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The  S- xBureau determined that the City should allow TCI to clarify these facts and directed the City to reconsider  xits disallowance of TCI's inside wiring charges in light of the additional facts and the guidance provided in the Bureau's order.  Sf- ` 3x3.` ` TCI claims in its petition that the Bureau erred in holding that the ownership of inside  xwiring is relevant to the regulatory treatment of inside wiring maintenance fees. For the reasons stated below, we deny TCI's petition.  S!- "!,**88F#"  S-II. BACKGROUND ă  S- ` x4.` ` The Cable Television Consumer Protection and Competition Act of 1992 ("1992 Act") yO-ԍPub. L. No. 102385, 106 Stat. 1460 (codified as amended in scattered sections of 47 U.S.C.).  S- x-provides that where competition is absent, cable rates are to be regulated to protect subscribers.X yO- xԍ47 U.S.C.  543(a). In the Telecommunications Act of 1996, Congress established a sunset date of March 31,  x-1999, for Commission regulation of cable programming service tier rates regardless of whether a cable system is  {O- x<subject to effective competition as of that date. See 47 U.S.C.  543(c)(4); Telecommunications Act of 1996   x301(b)(1), Pub. L. No. 104104, 110 Stat. 56, 115 (amending 47 U.S.C.  543(c)). The sunset date does not apply  xto local franchising authority regulation of basic service tier rates charged by systems that do not face effective competition. The 1992  xAct and the Commission's rules require that regulated equipment and installation services, including inside  S8- xwiring, be offered to subscribers at rate levels that reflect operators' actual costs.^8 yO -ԍ47 U.S.C.  543(b)(3); 47 C.F.R.  76.923(a)(2).^ Operators initially were  x{required to unbundle their charges for equipment and installation from their rates for programming  S- xservices to ensure that their equipment and installation rates reflected actual costs.Ab  yO-ԍ47 C.F.R.  76.923(b).A Charges that were  xbundled with programming rates prior to regulation should now appear as separately calculated and itemized charges.  SH - ` x5.` ` As we explained in Ocean Springs,;H  yO-ԍ10 FCC Rcd at 8731.; the Commission has held that the regulatory treatment  S" - xof inside wiring and the costs associated with its maintenance depends on who owns the wiring.t"  {OD- xLԍSee TCI TKR of Houston, Inc., 11 FCC Rcd 20929, 2093738 (Cab. Serv. Bur., 1996), petition for recon.  {O- xipending; TCI Cablevision of California, Inc., 11 FCC Rcd 11298, 1130203 (Cab. Serv. Bur., 1996), petition for  {O- xxrecon. pending; Continental Cablevision of Ohio, 11 FCC Rcd 508, 508 (Cab. Serv. Bur., 1996); TCI Cablevision  {O- xof Oregon, Inc., 10 FCC Rcd 12547, 12551 (Cab. Serv. Bur., 1995), petition for recon. pending; Comcast Cablevision  {Ol- xJof Mount Clemens, Inc. v. City of Mount Clemens, MI, 10 FCC Rcd 11046, 11048 (Cab. Serv. Bur., 1995); Comcast  {O6-Cablevision of Tallahassee, Inc., 10 FCC Rcd 7686, 7698 (Cab. Serv. Bur., 1995).t If an  x[operator installs inside wiring and retains ownership of it, the operator must establish a rate for the lease  S - x@of the wiring.   {Ox- xԍ47 C.F.R.  76.923(b); see Form 393, Part III, Step E, Instructions (computation of maximum permitted rates  xfor "Other Leased Equipment," including "cable home wiring"); FCC Form 1205, Schedule D, Step E, Instructions  x(same). Form 393 was used by operators to establish initial regulated rates. It applies to rates in effect until May  x15, 1994, and includes a section for the calculation of separately stated equipment rates and charges. Form 1205 is used by operators to establish equipment rates and charges in effect after May 15, 1994. As computed on Forms 393 and 1205, the lease rate includes a component for  xmaintenance and repair, and the operator therefore is not permitted to charge a separate wire maintenance  S - xLfee or other service charge to subscribers who pay the lease rate.z Z^  yO%- xZԍ47 C.F.R.  76.923(c), (d), (f), (g) (requiring operators to include the costs of repairing customer equipment  xiin the "Equipment Basket," which is used to compute the hourly service charge, which in turn is used to compute  {Oj'- x-the monthly lease rate for customer equipment); Implementation of Sections of the Cable Television