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                                 Before the
                Federal Communications Commission
                      Washington, D.C. 20554

                                )
In the Matter of                )
                                )
Promotion of Competitive Networks) WT Docket No. 99-217
in Local Telecommunications Markets)
                                )
Wireless Communications Association )
International, Inc. Petition for Rulemaking to)
Amend Section 1.4000 of the Commission's Rules)
to Preempt Restrictions on Subscriber Premises)
Reception or Transmission Antennas Designed)
To Provide Fixed Wireless Services)
                                )                           
     
Cellular Telecommunications Industry)
Association Petition for Rule Making and)
Amendment of the Commission's Rules     )
to Preempt State and Local Imposition of)
Discriminatory And/Or Excessive Taxes   )
and Assessments                 )
                                )
Implementation of the Local Competition)     CC Docket No. 96-98
Provisions in the Telecommunications Act)    
of 1996                         )
                                )

      NOTICE OF PROPOSED RULEMAKING AND NOTICE OF INQUIRY 
       in WT Docket No. 99-217, and THIRD FURTHER NOTICE 
         OF PROPOSED RULEMAKING in CC Docket No. 96-98

Adopted:  June 10, 1999                                                 Released:  July 7, 1999

Comment Date:  August 13, 1999
Reply Comment Date:  September 3, 1999

By the Commission:  Commissioner Ness issuing a statement; Commissioner Furchtgott-Roth concurring in
part, dissenting in part, and issuing a statement; Commissioner Powell concurring and issuing a statement. 
                        TABLE OF CONTENTS 

                                                    Paragraph No.

I.   INTRODUCTION AND SUMMARY. . . . . . . . . . . . . . . . . .1

II.  BACKGROUND. . . . . . . . . . . . . . . . . . . . . . . . .8

III. DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . 18

     A.   The Competitive Networks of the Future . . . . . . . 18
     B.   Access to Buildings and Rooftops . . . . . . . . . . 28
          1.   Overview. . . . . . . . . . . . . . . . . . . . 29
          2.   Access Under Section 224. . . . . . . . . . . . 36
          3.   Access to Unbundled Network Elements. . . . . . 49
          4.   Nondiscriminatory Access to Facilities Controlled by the Premises Owner52
          5.   Other Building Access Issues. . . . . . . . . . 64
     C.   Notice of Inquiry on Access to Public Rights-of-Way and Franchise Fees70
     D.   Notice of Inquiry on State and Local Taxes . . . . . 81
     E.   Other Means of Promoting Competitive Networks. . . . 85
     
IV.  CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . 86

V.   PROCEDURAL MATTERS. . . . . . . . . . . . . . . . . . . . 87
     A.   Regulatory Flexibility Act . . . . . . . . . . . . . 87
     B.   Ex Parte Rules . . . . . . . . . . . . . . . . . . . 88
     C.   Filing Procedures. . . . . . . . . . . . . . . . . . 90
     D.   Further Information. . . . . . . . . . . . . . . . . 95

VI.  ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  . .96

APPENDIX  Initial Regulatory Flexibility Analysis

                   I.  INTRODUCTION AND SUMMARY

     
1.  This item represents another step in our ongoing efforts to foster competition in local
telecommunications markets.  We believe competitive telecommunications networks will provide
alternatives to local services provided by the incumbent wireline local exchange carriers (LECs) and
provide new services to the public.  This item initiates a rulemaking proceeding to consider certain actions
to facilitate the development of competitive telecommunications networks, and commences an inquiry into
certain other issues related to this goal.  In particular, we consider actions to help ensure that competitive
providers will have reasonable and nondiscriminatory access to rights-of-way, buildings, rooftops, and
facilities in multiple tenant environments.  We also initiate an inquiry in order to compile a record on how
State and local policies regarding telecommunications service providers' access to public rights-of-way and
taxation of telecommunications providers and services may be affecting competition.  While focusing on
these particular issues in this proceeding, we do not mean to imply that we view these issues as the
principal impediments to facilities-based competition in local telecommunications markets.  Rather, our
consideration of these issues here is part of our ongoing effort to examine various possible impediments to
such competition that come to our attention.

     2.  In the Telecommunications Act of 1996, Congress sought "to provide for a pro-competitive,
de-regulatory national policy framework designed to accelerate rapidly private sector deployment of
advanced telecommunications and information technologies and services to all Americans by opening all
telecommunications markets to competition."  In particular, among other things, Congress sought to open
the traditionally monopolistic local exchange and exchange access telecommunications markets to
competitive entry.  Competition in the local exchange market is desirable not only because of the benefits
competition will bring to consumers of local services, but also because competition will eventually
eliminate the incumbent LECs' control of bottleneck local facilities and thereby permit freer competition in
other telecommunications services that must interconnect with the local exchange.

     3.  Moreover, competition to the incumbent LECs will not be limited to traditional, voice-grade
telephone service.  To the contrary, consumers are increasingly demanding high-speed data  services and
other advanced features in order to enhance their ability to access the vast amounts of information,
electronic commerce, and entertainment that are rapidly becoming available through the Internet and other
advanced networks, as well as to improve communications with their friends, families, and colleagues.  In
the 1996 Act, Congress directed the Commission to encourage the deployment on a reasonable and timely
basis of advanced telecommunications capability to all Americans, and directed us regularly to inquire into
the progress of such deployment.  We have recently completed our initial inquiry under this provision. 
We believe the ability of competitive providers to offer accessible, affordable, advanced capabilities to
consumers will be crucial to these providers' efforts to compete with, and offer different services from, the
incumbent LECs.
     
     4.  In the 1996 Act, Congress included provisions intended to facilitate competition to the
incumbent LECs by competitors who use their own end-to-end facilities, providers offering service using
unbundled elements of the incumbent's network, and resellers of the incumbent's service.  The Commission
adopted regulations implementing these provisions in the Local Competition First Report and Order.  We
continue to believe that carriers who provide service by all of these means have the potential to bring many
of the benefits of competition to local exchange markets, and we further observe that some carriers may use
resale and unbundled network elements as entry strategies before they have finished constructing their own
facilities.  Thus, we remain committed to remove obstacles to competitive entry by any of these means. 
As discussed more fully below, however, we believe that, in the long term, the most substantial benefits to
consumers will be achieved through facilities-based competition, because only facilities-based competitors
can break down the incumbent LECs' bottleneck control over local networks and provide services without
having to rely on their rivals for critical components of their offerings.  Moreover, only facilities-based
competition can fully unleash competing providers' abilities and incentives to innovate, both technologically
and in service development, packaging, and pricing.

     5.  Because of the unique benefits that facilities-based competition can confer upon the public, we
seek to eliminate barriers to the development of competitive networks.  Although facilities-based local
competition in this country is still in its incipient stages, there is reason to believe that such competition on
a broad basis is both technically and economically feasible.  As discussed below, the prospects for
facilities-based competition in the near term are especially great from providers that can avoid the need to
duplicate the incumbent LECs' costly wireline networks, either by using wireless technology or by using
existing facilities to customer locations.

     6.  We also believe it is important to bring the benefits of competition, choice, and advanced
services to all consumers of telecommunications, including both businesses and residential customers,
regardless of where they live or whether they own or rent their premises.  In the 1996 Act, Congress
emphasized its intent to bring these benefits "to all Americans."  To the extent that any class of consumers
is unnecessarily disabled from choosing among competing telecommunications service providers, the
achievement of this Congressional goal is placed in jeopardy.  Moreover, the fullest benefits of competition,
including the widespread availability of advanced and innovative services at reasonable prices, cannot be
achieved unless the incumbent carriers are, to the extent feasible, subject to competition in all sectors of
their markets.

     7.  We begin this item with a brief background section discussing the current status of facilities-
based competition and reviewing certain actions we have taken or are taking to promote this form of
competition.  Following that, we address problems of access to multiple tenant environments, such as
apartment and office buildings, office parks, shopping centers, and manufactured housing communities. 
Specifically, we initiate a notice of proposed rulemaking regarding:  section 224 of the Communications
Act and its application to riser conduit and privately granted rights-of-way in multiple tenant
environments that utilities "own or control;" Section 251's unbundled access requirements in the context
of riser cable or wiring that the incumbent LEC owns or controls in these environments; and certain other
issues related to facilitating competitive access to these locations.  Next, we initiate a notice of inquiry
concerning:  reasonable and nondiscriminatory State and local public rights-of-way and tax policies and
their relationship to facilities-based competition; and other means of promoting the development of
competitive facilities-based networks.
                         II.  BACKGROUND

     8.  Traditionally, local telecommunications services in the United States have been provided almost
exclusively by a single carrier in any given geographic area.  Although the Commission made some efforts
prior to 1996 to introduce facilities-based competition to the incumbent LECs, the Commission then had
few tools available to it.  For example, the Commission promulgated rules requiring incumbent LECs to
permit other carriers on reasonable and nondiscriminatory terms and conditions to collocate their equipment
at incumbent LECs' facilities, but the courts held that the Commission's authority at that time did not
encompass the power to order such physical collocation.  While some carriers did begin to offer
competition to the incumbent LECs -- for example, competitive access providers (CAPs) offering services
to certain large businesses -- that competition was quite modest during this period.

     9.  Under the 1996 Act, we have been able to act far more effectively to promote the development
of competition in local telecommunications markets.  For example, in addition to our actions in the Local
Competition First Report and Order implementing the interconnection, unbundling, and resale provisions
of the 1996 Act, we promulgated rules in the Local Competition Second Report and Order governing toll
and local dialing parity; nondiscriminatory access to telephone numbers, operator services, directory
assistance, and directory listings; disclosure of network information; and numbering administration.  In
addition, we have in several instances forborne under section 10 of the Act from enforcing against
competitive service providers statutory provisions and regulations that could unnecessarily inhibit their
ability to compete.

     10.  Both before and since the 1996 Act, we have also taken several actions that specifically
promote the ability of service providers using wireless technology to compete with the incumbent LECs. 
Thus, we have made spectrum in several frequency bands available in a form that is usable for offerings
that can compete with wireline local service, we have permitted new partnering arrangements between
Instructional Television Fixed Service (ITFS) and Multichannel Multipoint Distribution Service (MMDS)
licensees to offer two-way services, and we have increased CMRS licensees' flexibility to use spectrum
for competitive purposes by allowing them to offer fixed services on a co-primary basis with mobile
services.  We have also made spectrum more usable, and promoted opportunities for additional
competitors, by permitting licensees in many services to transfer portions of their spectrum authorizations
to other parties, with Commission approval, by partitioning their service areas and disaggregating their
spectrum.  In addition, even before we were granted broadly applicable forbearance authority under
section 10, we forbore from applying to CMRS providers under section 332(c)(1) of the Act several
provisions of Title II that we found unnecessary and contrary to the public interest as applied to those
services.  

     11.  The changes wrought by the 1996 Act have helped engender significant progress toward
meaningful competition in local telecommunications markets, including markets for advanced services. 
Competitive LECs are rapidly building customer base and gaining market share, although they still account
for less than five percent of local market revenues.  Competitive LECs are deploying fiber in their
networks at a faster rate than incumbent LECs and are rapidly acquiring numbering resources necessary to
provide switched telephone services over their own facilities.  Moreover, we have recently concluded that
new broadband technologies may be capable of creating competition for incumbent LECs in the
narrowband telephone market that incumbent LECs dominate today. 
 
     12.  Incipient and potential challenges to the incumbent LECs may come from several sources.  For
example, CMRS providers are increasingly marketing their services as substitutes for wireline second lines,
in many instances by offering pricing plans that, for an affordable flat price, include large numbers of
minutes for calls placed anywhere in the country or unlimited minutes for calls within the subscriber's
immediate home area.  Fixed wireless telephony services are also being offered by providers using cellular
and PCS frequencies, frequencies between 2 GHz and 4 GHz, and upper frequency bands between 24
GHz and 39 GHz.  We further recently observed that, in addition to these providers using terrestrial
wireless technology, companies offering or planning to offer two-way broadband services to residential
consumers include cable television companies using "cable modems," public utilities within their utility
service territories, wireline competitive LECs, and satellite-based service providers.  We note that
Congress apparently contemplated this variety when it included provisions in the 1996 Act to promote
competition to the incumbent LECs from entities that have not traditionally offered telecommunications
services.
  
     13.  While we are encouraged by certain progress that has been made toward local competition,
however, we recognize that these initial steps have thus far had little practical impact in terms of providing
most customers with choices of service providers or reducing the incumbent LECs' market power.  We are
also concerned that the growth of competition has been uneven and appears to be directly benefitting only
certain classes of telecommunications service users, for example, business customers in more urbanized
areas.  The substitution of CMRS for wireline local exchange service similarly appears at present to be
only a limited phenomenon.  In the Section 706 Report, we emphasized that, despite our finding of
reasonable and timely deployment of advanced telecommunications capability, we would continue to
monitor closely the deployment of broadband capability by providers using all technologies.  We believe
that a similar posture of vigilance, and of readiness to take action where necessary to remove barriers to
competition, is appropriate with respect to the local telecommunications market generally. 

     14.  Consistent with this view, we are considering issues relevant to the development of local
competition in several ongoing proceedings.  One major set of issues centers around ensuring that Federal
and State universal service support is provided in a manner that does not impede the ability of competitive
telecommunications carriers to seek customers, especially in rural areas.  For example, the provision of
implicit universal service support through geographically averaged incumbent LEC rates artificially lowers
the revenues available to competitors who might seek to serve rural areas, and thereby discourages them
from serving these areas.  We are currently in the process of transitioning from implicit to explicit high cost
universal service support.  We have also sought comment on the types of services and local calling plans
that carriers must offer to qualify for universal service funding.  

     15.  In areas other than universal service, we recently sought comment on the definition and
identification of network elements to which incumbent LECs must afford unbundled access in light of the
Supreme Court's order vacating and remanding our prior decision on this issue.  With respect to wireless
service providers in particular, we are considering whether we can and should take actions to facilitate
CMRS carriers' offering of "Calling Party Pays" service options and whether to allocate spectrum at
3650-3700 MHz to non-Government radiocommunications service between fixed points.  We also will be
adopting service rules and auctioning licenses in the 24 GHZ band and the 39 GHz band, which together
with the recently completed reauction of licenses in Local Multipoint Distribution Service (LMDS) should
promote the development of fixed wireless networks as competitive alternatives to the incumbent LECs'
networks.

