THE EVOLVING ROLE OF TECHNOLOGY: TELECOMMUNICATIONS REGULATION UPDATE

1. THE EVOLVING ROLE OF TECHNOLOGY:TELECOMMUNICATIONS REGULATION UPDATE National Association of Home Builders Dallas, Texas January 17, 2000 Matthew C. Ames Miller & Van Eaton, P.L.L.C.

2. FOUR ISSUES: 1. Competitive networks. 2. Satellite dishes. 3. Cable inside wiring. 4. Telephone inside wiring.

3. PROMOTION OF COMPETITIVE NETWORKS FCC issued rulemaking notice in June. Real Access Alliance filed comments August 27. Reply comments filed September 27. Real Access Alliance is now meeting with FCC staff.

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

5. SATELLITE DISH(OTARD) RULES 47 C.F.R. � 1.4000(a) preempts leases, building regulations and association rules if: lease or rule �impairs� maintenance, installation or use of antenna. property is within user�s exclusive use or control; and user has direct or indirect ownership interest in the property. Exceptions for safety, historic preservation.

6. WHAT DOES THE NEW RULE SAY? Tenant or condo resident can file complaint at FCC. Burden of Proof is on owner/manager.

7. EFFECTS OF NEW RULE Condo association: Can�t require prior approval. Can�t charge permit fee. Can�t require placement inside building if don�t get acceptable signal. Can require screening -- if no additional cost.

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

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

10. EFFECTS OF THE NEW RULE Tenants may: Install antenna inside premises. Install antenna on patio, desk, or balcony that they can exclusively use, including balcony railings. Install antennas on masts, no more than 12 feet above roof line.

11. EFFECTS OF THE NEW RULE (Cont.) What can residents not do? Install on exterior walls. Drill holes through walls to run cables. Install in common areas. Tenant not liable for �ordinary wear and tear.�

12. EFFECTS OF THE NEW RULE (Cont.) What can apartment owner/manager do? Enforce safety restrictions - must be �clearly-defined� and �legitimate.� Fire codes. Electrical codes. Installation requirements describing how antenna must be secured.

13. EFFECTS OF THE NEW RULE (Cont.) Can probably require reasonable security deposit ($100 or less). Can ban antennas installed outside leased premises, or installed by drilling holes in walls. Can require indemnification and insurance. Can regulate where antennas are placed if don�t interfere with reception or impose additional cost. Can charge more for apartment facing south.

14. EFFECTS OF THE NEW RULE (Cont.) What restrictions are not permissible? Permit fees, application fees, inspection fees. Prior approval requirements. Requirement that imposes unreasonable costs - based on cost of requirement compared to cost of equipment and service, and whether similar requirements apply to comparable objects (e.g., screening for bikes, grills, etc.).

15. EFFECTS OF THE NEW RULE (Cont.) Beware: Any complaint filed by tenant at FCC must be taken very seriously. FCC will use cases to expand scope of rule.

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

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

18. CABLE INSIDE WIRING (Cont.) Operator may elect to: remove. abandon. sell. If elects to sell, price determined by negotiation. If no agreement in 30 days, can arbitrate. Owner may let new provider exercise rights.

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

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

21. CABLE CONTRACT TERMS Cable vs. Broadband. Easement vs. license. Term. Renewals. Right of first refusal.

22. CONTRACT TERMS (Cont.) Definition of services. Ownership of wiring. Indemnification. Assignment. Performance guarantees. Service standards/complaint procedures.

23. TELEPHONE INSIDE WIRING New development: FCC now requires at least CAT 3 wiring in new construction. Tenants can sue owner/developers.

24. WHO CONTROLS WHAT: Tenant - in unit, 12 inches inside premises. Owner - between unit and demarc point. Carrier - on other side of demarc point.

25. DETERMINING CONTROL OVER EXISTING WIRING: Is there a contract? Was building built after 8/13/90? If built before 8/13/90, have there been major modifications? Has the carrier set the demarc at the MPOE? Is the owner willing to move the demarc to the MPOE and assume maintenance cost?

26. Telco must give owner info on location of wiring, and service records. If don�t respond within 30 days, send letter to FCC.

27. CONCLUSION �Eternal vigilance is the price of liberty.