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FCC Inside Wiring Rules

The FCC’s wiring rules are based on the recognition that the coaxial cable wiring infrastructure inside a residential multi-dwelling unit building cannot be easily or cost-effectively replicated by a would-be competitor to the incumbent cable television operator using that wiring to serve residents. Therefore, without regulatory intervention, the incumbent provider has an irreducible advantage over potential rivals, and competition never gets off the ground. The FCC’s inside wiring rules attempt to address this circumstance by mandating that in certain circumstances the incumbent cable company may be compelled to cede ownership and control over existing wiring infrastructure to the property owner, the cable television subscriber, or an alternative provider of video programming services.

The FCC rules apply to two categories of coaxial cable inside wiring: home run wiring and cable home wiring. Separate rules apply to each category of wiring.

The FCC defines home run wiring as “the wiring from the demarcation point to the point at which the MVPD's wiring becomes devoted to an individual subscriber or individual loop.” The rules governing the disposition of home run wiring are found at 47 C.F.R. § 76.804.

By contrast, cable home wiring is “the internal wiring contained within the premises of a subscriber which begins at the demarcation point.” The rules governing cable home wiring are found at 47 C.F.R. § 76.802.

  1. Home Run Wiring Rules (47 C.F.R. § 76.804)

The home run wiring rules are subdivided into the “building by building” rules and the “unit by unit” rules. 

The building by building rules apply where the incumbent cable operator owns the home run wiring, and does not have a “legally enforceable right to remain” on the premises – i.e., where the incumbent cable provider has no ongoing contractual right to access the MDU property, and the property is not subject to a state or local mandatory access law.

The unit by unit rules apply where the incumbent cable operator owns the home wiring and “does not … have a legally enforceable right to maintain any particular home run wire dedicated to a particular unit on the premises against the MDU owner's wishes …” The unit by unit rules may be used by a property owner to facilitate competition among several video providers in a building with only one set of home run wires; the FCC rules are designed to allow the owner to force the incumbent to share the existing wiring.

The building by building procedure requires that the property owner give the incumbent cable operator a minimum of 90 days notice of intent to invoke the rule; the incumbent then has 30 days after receipt of the notice in which to elect to sell, abandon or remove all the home run wiring in the building. The wiring must be disposed of according to the incumbent’s election within 30 days after the end of the 90-day notice period. Thus, even if the incumbent cooperates, the rules contemplate four month transition phase.

The unit by unit procedure requires that the property owner give the incumbent 60 days notice; as with the building by building procedure, the incumbent has 30 days after receipt of notice in which to make a single election whether to sell, abandon or remove each home run wiring dedicated to a unit terminating the incumbent’s cable service.  If the incumbent elects to sell the wiring to the MDU owner, the parties have 30 days after the date of election in which to negotiate a sale price, and if there is no agreement on price, the matter may be referred to binding arbitration. Assuming incumbent cooperation, the unit by unit rules allow for a transition period of at least two month.

  1. Cable Home Wiring Rules (47 C.F.R. § 76.802)

 

The FCC’s rule for cable home wiring in MDU buildings provides that upon voluntary termination of cable service by an individual subscriber in an MDU building, the incumbent cable operator may not remove the cable home wiring unless, when informed that the subscriber wishes to terminate cable service, the cable operator offers to sell the wiring to the terminating subscriber at its replacement cost, the subscriber has declined, and neither the MDU owner nor the alternative provider has notified the MSO that it wishes to purchase the wiring if and when the terminating subscriber declines to purchase.

“If the [incumbent cable operator] is entitled to remove the cable home wiring, it must then remove the wiring within seven days of the subscriber’s decision [to purchase or not], under normal operating conditions, or make no subsequent attempt to remove it or restrict its use.”

The effect of the cable home wiring rules is to transfer ownership of the home wiring – the cable wiring on the subscriber’s side of the demarcation point – from the incumbent cable company to the subscriber who terminates the MSO’s cable service. In other words, home wiring not removed by the incumbent within 7 days after the subscriber’s voluntary termination of cable service is deemed abandoned to the subscriber. Presumably (depending on the state’s abandoned property laws), when a former cable subscriber moves out of his or her unit without removing the home wiring, that wiring is abandoned and becomes the property of the building owner.

As the legal owner of home wiring that is not removed after termination of services, the terminating subscriber or the property owner may authorize an alternative video provider to connect its signal distribution system to the wiring at the demarcation point. The incumbent provider has an affirmative obligation to facilitate the alternative provider’s access to the wiring at that point. According to the rule, incumbent cable operators “must take reasonable steps within their control to ensure that an alternative service provider has access to the home wiring at the demarcation point.”