     16.  Another issue arises out of our rules for access to unbundled elements of the incumbent LECs'
networks.  In the Local Competition First Report and Order, we decided to apply the Total Element Long
Run Incremental Cost (TELRIC) methodology to the pricing of both interconnection and access to
unbundled network elements.  We also determined that a carrier may provide telephone service entirely
through the use of leased elements of an incumbent's network.  We believe that these decisions promote
competition by increasing a competitor's options for obtaining the facilities that it needs to provide service
under reasonable and nondiscriminatory rates, terms, and conditions.  At the same time, however, these
rules in combination arguably reduce the incentives for competitors to make the investments and take the
other business risks necessary to provide service using their own facilities.  Although we do not address this
issue here, it is one that we must continue to consider in our ongoing review of how our rules impact the
development of competition.

     17.  In this proceeding, we seek comment and make inquiry in several specific areas relating to the
development of competitive networks.  Specifically, in a notice of proposed rulemaking, we make proposals
and seek comment on issues relating to competitive providers' access to multiple tenant environments, and
in a notice of inquiry we explore issues related to access to public rights-of-way and State and local
taxation.  This effort is complementary to our past actions and other ongoing proceedings described above.  

                         III. DISCUSSION

A.   The Competitive Networks of the Future.

     18.  The most immediate beneficial effect of the introduction of competition into local
telecommunications markets, even on a small scale, is to make competitive alternatives available to
individual subscribers.  As noted above, this goal can be achieved in a number of ways: through resale,
leasing of unbundled network elements, or use of a new entrant's own facilities.  To date, our efforts to
facilitate local competition have generally encompassed all three of these means of entry, both separately
and in combination.  These efforts have helped eliminate many of the economic inefficiencies that
previously characterized local telecommunications markets and have contributed to the early growth of
competition in those markets, and we intend to continue enforcing our rules and taking other necessary
actions to ensure that all three means of entry are available on economically efficient terms.  Nonetheless,
as discussed above, our broadly directed efforts to date have resulted in only relatively limited competition
in many market sectors.

     19.  In this proceeding, we focus specifically on eliminating certain barriers to facilities-based
competition.  The major economic obstacle to the development of competitive facilities-based networks, at
least if pursued through a traditional wireline model, is the extensive investment necessary to duplicate the
existing wireline networks.  The incumbent LECs' networks have been built over the course of many
years, generally under a regime of rate of return regulation, and have been supported by an elaborate
system of explicit and implicit subsidies. Nonetheless, some facilities-based entry strategies show promise
of surmounting the competitive advantages inherent in the incumbent LECs' control of in-place facilities by
avoiding the need to construct new, costly wireline networks.  In particular, fixed wireless systems can
often be constructed in less time, at lower cost, and in smaller increments than wireline networks, especially
in areas where the costs of wireline links may be especially high.  Use of existing facilities that already
reach customer premises, such as those controlled by cable television or electric utility companies, may also
be an alternative to constructing new wireline networks from scratch.  With the exception of access to
certain utility facilities under section 224, however, we do not address in this proceeding issues of whether,
and the conditions under which, owners of existing networks other than LECs should be required to make
access to those networks available to third parties.

     20.  By focusing in this proceeding on certain actions that can promote facilities-based competition,
we believe we can accelerate the development of much broader and more effective competition in local
telecommunications markets than exists today.  Indeed, a whole system of competitive networks may
eventually develop, in which today's incumbent LEC in a given geographic area will become only one of
several competitors.  This development will not only bring competition for local services, but will
fundamentally change the nature of our telecommunications system. 

     21.  The dominant paradigm for the provision of telephone service in the United States today is the
connection of every call through the incumbent LECs.  Some industry observers believe that competitive
LECs today serve less than 3 percent of nationwide switched access lines, and that only about a quarter of
these are served through the competitive LEC's own facilities.  Because incumbent LECs still serve the
vast majority of customers and originate or terminate the vast majority of telephone calls, most competing
carriers obtain interconnection to the public switched telephone network through the incumbent LECs. 
Moreover, when two competitive carriers need to transmit calls between each other, they frequently do so
by interconnecting indirectly through the incumbent LECs.  Thus, as a practical matter, the incumbent
LECs exert bottleneck control over interconnection, an essential input to the carriage of
telecommunications.  

     22.  In order for competitive networks to develop, the incumbent LECs' bottleneck control over
interconnection must dissipate.  As the market matures and the carriers providing services in competition
with the incumbent LECs' local exchange offerings grow, we believe these carriers may establish direct
routing arrangements with one another, forming a network of networks around the current system.  In time,
it is likely that the incumbent LECs will cease to be viewed as the presumptive primary providers of
interconnection, and indeed they will begin to seek interconnection and other arrangements with their
challengers.  These circumstances would strengthen the case for substantial deregulation of the incumbent
LECs.

     23.  The current dependence of most carriers on the incumbent LECs for interconnection, and in
many instances for other inputs as well, may also be limiting the extent of publicly beneficial innovation for
two reasons.  First, the incumbent LECs' networks may be technically unable to support certain innovative
and advanced service offerings. Competitive networks may have the potential to bring these benefits to
American homes and businesses more quickly and more efficiently than can the existing arrangements built
around the incumbent LECs.  More fundamentally, however, in the absence of facilities-based
competition the incumbents may lack incentives to rapidly develop and introduce innovative products. 
Thus, the growth of competitive networks will not only lead to innovation by the new competitors, but
should also spur the incumbent providers to upgrade their systems and offer a broader array of desired
service options to meet customers' demands.  For example, many observers believe that the introduction of
fiber rings by CAPs in the 1980s was a central factor in causing the incumbent LECs to adopt this network
architecture.

     24.  In order for competitive facilities-based networks to develop and flourish, several conditions
are necessary.  First, competitive service providers must have the ability to access their potential
customers.  If only a limited class of consumers can be accessed by competitive facilities-based providers,
then it is unlikely that competition will grow to the point where it will effectively  eliminate the incumbent
LECs' market power.

     25.  Second, competitive providers must be free to provide services in the manner that will enable
them most efficiently to offer the services, or combinations of services, that consumers desire.  We
anticipate that the most successful future networks may be those that are most highly functional and
flexible.  Achieving this functionality and flexibility may involve the use of a variety of transmission
technologies.  For example, carriers may want to use terrestrial wireless technology in lower spectrum
bands or satellite technology to offer customers mobility, but use higher-band terrestrial wireless service or
wireline technology for other features, such as broadband interconnectivity, or for transport and termination
between cell sites and the public switched network.  In order to combine technologies in the most efficient
fashion, carriers may seek to acquire different technological capabilities, either through merger and
acquisition or through internal development.  Thus, some recent mergers have been touted as promoting the
incorporation of multiple technologies into particular carriers' network capabilities.  Alternatively,
independent network providers with different technological specialties may establish cooperative
arrangements among themselves.  For example, CMRS and upper frequency band fixed wireless service
providers could enter into productive relationships not only with each other, but with other alternative
providers, including wireline competitive LECs, cable television providers, and public utilities. 

     26.  Many different potential approaches exist to providing services and developing network
architectures to serve the local telecommunications market.  Demand for high-speed access to the Internet,
which was only dimly foreseen when the 1996 Act was passed, may drive many of the competitive
offerings.  Some competitors may focus only on this market segment, perhaps by providing data-only
services using unbundled wireline loops or unlicensed spectrum.  Other competitors may choose to offer
full service offerings over an integrated Internet Protocol (IP) network.  Incumbents may offer new services
through overlay networks that share facilities with their existing networks, as Asymmetric Digital
Subscriber Line (ADSL) technology is deployed.  In order for competitive networks to flourish and convey
the greatest benefits to consumers, competitors must be free to introduce different service, architectural,
and technological approaches, and the market should determine which of these approaches succeed for
different purposes. 
          
     27.  Our intent, broadly stated, is to implement policies that will best facilitate the efficient
development of competitive networks.  In addition to ensuring that our own rules and practices do not
unnecessarily inhibit carriers from developing competitive networks, facilitating competitive networks may
in some circumstances require us to take proactive measures to relieve barriers to competition created by
third parties.  In this item, we make proposals and seek comment on several possible actions, and initiate an
inquiry into other issues, all of which are related to achieving our procompetitive goals.  
     
B.   Access to Buildings and Rooftops.

     28.  In this section, we address issues that bear specifically on the availability of facilities-based
telecommunications competition to customers in multiple tenant environments, including, for example,
apartment buildings (rental, condominium, or co-op), office buildings, office parks, shopping centers, and
manufactured housing communities.  We begin with an overview of the problem of access to multiple
tenant environments generally. We then propose that, under section 224 of the Communications Act,
utilities must permit access to rooftop and similar rights-of-way and riser conduit that they "own or
control" in multiple tenant environments, and we request comment on issues relating to the implementation
of this requirement, including the circumstances under which utility ownership or control might be found to
exist.  We also ask whether we should require incumbent LECs to make available unbundled access to riser
cable and wiring that they control within multiple tenant environments pursuant to section 251(c)(3) of the
Act.  Finally, we request comment on other building access issues, including the legal and policy issues
raised by a possible requirement that building owners who allow any telecommunications carrier access to
facilities that they control make comparable access available to other carriers on a nondiscriminatory basis.

     1.   Overview.
          
     29.  Access by competing telecommunications service providers to customers in multiple tenant
environments is critical to the successful development of competition in local telecommunications markets. 
As of 1990, approximately 28 percent of all housing units nationwide were located in multiple dwelling
units, and that percentage is likely growing.  In addition, many businesses, especially small businesses,
are located in multiple tenant environments.  If a significant portion of these housing units and businesses is
not accessible to competing providers, that fact could seriously detract from local competition in general
and from the availability of competitive services to "all Americans."  

     30.  In order to serve customers in multiple tenant environments, telecommunications carriers
typically require a means of transporting signals across facilities located within the building or on the
landowner's premises to individual units.  In the case of a reseller, these signals are typically transported
across the underlying carrier's facilities as part of the resale arrangement.  Similarly, a carrier that utilizes
the incumbent LEC's local loop and network interface device (NID) as unbundled network elements will
obtain access to in-building facilities pursuant to its agreement with the underlying carrier and the
underlying carrier's arrangement with the building owner.  A carrier that transports signals to multiple
tenant premises by means of its own facilities, however, must then either install its own equipment on the
premises or obtain access to existing facilities in order to transport signals to individual customers' units. 
Depending on State law and local practices, some or all of the locations and facilities to which competing
carriers may require access may be controlled by the incumbent LEC, the building owner, or both.

     31.  In several proceedings before the Commission, a number of parties have argued that both
building owners and incumbent LECs have obstructed competing telecommunications carriers from
obtaining access on reasonable and nondiscriminatory terms to necessary facilities located within multiple
unit premises.  For example, WinStar's Vice President for Real Estate has stated in an affidavit that "many
building owners and/or building management are requesting non-recurring fees, recurring fees, per linear
foot basis charges, and a variety of other" charges that are not based on their costs and are not imposed on
incumbent carriers.  WinStar cites as an example a building manager who demanded a rooftop access fee
of $1000 per month and a $100 per month fee for each hookup in the building, which fees in combination
would amount to over $100,000 per year for a competitive provider seeking to serve the building.  OpTel
states that it has "lodged numerous complaints" regarding the slowness of the incumbent LEC in Houston
and Dallas, Texas, to establish demarcation points.  At the same time, we are aware that competitive
telecommunications carriers have successfully negotiated building access agreements in many instances,
and we recognize that building owners may have an incentive to offer high quality telecommunications
services and choices of providers in order to attract tenants.  On the other hand, long-term tenant leases and
high relocation costs may prevent the market from effectively conveying tenants' preferences to building
owners.  We request parties, including competing carriers, building owners, incumbent LECs, and
customers, to provide additional evidence of their experiences regarding the provision of
telecommunications services in multiple tenant environments.

     32.  The Commission has a long history of concern that all customers have access to their choice of
communications service providers in competitive markets.  For example, in the 1980s we imposed equal
access obligations on LECs, including presubscription and dial-around requirements, in order to ensure
consumer choice of interexchange service providers.  Congress subsequently extended the principle of
equal access to operator services, requiring that every aggregator of operator services allow consumers to
access the operator services provider of their choice at no additional charge.  In areas other than
telecommunications, we have established rules for the disposition of cable inside wiring that enhance
subscribers' ability to choose alternative providers of video service.  In addition, we have preempted
zoning and similar regulations that materially limit transmission or reception by satellite earth station
antennas, or impose more than minimal costs on users of such antennas, unless a regulation is demonstrated
to be reasonable.

     33.  Several provisions of the 1996 Act evince a similar Congressional concern that customers
have the ability to choose from among competing providers of communications services.  For example, the
interconnection, unbundled access, and resale obligations of section 251, as well as the provisions for
access to pole attachments in section 224, are intended to ensure that incumbent LECs will not be able to
obstruct their potential competitors from offering service to customers.  Section 207 of the 1996 Act
directs the Commission to promulgate regulations to prohibit restrictions that impair a viewer's ability to
receive video programming services through over-the-air reception devices, and we have implemented that
provision by issuing regulations that apply to all entities, including homeowner associations and
landlords.  Section 706 establishes a policy and directs the Commission to undertake actions to ensure
that advanced telecommunications capability is deployed on a reasonable and timely basis to all Americans. 
In addition, section 332(c)(7) of the Communications Act shields providers of personal wireless services
from prohibitory or unreasonably discriminatory regulation of the construction and placement of their
service facilities, thereby promoting the ability of all such carriers to serve customers at all locations. 
This concern is generally reflected in the preamble to the 1996 Act, which emphasizes that the purpose of
the 1996 Act is to accelerate the competitive deployment of advanced services "to all Americans."  We
further note that on May 13, 1999, the Subcommittee on Telecommunications, Trade, and Consumer
Protection of the United States House of Representatives Committee on Commerce held an oversight
hearing specifically to address issues regarding access to buildings and facilities by telecommunications
service providers.

