NCTA Loses Sheet Rock Case

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Washington—Cable’s competitors could have an easier time signing up subscribers in apartment buildings in the wake of a federal appeals court decision released Wednesday.

In the decision, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit upheld Federal Communications Commission's rules on the ability of new providers to use existing cable wiring after a customer has elected to switch providers.

The FCC ruled that cable wiring behind sheet rock or dry wall was physically inaccessible. That conclusion allows AT&T or Verizon Communications to obtain access to the cable wiring at locations where lots of drilling and plastering won't be necessary.

“The decision of the [FCC] that cable wiring located behind sheet rock ‘would likely be physically inaccessible’ was not ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with a law,’” the D.C. Circuit panel wrote in a two-page, unpublished judgment. The D.C. Circuit heard oral arguments on Oct. 10, 2008.

The FCC adopted the rules in May 2007 and they were appealed by the National Cable & Telecommunications Association. In 2004, the D.C. Circuit sided with NCTA but gave the FCC a second chance at justifying its rules.

The court's ruling also impacts cable's property rights because cable subscribers now can buy from their former cable operator a much greater amount of cable wiring at replacement cost.

Had NCTA won the case, cable operators would have retained greater control over wiring running from apartment units to hallway closets located, in some cases, at the far end of corridors; and cable would have been able to negotiate the sale price of that wiring when customers switch providers.

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