Under the FCC’s “Sheet Rock Order,” the demarcation point is generally located at the incumbent cable operator’s junction box. See subtopic entitled “FCC’s Sheet Rock Order” below for more information.

  1. FCC Rules for Cable Home Wiring: http://edocket.access.gpo.gov/cfr_2010/octqtr/47cfr76.802.htm

FCC Rules for Home Run Wiring: http://edocket.access.gpo.gov/cfr_2010/octqtr/47cfr76.804.htm

  1. Inside Wiring Primer: INSIDE WIRING PRIMER
  2. IMCC Sample Letters: IMCC Sample MDU Letters-2005-2
  3. Legal Memo: Wiring Update: http://www.imcc-online.org/blog/legal-memo-wiring-update
  4. Opinion of Alabama Supreme Court on inside wiring as a fixture to real estate: Sycamore Management Group and DirecPath, LLC vs. Coosa Cable Company, Inc.: http://www.alabamaappellatewatch.com/uploads/file/njx%20standard%20of%20review.pdf
  5. FCC’s Sheet Rock Order

In 2007, the FCC in effect moved the cable “demarcation point” in most MDU buildings from the individual unit to the incumbent cable provider’s lock box. This change allows a competitive provider to access existing inside wiring at the lock box and, in some circumstances, to utilize that wiring without the property owner having to invoke the FCC’s inside wiring rules.

The FCC defines the cable demarcation point as “a point at (or about) twelve inches outside of where the cable wire enters the subscriber's dwelling unit, or, where the wire is physically inaccessible at such point, the closest practicable point thereto that does not require access to the individual subscriber's dwelling unit” (47 C.F.R. § 76.5(mm)(2)).

However, MDU owners are reluctant to allow a competitive provider to access the wiring at the 12-inch point due to the disruption caused by drilling through sheet rock in hallways. Therefore, in its “Sheet Rock Order” (Report and Order and Declaratory Ruling (CS Docket No. 95-184, rel. June 8, 2007)), the FCC ruled that wiring behind sheet rock or wall board is “physically inaccessible,” such that the demarcation point is located at the first location, moving away from the subscriber’s unit, where the wiring is accessible. Usually, that location is at the incumbent’s junction box.

The location of the cable demarcation point is very important because it is the point at which a competitive video provider may access existing inside wiring. The Commission has described the demarcation point as “the point at which an alternative multichannel video programming distributor (MVPD) would attach its wiring to the subscriber’s wiring in order to provide service,” and as the location where “a competing provider may access existing cable home wiring in an MDU building.”

Furthermore, the incumbent cable provider has a legal obligation under FCC regulations to take affirmative steps to facilitate an alternative video provider’s access to wiring at the demarcation point.

Therefore (assuming that the wiring is behind sheet rock at the 12-inch mark), the incumbent cable operator is prohibited by FCC regulations from blocking a competitor’s access to the cable home wiring at the point where the wiring terminates at the incumbent’s junction box.

  1. Text of Sheet Rock Order: http://www.imcc-online.org/blog/declaratory-ruling-on-inside-wiring-rules
  2. Article: Cable Home Wiring Rules and Cable Competition (Broadband Properties, March/April 2011).
  3. Access to Cable Operator’s Lock Box

Here is a typical scenario:

An MDU owner signs a right of entry agreement with a satellite provider, asking the provider to compete with the incumbent cable operator for subscribers at the property. The agreement gives the satellite provider a right to access and use existing inside wiring to carry its signal to subscribers. However, the incumbent cable company refuses to open its proprietary lock box, and warns the alternative provider that anyone tampering with the box will prosecuted for trespass and vandalism.

FCC regulations prohibit a cable company from blocking a competitor’s access to cable home wiring at the demarcation point.

Therefore, in this circumstance, both the property owner’s and the satellite provider’s legal rights may be violated. If the wiring is the property of the owner, the incumbent’s use of the lock box to block access may constitute a conversion of property as well as a breach of the incumbent’s right of entry agreement. Blocking access also impairs the competitor’s Federal right to access wiring at the demarcation point. Owners and competitive providers are advised to consult legal counsel for advice, guidance and possible legal action.

