[Federal Register Volume 63, Number 246 (Wednesday, December 23, 1998)]
[Rules and Regulations]
[Pages 71027-71039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33869]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 1
[CS Docket No. 96-83; FCC 98-273]
Preemption of Local Zoning Regulation of Satellite Earth Stations
and Restrictions on Over-the-Air Reception Devices: Television
Broadcast, Direct Broadcast Satellite and Multichannel Multipoint
Distribution Services
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This Second Report and Order amends the Over-the-Air Reception
Devices Rule, which prohibits governmental and non-governmental
restrictions that impair a viewer's ability to receive video
programming through devices designed for over-the-air reception of DBS,
MDS, or television broadcast signals. This Order concludes that the
rule will be expanded to apply to antenna restrictions on rental
property where the viewer has exclusive use or control. This Order also
concludes that antenna restrictions that apply to common or restricted
access areas are beyond the scope of the statutory authority for this
rule, and that the rule, therefore, cannot apply to antenna
restrictions on common or restricted access.
EFFECTIVE DATES: January 22, 1999.
FOR FURTHER INFORMATION CONTACT: Eloise Gore at (202) 418-1066 or via
internet at egore@fcc.gov or Darryl Cooper at (202) 418-1039 or via
internet at dacooper@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Second Report and Order, CS Docket No. 96-83, adopted October 14, 1998
and released November 20, 1998. This Order is in response to the
Further Notice of Proposed Rulemaking (CS Docket No. 96-83, FCC 96-328,
61 FR 46557). The full text of this decision is available for
inspection and copying during normal business hours in the FCC
Reference Center (Room 239), 1919 M Street, NW, Washington, D.C. 20554,
or may be purchased from the Commission's copy contractor,
International Transcription Service (``ITS''), (202) 857-3800, 1231
20th Street, NW, Washington, D.C. 20036, or may be reviewed via
internet at http://www.fcc.gov/Bureaus/Cable/WWW/csb.html. For copies
in alternative formats, such as braille, audio cassette or large print,
please contact Sheila Ray at ITS.
Paperwork Reduction Act: This Second Report and Order contains
information collection requirements for which the Commission already
has clearance from the Office of Management and Budget (``OMB''). The
Commission submitted these information collection requirements to OMB
for clearance under OMB control number 3060-0707 upon the August 6,
1996 release of the Report and Order. OMB subsequently issued its
clearance to sponsor these requirements by means of a Notice of Action
dated October 14, 1996.
OMB Approval Number: 3060-0707.
Title: Over-the-Air Reception Devices.
SYNOPSIS OF ORDER ON RECONSIDERATION
Introductory Background
1. This Second Report and Order resolves the issues regarding
Section 207 of the Telecommunications Act of 1996 (``1996 Act'') (Pub.
L. No. 104-104, 110 Stat. 114 (1996)), on which the Commission sought
further comment in its Report and Order, Memorandum Opinion and Order,
and Further Notice of Proposed Rulemaking (``Report and Order'' and
``Further Notice''). Based on the Commission's review of the comments
filed in response to the Further Notice, the Commission adopts an
amendment to Section 1.4000 of the rules, 47 CFR 1.4000 (``Section 207
rules''), that prohibits restrictions on over-the-air reception devices
covered by Section 207 (``Section 207 reception devices'') on rental
property subject to the other terms and conditions of the Section 207
rules. Section 207 expressly covers over-the-air reception devices used
to receive television broadcast signals, multichannel multipoint
distribution service (``MMDS''), and direct broadcast satellite
services (``DBS''). In the Report and Order, the Commission concluded
that the rules implementing Section 207 should cover: (1) any type of
multipoint distribution service, including not only MMDS but also
instructional television fixed service (``ITFS'') and local multipoint
distribution service (``LMDS'') provided the antenna is one meter or
less in diameter or diagonal measurement; (2) medium-power satellite
services using antennas of one meter or less, even though such services
may not be technically defined as DBS elsewhere in the Commission's
rules; (3) DBS antennas that are one meter or less in diameter or over
one meter in Alaska (smaller DBS antennas do not work in Alaska); and
television (``TVBS'') antennas without size limitation.
