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Question of the Day #2 -- What is “Inside Wiring”?

When speaking of multi-dwelling unit (“MDU”) buildings, the term “Inside Wiring” generally refers to the cable wiring within the building. Thus, the Inside Wiring is to be distinguished from the cable wiring located underground leading from the street to and between buildings. That wiring is often referred to as “Distribution Wiring” or “Distribution plant.”

The concept of Inside Wiring is important for MDU owners because when dealing with cable television and broadband service providers because control over Inside Wiring often determines whether or not two or more service providers can co-exist and compete for subscribers in an MDU building. If a single service provider controls the existing Inside Wiring, that service provider will usually remain the only service provider available to MDU residents for as long as such control remains in effect. On the other hand, if the MDU owner controls the Inside Wiring, the owner may be able to bring in a second service provider, thus allowing residents a choice among providers.

The FCC has promulgated rules (usually referred to as the “Inside Wiring Rules”) designed to enhance competition in MDU buildings. The FCC rules allow the MDU owner to gain control over Inside Wiring in order to make it available for use by a competitive service provider. The rules divide Inside Wiring into two categories: Cable Home Run Wiring and Cable Home Wiring. The “Cable Home Run Wiring” is the wiring extending from the “lock box” (usually located within a telecommunications closet or other centralized facility, depending on the layout of the building) through the building’s hallways (or sometimes on the exterior of the building) to the “demarcation point”. The “Cable Home Wiring” is the wiring from the demarcation point to and within each residential unit. (The location of the “demarcation point” can vary from building to building. The FCC’s so-called “Sheetrock Order” of 2007 affects the location of the demarcation point.) This distinction is important because the different FCC rules apply to the Cable Home Run Wiring and the Cable Home Wiring, respectively. But the usefulness of the Inside Wiring Rules is limited because those rules apply only to wiring that is owned by the service provider. If the MDU owner owns the Inside Wiring – and has granted exclusive use rights to a single service provider – then the FCC rules do not apply. Most recent right-of-entry agreements provided by incumbent cable operators allocate ownership of Inside Wiring to the MDU owner while reserving exclusive use rights to the cable company, rendering the FCC’s pro-competition rules ineffective.

Two caveats: First, the FCC Inside Wiring Rules do not distinguish between the type of wiring that comprises the Inside Wiring. The applicability of the rules does not depend on whether the Inside Wiring is CAT-5, RG-6 or fiber optic cable. The rules are technology-agnostic. Second, the FCC rules address Inside Wiring that is used to deliver multi-channel video programming services. The rules do not address the question of how they apply in the case of Inside Wiring that is used (as is generally the case now) to provide multiple services such as video, broadband and telephone services. The FCC’s failure (to date) to address conflicts relating to multiple-use Inside Wiring can lead to confusion.

Finally, as indicated at the outset, Inside Wiring is different from in-ground Distribution Wiring. The FCC rules address the former but the latter. Therefore, ownership of and control over Distribution Wiring is a matter of state property law, and particularly the law of fixtures to real estate.

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In wake of the FCC’s Notice of Inquiry called Improving Competitive Broadband Access to Multiple Tenant Environments, competitive access to multi-tenant properties is again a burning public policy issue. We intend to summarize the controversy in a series of blog entries in the coming weeks.

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