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FCC Revives MDU Drywall Rule

The Federal Communications Commission voted unanimously Thursday to revive a court-rejected rule intended to aid new video providers that want to serve consumers located in apartment buildings and other multiple-dwelling units.

The FCC said it was promoting video choice and competition by declaring that existing cable wiring located behind drywall was “physically inaccessible.” As a result, new video providers can tap into the existing cable plant at a junction box many feet from the customer’s entrance instead of cutting into drywall closer to the front door.

In the same ruling, the FCC said it was helping Cox Communications compete against phone incumbents in Oklahoma apartment buildings by reaffirming voice competitors’ “right of direct access to an incumbent [local phone company’s] unbundled inside wire subloops at any point of technically feasible access.”

“Importantly, we are seeking to support all new entrants and do not favor one technology or industry over another,” FCC chairman Kevin Martin said.

Cable won in federal court a few years ago when it fought the FCC’s declaration that cable wiring behind drywall was as physically inaccessible as concrete, justifying competitive access at some other location.

“The Appeals Court reversed the last time the FCC made this finding. We will have to review the order closely before determining next steps,” National Cable & Telecommunications Association vice president of communications Brian Dietz said in a prepared statement.

Evidently, the FCC believes it has done a better job in the new rule of demonstrating that drywall is a structural element so costly to penetrate and repair that it deters building owners from welcoming new video providers.

The FCC’s latest drywall rule applies chiefly in circumstances where the cable incumbent has lost an individual MDU video customer or lost access to the entire building. It’s not exactly clear what happens under the rule if the customer dropped cable-TV service while continuing as a high-speed-data customer.

The FCC has different rules depending on whether the cable wiring is located inside the customer’s apartment or hidden behind walls in corridors and common areas.

When a customer terminates service, the cable company has to offer to sell the home wiring to the departing customer at replacement cost before removing it within a mandatory seven days. Home wiring includes plant inside the apartment leading to a point 12 inches outside the unit. The external location is known as the demarcation point.

A cable operator has three options concerning the disposition of wiring in the building not governed by the FCC’s home wiring rules. This plant, known as“home-run” wiring, can be removed, abandoned or sold at a negotiate price by the cable operator.

The FCC’s new drywall rule automatically moves the 12-inch demarcation point to another location in the building that isn’t “physically inaccessible” -- a shift that subjects more cable plant to the FCC’s less economically favorable home-wiring rules than would otherwise be the case.

At bottom, the FCC’s new drywall rule would reduce the amount of home-run wiring the cable operator could sell to someone at a negotiated price. Wiring covered by the rule that isn't sold to the customer at replacement cost or removed within one week would be there for the new entrant -- possibly AT&T or Verizon Communications -- to use it free-of-charge.

FCC Democrat Michael Copps, referring to both decisions, said the agency was dealing with “narrow implementation questions.”