2. This amendment to the rules serves two federal objectives of
promoting competition among multichannel video
[[Page 71028]]
providers and of providing viewers with access to multiple choices for
video programming. The new amendment strikes a balance between the
interests of tenants, who desire access to more video programming
services, and the interests of landlords, who seek to control access to
and use of their property. This Second Report and Order does not amend
the rules to cover common property and restricted access property, as
defined below, because Section 207 does not authorize the Commission to
do so.
3. In practice, under the amendment to the rules, renters will be
able, subject to the terms of the Section 207 rules, to install Section
207 reception devices wherever they rent space outside of a building,
such as balconies, balcony railings, patios, yards, gardens or any
other similar areas. Moreover, for renters who have not leased outside
rental space where a Section 207 reception device could be installed,
the new rules permit the installation of Section 207 devices inside
rental units and anticipate the development of future technology that
will create devices capable of receiving video programming signals
inside buildings. One such device, LMDS, is already capable of
receiving signals inside buildings. This amendment to the rules
provides video programming alternatives to as many viewers as possible
within the boundaries of Section 207's language.
4. Section 207 directs the Commission to remove restrictions on
Section 207 reception devices:
Within 180 days after the date of enactment of this Act, the
Commission shall, pursuant to section 303 of the Communications Act
of 1934, promulgate regulations to prohibit restrictions that impair
a viewer's ability to receive video programming services through
devices designed for over-the-air reception of television broadcast
signals, multichannel multipoint distribution service, or direct
broadcast satellite services.
5. Among other things, the Report and Order adopted rules that
generally prohibit both governmental and nongovernmental restrictions
that impair the installation, maintenance or use of Section 207
reception devices, unless the restriction serves a legitimate safety or
historic preservation objective in a non-discriminatory manner that is
no more burdensome than necessary to achieve the objective. In
addition, the Section 207 rules adopted in the Report and Order applied
only to property within the exclusive use or control of the viewer
where the viewer has a direct or indirect ownership interest in the
property.
6. In the Further Notice, the Commission sought comment on the
question of whether the antenna restriction preemption rules should be
extended to the placement of antennas on rental and other property not
within the exclusive use or control of a person with an ownership
interest. This includes, for instance, the question of whether Section
207 authorizes extending the Section 207 rules to (1) rental housing
(e.g., apartment buildings and single family dwellings) where viewers
would have possession and exclusive use of the leasehold in which
Section 207 reception equipment would be placed; (2) common property--
e.g., common property within condominiums, cooperatives, rental
complexes or manufactured housing parks--where viewers may have access
to, but not possession of and exclusive rights to use or control, the
areas where Section 207 reception equipment would be placed; and (3)
areas of a building to which viewers generally do not have access or
possession, such as the rooftop, on which Section 207 reception
equipment would be placed (``restricted access'' property). With regard
to condominiums, the term ``common property'' herein refers to the
common elements in which the condominium owner owns an interest with
other condominium owners but over which the owner does not exercise
exclusive use or control. The Section 207 rules already cover
condominium balconies, decks, patios and similar areas over which the
condominium unit owner exercises exclusive use and has a direct or
indirect property interest even if he or she does not own 100% of that
area.
7. In particular, the Further Notice sought comment on the impact
of Loretto v. TelePrompter Manhattan CATV Corp., 458 U.S. 419 (1982)
and Bell Atlantic Telephone Co. v. FCC, 24 F.3d 1441 (D.C. Cir. 1994)
on any such extensions of the rules. The Further Notice also invited
commenters to ``address technical and/or practical problems or any
other considerations they believe the Commission should take into
account in deciding whether to adopt such a rule and, if so, the form
such a rule should take.''
8. After analyzing the statute and the comments filed in response
to the Further Notice, the Commission concludes that, in Section 207,
Congress did not direct the Commission to impose affirmative duties on
other parties to install Section 207 devices or to grant access to
restricted areas to permit the installation of Section 207 reception
devices, and in particular, Congress did not direct the Commission to
require property owners to subject property to a Fifth Amendment
taking. In addition, Congress gave the Commission the discretion to
devise rules that would not create serious practical problems in their
implementation. Section 207 obliges the Commission to prohibit
restrictions on viewers who wish to install, maintain or use a Section
207 reception device within their leasehold because this does not
impose an affirmative duty on property owners, is not a taking of
private property, and does not present serious practical problems.