  1. Article: The Lock Box Problem (Broadband Properties, November/December 2011).

 

Inside Wiring Primer

KEY DEFINITIONS:

  1. MDU Owner: The entity that owns or controls the common areas of a multiple dwelling unit building (e.g., a landlord in a rental building or a condominium association).
  2. Home run wiring: The wiring extending from the demarcation point of 12 inches outside of an individual residential unit to the point at which the wiring first becomes dedicated to that individual residential unit (i.e., where it joins at the junction box, pedestal or riser cable). In a loop system configuration, it means the individual loop. It excludes any active elements such as amplifiers and riser cable. Any removal of amplifiers or other active devices can only occur if an equivalent replacement can be easily reattached.
  3. Cable home wiring or home wiring: The internal wiring contained within the premises of a subscriber which begins at the 12 inch demarcation point, excluding any active elements such as amplifiers, converter or decoder boxes, or remote control units. If the 12 inch demarcation point is "physically inaccessible," the demarcation point will be moved to the point at which it first becomes physically accessible outside of the subscriber's unit.+ The demarcation point is physically inaccessible if it would require significant modification or damage of preexisting structural elements (e.g., embedded in brick, metal conduit or cinder blocks), and would add significantly to the physical difficulty and/or cost of accessing the home wiring; wiring enclosed within hallway molding is not physically inaccessible.
  4. Loop-through cable wiring: A single cable used to provide service to either a portion of or an entire MDU such that every subscriber on the loop is limited to receiving services from a single provider.
  5. Building-by-building disposition: Where the MDU owner decides to convert an entire building or complex of buildings to a new video service provider.
  6. Unit-by-unit disposition: Where an MDU owner permits two or more video service providers to compete for subscribers at the unit level within a building or complex of buildings.
  7. Incumbent operator: The operator servicing the building at the time of the MDU owner notice of termination or of multiuse competition. While typically this will be a franchised cable operator, the FCC rules are applicable to all video service providers.

HOME RUN WIRING DISPOSITION

BUILDING-BY-BUILDING DISPOSITION

  1. General Application: Applies only when the incumbent operator owns the home run wiring and does not (or will not at the conclusion of the notice period) have a legally enforceable right to remain on the premises. FCC presumption that building-by-building procedural mechanisms will apply unless and until the incumbent obtains a court ruling or an injunction enjoining its displacement during the 45-day period following the initial notice by the MDU owner.
  2. Procedures for building-by-building disposition:
    • MDU owner notifies incumbent operator in writing that service will be terminated in 90 days
    • incumbent operator notifies MDU owner in writing within next 30 days whether operator intends to (a) remove the wiring and restore the MDU within 30 days of the end of the 90 day period or of actual service termination whichever occurs first; (b) abandon and not disable the wiring at the end of the 90 day period or the date of actual service termination; or (c) sell the wiring to the MDU owner
    • If the election is (a) or (b), and if the incumbent operator intends to terminate service in advance of the 90 day period, the operator must provide the precise date of service termination to the MDU owner in writing at the time of the election
    • If the election is (c), the MDU owner decides whether it wishes to purchase the home run wiring and if so, negotiations over the price proceed over the next 30 days (no default price or formula was established); the MDU owner may allow the competitor to purchase the home run wiring and handle the negotiations instead
    • If price agreement cannot be reached within that 30 days, the incumbent operator must re-elect between (a) or (b) or (d) to submit the price determination to binding arbitration by an independent expert; if (a) or (b) the precise date of service termination must be supplied in writing at the time of this election if not the close of the 90 day period
    • Binding arbitration procedures: parties have seven days to agree on independent expert or to each designate an independent expert who together will pick a third expert within an additional seven days; the expert(s) must assess a reasonable price for the home run wiring by the close of the 90 day period; any refusal by MDU owner or alternative provider to submit to binding arbitration will release the incumbent operator from having to comply with rules
  3. "Penalty": If the incumbent operator fails to comply with any of the procedural deadlines, the home run wiring will be automatically deemed abandoned at the end of the 90 day period. The FCC declined to establish a monetary penalty at this time against incumbent operators who elect but then fail to remove the home run wiring. The FCC also declined to require an operator to post a performance bond prior to any removal.
  4. Overall rule for seamless transition: The parties must cooperate to avoid service disruption to subscribers. In such fashion, it is expected that the incumbent operator cannot establish an actual service termination date in advance of the close of the 90 day period that would leave subscribers without cable service for longer than a few hours.