     34.  The types of access that a competing telecommunications carrier needs in order to provide
telecommunications service within multiple tenant environments may depend in part upon the technology a
provider uses, the design of its network, and the nature of its service offerings.  In general, incumbent LECs
provide service to multiple-unit buildings by connecting their networks to a NID, which is typically located
in the basement or on the ground floor.  Signals are transported from the NID to locations on each story of
the building by means of riser cable, and to individual units by inside wire.  In order to reach individual
units, competing carriers typically need access either to the existing riser cable and inside wiring, or to riser
conduit and other building space in which to place their own facilities, or both.  Although use of existing
cable and inside wiring is typically less expensive and less disruptive, the existing facilities in many
buildings may be technically inadequate to support some providers' services.  In addition, providers using
wireless technology may need access to rooftops on which to place their antennas, and to conduit for laying
cable to carry signals from the antenna either to the NID or directly to individual units.  We seek
comment generally both on competing providers' preferred engineering arrangements within multiple tenant
environments and on the types of arrangements that they can feasibly employ, as well as on the access
requirements attendant upon each form of engineering arrangement.  We further seek comment on whether
different engineering issues are implicated in accessing multiple tenant environments that are not contained
within a single structure, such as campuses and manufactured housing communities. 

     35.  In order best to accommodate the varying access needs of different competing
telecommunications service providers, we address herein several potential requirements to ensure that
incumbent LECs and property owners do not unreasonably obstruct the availability of facilities-based
competitive telecommunications services to customers located in multiple tenant environments.  We ask
commenters to address specifically how each potential requirement meets or fails to meet the access needs
of different competing providers.

     2.   Access Under Section 224.

     36.   Pursuant to section 224 of the Communications Act, utilities, including LECs, must provide
cable television systems and telecommunications carriers with nondiscriminatory access to any pole, duct,
conduit, or right-of-way that they own or control.  In addition, section 224 requires the Commission to
regulate the rates, terms, and conditions for attachments to poles, ducts, conduits, or rights-of-way to
ensure that such rates, terms, and conditions are just and reasonable, except where such matters are
regulated by a State.  The right of access granted under section 224 includes access for facilities used to
provide wireless telecommunications services.  The rights and obligations created under section 224 run
between utilities, on the one hand, and cable television systems and telecommunications carriers, on the
other hand.

     37.  In the Local Competition First Report and Order, we held that section 224 does not mandate
that a utility make space available on the roof of its corporate offices for the installation of a
telecommunications carrier's transmission tower, although access of this nature might be mandated
pursuant to a request for interconnection or for access to unbundled network elements under section
251(c)(6).  In this regard, we observed that Congressional intent was to permit cable operators and
telecommunications carriers to "piggyback" along distribution networks owned or controlled by utilities,
not to grant access to every piece of equipment or real property owned or controlled by the utility.  We
further observed that an overly broad interpretation of section 224 could impact the owners and managers
of small buildings, as well as small incumbent LECs, by requiring additional resources to effectively
control and monitor rights-of-way located on their properties.

     38.  WinStar petitioned for clarification or reconsideration of this holding, requesting a ruling that
a LEC must allow telecommunications carriers access pursuant to section 224 to rooftop facilities and
related riser conduits that the LEC owns or controls.  In particular, WinStar argues that for wireless local
exchange carriers, "access to roofs and risers by definition is access to the critical rights-of-way," and
therefore that failure to afford such access would amount to unreasonable discrimination against providers
using alternative technologies.  WinStar further argues that because some incumbent LECs rely on
microwave transmission facilities as an integral part of their transmission and distribution networks, failure
to grant relief would enable these incumbents to favor their own services in a blatantly discriminatory
fashion.  Six parties filed oppositions or comments addressing the WinStar Petition, and three parties filed
replies.

     39.  Based on the WinStar Petition and the record compiled in response to that Petition, it appears
that the obligations of utilities under section 224 encompass access to rights-of-way, conduit, and risers on
private property, including end user premises in multiple tenant environments, that utilities own or control. 
Similarly, section 224 appears to include locations on a utility's own property that are used by the utility in
the manner of a right-of-way in connection with the utility's distribution network.  Depending on the
definition of "ownership" or "control," however, these interpretations may raise practical and constitutional
concerns that are not fully addressed in the record.  We therefore seek further comment on the issues raised
in the WinStar Petition.

     40.  Much of the opposition to the WinStar petition is directed at refuting the proposition that
section 224 encompasses a right of access to all real property owned or controlled by a utility.  These
commenters argue that the simple fact that a provider may find it convenient to utilize a piece of utility
property in constructing its network does not justify broadening the scope of section 224 to include that
property.  By its terms, section 224 governs attachments to "pole[s], duct[s], conduit[s], or right[s]-of-
way."  Unless utility property falls within this definition, therefore, it is not within the plain language of
section 224.  Thus, we held in the Local Competition First Report and Order that section 224 does not
mandate that a utility make space available on the roof of its corporate offices for the installation of a
transmission tower.  Nothing in the present record persuades us to reexamine this holding.  Thus, we
tentatively conclude that we should not reconsider our prior determination that section 224 does not confer
a general right of access to utility property, and we seek comment on this tentative conclusion.

     41.  At the same time, it appears that where a rooftop or other location does constitute a right-of-
way owned or controlled by a utility, section 224 requires the utility to permit cable television systems and
telecommunications service providers nondiscriminatory access to such rights-of-way under just and
reasonable rates, terms, and conditions.  This situation may occur, for example, where a utility has
obtained the right to place an antenna or other facility on a roof, including the roof of an end user's
premises in a multiple tenant environment, in connection with its distribution of telecommunications or
utility services, and the utility exercises the requisite ownership or control.  Contrary to the arguments of
some commenters, section 224 does not on its face limit the definition of "right-of-way" to property used
for cabling or similar equipment.  Similarly, unlike section 253, nothing in section 224 limits its application
to "public" rights-of-way.  Indeed, the inclusion within section 224 of rights-of-way that a utility
"controls," as well as "owns," suggests that rights-of-way over private property owned by a third party
were intended to be included.  Thus, so long as a utility uses any pole, duct, conduit, or right-of-way for
wire communications, we tentatively conclude that all rights-of-way that it owns or controls, whether
publicly or privately granted, and regardless of the purpose for which a particular right-of-way is used, are
subject to section 224.

     42.  We tentatively conclude that the definition of "right-of-way" as including a publicly or
privately granted right to place a transmit or receive antenna on public or private premises is consistent
with the common usage of the term.  A right-of-way over another party's property has been understood in
the case law as equivalent to an easement; that is, a right to use or pass over property of another.  We
believe that a right to place an antenna on private property fits comfortably within this definition.  We seek
comment on this analysis.

     43.  We also tentatively conclude that section 224 encompasses a utility's obligation to provide
cable television systems and telecommunications service providers with access to property that it owns
which it uses as part of its distribution network.  In interpreting section 224(f), an arbitration panel of the
Michigan Public Service Commission has held that land used for distribution facilities would be considered
a "right-of-way" even if it were held by the utility in fee simple absolute.  We believe this holding is
consistent with the common use of the term "right-of-way" to denote land that is used for a right-of-way. 
Although a "right-of-way" can be understood in some contexts as limited to a right to use property
belonging to another, we tentatively conclude that the broader definition, which is equally consistent with
common usage, better effectuates the procompetitive intent of this provision.  We further tentatively
conclude that this definition is more consistent with the language of section 224, which encompasses rights-
of-way that a utility "owns" as well as "controls."   Thus, where a utility uses its own property in a manner
equivalent to that for which it might obtain a right-of-way from a private landowner, we tentatively
conclude that it should be considered to own or control a right-of-way within the meaning of section 224. 
We seek comment on this tentative conclusion, as well as on the test for determining when a utility is using
its own property in a manner equivalent to a right-of-way.

     44.  In addition, we tentatively conclude that the obligations of utilities under section 224
encompass in-building conduit, such as riser conduit, that may be owned or controlled by a utility.  First,
we believe that riser conduit used by a utility could reasonably be interpreted as a right-of-way.  In
addition, section 224 on its face provides broadly for a right of access to "conduit," without any limitation
on the term.  Although legislative history dating from 1978, when the Pole Attachments Act was originally
enacted, suggests that conduit consists of "underground reinforced passages," we are not currently
persuaded that this legislative history legally limits the plain language of the statute.  Moreover, even if,
as has been argued, electric utilities rarely own or control riser, this fact does not necessarily limit the
application of section 224 to any situations where a utility does exercise such ownership or control.  We
request comment on this analysis.  In addition, we note that section 1.1402(i) of our rules currently defines
conduit as consisting of pipe "placed in the ground."  We seek comment regarding whether this definition
should be amended.

     45.  At the same time, we are aware that an interpretation of section 224 as including rights-of-way
and conduits on end user premises may raise difficult issues of implementation.  In particular, although
section 224 on its face imposes obligations only on utilities, we believe it is important to consider whether
application of that provision would have an impact on underlying property owners. We therefore seek
comment on several issues relating to the implementation of our interpretation of section 224.  First, we
seek comment regarding the circumstances under which a utility may be considered to own or control a
right-of-way or conduit within the meaning of section 224.  For example, a utility might be considered to
"control" a right-of-way when it has actually placed a distribution facility on a piece of property with the
agreement of the owner, when it has obtained a right from the owner to use a portion of its property in that
manner, or when it has taken other action to secure the right to place distribution facilities, such as by
exercising the power of eminent domain.  WinStar further argues that a utility might own or control a right-
of-way, and thus may be required to permit access, even where it has chosen not to use that right-of-way
for distribution facilities.  Alternatively, utility control might be construed more narrowly, for example
by requiring some specific cession of rights by the underlying property owner.  We seek comment on these
and other possible conditions for establishing utility ownership or control of a right-of-way, as well as on
how such ownership or control may be ascertained by a competitive service provider.  Similarly, we seek
comment regarding what circumstances would establish utility ownership or control of riser conduit for
purposes of section 224.

     46.  Commenters should also consider how to measure the extent of the right-of-way that a utility
might be considered to own or control under specific circumstances.  For instance, assuming a utility leases
a defined amount of space on a roof under circumstances that establish ownership or control, and its
antenna structure entirely fills that space, we seek comment regarding the extent of the utility's obligations. 
Alternatively, we seek comment regarding a utility's obligations if it simply contracts for the right to place a
facility on a roof, without any defined space.  We also request comment on the scope of any ownership or
control a utility may establish by, for example, running cable through riser conduit.  In this regard, we note
that a utility is required to exercise its authority of eminent domain where necessary to expand an existing
right-of-way in order to accommodate a request for access.  We request comment as to whether any
similar principle applies where a utility has obtained a right-of-way by agreement with the property owner,
rather than by the exercise of eminent domain.  

     47.  With regard to these questions generally, we note an earlier holding that "[t]he scope of a
utility's ownership or control of an easement or right-of-way is a matter of state law."  Commenters
should consider whether, in light of this principle, it is useful or appropriate for us to offer any guidance
regarding the existence and scope of ownership or control under particular circumstances, or whether we
should defer entirely to state law.  Commenters should also consider whether any interpretation of utility
ownership or control might result in the taking of a building owner's property without just compensation
within the meaning of the Fifth Amendment to the United States Constitution, and whether any such
construction should therefore be avoided.  Similarly, commenters should consider whether an overly
broad construction of utility ownership or control would impose unreasonable burdens on building owners,
including small building owners, or compromise their ability to ensure the safe use of rights-of-way or
conduit, or engender other practical difficulties.  In addition, commenters should consider whether any
construction would effectively limit the ability of property owners to enter into exclusive service contracts
with telecommunications service providers or multichanel video programming distributors (MVPDs), and,
if so, whether this result is appropriate.  We also note that our rules governing the disposition of cable
home run wiring apply only where the incumbent MVPD no longer has a legally enforceable right to remain
on the premises.  We seek comment on whether and how our proposed interpretation of section 224,
under any definition of "own" or "control", might affect the application of the rules governing home run
wiring by expanding a cable television system's ability to remain on multiple unit premises, and on what
action we should take to account for any such effects.    

     48.  Finally, section 224(c) of the Act provides that the Commission shall not have jurisdiction
with respect to rates, terms, and conditions of access to pole attachments if a State regulates such matters
and certifies to the Commission that it does so and that it meets certain conditions.  We request comment
as to whether any additional certification or other Commission action is necessary to ascertain whether a
State is regulating the rates, terms, and conditions of access to facilities and rights-of-way on multiple unit
premises within the meaning of this provision.

     3.   Access to Unbundled Network Elements.

     49.  Pursuant to section 251(c)(3) of the Communications Act, an incumbent LEC must make
available to any requesting carrier nondiscriminatory access to network elements on an unbundled basis at
any technically feasible point under just, reasonable, and nondiscriminatory rates, terms, and conditions. 
In determining what network elements should be made available under this provision, the Commission is
directed to consider, at a minimum, (a) whether access to such network elements as are proprietary in
nature is necessary, and (b) whether the failure to provide access would impair the ability of the
telecommunications carrier seeking access to provide the services that it seeks to offer.  In the Local
Competition First Report and Order, we required incumbent LECs to make available pursuant to these
provisions unbundled access to the NID in multi-tenant buildings, finding that a competitor that deploys its
own loops must have access to this facility in order to provide service and that such access is technically
feasible.  This decision, however, did not mandate unbundled access to subloop facilities located on
multiple tenant premises.

     50.  The Supreme Court in Iowa Utilities Board vacated our rule identifying the minimum set of
network elements that incumbent LECs must make available on an unbundled basis, holding that we had
not adequately considered the "necessary" and "impair" standards of section 251(d)(2).  Following this
decision, we requested further public comment regarding how sections 251(c)(3) and 251(d)(2) should be
applied.  In addition to requesting comment on how the "necessary" and "impair" standards should be
interpreted in light of the Supreme Court's decision, we also asked commenters to apply their proposed
criteria to the seven network elements that had previously been identified in the rule that the Supreme Court
had vacated, as well as to any other network elements they contended should be unbundled.  We
specifically suggested that commenters might want to address whether we should require unbundling of
facilities owned by the incumbent LEC on the end user's side of the demarcation point, as well as sub-loop
unbundling at the remote terminal or at other points within the incumbent LEC's network.