Consumer"j' ,`(`('"  {O- xProtection and Competition Act of 1992: Rate Regulation ("Rate Regulation"), MM Docket No. 92266, First Order  {OZ- xon Reconsideration, Second Report and Order, and Third Notice of Proposed Rulemaking ("First Order on  {O$-Reconsideration"), 9 FCC Rcd 1164, 1190, 1200 (1993); see cases cited supra note 8.z If the operator sells the equipment to"  ,`(`(88y"  xa subscriber, then no lease rate would apply, but the operator may offer a service contract for the repair  S- xand maintenance of such equipment.A  yOf-ԍ47 C.F.R.  76.923(i).A Section 76.923(i) of our rules states that the cost for such a service  xzcontract shall equal "the HSC [hourly service charge] times the estimated average number of hours for  S- xlmaintenance and repair over the life of the equipment."y ~ {O -ԍId. The HSC is derived in Part III of Form 393 and in Step A of Form 1205.y If subscribers own their inside wiring, an  xoperator may also charge a rate based on the operator's HSC for installationrelated activities, provided  S8- xthat the HSC was properly unbundled from its programming rates.Q 8 {O -ԍOcean Springs, 10 FCC Rcd at 8731. Q The operator may charge that hourly rate for each visit the operator makes to a subscriber's premises.  S- ` x6.` ` In its appeal of the City's local rate order, TCI objected to the City's disallowance of  x|TCI's optional monthly inside wiring maintenance fee and its hourly rate charged for each wire  xmaintenance visit to a subscriber's premises. Prior to rate regulation, TCI explained, wire maintenance  xservice was included in its rates for programming and equipment and was provided to all subscribers at  xno extra cost. TCI stated that it began charging for the maintenance and repair of inside wiring to comply  xwith the requirement that cable operators unbundle equipment and installation rates from the rates for the  xbasic service tier ("BST"). According to TCI, customers could choose from the following four options  x.for the maintenance and repair of inside wiring: (1) paying the regulated HSC for each wire maintenance  xvisit, (2) fixing the problem themselves, (3) contracting an outside party to do the work, or (4) paying a monthly wire maintenance fee.  S- III. THE BUREAU'S ORDER ă  S- ` x7.` ` In Ocean Springs, we concluded that the inside wiring issues raised by the City's rate  xorder could not be resolved without additional information about the ownership of the inside wiring in  xquestion. We ruled that if TCI owned the inside wiring, it could not charge its subscribers a separate wire  x[maintenance fee because the lease rate for operatorowned wiring would already include a component for  xmaintenance and repair. If, on the other hand, TCI's subscribers owned their inside wiring, no lease rate  x=would apply, and TCI could offer a separate wire maintenance service, but the rates would be subject to  xreview by the City and must be determined in accordance with the Commission's regulations for pricing equipment service contracts and hourly rates for asneeded service.  SR- ` Px8.` ` We held that the City could not disallow TCI's use of a properly calculated hourly service  x=charge for the maintenance of subscriberowned inside wiring, prohibit TCI from establishing a regulated  x[monthly wire maintenance fee for subscriberowned wiring, or restrict its ability to offer both options as  xmutually exclusive methods to recoup the costs associated with the repair and maintenance of subscriber xowned inside wiring. We remanded the local rate order to the City to allow TCI to provide the required" ,`(`(88"  xownership information, and we directed the City to reconsider its order in light of the regulatory  S-requirements. yO@- xiԍThe Bureau ruled in favor of TCI on other issues raised in its appeal. TCI has sought not reconsideration of the Bureau's decision with respect to those issues.  S- IV. TCI'S PETITION FOR RECONSIDERATION ă  S8- ` x9.