TELECOMMUNICATIONS REGULATION AND UPDATE

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TELECOMMUNICATIONS REGULATION AND UPDATE

• IREM Annual Convention
• Orlando, Florida
• November 9, 1999
• Matthew C. Ames
• Miller Van Eaton, P.L.L.C.

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TELECOMMUNICATIONS ACT OF 1996

• Purpose Promote lower prices, higher quality
  and rapid deployment of new services.
• Theory Technology convergence requires
  regulatory changes.
• Tools Competition and deregulation.

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RESULTS OF THE ACT

• FCC rulemakings
• Satellite dish (OTARD) rules.
• Promotion of competition networks rulemaking.
• Cable inside wiring rules.
• State utility commissions.
• Forced access proceedings.

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SATELLITE DISH(OTARD) RULES

• Section 207 of the 1996 Act directs FCC to
• promulgate regulations that prohibit
  restrictions that impair a viewers ability to
  receive video programming services through
  devices designed for over-the-air reception

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NEW SATELLITE DISH(OTARD) RULES

• Big change Rule now includes leased property,
  effective January 22, 1999.

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SATELLITE DISH(OTARD) RULES

• 47 C.F.R. ?1.4000(a) preempts leases, building
  regulations and association rules if
• lease or rule impairs maintenance, installation
  or use of antenna.
• property is within users exclusive use or
  control and
• user has direct or indirect ownership interest in
  the property.
• Exceptions for safety, historic preservation.

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WHAT DOES THE NEW RULE SAY?

• Tenant or condo resident can file complaint at
  FCC.
• Burden of Proof is on owner/manager.

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EFFECTS OF NEW RULE

• Condo association
• Cant require prior approval.
• Cant charge permit fee.
• Cant require placement inside building if dont
  get acceptable signal.
• Can require screening -- if no additional cost.

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EFFECTS OF RULE (Cont.)

• Condo association (Cont.)
• Can probably keep within outer limits of premises
  - Saran wrap rule.
• Can keep out of common areas (other than decks,
  patios and balconies).

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EFFECTS OF THE NEW RULE

• FCC would like to impose same rules on leased
  property as it does on condos.
• Too soon to tell if FCC will recognize that
  tenant in apartment has incentives different from
  property owner.

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EFFECTS OF THE NEW RULE

• Tenants may
• Install antenna inside premises.
• Install antenna on patio, desk, or balcony that
  they can exclusively use, including balcony
  railings.
• Install antennas on masts, no more than 12 feet
  above roof line.

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EFFECTS OF THE NEW RULE (Cont.)

• What can residents not do?
• Install on exterior walls.
• Drill holes through walls to run cables.
• Install in common areas.
• Tenant not liable for ordinary wear and tear.

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EFFECTS OF THE NEW RULE (Cont.)

• What can apartment owner/manager do?
• Enforce safety restrictions - must be
  clearly-defined and legitimate.
• Fire codes.
• Electrical codes.
• Installation requirements describing how antenna
  must be secured.

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EFFECTS OF THE NEW RULE (Cont.)

• Can probably require reasonable security deposit
  (100 or less).
• Can ban antennas installed outside leased
  premises, or installed by drilling holes in
  walls.
• Can require indemnification and insurance.
• Can regulate where antennas are placed if dont
  interfere with reception or impose additional
  cost.
• May be able to require professional
  installation.
• Can charge more for apartment facing south.

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EFFECTS OF THE NEW RULE (Cont.)

• What restrictions are not permissible?
• Permit fees, application fees, inspection fees.
• Prior approval requirements.
• Requirement that imposes unreasonable costs -
  based on cost of requirement compared to cost of
  equipment and service, and whether similar
  requirements apply to comparable objects (e.g.,
  screening).

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EFFECTS OF THE NEW RULE (Cont.)

• Rules permit central antennas as proposed by CAI.
• Building can ban individual antennas if it
  provides a central antenna.
• Must provide central antenna for each service
  required by residents.
• Can impose no greater cost on residents.
• Reception must be at least as good.

