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NCTA Challenges FCC Wiring Rules

2/08/2004 7:00 PM Eastern

Apartment towers are the place where density yields the highest dividends, making them fertile battlegrounds for cable operators and their pay TV competitors.

For more than a decade, the Federal Communications Commission has periodically refined the rules designed to simplify the handoff of cable wiring when subscribers cancel service or building owners sign up a new pay TV provider, either as a second player or a complete substitute to the incumbent.

The FCC's most recent modification to wiring rules triggered a strong reaction from the National Cable & Telecommunications Association, which filed suit in the U.S. Court of Appeals for the D.C. Circuit.

The case is scheduled for argument Feb. 12.

In its appeal, the NCTA complained that the FCC changes were too generous to competitors without much of a showing that the changes were necessary.

"Accordingly, the decision should be set aside," NCTA argued in its brief.

The FCC, meanwhile, has told the court its changes were designed to promote competition in multiple dwelling units (MDUs) by ensuring that new entrants did not face costly installation problems.

Since the early 1990s, the FCC has been examining competitive conditions in apartment buildings, including the ability of companies to gain access to installed cable wiring and the rights of tenants to attach direct-broadcast satellite dishes to balconies.

Under an old set of FCC rules regarding MDUs, a new pay-TV player was required to string wire the distance from a junction box in a corridor closet to a location near the outside of the apartment unit — but not if the wiring just outside the unit's exterior was "physically inaccessible," meaning it was buried in brick, metal or cinder blocks.

Wire behind molding was not considered physically inaccessible by the FCC.

But the FCC determined that when the wire is deemed "physically inaccessible," the new entrant should be saved the hassle of laying in new wires in a tough environment, and should be able to take control of the incumbent's so-called home run wiring, hidden in the walls.

Under that scenario, the cable company is required to sell the so-called home-run wiring to the former subscriber, to the new pay-TV provider or to the landlord at the going per-foot market price.

The FCC has other rules when the wire outside the apartment is physically accessible and the cable incumbent has lost its right to serve a customer or the building.

In such an instance, the incumbent has more options. It can remove the home-run wiring, abandon it or sell it to the landlord or the new pay-TV provider at a negotiated price.

In 1999, the FCC was asked to change the rules. An affiliate of RCN Corp. urged the commission to expand the definition of "physically inaccessible" to include sheet rock, the boarding used to erect walls and ceilings commonly found in many modern buildings.

Sheet rock needed to be added to the list because it made wires just as physically inaccessible as brick and metal, RCN said.

RCN explained that landlords were hostile to requests for permission to make cuts in sheet rock.

Last January, the FCC granted the RCN request, leading to the NCTA's appeal.

The NCTA claims that the inclusion of sheet rock was made despite several affidavits and declarations from cable operators that sheet rock did not make wires as physically inaccessible as brick and metal.

The NCTA wants the court to vacate the sheet rock decision as arbitrary and capricious.

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