications carrier (CLEC) for the “transmission and routing of telephone exchange traffic, exchange access traffic, or both.” 47 C.F.R. § 51.305(a)(1). An MSO that provides telecommunications services qualifies as a CLEC for interconnection under this rule, for the limited purpose of providing telephone service. Thus, even in the absence of a contract with the MDU owner, an MSO, functioning as a CLEC, may interconnect with the MDU owner’s wiring infrastructure to provide telephony to MDU residents, despite the owner’s objection.
California is probably unique and the above would not be the case. There, even if there is no contract for the MSO to provide telephony service the MSO/CLEC can gain access and use the MDU MPOE.
There is another CLEC scenario that the MSO’s use to provide telephony on properties without the owner’s blessing. The MSO installs a multi-voice port device (MVP) either inside the unit or at the end of the building. From that point, they connect to the inside wiring of the building or unit. This practice is usually used at properties that do not have a single point of entry (MPOE).
ii Competitive Networks Rule. This FCC rule, adopted in October 2000 (First Report and Order and Further Notice of Proposed Rulemaking, In the Matter of Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99-217), interprets the “Pole Attachments Act” (47 U.S.C. § 224) to confer upon cable operators and telecommunications providers a right of non-discriminatory access to ducts, conduits and rights-of-way controlled by utilities (including LECs) within MDU (residential) buildings. These areas are “controlled by” the utility when they are actually being used or are specifically identified for use as part of the utility’s transmission or distribution network. We anticipate that MSOs will claim that the FCC’s new interpretation of the Pole Attachment Act gives them a right to maintain control over wiring inside MDU buildings, barring use of the inside wiring rules by alternative providers. We do not believe that this claim is valid: the Competitive Networks rule “does not grant a legally enforceable right to remain on the premises of the MDU owner,” and therefore “does not interfere with the disposition of cable home wiring under our rules.”[1] Thus, an MDU owner may block an MSO’s use of in-building conduits, ducts and rights-of-way based on the Pole Attachments Act.
A second issue arising under the Competitive Networks rule is the extent to which it may authorize cable operators (or telecommunications providers) to utilize in-building ducts, conduits and rights-of-way for the provision of intermingled services, including telephony and high-speed data, despite the MDU owner’s objection. While National Cable & Telecommunications Assn., Inc. v. Gulf Power Co., 534 U.S. 337 (2002) did not directly address this issue, the decision clearly states that cable operators providing “mingled services,” including video, high-speed data and telephony, are subject to the Pole Attachments Act. It is conceivable that MSOs could assert a right based on Gulf Power and the Competitive Networks Rule to provide bundled services over the objection of the MDU owner. State Mandatory Access Statutes/Regulations. Fifteen states (mostly in the eastern United States, see IMCC web site) and many cities/localities have adopted statutes and regulations giving MSOs the right to provide video services to MDU residents without the MDU owner’s consent. While these statutes vary in their wording, New York’s mandatory access statute is typical: “No landlord shall … interfere with the installation of cable television facilities upon his property or premises.” Some states (including Texas, California and Massachusetts, as summarized above) provide mandatory access for providers of telephone and/or high-speed data services.
2. If there is an ROE or Service Agreement in effect, does it specifically provide the MSO with the right to provide telephony, data or “other” services over existing infrastructure? If the contract does not explicitly give the MSO the right to provide additional services, the MSO may not provide those services, unless it can claim such a right based on federal or state law as discussed above. Remember that California Public Utility Commission regulations force a different treatment. If the MSO/CLEC has the right to deliver cable service on the property and there is an MPOE established, the MDU will be forced to grant nondiscriminatory access to the MSO/CLEC.