     51.  We seek comment on the potential treatment of in-building cable and wiring owned or
controlled by an incumbent LEC as an unbundled network element under section 251(c)(3).  We will
establish criteria for applying the "impair" and "necessary" standards of section 251(d)(2), and apply those
criteria to the previously identified minimum set of network elements, including the NID, based on the
record compiled in response to our recent Further Notice of Proposed Rulemaking.  We request comment
on whether unbundled access to riser cable and wiring within multiple tenant environments is technically
feasible.  We note that facilities-based competitive LECs have advanced arguments that, in many
instances, it is difficult for them to provide service without access to these facilities, and that at least one
State commission has required incumbent LECs to unbundle house and riser cable within multiple tenant
environments.  We seek comment, in particular, from a technical standpoint, on whether sharing of wire
may lead to problems due to insufficient power or electromagnetic incompatibility.  Commenters should
address whether any obligation to allow unbundled access to cable and wiring should be limited, or whether
any additional rules should be adopted, to avoid these problems.  We also seek comment regarding how
this network element should be defined, whether any other facilities controlled by incumbent LECs within
multiple tenant environments should be included, whether and to what extent these facilities must be
unbundled from each other, and any other issues relating to the implementation of this potential
requirement.  For example, commenters may wish to address whether, in addition to or instead of the
network unbundling obligation discussed above, we should require incumbent LECs to permit unbundled
access to a remote terminal or other point outside the walls of a multiple tenant building.  Commenters
should consider to what extent alternative proposals would satisfy the needs of all classes of competing
providers.

     4.   Nondiscriminatory Access to Facilities Controlled by the Premises Owner.
               
     52.  The potential actions discussed above under sections 224 and 251(c)(3) would help ensure that
utilities, including LECs, provide competitive telecommunications carriers with reasonable and
nondiscriminatory access to rights-of-way and facilities in multiple tenant premises that they own or
control.  These provisions, however, do not provide access to areas or facilities controlled by the premises
owner.  In the Inside Wiring Report and Order and Second Further NPRM, we observed that
nondiscriminatory access to facilities for video and telephony service providers would enhance
competition.  We declined, however, to adopt a Federal mandatory access requirement, finding that the
record in that proceeding did not provide a sufficient basis for addressing the issues.

     53.  Consistent with our statement in the Inside Wiring Report and Order and Second Further
NPRM, we now seek comment on whether building owners who allow access to their premises to any
provider of telecommunications services should make comparable access available to all such providers
under nondiscriminatory rates, terms, and conditions.  In light of the information discussed above that a
number of building owners may be imposing unreasonable and discriminatory charges on competitive
carriers, we seek comment on whether adoption of this principle may be necessary to ensure that
consumers in multiple tenant environments have the ability to access the service provider of their choice. 
We also seek comment on whether there are circumstances in which exclusive contracts may promote
competition and serve the public interest (e.g., where the service provider lacks market power or when the
period of exclusivity is reasonably related to the time needed for the provider to recoup its investment in the
property).

     54.  We note that several States have enacted legislation or taken regulatory action to prevent
building owners from discriminating or demanding unreasonable payments or conditions with respect to
access by telecommunications service providers.  Furthermore, the National Association of Regulatory
Utility Commissioners (NARUC) has resolved that it "supports legislative and regulatory policies that
allow customers to have a choice of access to properly certificated telecommunications providers in multi-
tenant buildings," and that it "supports legislative and regulatory policies that will allow all
telecommunications service providers to access, at fair, nondiscriminatory and reasonable terms and
conditions, public and private property in order to serve a customer that has requested service of the
provider."  We seek comment on the effectiveness of existing State statutes and regulations governing
building access.  Furthermore, we note that the Building Owners and Managers Association, International
(BOMA) has stated that it offers its members model license agreements that do not discriminate between
incumbent and competitive providers.

     55.  In addition to continuing to work with State and local governments, industry, and building
owners, we seek comment here on the necessity and prospects for adopting a national nondiscriminatory
access requirement. If we were to consider such a national requirement, we seek comment on how it could
be tailored to ensure that consumers in all parts of the country will in fact have a choice of competitive
service providers without infringing on the rights of property owners and the authority of other regulating
jurisdictions.  

     56.  Specifically, we seek comment on whether the imposition of a nondiscrimination requirement
on building owners would be within our statutory authority.  First, we seek comment on whether the use of
in-building facilities to provide interstate and foreign communication is within our subject matter
jurisdiction to regulate under Title I of the Communications Act.  Sections 1 and 2(a) of the Act, read
together, give the Commission jurisdiction to enforce the Act with respect to "all interstate and foreign
communication by wire or radio. . . ."  Pursuant to section 3, "radio communication" and "wire
communication" are defined to include "all instrumentalities, facilities, apparatus, and services . . .
incidental to" such communication.  We seek comment on whether or not the use of inside wire for
interstate and foreign communication may be feasibly severable from its use for intrastate communication
for purposes of carrier access, and whether the partial intrastate usage of these facilities would obstruct our
jurisdiction.  Thus, for example, in connection with the Commission's decision to detariff the LECs'
provision of inside wiring, the Commission also preempted the States from tariffing this service, and the
Commission found that such preemption was consistent with its statutory authority under Title I.  We
seek comment on whether our subject matter jurisdiction for purposes of imposing a nondiscriminatory
access requirement is subject to a similar analysis, and whether any other grants of authority are
applicable.
          
     57.  To the extent that in-building facilities are within our subject matter jurisdiction, we further
seek comment on whether we have authority to impose a nondiscriminatory access requirement on building
owners pursuant to the provisions of the Communications Act and the doctrine of ancillary jurisdiction. 
Section 4(i) of the Act authorizes the Commission to "perform any and all acts, make such rules and
regulations, and issue such orders, not inconsistent with this Act, as may be necessary in the execution of
its functions."  Section 303(r) of the Act authorizes the Commission to "[m]ake such rules and
regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary
to carry out the provisions of this Act . . . ."  These provisions, among others, have been understood to
give the Commission broad flexibility to promulgate regulations that may not fall strictly within any
particularly enumerated statutory power where necessary to carry out the purposes and provisions of the
Act.  Indeed the Supreme Court held that the Commission may exercise authority that is "reasonably
ancillary to the effective performance of the Commission's various responsibilities. . . ." As discussed
above, several provisions of the Communications Act, as amended by the 1996 Act, are designed to
promote consumers' ability to choose from among competing providers of communications services.  We
seek comment on whether the addition of a nondiscrimination requirement with respect to access to
facilities used to provide interstate and foreign telecommunications services owned or controlled by
premises owners is sufficiently closely related to the regulation of those services under Title II as to confer
jurisdiction.  Would such an exercise of Commission authority be sufficiently necessary to carry out the
provisions and intent of the 1996 Act to promote competition and consumer choice?  In addition, we seek
comment on any other potential sources of or conflicts with Commission jurisdiction.

     58.  We also ask for comment on whether there would be any constitutional impediment to our
adoption and enforcement of a nondiscrimination requirement.  Under the Fifth Amendment to the United
States Constitution, government may not effect a taking of private property without just compensation. 
In the Loretto case, the United States Supreme Court considered a challenge to a New York statute that
required building owners to permit cable television service providers to install facilities on their premises in
exchange for compensation determined by a State regulatory commission to be reasonable.  The Court
held that because the installation of these facilities constituted a permanent physical occupation of the
landlord's property, it amounted to a per se taking for which just compensation is constitutionally required,
regardless of the minimal extent of the occupation or the importance of the public interest served.  The
Court therefore remanded the matter to State court to determine whether the nominal compensation
prescribed by regulation was just.  In Bell Atlantic, the United States Court of Appeals for the D.C.
Circuit narrowly construed the Commission's pre-1996 statutory authority to overturn a requirement that
LECs offer physical collocation to competing telecommunications carriers.  The Court held that because
the Commission's order created an identifiable class of cases in which application of the regulation would
necessarily constitute a taking, it could not be sustained in the absence of express statutory authority.

     59.  We recently applied Loretto and Bell Atlantic in the OTARD Second Report and Order,
where we considered our authority under section 207 of the 1996 Act to require building owners to allow
devices for the reception of over-the-air video signals to be placed on their premises.  We concluded that
section 207 authorizes the Commission to prohibit restrictions on the placement of such antennas in areas
within a tenant's exclusive use and control, and that such a prohibition does not constitute a per se taking
of private property within the meaning of the Fifth Amendment because it does not result in a new physical
occupation of the landowner's property, but only affects the use of areas that the landlord has voluntarily
allowed the tenant to occupy.  We further concluded, upon balancing the character of the governmental
action, its economic impact, and its interference with reasonable investment-backed expectations, that such
regulation does not effect a regulatory taking.  With respect to common and restricted access areas,
however, we were concerned that a prohibition on restrictions on the placement of antennas would
constitute a per se taking because it would authorize a permanent physical occupation of the landlord's
property.  In addition, we found that section 207 did not explicitly authorize us to permit a tenant to
install a device on common or restricted access property, over which the tenant did not otherwise have
exclusive use or control, over the property owner's objection.  Under these circumstances, and in light of
case law indicating that an agency's authority is construed narrowly not to authorize a per se taking unless
such authority is expressly granted or must necessarily be implied in order not to defeat a grant of
substantive authority to the agency, we declined to extend our rules implementing section 207 to cover
the placement of antennas in common and restricted access areas. 
          
     60.  We seek comment on the extent to which a nondiscrimination requirement on private property
owners can be sustained consistent with Loretto and Bell Atlantic, and with the application of those
decisions in the OTARD Second Report and Order.  For example, would constitutional problems be
mitigated if a requirement were tailored to apply only if the property owner has already permitted another
carrier physically to occupy its property, if it enabled a property owner to obtain from a new entrant the
same compensation that it has voluntarily agreed to accept from an incumbent LEC, or if a property owner
could satisfy a nondiscrimination obligation in many instances simply by allowing transport of a competing
carrier's signals over existing wire that the building owner owns and controls?  Under the last of these
circumstances, the competing carrier would not physically occupy the building owner's property.  We
therefore seek comment on whether either a per se or regulatory taking would be involved under any of
these situations, or any combination of these situations.  We further request comment regarding whether
such arrangements will be sufficient to allow competing providers to offer telecommunications service, and
on whether providers utilizing such arrangements will also require additional access to premises facilities,
such as physical connection to the existing wire.

     61.  If we decide to adopt any nondiscrimination requirement, we seek additional comment on how
that requirement should be structured to achieve our procompetitive objectives.  In particular, commenters
should consider whether it is sound policy, and would promote competition, to permit exclusive contracts
between property owners and service providers under some circumstances.  On the one hand, an exclusive
contract prevents carriers from competing to serve customers on the covered premises during the period
that the contract is in effect.  On the other hand, it has been argued that new entrants often need exclusive
contracts for a limited period of time in order to recoup their investment, and that if exclusive contracts are
not permitted incumbents might face no competition at all.  We seek comment on the extent to which, and
under what circumstances, the ability to enter into exclusive contracts materially advances the ability of
competitive carriers to serve customers in multiple tenant environments.  We also seek comment on whether
end users may benefit from a property owner's ability to enter into an exclusive contract, for example by
negotiating a discount with the carrier.  Commenters that favor permitting exclusive contracts should
address the circumstances under which such contracts should be allowed.  For example, a rule might permit
only exclusive contracts that are limited to some defined period of time, or contracts between building
owners and carriers that do not exercise market power.  Commenters should also consider whether any rule
should be applied in a manner that abrogates existing contracts, and whether doing so would raise
constitutional concerns.  For example, commenters should consider whether any unfairness might arise, and
whether the effectiveness of any rule might be compromised, if the compensation provided for in a contract
that contemplated exclusivity were to become the nondiscriminatory standard for non-exclusive contracts.
     
     62.  In addition, we invite commenters to address whether we should establish any special
mechanism for enforcing any nondiscrimination obligation on private premises owners.  We also invite
comment on whether, and under what circumstances, we should preempt any State regulation of access that
may be inconsistent with any regulations that we may adopt, or whether our regulations should apply only
in States that do not enforce their own nondiscriminatory access rules.  In addition, commenters should
consider whether we should limit the scope of any obligation in order to avoid imposing unreasonable
regulatory burdens on building owners.  For example, both the Texas and Connecticut nondiscriminatory
access statutes require a property owner to afford nondiscriminatory access to a carrier only after a
customer has requested that carrier's service.  In addition, a rule could exempt buildings that house fewer
than a certain number of tenants or are under a certain size.  

     63.  Finally, we request comment on any practical issues that a nondiscrimination requirement may
engender.  For example, we request comment on any technical issues that may be raised by requiring
nondiscriminatory access to existing wire, such as power or electromagnetic compatibility problems, and
what rules, if any, we should adopt to address those issues.  Commenters should particularly consider any
different issues that may arise depending on whether a building is wired by means of dedicated facilities to
each unit or shared media.  We further request comment on how any rule should address situations in which
space constraints may prevent the addition of new facilities.  Commenters should further consider safety
questions, insurance and liability issues, and any other relevant factors.
           
     5.   Other Building Access Issues.

     64.  In addition to the proposals discussed above, we seek comment on several other potential
actions that might help to ensure that customers located in multiple tenant environments have access to
their choice of telecommunications service providers.  First, if we do not adopt a nondiscrimination
requirement, or adopt a nondiscrimination rule that applies only under some circumstances, we request
comment on whether, as an alternative, we should forbid telecommunications service providers, under some
or all circumstances, from entering into exclusive contracts with building owners.  We also request
comment on whether we should adopt any such rule in addition to any building owner nondiscriminatory
access requirement.  We seek comment on whether we have the authority to forbid common carriers from
entering into exclusive contracts with building owners or managers under section 201 of the
Communications Act, which prohibits unjust and unreasonable practices.  In addition, we request comment
on the appropriate scope of any rule against exclusive contracts, and how such a rule should be
implemented.  Commenters should particularly address whether a ban on exclusive contracts would be an
effective means of securing nondiscriminatory access, and whether such a rule should apply to all
telecommunications carriers and contracts or only in some situations, such as unreasonably long contracts
or contracts involving carriers with market power.  We also request comment on the legal and policy
issues and practical implications of either abrogating existing exclusive contracts or allowing them to
remain in force, including any constitutional issues.  