` ` In its petition for reconsideration, TCI argues that the Bureau erred in ruling that (1)  xoperators may not offer inside wiring maintenance plans to subscribers that use operatorowned inside  xwiring, and (2) such plans may be offered to subscribers that own their own wiring only on a regulated  xbasis. TCI notes in its petition that its subscribers own their inside wiring but maintains that this is  ximmaterial to the permissibility and regulatory status of its inside wiring maintenance plan. TCI states  xthat "[t]he Bureau's approach is inconsistent with the principles and goals underlying cable rate  SH -regulation."8H  yO- xԍPetition at 1. TCI attaches and incorporates in its petition for reconsideration a pleading filed by an affiliate  xin another matter. In that pleading, TCI's affiliate addressed the regulatory status of inside wiring maintenance plans  {O- xand presented substantially the same arguments as TCI presents in its petition in this proceeding. See West Virginia  xCable Television Advisory Bd. Motion for Declaratory Ruling on Whether Optional Inside Wiring Maintenance  {O*- xCharge Is Regulated ("West Virginia Motion for Declaratory Ruling"), "Response of TCI of West Virginia to Petition for Declaratory Ruling" ("TCI of West Virginia Response") (Dec. 14, 1994).8  S - ` x 10.` ` With respect to its first issue, TCI asserts that cable operators should be allowed to  x/unbundle inside wiring lease rates to create separate charges for subscribers' use of the wiring and for  S - x=maintenance service, so that it could give subscribers a choice of maintenance options.X  yO-ԍTCI did not address this argument in its appeal.X TCI argues that  xthe Bureau's concerns about potential doublerecovery of costs where operators charge both a lease rate  xand a separate maintenance rate should be addressed on a casebycase basis and should not be used as the basis to prohibit this type of unbundling.  S- ` x 11.` ` Addressing its second issue, TCI contends that the Bureau erred by ruling that inside  xjwiring maintenance plans are a regulated service offering, even where an operator offers another regulated  S- xzoption, such as the asneeded HSCbased charge. TCI asserts that the Commission has determined in  xanalogous circumstances that otherwise regulated services may be offered on an unregulated basis if the  xservices in question are optional and (1) there is a comparable regulated alternative, or (2) there are "competitive" alternatives from sources other than the cable operator.  S- %V. DISCUSSION ă  Sx-  A. Unbundling of Inside Wiring Lease Rates ă  S(- ` x 12.` ` TCI objects to the Bureau's conclusion that it may offer inside wiring maintenance plans  xonly to subscribers that own their inside wiring. TCI contends that it also should be permitted to offer  xthe service to customers that lease their inside wiring from TCI provided the lease rate does not include  xya component for maintenance and repair service. TCI argues that such "unbundling" of the lease rate into", ,`(`(88"  xseparate use and maintenance rates is consistent with the Commission's goal of increasing subscribers' options.  S- ` x 13.` ` TCI's approach is not consistent with the Commission's rules regarding equipment lease  xrates. In adopting rate regulations pursuant to the 1992 Act, the Commission determined that equipment  xrates should be unbundled from programming service rates to ensure that equipment rates reflect actual  S- xcosts. {Ox- xԍRate Regulation, MM Docket No. 92266, Report and Order and Further Notice of Proposed Rulemaking ("Rate  {OB-Order"), 8 FCC Rcd 5631, 5808, 581417 (1993). Equipment lease rates are to include the costs of maintenance and repair.E$ yO -ԍ47 C.F.R.  76.923(f)(g).E Operators may not  S-charge separately for these services.` {O< -ԍFirst Order on Reconsideration, 9 FCC Rcd at 1200.`  S- ` x 14.` ` We do not agree with TCI's argument that the type of unbundling it advocates is  xnecessary to increase subscribers' service options regarding the maintenance and repair of inside wiring.  xUnder existing Commission rules, subscribers benefit from reasonable rates for the equipment and service  xthey receive and from the simplicity of paying a single rate for the use of the equipment and for all  xnecessary maintenance and repair. A rule permitting operators to lease inside wiring to subscribers  xywithout also providing them with maintenance and repair service as part of the lease rate would eliminate  xkan existing option that is available to subscribers. If an operator wishes to give subscribers additional  xzoptions for the maintenance and repair of inside wiring, the operator can offer to sell the inside wiring  xto its subscribers, as TCI apparently has done in this case. It can then offer maintenance and repair  xservices to subscribers through a costbased wire maintenance plan that is priced according to Commission  S- xrules or through an asneeded HSCbased repair option.F yO- xjԍBecause the HSC is a regulated charge, the asneeded HSCbased option also would be priced according to Commission rules. Subscribers also would be permitted, as the  xowners of the equipment, to maintain and repair it themselves or to contract with an outside vendor for these services.  