UNIT-BY-UNIT DISPOSITION

  1. General Application: Applies only when the incumbent operator owns the home run wiring in an MDU and does not (or will not at the close of the notice period) have a legally enforceable right to keep a particular home run wire dedicated to a particular unit. FCC presumption that unit-by-unit procedural mechanisms will apply unless and until the incumbent obtains a court ruling or an injunction enjoining its displacement during the 45-day period following the initial notice by the MDU owner.
    Exception: Presumption will not apply where a state's highest court has previously found under a state mandatory access statute that the incumbent has an enforceable right to maintain home run wiring on the premises. Burden shifts to competitor or MDU owner to obtain a judicial ruling to the contrary in order for procedural mechanism to go forward.
  2. Procedures for unit-by-unit disposition: -- MDU owner provides written notice to incumbent operator 60 days in advance of when competitor intends to access home run wiring for those units who wish competitor=s service -- 30 days later, incumbent operator must provide MDU owner with a single written election intended to address all of the incumbent=s home run wiring dedicated to individual subscribers who later choose the competitor=s service; election is between (a), (b) and (c) options as described above in building-by-building disposition; this election is then implemented each time an individual subscriber switches service to the competitor -- if the competitor is to purchase the wiring instead of the MDU owner (assumes the incumbent elects option (c)), then the competitor must make a similar election between the same options within the same 30 day period; this is to govern the wiring disposition when an individual subscriber switches back to the incumbent -- if the incumbent or competitor or both elects (c), a 30 day period of time for negotiation occurs; the parties may negotiate an up-front one-time lump sum payment for all the units or a unit-by-unit payment to occur at the time of each switch -- in the absence of an agreement on purchase price for either or both operators electing (c), the affected operator must then elect between options (a), (b) or (d) binding arbitration; the arbitration procedures proceed similar to the procedures for the building-by-building disposition except that the expert(s) must access the price for the wiring within 14 days; if that time period occurs after the close of the 60 day period, subscribers can be switched over to the new provider subject to the price to be established by the expert; again, any refusal to participate in the arbitration process will release the incumbent from any compliance with the rules -- regardless of which option is chosen, the election will be carried out (by either the incumbent or the competitor if a switch back) only if the subscriber (or the new provider as the subscriber=s agent) notifies its current provider orally or in writing that it not only wants to terminate service but wants to allow the alternative provider to use the wiring to provide it with service [this does not alter incumbent=s obligations for disposition of cable home wiring, see below] -- e.g., if subscriber is vacating the premises as opposed to switching service providers, the election need not be carried out; however, if subsequent tenant requests service switch, election must be implemented at that time -- if option (a), removal of the home run wiring for that unit must occur within 7 days or within 7 days of the actual service termination date chosen by the subscriber or the wiring is deemed abandoned and useable by the competitor -- if option (b), abandonment will be deemed effective upon actual service termination or upon the subscriber=s requested date of termination, whichever occurs first -- if option (c), the sale will become effective upon actual service termination or upon the subscriber=s requested date of termination, whichever occurs first -- if the incumbent intends to terminate service in advance of the 7 day period, the subscriber or subscriber=s agent must be told of that termination date at the time of the request for service termination
  3. "Penalty": If the incumbent operator fails to comply with any of the procedural deadlines, the home run wiring will be automatically deemed abandoned and available for immediate use. The FCC declined to establish a monetary penalty at this time against incumbent operators who elect but then fail to remove the home run wiring. The FCC also declined to require an operator to post a performance bond prior to any removal.
  4. Overall rule for seamless transition: The parties must cooperate so as not to create a service disruption. Alternative service providers and MDU owners are permitted to act as subscribers= agents (upon request of subscriber) in providing notice of a subscriber's desire to switch service providers on a unit-by-unit basis. Incumbent provider must disconnect the home run wiring from the lockbox (or pedestal etc.) and leave it accessible for the competitor within 24 hours of actual service termination.