[1] In the Matter of Promotion of Competitive Networks in Local Telecommunications Markets, WT Docket No. 99-217 (Released: Oct. 25, 2000), First Report and Order and Further Notice of Proposed Rulemaking, ¶ 90 (referred to herein as “Competitive Networks”). The State of Massachusetts has adopted building access regulations that include MDU owners within the definition of “utility.” See 220 Code of Massachusetts Regulations § 45.02. Therefore, in Massachusetts an MDU owner may not object to an MSO’s use of in-building ducts, conduits and rights-of-way for the provision of services based on the Pole Attachments Act. Massachusetts is currently the only state to have adopted this approach.
9. I've heard the FCC adopted some rules changing the telephone demarcation point and some stuff about pole attachments/conduits/rights-of-way. Do I have to care about that?
FCC rules on telephony demarcation point. Under section 251 of the 1996 Telecommunications Act, incumbent LECs are required to provide CLECs with access to existing regulated wiring on a nondiscriminatory basis, but not necessarily for free. The demarcation point for telephone wiring marks the end of wiring under the control of the LEC and the beginning of wiring under the control of the property owner of subscriber, and determines where the CLEC may access the incumbent RBOC's or LEC's inside wiring. The current rule (47 C.F.R. § 68) provides that for installations performed subsequent to August 13, 1990, the incumbent LEC may place the demarcation point at the “minimum point of entry,” (MPOE) i.e., either the closest practicable point where the wiring crosses a property line or the wiring enters a multiunit building or buildings. The Competitive Networks Rule modified the definition of the demarcation point in order to give the MDU owner more control over the location at which a CLEC may access inside wiring for telephony. Specifically, the incumbent LEC must move the demarcation point to the MPOE upon the owner’s request within a defined time period. Furthermore, where the demarcation point is not located at the MPOE, the incumbent LEC must inform the MDU owner as to its location on a timely basis. This is true regardless of whether the wiring was originally installed before or after August 13, 1990.
10. I want to put in a DBS system and get all the dishes off the balconies of individual units. Can I do that under OTARD? What if I already have an exclusive service contract with the MSO?
MDU owner rights under OTARD to stop proliferation of dishes on buildings. According to FCC rules governing “over the air reception devices” (“OTARD”, 47 C.F.R. § 1.4000), an MDU owner may not (with certain exceptions such as for safety, common areas, no drilling into the structure, etc. see IMCC web site) prohibit or restrict an MDU resident from placing a DBS antenna in any "exclusive use" area controlled by that resident, for example on a balcony. However, the so-called “common antenna” exception allows the MDU owner to restrict the installation of individual resident antennas if the MDU owner has installed a central or common antenna making DBS service(s) available to all residents. The Competitive Networks Rule amended the OTARD rule to cover fixed wireless antennas that are capable of distributing multiple services including video, data and voice. A MDU owner who has chosen to provide a common DBS antenna for residents may utilize the FCC’s cable inside wiring rules (47 C.F.R §§ 76.804(a) and 76.804(b), described above) in order to make inside wiring available for use by the DBS provider.
A crucial question remains as to whether an MDU owner who has an exclusive service contract with an MSO may provide DBS service to residents by means of a common antenna. On the one hand, the OTARD rule does not state that such exclusive contracts are void, implying that an MDU owner with an exclusive service contract may not install a common DBS antenna. On the other hand, it could be argued that if the common antenna provision of OTARD were blocked by the existence of an exclusive MSO service contract it would be against the intent of the OTARD regulations and therefore contrary to public policy and therefore null and void.
11. I want to allow an alternative video provider into my building, but the incumbent MSO has threatened to remove the home run wiring. Removing that wiring would cause a big disruption and I’m afraid of damage to my building. Is there any way I can bring a PCO into my building and prevent the MSO from removing the home run wiring?