     65.  Second, we request comment on how our rules governing determination of the demarcation
point between facilities controlled by the telephone company and by the property owner on multiple unit
premises under Part 68 of our rules impact competitive provider access, and whether any modification or
clarification of those rules is appropriate to promote access.  In 1984 and 1986, in order to foster
competition in the market for telecommunications inside wiring, the Commission acted to detariff the
provision of inside wiring by the LECs and permit subscribers and premises owners to install and connect
their own inside wiring.  The "demarcation point" establishes the division, for purposes of these rules,
between wiring and other equipment that is under the control and responsibility of the carrier and that
which is under the control and responsibility of the subscriber or premises owner.  Under our current rules,
the demarcation point in multiple unit premises may be established at any number of places depending on
the date the inside wiring was installed, the local carrier's reasonable and nondiscriminatory practices, and
the property owner's preferences.  Specifically, in multiple unit premises existing as of August 13, 1990,
the demarcation point shall be determined in accordance with the local carrier's reasonable and
nondiscriminatory standard operating practices as of August 13, 1990.  In multiple unit premises in
which wiring is installed, or major additions or rearrangements of wiring are made, after August 13, 1990,
the telephone company may establish a reasonable and nondiscriminatory practice of placing the
demarcation point at the minimum point of entry, or, if the telephone company does not establish such a
practice, the premises owner shall establish one or more demarcation points.

     66.  In various recent pleadings, several parties have argued that modification of our Part 68 rule
governing determination of the demarcation point would facilitate competitive access to multiple tenant
environments.  For example, it has been argued that fixing the demarcation point in all multiple unit
premises at the minimum point of entry, in combination with a nondiscriminatory access obligation on
building owners, would constitute an effective alternative to requiring access to inside wiring as an
unbundled network element.  Other parties advocate a uniform demarcation point independent of this
issue in order to prevent incumbent LECs from obstructing competition by designating demarcation points
that are inconvenient to access or difficult to determine.

     67.  We seek comment on how the definition of the demarcation point under Part 68 affects access
to multiple tenant environments by competitive telecommunications service providers, and whether any
Commission action is appropriate.  First, we request comment, accompanied by specific evidence,
regarding whether, and how, the definition of the demarcation point is in fact affecting competitive
providers' access.  To the extent there is a deleterious effect, we further request commenters to consider
what actions can be taken to remedy the situation.  For example, commenters may consider whether the
person who controls wire and related facilities for purposes of installation and maintenance must
necessarily be the same person who exercises control for purposes of competitive access, and, if not,
whether we should apply different standards for each of these purposes. Commenters may also consider
whether, as suggested in the comments described above, they believe we should adopt a uniform
demarcation point for purposes of competitive access, either at the minimum point of entry or at some other
point, for all or some class of multiple-unit premises owners.  Among other things, commenters should
address the need for and benefits of any regime that they propose, any costs for incumbent providers and
building owners, any effects on the competitive installation and maintenance of inside wiring, and how any
rule should be drafted and implemented. 

     68.  Third, we ask commenters to consider whether our rules governing access to cable inside
wiring for MVPDs should be extended so as to afford similar access to providers of telecommunications
services.  Section 76.804 of our rules sets forth procedures governing the disposition of home run wiring
(i.e., the wiring from the demarcation point to the point at which the MVPD's wiring becomes devoted to an
individual subscriber or individual loop) owned by an MVPD when the MVPD ceases to provide service to
a building, and governing access to that wiring by other MVPDs after its disposition.  In order to take
advantage of these procedures, however, a provider must offer multichannel video programming services. 
Commenters in other proceedings have argued that this rule offers benefits to providers of video services
that are not currently available to telecommunications service providers, and that this distinction not only is
arbitrary but creates uneconomic incentives for providers to incorporate video services into their offerings
simply to take advantage of the more favorable rules.  Indeed, in a world increasingly marked by
technological convergence and interchangeable services, we believe a strong argument can be made for
applying uniform rules governing access to inside wiring regardless of a provider's service technology or
the form of its authorization.  Commenters should accordingly address the advantages and disadvantages of
extending the MVPD home run wiring rule to benefit telecommunications service providers.  In particular,
commenters should consider whether extension of the rule in this manner would present practical
difficulties for administration, for example, if a telecommunications service provider and an MVPD both
seek to use the same wire.  We further request comment on whether other of our cable inside wiring rules
should also be extended to benefit telecommunications service providers.

     69.   Finally, we request comment on whether we should adopt rules similar to those adopted in the
video context under section 207 of the 1996 Act that would protect the ability to place antennas to transmit
and receive telecommunications signals and other fixed wireless signals that are not covered by section 207. 
Section 1.4000 of our rules prohibits, with limited exceptions, any State or local law or regulation, private
covenant, contract provision, lease provision, homeowners' association rule, or similar restriction that
impairs the installation, maintenance, or use of certain antennas designed to receive video programming
services on property within the exclusive use or control of the antenna user where the user has a direct or
indirect ownership or leasehold interest in the property.  Section 1.4000 was adopted pursuant to section
207 of the 1996 Act, which applies only to certain video programming services.  The Wireless
Communications Association International, Inc. (WCAI) has very recently filed a Petition for Rulemaking
asking us to extend the principles embodied in section 1.4000 to the placement of antennas used for any
fixed wireless service.  Although section 1.4000 applies only to antennas used to receive certain video
programming services pursuant to section 207, we believe we may have the authority to adopt similar rules
pertaining to telecommunications services, services delivered via telecommunications, and other fixed
wireless services pursuant to section 4(i) and other provisions, including sections 201(b) and 303(r),
granting us general authority to effectuate the provisions and purposes of the Communications Act.  We
seek comment on whether it is necessary to apply any or all of the principles embodied in section 1.4000 to
the placement of antennas for receiving and transmitting telecommunications signals and other fixed
wireless signals that are not encompassed within section 207.  We seek comment on the nature and extent
of any video services that are not included within section 1.4000 or section 207, and how the exclusion of
these services can best be addressed.  We also seek comment on whether the Commission's authority to
promulgate rules that preempt governmental and nongovernmental restrictions on antennas used for
telecommunications and video services is limited to those antennas and services specified in section 207, or
whether the Commission has authority pursuant to other sections of the Act, including sections 4(i), 201(b),
253(d), 303(r), 705, and 706(a), to preempt State, local, community association and lease restrictions on
such antennas.  We note that section 207 by its terms directs the Commission to promulgate regulations
"pursuant to section 303 of the Communications Act of 1934."  We further seek comment on whether
rules similar to section 1.4000 but applying to services that are not within the scope of section 207 would
be constitutional, consistent with the analysis in the OTARD Second Report and Order.  In addition, to
the extent commenters advocate restrictions on State or local regulation of the placement on end user
premises of antennas used to receive and transmit personal wireless services, they should address whether
our adoption of such rules would be consistent with section 332(c)(7).  
     
C.   Notice of Inquiry on Access to Public Rights-of-Way and Franchise Fees.
     
     70.  In order to serve any customers, whether they are in a fixed location or mobile, a
telecommunications service provider must have a means of transporting signals between calling and called
parties' locations.  This transport of signals may be accomplished using either wireline or wireless
technology.  Where wireline technology is used, it is often most efficient to place the necessary facilities
within the public rights-of-way.  The incumbent LECs have long been granted authority to use public
rights-of-way for this purpose, and they have extensive facilities in place.
     
     71.  Full and fair competition in the provision of local telecommunications service requires that
competing providers have comparable access to the means of transporting signals.  For competitive carriers
using wireline technology, this may involve the ability to utilize public rights-of-way in a manner, on a
scale, and under terms and conditions similar to those applicable to the incumbent LECs' use of public
rights-of-way.  Providers of wireless telecommunications services, by contrast, do not need access to public
rights-of-way to transport signals between their transmitting and receiving facilities and their customers'
locations.  However, wireless service providers do need to connect their antenna facilities to each other and
to central switches, and these connections are often most efficiently accomplished by means of wireline
facilities that traverse the public rights-of-way.  Often, wireless carriers lease capacity on facilities owned
by other communications providers, but in some instances they install their own cables.  Thus, providers of
wireless telecommunications services sometimes require access to public rights-of-way in connection with
the provision of service.  These carriers will, however, typically impose far less burden on public rights-of-
way than carriers that offer service primarily by means of wireline technology.

     72.  Public rights-of-way generally are controlled and managed by local governments and, to a
lesser extent, State governments.  These governments are responsible for, among other things, ensuring that
the rights-of-way are used in a manner that benefits the public and, in particular, that neither threatens
public safety, unnecessarily inconveniences the public, nor imposes uncompensated costs.  One challenge
for State and local governments in the era of competitive telecommunications service is to administer the
public rights-of-way in a manner that serves these ends and at the same time does not unfairly favor
incumbent carriers or obstruct other providers' ability to compete effectively in the provision of service. 
We are confident that the majority of State and local governments recognize the advantages to their citizens
of encouraging new telecommunications competitors and that they are managing their rights-of-way in a
competitively neutral way.  Nevertheless, we are aware of claims that this is not the case in all jurisdictions,
as well as of arguments by State and local governments that carriers are making unreasonable and
unfounded complaints.  In this section, we initiate an inquiry into the management of public rights-of-way
as it relates to the development of facilities-based competition.  We begin by reviewing the principal
provisions of the Communications Act that are relevant to management of the public rights-of-way, as well
as Commission and judicial precedent interpreting those provisions.  We then seek comment regarding
carriers' and governments' experiences with respect to rights-of-way management.  Our aim is to compile a
record on the basis of which we, together with representatives of State and local governments and the
affected industry, can evaluate whether, and in what form, further action is appropriate.

     73.  Statutory Background.  Section 253 of the Communications Act addresses State and local
government authority to manage the public rights-of-way.  Section 253(a), considered alone, generally
proscribes State and local governments from imposing legal requirements that either directly prohibit the
ability of any entity to provide any interstate or intrastate telecommunications service or have the effect of
prohibiting any entity's ability to provide such service.  Sections 253(b) and 253(c), however, permit
State and local governments to take certain actions that meet the requirements of those subsections
notwithstanding section 253(a).  Specifically, section 253(c) provides that "[n]othing in this section affects
the authority of a State or local government to manage the public rights-of-way or to require fair and
reasonable compensation from telecommunications providers, on a competitively neutral and
nondiscriminatory basis, for use of the public rights-of-way on a nondiscriminatory basis, if the
compensation required is publicly disclosed by such government."  Under section 253(d), the
Commission is directed, after notice and an opportunity for public comment, to preempt the enforcement of
any statute, regulation, or legal requirement that "violates subsection (a) or (b)," to the extent necessary to
correct such violation or inconsistency.  Section 253(d) does not, however, on its face grant the
Commission any direct authority over section 253(c).

     74.  Where a CMRS provider seeks to use public rights-of-way for its facilities, the permissible
exercise of State and local authority may also be affected by section 332(c)(3).  Under section 332(c)(3), in
general, "no State or local government shall have any authority to regulate the entry of or the rates charged
by any commercial mobile service or any private mobile service."  However, section 332(c)(3) does not
"prohibit a State from regulating the other terms and conditions of commercial mobile services."  Thus, a
State or local rights-of-way management procedure or requirement, as applied to CMRS providers, is
permissible under section 332(c)(3) if it constitutes regulation of terms and conditions of service other than
rates or entry.  Any requirement that functions as an entry regulation, however, is not permissible as
applied to CMRS providers.

     75.  Commission and Judicial Precedent.  During the period since the 1996 Act became law, the
Commission and the courts have discussed or applied section 253(c) on several occasions.  These decisions
recognize that State and local governments have an important interest in managing the public rights-of-way
to promote the public good, and in obtaining fair and nondiscriminatory compensation for use of the rights-
of-way.  Thus, for example, we have stated that "[l]ocal governments must be allowed to perform the range
of vital tasks necessary to preserve the physical integrity of streets and highways, to control the orderly
flow of vehicles and pedestrians, [and] to manage . . . facilities" in the rights-of-way, including such
activities as "coordination of construction schedules, determination of insurance, bonding and indemnity
requirements, establishment and enforcement of building codes, and keeping track of the various systems
using the rights-of-way to prevent interference between them."  At the same time, the cases consistently
recognize that certain types of practices are inimical to competition and are not consistent with section 253. 
For one thing, section 253(c) plainly requires that compensation requirements for use of the public rights-
of-way must be imposed "on a competitively neutral and nondiscriminatory basis."  Thus, we have made
clear that we are troubled by any rights-of-way regulations that, either explicitly or in practical effect, favor
incumbent LECs over competing carriers.  

     76.  We have also expressed concern about requirements imposed on carriers that use the public
rights-of-way that are unrelated to their rights-of-way usage.  Thus, where the record was "inadequate to
establish that the Cities' actions reflect[ed] an exercise of public rights-of-way management authority or the
imposition of compensation requirements for the use of such rights-of-way," we have held that the cities'
actions did "not trigger section 253(c)."  Furthermore, we have expressed concern that local regulation
should not "reach[ ] beyond traditional rights-of-way matters and seek[ ] to impose a redundant 'third tier'
of telecommunications regulation which aspires to govern the relationships among telecommunications
providers, or the rates, terms and conditions under which telecommunications service is offered to the
public."  In particular, while recognizing local governments' continued authority to manage the public
rights-of-way, we noted that regulation of matters such as interconnection, fees, and provision of services
would be "difficult to justify under section 253(c)."  In addition, the United States District Court for the
Northern District of Texas has held that although a municipality may require a provider of local telephone
service to obtain a franchise in order to use its rights-of-way, the franchise may not be conditioned on
anything other than the carrier's agreement to comply with the city's reasonable regulations of its rights-of-
way and the fees for use of those rights-of-way.  Thus, the court held, the carrier may not be required to
complete a wide-ranging franchise application including matters unrelated to use of the rights-of-way, or to
comply with conditions that are unrelated to its use of the rights-of-way.  Similarly, the United States
District Court for the District of Maryland has struck down a franchise ordinance that required a franchise
applicant to supply broad-ranging information that was not directly related to the county's right-of-way
management, including undefined "financial information" and information about "technical standards," and
that conferred on the franchising authority complete discretion to grant or deny a franchise application,
including authority to consider such factors as managerial, technical, financial, and legal qualifications and
the public interest.