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EFFECTS OF THE NEW RULE (Cont.)

• Beware
• Any complaint filed by tenant at FCC must be
  taken very seriously.
• FCC will use cases to expand scope of rule.

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MINNESOTA CASE

• Manager required prior notice and approval, 100
  security deposit (refundable), 400 inspection
  fee (nonrefundable), professional installation.
• Resident challenged at FCC.
• Resident claimed no holes were drilled, but
  installer breached internal fire wall and bent
  exterior flashing.
• Decision still pending.

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PROMOTION OF COMPETITIVE NETWORKS

• FCC issued rulemaking notice in June.
• Real Access Alliance filed comments August 27.
• Reply comments filed September 27.
• Real Access Alliance is now meeting with FCC
  staff.

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COMPETITION NETWORKS (Cont.)

• Rulemaking started at request of Winstar and
  Teligent.
• They claim that building owners are unreasonable
  and discriminate against them because incumbent
  phone companies usually pay nothing.

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PROMOTION OF COMPETITIVE NETWORKS (Cont.)

• FCC considering four ways to get into building
• Mandatory, nondiscriminatory access.
• Extension of pole attachment rules, so incumbent
  utilities must share existing conduit, access
  rights, including antenna sites.
• Incumbents must make their wiring available to
  competitors.
• Extend OTARD rules to common and restricted
  areas, and to non-video services.
• Ban exclusive contracts.
• Should demarcation point be moved to minimum
  point of entry?

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REAL ACCESS ALIANCE COMMENTS

• FCC has no jurisdiction/authority over building
  owners.
• There is no problem building owners do let
  competitors in. They just want free ride.
• Mandatory access violates the 5th Amendment.
• Real problem is that we cant change legal rights
  of incumbents.
• Exclusive contracts actually help competition in
  some cases.
• Building owners want flexibility to set
  demarcation point.

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INSIDE WIRING RULES

• Wiring in common areas (home run wiring).
• Two models building-by-building and
  unit-by-unit.
• Wiring inside units (cable home wiring).
• Also two models.

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HOME RUN WIRING

• Building-by-building
• Operator must not have legally enforceable right
  to remain on the premises, e.g., contract,
  access law.
• Owner may acquire all wiring in building.
• Must give 90 days notice.

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HOME RUN WIRING (Cont.)

• Operator may elect to
• remove.
• Abandon.
• Sell.
• If elects to sell, price determined by
  negotiation. If no agreement in 30 days, can
  arbitrate.
• Owner may let new provide exercise rights.

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HOME RUN WIRING (Cont.)

• Unit-by-Unit
• Assumes multiple providers can serve building by
  switching control of home run wiring.
• Owner must give 60 days notice.
• Provider has same 3 options remove, abandon, or
  sell - but election applies to all individual
  changes by subscribers.

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HOME RUN WIRING (Cont.)

• Owner or alternative provider and operator have
  30 days to set price.
• Can pay up-front lump sum, or agree to per-unit
  price.
• All contracts must now address disposition of
  home run wiring.

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CABLE HOME WIRING

• Building owners now have right to buy wiring
  inside units on unit-by-unit basis, if subscriber
  terminates service and does not buy wiring.
• Owner may also buy all wiring in the building if
  all service in building is terminated.

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OTHER ISSUES

• FCC still considering exclusive and perpetual
  contract issue.
• Order due out soon.

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STATE ACTIVITY

• Competitive providers demanding access to
  buildings.
• Regulatory proceedings in California, Florida,
  Nebraska, Texas and others.
• Legislation introduced and defeated in many
  states.

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WHATS AT RISK

• Exclusive contracts.
• Marketing arrangements.
• Access fees.
• Prior notification.
• Ability to treat providers differently.

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FUTURE ISSUES

• High speed Internet access is the issue.
• Will cable and voice migrate to Internet?

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CONCLUSION

• Eternal vigilance is the
• price of liberty.