CABLE HOME WIRING DISPOSITION

1. General Application: Applies only when the incumbent operator owns and intends to remove the cable home wiring when an individual subscriber (or an MDU owner on its behalf) voluntarily terminates service, either to vacate the premises or to switch providers. 2. Procedures for individual subscriber termination [can be implemented by MDU owner on behalf of all subscribers if MDU owner terminating incumbent=s access to entire building and MDU owner or alternative provider are not invoking home run wiring disposition procedural mechanism; see 3. directly below]: -- Subscriber places call to terminate service -- During call, incumbent operator must tell subscriber that operator (a) owns the cable home wiring; (b) intends to remove it; (c) must sell it to subscriber if subscriber wishes to purchase it for a specified per-foot replacement cost including the replacement cost for any passive splitters attached to the wiring on the subscriber=s side of the demarcation point, i.e., the total charge for the wiring -- If subscriber agrees to purchase home wiring, constructive ownership over wiring transfers immediately to subscriber who can authorize a competitor to use it in advance of final payment (competitor can reimburse subscriber for purchase) -- If subscriber declines to purchase home wiring, either MDU owner or alternative provider may do so; MDU owner must inform incumbent operator one time for the entire building that MDU owner (or alternative provider) will purchase the home wiring if and when a subscriber elects not to do so or incumbent is under no obligation to sell it; this one time notice can occur at the same time as the unit-by-unit disposition notice for the home run wiring; -- If no entity timely purchases home wiring, incumbent operator has seven calendar days to remove the wiring or make no subsequent attempt to remove it or restrict its use. 3. Procedures for MDU owner entire building termination where home run wiring disposition procedural mechanism also invoked: -- upon invocation of home run wiring procedures by provision of 90 day notice, incumbent operator has 30 days to (a) offer to sell to MDU owner any home wiring within the individual units which the incumbent owns and intends to remove, and (b) provide the MDU owner with the total per-foot replacement cost of such home wiring -- MDU owner may permit alternative provider to purchase the home wiring instead -- MDU owner or alternative provider must inform incumbent whether purchase will occur 30 days prior to access termination -- if purchase is rejected by MDU owner or alternative provider, incumbent provider can remove home wiring on the date of actual service termination but no later than 30 days thereafter 4. APenalty@: If incumbent operator fails to adhere to these procedures, home wiring ownership is automatically relinquished and operator is not entitled to remove wiring, restrict use or obtain compensation for it. LOOP-THROUGH CABLE WIRING DISPOSITION 1. The portion of the loop-through wiring within the individual units up to the demarcation point may be purchased by the MDU owner (or alternative provider) consistent with the rules governing the purchase of cable home wiring set forth above. 2. The portion of the loop-through wiring on the non-subscriber side of the demarcation point up to the riser or feeder cable will be determined in accordance with the procedures set forth for the disposition of home run wiring set forth above. 3. The demarcation point for loop-through wiring is set at or about 12 inches outside the point at which the loop enters or exits the first and last individual dwelling units on the loop, or as close as practicable where 12 inches outside is physically inaccessible. ACCESS TO MOLDING 1. Incumbent providers are prohibited from using any ownership interests they may have in property on or near the home run wiring, such as molding or conduit, to prevent or in any way interfere with the competitor=s ability to use the home run wiring after implementation of the procedural mechanisms set forth above. 2. An alternative provider can install, at its own expense, its own home run wiring within an incumbent=s existing molding, over the incumbent=s objection and without compensation, if the MDU owner gives its affirmative consent and there is adequate space in the molding, provided that the incumbent does not have an exclusive contractual right to occupy the molding. Sharing of space within conduits was not mandated. 3. If there is insufficient space in the existing molding, the MDU owner can agree that larger, replacement molding sufficient to house both providers= home run wiring be installed at the expense of the alternative provider as long as the incumbent does not have a contractual right to prohibit the replacement of the existing molding. CONTRACTS ENTERED AFTER EFFECTIVE DATE OF RULES 1. No requirement to transfer ownership of home run or home wiring to MDU owner upon installation. 2. For any contracts between any MVPDs and MDU owners entered into after the effective date of these rules, the contract must include a provision describing the disposition of the home run wiring upon the contract=s termination. Where a contract clearly and expressly addresses the disposition of the home run wiring, the above procedures will not apply. SIGNAL LEAKAGE RULES APPLICABLE 1. Existing cable signal leakage requirements are extended to all MVPDS, including SMATV and MMDS operators. All MVPDs must immediately comply with Section 76.613 of the FCC=s Rules upon the effective date of the inside wiring report and order for all systems. For systems already built or 75% built as of January 1, 1998, other than compliance with Section 76.613, MVPDs have a five-year transition time period to come into full compliance with the remainder of the FCC=s signal leakage rules. For systems built after January l, 1998, full compliance is expected upon system completion. The FCC may exempt all small MVPDs from the annual reporting requirements and is seeking further comment thereon.

 

Docket No:           95-184

Title:          Telecommunications Services Inside Wiring, Customer Premises Equipment, Implementation of Cable Television Consumer Protection and Competition Act of 1992; Cable Home Wiring.

(fcc97304.wp..wp [FNPRM - Aug 1997])
(fcc97376.wp..wp[R&O- 2nd FNPRM - Oct 1997])

Letters to pursue FCC MDU Inside Wiring Rules

Mar 28, 2001. IMCC Ex Parte letter Re. Conversation with Ms. Royce Dickens, Cable Services Bureau, Re: CSB Docket No. 95-184, Cable MDU Inside Wiring expart-3-28-2001-95-184