     77.  The courts have also held that local governments may not impose fees, conditions, and
franchise requirements on service providers, such as resellers, purchasers of unbundled network elements,
and wireless service providers, that do not use any public rights-of-way for their own facilities.  In
Dallas II, in particular, the court specifically rejected arguments that the city had jurisdiction over the
carrier because calls made over the carrier's network would traverse the city's rights-of-way after being
transferred to other carriers' networks or because some calls on the carrier's network might travel in part
over wireline facilities in the rights-of-way leased from other carriers, holding that local authority to
manage the rights-of-way extends only to regulation of physical facilities located in the rights-of-way.  In
addition, the court held that the principle of competitive neutrality did not require that carriers that use the
rights-of-way differently, or do not use the rights-of-way at all, be charged the same fees; indeed, the court
noted that charging usage fees to a carrier that leases facilities in the rights-of-way from another carrier
would amount to discrimination against that carrier, because it would likely have to pay both its own fees
directly to the city and the underlying carrier's fees passed on through its rates.

     78.  Also, some courts have struck down compensation schemes that they found were not
reasonably related to a carrier's rights-of-way usage and the costs that use imposes on the local government
and its citizens.  Thus, for example, the court in Dallas I held that the city could not require a carrier to pay
four percent of its revenues from all services provided with the city.  Similarly, the Prince George's
County court held that rights-of-way fees must be based on a government's cost of maintaining and
improving the rights-of-way and on a provider's rights-of-way use, not on the "value" of the "privilege" of
using the rights-of-way, and it therefore struck down a fee of three percent of gross revenues, broadly
defined.

     79.  Inquiry.  Notwithstanding the case law discussed above, several carriers and their associations
have alleged that many State and local governments continue to engage in rights-of-way management and
compensation practices that the carriers believe are unreasonable, anticompetitive, and contrary to federal
law.  While these carriers state that they have generally been successful in challenging such regulations in
court, they believe Commission action could help reduce the incidence of those regulations and the need for
litigation.  At the same time, State and local governments assert that the carriers' complaints are
unreasonable, unfounded, and merely designed to impede local jurisdictions' legitimate exercise of their
public rights-of-way authority.  We note that the rights-of-way regulations that have been brought to our
attention, either formally or informally, cover only a relatively small number of communities, and we
believe most communities and carriers have arrived at solutions that both protect State and local
governments' authority to manage the public rights-of-way and avoid imposing unreasonable or
discriminatory burdens on competitive service providers.  Nonetheless, in light of the persistent assertions
of concern expressed in this area, we believe it is appropriate to compile a record regarding local rights-of-
way management as it affects telecommunications service providers.  We therefore seek comment from
both service providers and State and local governments regarding their rights-of-way management
experiences, including examples of problems they have encountered, successful solutions to problems, and
information regarding the prevalence of each of these types of experience.  In addition, we note that several
States have enacted guidelines to govern the requirements that local governments may impose on
telecommunications rights-of-way users.  We seek comment on the success or failure of these efforts.

     80.  We particularly welcome the participation in this process of our Local and State Government
Advisory Committee (Advisory Committee).  The Advisory Committee has been an important vehicle for
facilitating constructive cooperation among the Commission, carriers, and State and local governments. 
For example, in August 1998, following an extensive period of discussions, the Advisory Committee and
several trade associations entered into an agreement on voluntary, non-binding guidelines and informal
dispute resolution procedures for disputes involving local government moratoria on personal wireless
services facilities siting.  The Advisory Committee has expressed a consistent interest in rights-of-way
issues and a willingness to participate in finding appropriate solutions.  Through the participation of the
Advisory Committee as well as industry representatives, one outcome of this inquiry could be a greater
agreement on principles that could be broadly accepted both by carriers and by State and local
governments.

D.   Notice of Inquiry on State and Local Taxes.
     
     81.  The assessment and collection of taxes and other fees is a vital function of State and local
governments, indeed a necessary one to support all of those governments' other functions.  Virtually all
businesses are subject to a wide array of State and local taxes, and there is no reason that
telecommunications businesses should be any exception.  At the same time, State and local tax policies that
impose excessive or unequal burdens on competitive service providers have the potential to inhibit the
development of competitive facilities-based networks in local telecommunications markets.  In this section,
we commence an inquiry concerning these issues.    

     82.  We believe that State and local governments share our goal of ensuring that tax burdens on
telecommunications providers are imposed fairly so as not to impede competition.  Carriers have alleged,
however, that some State and local taxes are excessive or are applied in a discriminatory manner.  For
example, in July 1996, Western PCS I Corporation (Western) filed a petition seeking preemption under
sections 253 and 332(c)(3) of the Communications Act of the State of Oregon's assessment of property tax
on Western.  Western alleged that Oregon had calculated the value of Western's property by including
the amount Western had paid at auction for its license to serve the Portland Major Trading Area, and that
this method of assessment resulted in Western's bearing a substantially higher tax burden than other
telecommunications service providers that had not purchased licenses at auction.  Subsequently, Western
and the Oregon Department of Revenue reached a settlement of most of the issues that were the subject of
Western's petition, and Western moved to dismiss its petition without prejudice.  We granted Western's
motion on January 20, 1999.
          
     83.  Other allegations of unfair State and local taxes surfaced in a petition for rulemaking filed by
the Cellular Telecommunications Industry Association (CTIA).  The CTIA Petition asks the Commission
to preempt State and local governments from imposing discriminatory or excessive taxes or similar burdens
on CMRS providers and services and other telecommunications providers and services.  By way of
example of the taxes that CTIA finds objectionable, the petition cites the Oregon tax challenged by Western
PCS and other property taxes in West Virginia and Kentucky, as well as an excise tax imposed on
mobile telephone use by Montgomery County, Maryland.  The Personal Communications Industry
Association also has recently filed with us a study detailing what it considers to be the excessive cumulative
burden of Federal, State, and local taxes and fees on wireless telecommunications service providers.  

     84.  In recognition of the limits on our expertise and out of respect for principles of federalism, we
conclude that it is not appropriate for us to initiate a rulemaking proceeding at this time, and we therefore
deny CTIA's petition.  Indeed, we note that our legal authority to preempt State and local tax policies is
extremely limited.  In particular, section 601(c)(2) of the 1996 Act provides, with limited exceptions, that
"nothing in [the 1996] Act or the amendments made by [the 1996] Act shall be construed to modify, impair,
or supersede, or authorize the modification, impairment, or supersession of, any State or local law
pertaining to taxation."  Nonetheless, we are concerned about the potential discriminatory and
anticompetitive effects of certain State and local tax policies, and we are therefore initiating an inquiry on
this issue.  We seek comment generally on the nature and prevalence of unreasonable or discriminatory tax
burdens on competitive telecommunications service providers, whether most tax schemes have successfully
avoided these shortcomings, and what tax regimes have best promoted the interests of all parties.  We also
seek comment regarding the availability of State remedies to correct any harmful inequities.  We are eager
to work closely with those State and local government bodies that are most responsible for the formulation
of tax policy, such as the Multistate Tax Commission and the Federation of Tax Administrators, on these
issues.  

E.   Other Means of Promoting Competitive Networks.

     85.  We also, through means of a notice of inquiry, seek comment regarding any other actions that
we should take to facilitate the development of competitive networks not already being considered in
another proceeding.  As discussed above, the rapid development of competition requires that competing
carriers be free to innovate, enter into business arrangements, and offer the services of their choice through
the means of their choice without incurring unnecessary costs.  In this item and in other proceedings, we
have identified and requested comment regarding several potential obstacles to this freedom, including
obstacles that may arise both from our own rules and from the actions of third parties.  However, there may
be additional extraneous factors impeding the development of competition that we have not identified.  We
ask commenters to identify any such impediments with as much specificity as possible, discuss with
particularity the nature and extent of the impediment, and suggest specific remedial actions.

                         IV.  CONCLUSION

     86.  Over the last several years, legal and market developments have come a long way toward
bringing competition to all United States communications markets.  In the 1996 Act, Congress established
a national policy in favor of competition and made legal changes that are essential to achieving this policy
goal.  Nonetheless, much remains to be achieved.  In particular, most local telecommunications markets
have not yet experienced the type of facilities-based competition that will bring innovative services and
service choices to all Americans, and will eliminate the market power of the incumbent LECs.  We believe
that the proposals we explore and the inquiry we initiate here are a useful step towards promoting the rapid
and efficient development of competitive networks in local telecommunications markets.  In this way, we
hope to advance the goals of the 1996 Act and advance the public interest in competitive
telecommunications.

                      V.  PROCEDURAL MATTERS

A.   Regulatory Flexibility Act.

     87.  As required by the Regulatory Flexibility Act (RFA), the Commission has prepared an
Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities
of the proposals suggested in this Notice of Proposed Rulemaking and Third Further Notice of Proposed
Rulemaking.  The IRFA is set forth in the attached Appendix.  Written public comments are requested on
the IRFA.  These comments must be filed in accordance with the same filing deadlines for comments on the
rest of this Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking, as set forth
in Section V.C infra, and they must have a separate and distinct heading designating them as responses to
the IRFA.  The Commission's Office of Public Affairs, Reference Operations Division, will send a copy of
this Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking, including the
IRFA, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with the
RFA.  In addition, this Notice of Proposed Rulemaking and Third Further Notice of Proposed
Rulemaking, including the IRFA (or summaries thereof), will be published in the Federal Register.
          
B.   Ex Parte Rules.

     88.  This Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking
initiate and constitute a "permit-but-disclose" proceeding in accordance with the Commission's ex parte
rules.  Persons making oral ex parte presentations relating to the Notice of Proposed Rulemaking and
Third Further Notice of Proposed Rulemaking are reminded that memoranda summarizing the presentations
must contain summaries of the substance of the presentations and not merely a listing of the subjects
discussed.  More than a one or two sentence description of the views and arguments presented is generally
required.  Other rules pertaining to oral and written presentations are set forth in Section 1.1206(b) as
well.  Interested parties are to file with the Secretary, FCC, and serve International Transcription Services
(ITS) with copies of any written ex parte presentations or summaries of oral ex parte presentations in these
proceedings in the manner specified below for filing comments.

     89.  This Notice of Inquiry commences an exempt proceeding in accordance with the Commission's
ex parte rules.

C.   Filing Procedures.

     90.  Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R.  1.415, 1.419,
interested parties may file comments on or before August 13, 1999, and reply comments on or before
September 3, 1999.  Comments may be filed using the Commission's Electronic Comment Filing System
(ECFS) or by filing paper copies.  See Electronic Filing of Documents in Rulemaking Proceedings, 63
Fed. Reg. 24,121 (1998).  

     91.  Comments filed through the ECFS can be sent as an electronic file via the Internet to
<http://www.fcc.gov/e-file/ecfs.html>.  Generally, only one copy of an electronic submission must be filed. 
If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters
must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the
caption.  In completing the transmittal screen, commenters should include their full name, Postal Service
mailing address, and the applicable docket or rulemaking number.  Parties may also submit an electronic
comment by Internet e-mail.  To get filing instructions for e-mail comments, commenters should send an e-
mail to ecfs@fcc.gov, and should include the following words in the body of the message, "get form <your
e-mail address>."  A sample form and directions will be sent in reply.  

     92.  Parties who choose to file by paper must file an original and four copies of each filing.   If
more than one docket or rulemaking number appear in the caption of this proceeding, commenters must
submit two additional copies for each additional docket or rulemaking number.  All filings must be sent to
the Commission's Secretary, Magalie Roman Salas, Office of the Secretary, Federal Communications
Commission, 445 Twelfth Street, S.W.; TW-A325; Washington, D.C. 20554.  

     93.  Regardless of whether parties choose to file electronically or by paper, parties should also file
one copy of any documents filed in this docket with the Commission's copy contractor, International
Transcription Services, Inc., 445 Twelfth Street, S.W., Room CY-B402, Washington, D.C.  20554. 
Comments and reply comments will be available for public inspection during regular business hours in the
FCC Reference Center, 445 12th Street, S.W., Washington, D.C. 20554.  

     94.  Comments and reply comments must include a short and concise summary of the substantive
arguments raised in the pleading.  Comments and reply comments must also comply with section 1.49, 47
C.F.R.  1.49, and all other applicable sections of the Commission's rules.  We also direct all interested
parties to include the name of the filing party and the date of the filing on each page of their comments and
reply comments.  All parties are encouraged to utilize a table of contents, regardless of the length of their
submission.
     
D.   Further Information.

     95.  For further information about this proceeding, contact Jeffrey Steinberg at 202-418-0896,
jsteinbe@fcc.gov, or Joel Taubenblatt at 202-418-1513, jtaubenb@fcc.gov.

                      VI.  ORDERING CLAUSES

     96.  Accordingly, IT IS ORDERED, pursuant to sections 1, 2(a), 4(i), 4(j), 201(b), 224, 251(c)(3),
251(d), 253, 303(r), 332, and 403 of the Communications Act of 1934, as amended, 47 U.S.C.  151,
152(a), 154(i), 154(j), 201(b), 224, 251(c)(3), 251(d), 253, 303(r), 332, and 403, and sections 1.411 and
1.412 of the Commission's rules, 47 C.F.R.  1.411 and 1.412, this Notice of Proposed Rulemaking and
Notice of Inquiry, and Third Further Notice of Proposed Rulemaking is ADOPTED.

     97.  IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 201(b), and 303(r) of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 201(b), and 303(r), and section
1.401(e) of the Commission's rules, 47 C.F.R.  1.401(e), that the Petition for Rulemaking filed by the
Wireless Communications Association International, Inc. on May 26, 1999, is GRANTED.
          
     98.  IT IS FURTHER ORDERED, pursuant to sections 1, 4(i), 253, and 332(c)(3) of the
Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 253, and 332(c)(3), and section
1.401(e) of the Commission's rules, 47 C.F.R.  1.401(e), that the Petition for Rulemaking filed by the
Cellular Telecommunications Industry Association on September 26, 1996, is DENIED.        
     