Sh-  B. Regulation of Inside Wiring Maintenance Plans ă  S- ` x15.` ` TCI argues against regulation of its inside wiring maintenance plan for subscriberowned  xwiring. TCI contends that the pricing rule for equipment service contracts set forth in Section 76.923(i)  S- xof the Commission's rules is inapplicable because TCI offers a regulated alternative, i.e., the asneeded,  xHSCbased option, and because subscribers also can obtain inside wiring maintenance services from third xparty contractors or perform the maintenance work themselves. According to TCI, unregulated treatment  x[of its inside wiring maintenance plan would be consistent with the Commission's determinations in other  xmatters. In support of its argument, TCI relies first on the Commission's determination that equipment  xsales are not subject to price regulation under Section 76.923(i) when the same equipment is offered under",`(`(88M"  S- x\a regulated lease rate." {Oh- x ԍPetition at 5 (citing First Order on Reconsideration, 9 FCC Rcd at 1192). Section 76.923(i) of the  xCommission's rules states that the price of customer premises equipment sold by an operator to a subscriber "shall  xrecover the operator's cost of the equipment, including costs associated with storing and preparing the equipment for sale up to the time it is sold to the customer, plus a reasonable profit." 47 C.F.R.  76.923(i). TCI next asserts that the Commission's rationale for permitting marketbased  S- xpricing of new product tiers ("NPTs") also justifies a finding that its inside wiring maintenance plan should  S- xnot be regulated.^ {O- x ԍId. at 6 (citing Rate Regulation, MM Docket Nos. 92266, 93215, Sixth Order on Reconsideration, Fifth Report  {O- xand Order, and Seventh Notice of Proposed Rulemaking ("Sixth Order on Reconsideration"), 10 FCC Rcd 1226, 1235  {O -(1994), aff'd, Adelphia Communications Corp. v. FCC, 88 F.3d 1250 (D.C. Cir. 1996)). Finally, TCI finds support for its position in the Bureau's decision not to regulate A/B  S-switches in SBC Media Ventures, Inc. ("SBC"). {O -ԍSBC Media Ventures, Inc., 9 FCC Rcd 7175, 7180 (Cab. Serv. Bur., 1994); see Petition at 6.  S:- ` x16.` ` The 1992 Act required the Commission to establish standards to ensure that equipment  S- xwould be available on the basis of actual cost.Aj  yO-ԍ47 U.S.C.  543(b)(3).A The legislative history concerning the home wiring  xprovisions in the 1992 Act indicates that Congress wanted the Commission to "adopt policies that will  xprotect consumers against the imposition of unnecessary charges, for example, for home wiring  S- x?maintenance."  yO4- xԍS. Rep. No. 92, 102d Cong., 1st Sess. 23 (1991) ("Senate Report"). The Senate Report encourages the  x;Commission to adopt regulations to promote subscriber ownership of inside wiring but cautions, in the abovequoted  xlanguage, that the Commission should also protect subscribers from unnecessary inside wiring maintenance charges.  {O- xSee id. The statutory provision contained in the Senate Report is identical in all material respects to the language  xCongress adopted in Section 16 of the 1992 Act, 47 U.S.C.  544(i) (directing the Commission to enact rules regarding the disposition of inside wiring upon a subscriber's termination of service). In establishing initial rate regulations pursuant to the 1992 Act, the Commission  xzimplemented the law by establishing standards governing operators' rates for equipment service plans  SJ - x.when operators sell equipment to subscribers.VJ t {O^-ԍSee Rate Order, 8 FCC Rcd at 5818.V The statutory directive to ensure that equipment rates  xreflect actual costs and the specific reference to "home wiring maintenance" in the legislative history of  xthe 1992 Act give premise to the Commission's responsibility to ensure that the rates for inside wiring  xmaintenance plans reflect the law's standard. This includes circumstances in which another form of  x service, such as an HSCbased charge, is available. Inside wiring maintenance fees in excess of actual  xcost are the type of "unnecessary charges" Congress sought to prevent. The Commission's costbased pricing formula for equipment service contracts is directed to fulfilling the law's mandate.  