Incumbent MSO threatens to remove home run wiring. FCC regulations governing the disposition of inside wiring provide that upon written notice that the incumbent MSO’s service is terminated, either for the entire building or for any particular unit(s), the incumbent must choose one of three options with regard to the home run wiring: (1) remove the wiring; (2) sell the wiring to the MDU owner or the alternative provider; or (3) abandon the wiring. The existence of the removal option is a major flaw in the FCC inside wiring rules, because removal of home run wiring is disruptive and potentially damaging to the MDU building. As a result, by threatening to remove the home run wiring, incumbent MSOs are able to deter MDU owners from inviting competitive providers into their buildings. As the Inside Wiring Rules are currently written, there is nothing an MDU owner can do to stop the terminated MSO from removing the home run wiring. Note that the rules governing the disposition of home wiring (i.e., the wiring inside the subscriber’s unit) do not provide incumbents with the removal option. Upon termination of service, the incumbent must sell or abandon the home wiring.
12. I understand that a PCO is allowed to connect its wiring to the home wiring in an individual unit at the demarcation point, which is located 12 inches outside the unit. The PCO tells me it can’t access the wiring at that point because the wiring is behind brick or concrete. What can I do in this situation?
Wiring inaccessible at the demarcation point 12 inches outside of the individual unit. The “demarcation point” is important because it is the point at which a subscriber’s “home wiring” (inside-unit wiring) begins. When the subscriber terminates service from the incumbent provider, the alternative provider may connect its own wiring with the subscriber’s home wiring at the demarcation point. The demarcation point is defined as the point located 12 inches outside of the subscriber’s unit, or, if the wiring is “physically inaccessible” at that point, then at the closest point where the wiring is physically accessible. 47 C.F.R. § 76.5(mm). Wiring is “physically inaccessible” if gaining access at that point would require significant modification of or damage to existing structural elements. While wiring that is encased in concrete, metal conduit or cinder block is considered to be physically inaccessible, wiring behind sheetrock or molding is not. IMCC advocating that the FCC alter its definition of “physically inaccessible” to include wiring behind sheetrock or plaster.
13. I want to allow a PCO to serve my building, but the PCO is reluctant to invest any money on infrastructure because the MSO will simply drop the price of its cable service to undercut any competition. Are there any legal restrictions on an MSOs ability to manipulate prices to stave off competition?
MSO price manipulation. Before enactment of the Telecommunications Act of 1996, franchised cable operators could not charge different prices for the same service in any given service area. However, with deregulation in 1996, MSOs are permitted to provide “bulk discount” rates to some subscribers and not to others, so long as those discounted rates are not “predatory” under antitrust law. (“Predatory pricing” occurs when a firm prices goods or services below cost, and is very difficult to prove in a legal proceeding.) The bulk discount rule allows MSOs to lower its rates in any building or area in which there is competition or the threat of competition, while maintaining its normal rates in markets where it does not face competition. The FCC looked at this issue in a recent proceeding (CS Docket No. 96-85, released. April 16, 2002) but did not alter the status quo. Thus, the answer to the question is that there currently are no legal restrictions (apart from the prohibition on predatory pricing) on an MSO’s ability to manipulate rates for the purpose of undercutting competition.
14. I understand that over the past few years, there has been a legal battle over unaffiliated ISPs should have “open access” to an MSO’s cable network to provide cable modem services. What was the outcome of all this, and is cable modem service regulated by the FCC?
Regulation of cable modem services. The fight over “open access” to proprietary cable systems was the subject of several contradictory rulings in federal circuit courts, causing the Supreme Court in 2001 to urge the FCC to decide for itself whether and how cable modem services should be regulated. In March 2002, the FCC issued a Declaratory Ruling (CS Docket No. 00-165) classifying cable modem service as an “information service” subject to FCC jurisdiction. Because the FCC had already classified DSL services as an “information service,” the ruling placed cable broadband technology on the same regulatory footing as the competing technology provided by telephone companies. The FCC has adopted a Notice of Proposed Rulemaking (CS Docket No. 02-52) to consider whether and how cable modem service should be regulated, but to date no action has been taken. In the current “deregulatory” climate, it is unlikely that the FCC will take any significant regulatory action on cable broadband in the near future.
Bill Burhop
Copyright © 2008 IMCC All rights reserved.
Revised: 03/05/08.