     99.  IT IS FURTHER ORDERED that the Commission's Office of Public Affairs, Reference
Operations Division, SHALL SEND a copy of this Notice of Proposed Rulemaking and Notice of Inquiry,
and Third Further Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to
the Chief Counsel for Advocacy of the Small Business Administration.

                              FEDERAL COMMUNICATIONS COMMISSION



                              Magalie Roman Salas
                              Secretary


                            APPENDIX 
          
             INITIAL REGULATORY FLEXIBILITY ANALYSIS        

     1.   As required by the Regulatory Flexibility Act (RFA), the Commission has prepared this
Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities
of the policies and rules proposed in this Notice of Proposed Rulemaking and Third Further Notice of
Proposed Rulemaking.  Written public comments are requested on this IRFA.  These comments must be
filed in accordance with the same filing deadlines for comments on the rest of this Notice of Proposed
Rulemaking and Third Further Notice of Proposed Rulemaking, as set forth in Section V.C supra, and they
must have a separate and distinct heading designating them as responses to the IRFA.  The Commission's
Office of Public Affairs, Reference Operations Division, will send a copy of this Notice of Proposed
Rulemaking and Third Further Notice of Proposed Rulemaking, including the IRFA, to the Chief Counsel
for Advocacy of the Small Business Administration, in accordance with the RFA.  In addition, this
Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking, including the IRFA (or
summaries thereof), will be published in the Federal Register.

I.   Need for and Objectives of the Proposed Rules

     2.   We are issuing this Notice of Proposed Rulemaking and Third Further Notice of Proposed
Rulemaking to seek comment on proposals to facilitate competition to the incumbent local exchange
carriers (LECs) by competitors who use their own end-to-end facilities.  Extensive facilities-based
competition will provide consumers with a choice of telecommunications providers that will compete to
offer traditional, voice-grade telephone service, as well as high-speed data and other advanced services, at
reasonable prices and conditions -- a major goal of the Telecommunications Act of 1996.  We particularly
expect this proceeding to further the availability of competition to the many consumers and businesses that
are located in multiple tenant environments, such as apartment and office buildings.

     3.   Specifically, this Notice of Proposed Rulemaking and Third Further Notice of Proposed
Rulemaking seeks comment on the following issues:  (1) the tentative conclusion that, to the extent that
LECs or other utilities own or control rooftop and other rights-of-way or riser conduit in multiple tenant
environments, section 224 of the Communications Act, 47 U.S.C.  224, requires that they permit
competing providers access to such rights-of-way or conduit under just, reasonable and nondiscriminatory
rates, terms, and conditions; (2) whether we should require incumbent LECs to make available to any
requesting telecommunications carrier unbundled access to riser cable and wiring that they control within
multiple tenant environments, subject to the Commission's future interpretation of the "necessary" and
"impair" standards of section 251, 47 U.S.C.  251; (3) whether we should require building owners who
allow access to their premises to any telecommunications provider to make comparable access available to
all such providers on a nondiscriminatory basis; (4) whether we should forbid telecommunications service
providers, under some or all circumstances, from entering into exclusive contracts with building owners,
and abrogate any existing exclusive contracts between these parties; (5) whether we should modify our
rules governing determination of the demarcation point between facilities controlled by the telephone
company and by the landowner on multiple unit premises; (6) whether the rules governing access to cable
home wiring for multichannel video program distribution should be extended to benefit providers of
telecommunications services; and (7) whether we should adopt rules similar to those adopted in the video
context under section 207 of the 1996 Act protecting the ability to place antennas to transmit and receive
telecommunications signals and other signals that are not covered under section 207.
     
II.  Legal Basis

     4.   The potential actions on which comment is sought in this Notice of Proposed Rulemaking
and Third Further Notice of Proposed Rulemaking would be authorized under sections 1, 2(a), 4(i), 4(j),
201(b), 224, 251(c)(3), 251(d), 253, 303(r), and 332 of the Communications Act of 1934, as amended, 47
U.S.C.  151, 152(a), 154(i), 154(j), 201(b), 224, 251(c)(3), 251(d), 253, 303(r), and 332, and sections
1.411 and 1.412 of the Commission's rules, 47 C.F.R.  1.411 and 1.412. 

     III. Description and Estimate of the Number of Small Entities to which the Proposed Rules Will
     Apply

     5.   The RFA requires that an initial regulatory flexibility analysis be prepared for notice-and-
comment rulemaking proceedings, unless the agency certifies that "the rule will not, if promulgated, have a
significant economic impact on a substantial number of small entities."  The RFA generally defines
"small entity" as having the same meaning as the terms "small business," "small organization," and "small
governmental jurisdiction."  In addition, the term "small business" has the same meaning as the term
"small business concern" under the Small Business Act.  A small business concern is one which:  (1) is
independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration (SBA).  For many of the entities
described below, the SBA has defined small business categories through Standard Industrial Classification
("SIC") codes.

     6.   This Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking
could result in rule changes that, if adopted, would impose requirements on local exchange carriers and
other utilities, building owners and managers, multichannel video program distributors, neighborhood
associations, and small governmental jurisdictions.  To assist the Commission in analyzing the total number
of potentially affected small entities, commenters are requested to provide estimates of the number of small
entities that may be affected by any rule changes resulting from this Notice of Proposed Rulemaking and
Third Further Notice of Proposed Rulemaking. 

     a.   Local Exchange Carriers 

     7.   Many of the potential rules on which comment is sought in this Notice of Proposed
Rulemaking and Third Further Notice of Proposed Rulemaking, if adopted, would affect small LECs. 
Neither the Commission nor the SBA has developed a small business definition specifically for small
LECs.  The closest applicable definition under the SBA rules is for telephone communications companies
other than radiotelephone (wireless) companies.  The SBA has defined establishments engaged in
providing "Telephone Communications, Except Radiotelephone" to be small businesses when they have no
more than 1,500 employees.  According to November, 1997 Telecommunications Industry Revenue data,
1,371 carriers reported that they were engaged in the provision of local exchange services.  We do not
have data specifying the number of these carriers that are either dominant in their field of operations, are
not independently owned and operated, or have more than 1,500 employees, and thus are unable at this time
to estimate with greater precision the number of LECs that would qualify as small business concerns under
the SBA's definition.  Consequently, we estimate that fewer than 1,371 providers of local exchange service
are small entities or small incumbent LECs that may be affected by the potential actions discussed in this
Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking, if adopted.

     8.   Above, we have included smaller incumbent LECs in our analysis.  Although some 
incumbent LECs may have 1,500 or fewer employees, we do not believe that such entities should be
considered small entities within the meaning of the RFA because they are either dominant in their field of
operations or are not independently owned and operated, and therefore by definition not "small entities" or
"small business concerns" under the RFA.  Accordingly, our use of the terms "small entities" and "small
businesses" does not encompass small incumbent LECs.  Out of an abundance of caution, however, for
regulatory flexibility analysis purposes, we will separately consider small incumbent LECs within this
analysis and use the term "small incumbent LECs" to refer to any incumbent LECs that arguably might be
defined by the SBA as "small business concerns."

     b.   Other Utilities

     9.   The proposal in this Third Further Notice of Proposed Rulemaking with respect to Section
224 of the Communications Act, 47 U.S.C.  224, if adopted, would affect utilities other than LECs. 
Section 224 defines a "utility" as "any person who is a local exchange carrier or an electric, gas, water,
steam, or other public utility, and who owns or controls poles, ducts, conduits, or rights-of-way used, in
whole or in part, for any wire communications.  Such term does not include any railroad, any person who is
cooperatively organized, or any person owned by the Federal Government or any State."  The Commission
anticipates that, to the extent its section 224 proposal affects non-LEC utilities, the effect would be
concentrated on electric utilities.

          (1)  Electric Utilities (SIC 4911, 4931 & 4939)

     10.  Electric Services (SIC 4911).  The SBA has developed a definition for small electric utility
firms.  The Census Bureau reports that a total of 1,379 electric utilities were in operation for at least one
year at the end of 1992.  According to SBA, a small electric utility is an entity whose gross revenues do not
exceed five million dollars.  The Census Bureau reports that 447 of the 1,379 firms listed had total
revenues below five million dollars in 1992.

     11.  Electric and Other Services Combined (SIC 4931).  The SBA has classified this entity as a
utility whose business is less than 95% electric in combination with some other type of service.  The
Census Bureau reports that a total of 135 such firms were in operation for at least one year at the end of
1992.  The SBA's definition of a small electric and other services combined utility is a firm whose gross
revenues do not exceed five million dollars.  The Census Bureau reported that 45 of the 135 firms listed
had total revenues below five million dollars in 1992.

     12.  Combination Utilities, Not Elsewhere Classified (SIC 4939).  The SBA defines this type of
utility as providing a combination of electric, gas, and other services which are not otherwise classified. 
The Census Bureau reports that a total of 79 such utilities were in operation for at least one year at the end
of 1992.  According to SBA's definition, a small combination utility is a firm whose gross revenues do not
exceed five million dollars.  The Census Bureau reported that 63 of the 79 firms listed had total revenues
below five million dollars in 1992.

               (2)  Gas Production and Distribution (SIC 4922, 4923, 4924, 4925 & 4932)

     13.  Natural Gas Transmission (SIC 4922).  The SBA's definition of a natural gas transmitter
is an entity that is engaged in the transmission and storage of natural gas.  The Census Bureau reports
that a total of 144 such firms were in operation for at least one year at the end of 1992.  According to
SBA's definition, a small natural gas transmitter is an entity whose gross revenues do not exceed five
million dollars.  The Census Bureau reported that 70 of the 144 firms listed had total revenues below five
million dollars in 1992.

     14.  Natural Gas Transmission and Distribution (SIC 4923).  The SBA has classified this type
of entity as a utility that transmits and distributes natural gas for sale.  The Census Bureau reports that a
total of 126 such entities were in operation for at least one year at the end of 1992.  The SBA's definition of
a small natural gas transmitter and distributer is a firm whose gross revenues do not exceed five million
dollars.  The Census Bureau reported that 43 of the 126 firms listed had total revenues below five million
dollars in 1992.

     15.  Natural Gas Distribution (SIC 4924).  The SBA defines a natural gas distributor as an
entity that distributes natural gas for sale.  The Census Bureau reports that a total of 478 such firms
were in operation for at least one year at the end of 1992.  According to the SBA, a small natural gas
distributor is an entity whose gross revenues do not exceed five million dollars.  The Census Bureau
reported that 267 of the 478 firms listed had total revenues below five million dollars in 1992.

     16.  Mixed, Manufactured, or Liquefied Petroleum Gas Production and/or Distribution (SIC
4925).  The SBA has classified this type of entity as a utility that engages in the manufacturing and/or
distribution of the sale of gas.  These mixtures may include natural gas.  The Census Bureau reports that
a total of 43 such firms were in operation for at least one year at the end of 1992.  The SBA's definition of
a small mixed, manufactured or liquefied petroleum gas producer or distributor is a firm whose gross
revenues do not exceed five million dollars.  The Census Bureau reported that 31 of the 43 firms listed
had total revenues below five million dollars in 1992.

     17.  Gas and Other Services Combined (SIC 4932).  The SBA has classified this entity as a gas
company whose business is less than 95% gas, in combination with other services.  The Census Bureau
reports that a total of 43 such firms were in operation for at least one year at the end of 1992.  According
to the SBA, a small gas and other services combined utility is a firm whose gross revenues do not exceed
five million dollars.  The Census Bureau reported that 24 of the 43 firms listed had total revenues below
five million dollars in 1992.

          (3)  Water Supply (SIC 4941)

     18.  The SBA defines a water utility as a firm who distributes and sells water for domestic,
commercial and industrial use.  The Census Bureau reports that a total of 3,169 water utilities were in
operation for at least one year at the end of 1992.  According to SBA's definition, a small water utility is a
firm whose gross revenues do not exceed five million dollars.  The Census Bureau reported that 3,065 of
the 3,169 firms listed had total revenues below five million dollars in 1992.

          (4)  Sanitary Systems (SIC 4952, 4953 & 4959)  
        
     19.  Sewerage Systems (SIC 4952).  The SBA defines a sewage firm as a utility whose
business is the collection and disposal of waste using sewage systems.  The Census Bureau reports that a
total of 410 such firms were in operation for at least one year at the end of 1992.  According to SBA's
definition, a small sewerage system is a firm whose gross revenues did not exceed five million dollars. 
The Census Bureau reported that 369 of the 410 firms listed had total revenues below five million dollars
in 1992.

     20.  Refuse Systems (SIC 4953).  The SBA defines a firm in the business of refuse as an
establishment whose business is the collection and disposal of refuse "by processing or destruction or in the
operation of incinerators, waste treatment plants, landfills, or other sites for disposal of such materials." 
The Census Bureau reports that a total of 2,287 such firms were in operation for at least one year at the
end of 1992.  According to SBA's definition, a small refuse system is a firm whose gross revenues do not
exceed six million dollars.  The Census Bureau reported that 1,908 of the 2,287 firms listed had total
revenues below six million dollars in 1992.

     21.  Sanitary Services, Not Elsewhere Classified (SIC 4959).  The SBA defines these firms as
engaged in sanitary services.  The Census Bureau reports that a total of 1,214 such firms were in
operation for at least one year at the end of 1992.  According to SBA's definition, a small sanitary service
firm's gross revenues do not exceed five million dollars.  The Census Bureau reported that 1,173 of the
1,214 firms listed had total revenues below five million dollars in 1992.

          (5)  Steam and Air Conditioning Supply (SIC 4961)

     22.  The SBA defines a steam and air conditioning supply utility as a firm who produces and/or
sells steam and heated or cooled air.  The Census Bureau reports that a total of 55 such firms were in
operation for at least one year at the end of 1992.  According to SBA's definition, a steam and air
conditioning supply utility is a firm whose gross revenues do not exceed nine million dollars.  The
Census Bureau reported that 30 of the 55 firms listed had total revenues below nine million dollars in
1992.