S - ` x17.` ` We do not agree that the exemption from price regulation for certain equipment sales  x?justifies a similar exemption for inside wiring maintenance plans. The Commission determined in  xadopting its rate regulations that the sale of equipment to subscribers will be exempt from price regulation  S- xunder Section 76.923(i) if the same equipment is available from the operator on a leased, i.e., regulated,  Sl- xbasis.dl {O'-ԍSee First Order on Reconsideration, 9 FCC Rcd at 1192.d In such cases, the subscriber would have a comparable regulated alternative to the unregulated"l,`(`(88"  S- xequipment sale.1 {Oh-ԍId.1 A service contract for the maintenance and repair of equipment is not comparable to  x{an asneeded maintenance fee based on a regulated HSC. A maintenance agreement is similar to an  xinsurance contract. It is designed to protect subscribers from incurring essentially unquantifiable costs for  S- xservice provided on an asneeded basis.."Z yO- xԍAlthough the future maintenance and repair costs for an individual subscriber may be unquantifiable, cable  xoperators can use historical data to quantify the aggregate maintenance and repair costs likely to be incurred on  xybehalf of all subscribers. Operators are required to quantify these historical costs in deriving the lease rate for  {O-customer equipment. See, e.g., Form 1205, General Instructions and Instructions for Schedule C.. Subscriber purchase of equipment, in contrast, is a close  xsubstitute for a lease rate. By multiplying the lease rate by the number of months the subscriber plans  x.to use the equipment in question and comparing the result to the sales price and the estimated life of the  xequipment, the subscriber can readily ascertain the relative costs and benefits of leasing versus purchasing  xthe equipment. Comparing the relative costs and benefits of purchasing an inside wiring maintenance plan  xkversus relying on the HSC is a difficult, if not amorphous, task. The analysis requires a subscriber to  x=make assumptions about future events that even the cable operator may be unable to predict reliably for  xa particular subscriber, such as the capability of the wire to withstand a number of elements. The two  xforms of maintenance service are not comparable. It cannot be said that a regulated, HSCbased charge parallels the unregulated inside wiring maintenance plan.  S - ` x18.` ` TCI's reliance on the regulatory treatment of NPTs in support of its argument that inside  xwiring maintenance plans should not be regulated is misplaced. NPTs are cable programming service tiers  S - x("CPSTs") subject to the statutory requirement that rates not be unreasonable. D yOd- xKԍ47 U.S.C.  543(c)(1). NPTs composed of video programming provided over cable systems are not part of the BST and are offered in a package, rather than exclusively on a perchannel or perprogram basis. Because NPTs compete  x.for subscribers against the BST and other CPSTs, the Commission determined that, if certain conditions  xare met, market forces would operate to ensure that NPT rates would be consistent with the statutory  S- xLstandard.t {OD-ԍSee Sixth Order on Reconsideration, 10 FCC Rcd at 1235, 123839.t The conditions are specified in the Commission's rules.H .  {O-ԍSee 47 C.F.R.  76.987.H In contrast, equipment rates are to  S- xbe costbased.A!  yO@-ԍ47 U.S.C.  543(b)(3).A TCI acknowledges that its maintenance plan is not, and is not intended to be, based on  S- xthe actual cost of the service.M"P  {O - xԍAppeal at 7 n.8. We note that in West Virginia Motion for Declaratory Ruling, supra note 15, the record  xindicates that TCI's West Virginia affiliate was charging the same 49cent monthly inside wiring maintenance fee  {O:"- xas TCI charges in Ocean Springs. See TCI of West Virginia Response at 5. The actual cost of that service, however,  {O#- xwas only seven cents per month in one community. West Virginia Motion for Declaratory Ruling, "Supplemental  xResponse of TeleCommunications, Inc. to Petition for Declaratory Ruling" at 8 (Mar. 10, 1997). The record in this proceeding does not identify TCI's actual cost to provide the monthly inside wiring maintenance service.M TCI has not shown how competitive pressures from the service  x.alternatives it references will ensure that an inside wiring maintenance plan will be offered in compliance with the statutory standard. "@",`(`(88r"Ԍ S- ` x19.` ` TCI argues that the existence of competitive alternatives to its inside wiring maintenance  xLplan justifies an exemption from the Commission's rule governing service contract rates. TCI essentially  xproposes that we apply an effective competition test to the market for inside wiring maintenance services.  S- x=Citing SBC, TCI states that an effective competition rationale supported the finding that the sale of A/B switches should not be subject to price regulation.  S- ` x20.` ` SBC does not support TCI's argument. The decision in SBC turned on an analysis of the  xnature of the equipment and the statutory definition at issue. We concluded that the sale of A/B switches  xis not subject to price regulation because A/B switches are not equipment "that is used to receive the basic  S- xservice tier."h# {O -ԍSBC, 9 FCC Rcd at 7180 (quoting 47 C.F.R.  76.923(a)).h Rather, they are equipment used to turn off the basic service tier and instead receive over St- xytheair broadcasts.1$tZ {On -ԍId.1 They do not fall within the scope of Section 76.923 of the Commission's rules, and,  xmore broadly, Section 623 of the Communications Act of 1934, which impose price regulation only on  S$ - xequipment that is used to receive the basic service tier.`%$  {O-ԍId.; 47 U.S.C.  543; 47 C.F.R.  76.923(a).` While we observed in SBC that alternative  S - xsources of A/B switches existed,E& ~ {O-ԍSBC, 9 FCC Rcd at 7180.E the conclusion that A/B switches are not subject to price regulation was  xpremised on the finding that A/B switches are not within the scope of Section 76.923 of the Commission's  S -rules.;'  {O^-ԍSee id.;  S^- ` ox21.` ` Our costbased formula for equipment rates, which includes a reasonable profit, results  S6- xin rates that are "comparable to those that would exist in a competitive environment."(6 {Ox- xzԍFirst Order on Reconsideration, 9 FCC Rcd at 1188; see id. at 119192 (same); id. at 1192 n.80 ("A competitive rate is generally one that reflects actual cost including a reasonable profit"). Costbased pricing  xof equipment service contracts is appropriate regardless of whether an operator also offers to perform  xmaintenance and repair work on an asneeded basis at an hourly rate equal to the HSC. Even if  x.competitive alternatives to TCI's inside wiring maintenance plan were to be considered, there is no basis  xon the record to deregulate the rates for TCI's service offering. TCI has not provided persuasive evidence  x=that its proffered alternativesthe rateregulated, asneeded HSC option; the thirdparty option; and the  xselfrepair optionwill provide competitive pressures affecting the price of TCI's inside wiring  xmaintenance plan and ensuring that the price will be consistent with the statutory requirement that equipment rates be based on actual cost.  S-  VI. CONCLUSION AND ORDERING CLAUSES ă  SV- ` x22.` ` In view of the foregoing, we affirm that operators may not charge subscribers separately  x for the repair and maintenance of leased inside wiring. Further, we affirm that rates for inside wiring  xmaintenance plans for subscriberowned wiring must be determined in accordance with Commission regulations and are subject to local franchising authority review and approval." (,`(`(88["Ԍ S- ` "ԙx23.` ` Accordingly, IT IS ORDERED that the Petition for Reconsideration of TCI of Southeast  S-Mississippi IS DENIED .  S- ` Bx24.` ` This action is taken by the Acting Chief, Cable Services Bureau, pursuant to authority  S`-delegated by Sections 0.321 and 1.106 of the Commission's rules.N)` yO-ԍ47 C.F.R.  0.321, 1.106(a)(1).N  x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhJohn E. Logan x` `  hhActing Chief, Cable Services Bureau