PRESS RELEASE

Comments Filed In Latest Round Of Inside Wiring Proceeding

Today, ICTA filed its comments in the Second Further Notice of Proposed Rulemaking arising out of the inside wiring proceeding.

ICTA focused on the issues the Commission raised regarding potential limitations on the use of exclusive contracts, the treatment of "perpetual contracts," the obligations of small operators to monitor for signal leakage and the feasibility of shared use of home run wiring.

ICTA urged the Commission not to impose any external limit on the duration of exclusive service contracts since these are an essential pro-competitive tool. ICTA explained that exclusive contracts are critical to the ability of private cable operators to finance new projects and provide alternatives to franchised service in markets where property owners have historically enjoyed no other option.

In the event the Commission decides to impose a cap on these contracts, ICTA asked that such a cap not be less than fifteen years since it is only over such a period that private operators can recoup costs and gain strength to withstand competition from a franchised operator subsidized by its city or county-wide operations. ICTA maintained that such a duration is appropriate given that it corresponds to the period of exclusivity granted to most franchised operators as they began operations in the 1970's. Also, ICTA pointed out that if experience indicates that this period is excessive, the Commission could simply revisit the issue with no harm to franchised operators having developed in the interim. On the other hand, if the Commission imposes a cap of insufficient length, private operators may be forced out of the market by the time the Commission can take corrective action.

ICTA discussed the fact that mandatory access statutes almost always authorize franchised operators alone to force access and exclude private operators from their reach. As a result, franchised operators can preempt a private operator's exclusive contractual arrangement while its own such contracts remain intact. In order to avoid this highly inequitable result, ICTA urged the Commission to prohibit franchised cable operators from obtaining exclusive contracts in states which have enacted mandatory access statutes.

ICTA proposed that the Commission establish a three-year "fresh look" period during which property owners would be able to renegotiate both exclusive and non-exclusive "perpetual contracts." It emphasized that the policy must apply not only to contracts which extend for the duration of the franchise and any renewals or extensions, but also to other contracts with language that in practical effect results in a perpetual term, such as language linking termination to some future uncertain event.

ICTA supported the exemption of small operators from the reporting requirements related to signal leakage monitoring obligations and suggested using a definition similar to that of "small cable operator."

Finally, ICTA argued that the issue of whether competitors should share a home run wire should be decided by the parties themselves based upon technical and economic factors. ICTA stated its belief that the forced sharing of the wire would result in de facto mandatory access rights and raise Fifth Amendment concerns.