          (6)  Irrigation Systems (SIC 4971)

     23.  The SBA defines irrigation systems as firms who operate water supply systems for the
purpose of irrigation.  The Census Bureau reports that a total of 297 firms were in operation for at least
one year at the end of 1992.  According to SBA's definition, a small irrigation service is a firm whose gross
revenues do not exceed five million dollars.  The Census Bureau reported that 286 of the 297 firms listed
had total revenues below five million dollars in 1992.

     c.   Building Owners and Managers

     24.  Several of our inquiries in this Notice of Proposed Rulemaking would affect multiple
dwelling unit operators and real estate agents and managers, if such inquiries lead to adopted rules.  Such
inquiries include the following issues:  whether we should require building owners who allow access to their
premises to any telecommunications provider to make comparable access available to all such providers on
a nondiscriminatory basis; whether we should forbid telecommunications service providers, under some or
all circumstances, from entering into exclusive contracts with building owners, and abrogate any existing
exclusive contracts between these parties; and whether we should adopt rules similar to those adopted in the
video context under section 207 of the 1996 Act protecting the ability to place antennas to transmit and
receive telecommunications signals and other signals that were not covered under section 207. 

                         (1)  Multiple Dwelling Unit Operators  (SIC 6512, SIC 6513, SIC 6514)

     25.  The SBA has developed definitions of small entities for operators of nonresidential
buildings, apartment buildings, and dwellings other than apartment buildings, which include all such
companies generating $5 million or less in revenue annually.  According to the Census Bureau, there
were 26,960 operators of nonresidential buildings generating less than $5 million in revenue that were in
operation for at least one year at the end of 1992.  Also according to the Census Bureau, there were 39,903 operators of apartment dwellings
generating less than $5 million in revenue that were in operation for at least one year at the end of 1992.  The Census Bureau provides no separate data regarding operators
of dwellings other than apartment buildings, and we are unable at this time to estimate the number of such operators that would qualify as small entities.

          (2)  Real Estate Agents and Managers (SIC 6531)

     26.  The SBA defines real estate agents and managers as establishments primarily engaged in renting, buying, selling, managing, and appraising real
estate for others.  According to SBA's definition, a small real estate agent or manager is a firm whose revenues do not exceed 1.5 million dollars.

     d.   Multichannel Video Program Distributors (SIC 4841)

     27.  Our inquiry in this Notice of Proposed Rulemaking regarding whether the rules governing access to cable home wiring for multichannel video
program distribution should be extended to benefit providers of telecommunications services would affect operators of cable and other pay television services, if such inquiry
leads to the adoption of rules.  The SBA has developed a definition of a small entity for cable and other pay television services, which includes all such companies generating
$11 million or less in annual receipts.  This definition includes cable system operators, closed circuit television services, direct broadcast satellite services, multipoint
distribution systems, satellite master antenna systems and subscription television services.  According to the Bureau of the Census, there were 1423 such cable and other pay
television services generating less than $11 million in revenue that were in operation for at least one year at the end of 1992.   

     e.   Neighborhood Associations

     28.  Our inquiry in this Notice of Proposed Rulemaking regarding whether we should adopt rules similar to those adopted in the video context under
section 207 of the 1996 Act protecting the ability to place antennas to transmit and receive telecommunications signals and other signals that are not covered under section 207
would affect neighborhood associations, if such inquiry leads to the adoption of rules.  Section 601(4) of the Regulatory Flexibility Act, 5 U.S.C.  601(4), defines "small
organization" as "any not-for-profit enterprise which is independently owned and operated and is not dominant in its field."  This definition includes homeowner and
condominium associations that operate as not-for-profit organizations.  The Community Associations Institute estimates that there were 150,000 such associations in 1993.  
    

     f.   Municipalities

     29.  Our inquiry in this Notice of Proposed Rulemaking regarding whether we should adopt rules similar to those adopted in the video context under
section 207 of the 1996 Act protecting the ability to place antennas to transmit and receive telecommunications signals and other signals that are not covered under section 207
may affect municipalities, if such inquiry leads to the adoption of rules.  The term "small governmental jurisdiction" is defined as "governments of . . . districts, with a
population of less than 50,000."  As of 1992, there were approximately 85,006 governmental entities in the United States.  This number includes such entities as states,
counties, cities, utility districts and school districts.  Of the 85,006 governmental entities, 38,978 are counties, cities and towns.  The remainder are primarily utility districts,
school districts, and states.  Of the 38,978 counties, cities and towns, 37,566, or 96%, have populations of fewer than 50,000.  The Census Bureau estimates that this ratio
is approximately accurate for all governmental entities.  Thus, of the 85,006 governmental entities, we estimate that 81,606 (96%) are small entities.

IV.  Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements

     30.  This Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking proposes no additional reporting, recordkeeping or other
compliance measures.  

     V.   Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered

     31.  This Notice of Proposed Rulemaking and Third Further Notice of Proposed Rulemaking seeks comment on how the proposals and inquiries set forth
could impact regulated entities, including small entities.  For example, with respect to our Section 224 proposal, we seek comment on whether an overly broad construction of
utility ownership or control would impose unreasonable burdens on building owners, including small building owners, or compromise their ability to ensure the safe use of
rights-of-way or conduit, or engender other practical difficulties. In addition, with respect to our inquiry into building owner obligations, we seek comment on whether we
should limit the scope of any building owner obligation in order to avoid imposing unreasonable regulatory burdens on building owners, and we suggest that a potential rule
could exempt buildings that house fewer than a certain number of tenants or are under a certain size.  Commenters are invited to address the economic impact of all of our
proposals on small entities and offer any alternatives.  


     VI.  Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules

     32.  None.
                                     June 10, 1999

                      
                       Separate Statement
                               of
                    Commissioner Susan Ness
                                


     Re:    Promotion of Competitive Networks in Local Telecommunications Markets; Implementation of the Local Competition Provisions in the
     Telecommunications Act of 1996; Wireless Communications Association International, Inc. Petition
       For Rulemaking to Amend Section 1.4000 of the Commission's Rules to Preempt Restrictions on Subscriber Premises Reception or Transmission
     antennas Designed to Provide Fixed Wireless Services

This Notice grapples with a critical component of the competitive landscape -- the ability of wireless carriers to gain access to essential communications facilities to serve tenants in multi-
dwelling buildings.  Multi-dwelling customers represent a substantial portion of the residential and business population.  Access to these customers, therefore, is a pivotal part
of the business plan of many competitive carriers.

The proposals in this Notice are aggressive, but reflect the pro-competitive spirit imbued in the Telecommunications Act of 1996, and I am pleased to support this initiative.  I write
separately, however, to voice my concern over one proposal:  imposing a nondiscrimination building access requirement on building owners.  Under this proposal, once a
building owner allows a telecommunications provider access to its premises, the building owner must make comparable access available to all other telecommunications carriers
under nondiscriminatory rates, terms and conditions.

While well intended, the concept would impose a new regulation on building owners -- a class of persons not otherwise regulated by the Commission.  Less than a year ago,  the Commission
considered a similar issue.  In the OTARD Second Report & Order, the Commission declined to impose an affirmative obligation on building owners to allow a tenant access to
building common and rooftop areas for the placement of over the air video reception devices.  In that proceeding, the Commission expressed its reluctance to use its express
authority under Section 207 of the Telecommunications Act of 1996, which was limited to prohibiting regulations that impair a viewer's ability to receive video programming
through devices designed for over the air reception as a basis for imposing obligations on how building owners should use their private property.  I have difficulty
distinguishing that precedent from the instant case.

Moreover, where constitutional rights are at stake, judicial precedent informs us that the courts do not favor the imposition of obligations by a federal administrative agency which relies on
ancillary jurisdiction.  Rather, this may be one area that is better served by a legislative solution.  Notwithstanding these reservations, I enthusiastically support this Notice, and
look forward to a spirited debate on the issue of  the Commission's authority to impose nondiscrimination obligations on building owners.




  

       Statement of Commissioner Harold Furchtgott-Roth,
           Concurring in Part and Dissenting in Part
                                
                                
    In the Matter of Promotion of Competitive Networks in Local Telecommunications Markets (WT Docket No. 99-217); Implementation of the Local
  Competition Provisions in the Telecommunications Act of 1996 (CC Docket No. 96-98); Wireless Communications Association International, Inc. Petition
  for Rulemaking to Amend Section 1.4000 of the Commission's Rules to Preempt Restrictions on Subscriber Premises Reception or Transmission Antennas
  Designed To Provide Fixed Wireless Services; Cellular Telecommunications Industry Association Petition for Rule Making and Amendment of the
  Commission's Rules to Preempt State and Local Imposition of Discriminatory And/Or Excessive Taxes and Assessments


  Today's decision initiating a proceeding to promote the establishment of competitive networks in local telecommunications networks has a number of laudable
aspects.  In particular, I applaud our efforts to develop a record to assist us in determining the precise contours of Section 224 of the Act, 47 U.S.C.  224, which
requires that utilities owning or controlling poles, ducts, conduits and rights of way provide access on reasonable and non-discriminatory terms to cable television
systems and telecommunications carriers (other than incumbent local exchange carriers).  I urge this Commission to take prompt action on this issue so that fixed
wireless and other providers attempting to enter the local market have certainty as to the boundaries of that provision.

  I am deeply troubled, however, by two aspects of this proceeding.  First, the Commission decides today to seek comment on whether building owners permitting
access to any telecommunications provider must make comparable access available to all such providers under nondiscriminatory terms and conditions.  As authority
for such action, today's decision posits that most slender of reeds:  the Commission's ancillary jurisdiction under Sections 4(i) and Sections 303(r) of the Act, 47
U.S.C.  154(i), 303(r).  But as Bell Atlantic v. FCC, 24 F.3rd 1441 (D.C. Cir. 1994) instructs, this Commission must be vigilant in overstepping its authority
where private property rights are implicated, being careful not to regulate where it does not have specific statutory authority -- regardless of whether such regulation
constitutes commendable public policy.  I fear that today's proposal, if ultimately adopted by the Commission, may stray outside this agency's jurisdictional
boundaries.

  The second area which causes me great concern is the Commission's apparent inclination to deal piecemeal with the Supreme Court's recent remand of our rules
implementing Section 251 of the Act, 47 U.S.C.  251.  The Commission recently issued a further notice of proposed rulemaking to deal with the issues raised by
the remand.  Yet, in this proceeding, the Commission requests comment on whether unbundled access to riser cable and wiring within multiple tenant environments
meets the requirements of Section 251.  Although we do state that we will apply our decisions in the remand proceeding to the issue of riser cable and wiring in
multiple tenant environments presented here, the better course of action in my judgment would be to consider all issues pertaining to unbundled network elements in
one proceeding.





SEPARATE STATEMENT OF COMMISSIONER MICHAEL K. POWELL, CONCURRING
                                

     Re:  Promotion of Competitive Networks in Local Telecommunications Markets; Implementation of the Local Competition Provisions in the Telecommunications Act
     of 1996; and Cellular Telecommunications Industry Association Petition for Rule Making and Amendment of the Commission's Rules to Preempt State and
     Local Imposition of Discriminatory and/or Excessive Taxes and Assessments (CC Docket No. 96-98)
          

     I whole-heartedly support taking all appropriate steps to promote local competition.  And, I commend the Wireless Bureau staff for their initiative in
identifying the specific issues in this item and commencing this proceeding to examine them further.  I do, however, have grave concerns about a couple components
in this item.

     First, under judicial precedent, this agency should not move toward rules that would effectuate a per se taking without specific authority to do so.  See
Bell Atlantic Telephone Co. v. FCC, 24 F.3d 1441 (D.C. Cir. 1994).  Here, it seems that we propose to do just that.  We have no specific statutory provision that
directs, or "empowers," us to assert regulatory authority over owners of private property.  Instead, this item proposes to rely solely on "ancillary" jurisdiction. 
Assuming one believes it is permissible to use such plenary jurisdiction to regulate a building owner or landlord, those powers seem to lack the specificity the law
requires before treading onto constitutionally protected turf.

     Moreover, this proposed rulemaking stands in stark contrast to our recent consideration of the limits of our authority when the rights of property owners
are involved.   Specifically, we refused to go beyond the language of Section 207 of the Telecommunications Act of 1996 regarding the placement of over-the-air
reception devices on common and restricted access property because of constitutional and statutory authority concerns.  Implementation of Section 207 of the
Telecommunications Act of 1996, CS Docket No. 96-83, Second Report and Order, 13 FCC Rcd 23874, 23894-97,  39-45 (1998) (OTARD proceeding)
("because there is a strong argument that modifying our Section 207 rules to cover common and prohibited access property would create an identifiable class of per
se takings, and there is no compensation mechanism authorized by the statute, we conclude that Section 207 does not authorize us to make such a modification"
(relying on Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982))).  Yet here, we lack a provision analogous to Section 207, but nevertheless
contemplate requiring "nondiscriminatory access" to privately owned rooftops and other areas a seemingly greater intrusion into the rights of property owners than
we could stomach in the OTARD proceeding.  In the context of a likely takings under the Fifth Amendment, this is not an area where we should be pushing the
envelope of our "ancillary" statutory authority without, at least, being certain we have exhausted other alternatives.
 
     Even though my mind remains open to what commenters present, the door is open only a sliver.  We may eventually win an "ancillary jurisdiction"
argument in court against the building owners and landlords, but it does not seem like good policy to propose a new regulatory dictate on these entities before other
measures to evaluate the problem or pursue other non-regulatory initiatives prove inadequate.  Nevertheless, I will concur with asking the questions we do in this
item, anticipating an end result   based on the record   that is consistent with the law.

     My second area of concern is the proposal to consider requiring incumbent LECs to make available "unbundled access" to riser cable and wiring they
control within multiple tenant environments pursuant to section 251(c)(3) of the 1996 Act.  I feel strongly about our duty to faithfully and quickly implement the
Supreme Court's remand of the Commission's unbundled network element rule (the so-called Rule 319).  I am therefore concerned about adding yet another possible
"network element" to a list that the Supreme Court struck down without the thorough and thoughtful interpretation and application of the "necessary" and "impair"
standards of section 251(d)(2).

     I will not object to the inclusion of this issue in this item since it basically defers to the UNE remand proceeding, but I am troubled by the growing list of
UNEs that we put out for comment before we implement the limiting principle as Congress and the Court required.