9. To effect the above changes, 47 CFR 1.4000 of the rules is
amended as follows (new language underlined):
(a) Any restriction, including but not limited to any state or
local law or regulation, including zoning, land-use, or building
regulations, or any private covenant, contract provision, lease
provision, homeowners' association rule or similar restriction, 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 that impairs the installation, maintenance,
or use of: * * *
10. We also revise the rule to provide the new Commission street
address for purposes of filing petitions for waiver or declaratory
ruling:
(g) All allegations of fact contained in petitions and related
pleadings before the Commission must be supported by affidavit of a
person or persons with actual knowledge thereof. An original and two
copies of all petitions and pleadings should be addressed to the
Office of the Secretary, Federal Communications Commission, 445 12th
St. S.W., Washington, D.C. 20554, Attention: Cable Services Bureau.
Copies of the petitions and related pleadings will be available for
public inspection in the Cable Reference Room in Washington, D.C.
Copies will be available for purchase from the Commission's contract
copy center, and Commission decisions will be available on the
Internet.
11. In light of the decision to allow a tenant to install a Section
207 device within a leasehold without the landlord's permission, 47 CFR
1.4000 is further amended to delete paragraph (h) which required that
the landlord consent to such an installation. The tenant's installation
is subject to the terms of the Section 207 rules.
Application of the Section 207 Rules to Rental Property
Scope of Section 207
12. The starting point of the analysis is the statute. If Congress
has directly spoken to the precise question at issue ``that is the end
of the matter,'' and the Commission must give ``effect to the
unambiguously expressed intent of Congress.'' (See Chevron, U.S.A.,
Inc. v.
[[Page 71029]]
NRDC, 467 U.S. 837, 842-43 (1984).) If, however, Congress has not
spoken to the precise question at hand--i.e., if ``the statute is
silent or ambiguous with respect to the specific issue''--the
Commission may exercise its reasonable discretion in construing the
statute.
13. As an initial matter, we agree with those commenters that argue
that Section 207 applies on its face to all viewers, and that the
Commission should not create different classes of ``viewers'' depending
upon their status as property owners. For instance, if a local
government imposed a zoning restriction that prohibited a landlord from
installing a master antenna system for his tenants to receive over-the-
air broadcast signals, such a restriction would be preempted,
notwithstanding the fact that the viewers in that situation are
renters.
14. Section 207 expressly directs the Commission only to ``prohibit
restrictions'' that impair a viewer's ability to receive covered video
programming; Section 207 does not grant the Commission the authority to
require property owners or third parties to take affirmative steps to
enable a viewer to receive such video programming. Accordingly, the
Commission may prohibit restrictions that a property owner or third
party may impose upon a viewer (e.g., local zoning ordinances or
community association rules), but may not impose affirmative
requirements on a property owner or a third party, such as a duty to
install Section 207 reception devices for a viewer or give a viewer or
video provider possession of restricted access areas or common areas
for an installation. (``Community associations'' includes homeowners''
associations, townhome or townhouse associations, condominium
associations, cooperative associations, planned unit development
associations and similar associations and entities.) This distinction
between prohibiting restrictions and imposing affirmative duties is
consistent with Section 207's legislative history, which states that
``[e]xisting regulations, including but not limited to, zoning laws,
ordinances, restrictive covenants or homeowners' association rules,
shall be unenforceable to the extent contrary to this section.''
15. Removing a restriction on installing an antenna within a
leasehold does not impose a duty on the landlord to relinquish property
because the landlord has already voluntarily relinquished possession of
the leasehold by virtue of the lease; therefore, the language of
Section 207 permits the Commission to prohibit lease and other
restrictions on a viewer's installation, maintenance or use of a
Section 207 device within a leasehold subject to the terms and
conditions of the Section 207 rules.
Constitutional Considerations
16. Under Bell Atlantic, where an agency authorizes ``an
identifiable class of cases in which the application of a statute will
necessarily constitute a taking,'' its authority is construed narrowly
to defeat such an interpretation unless the statute grants express or
implied authority to the agency to effect the taking. According to the
Bell Atlantic court, implied authority may be found only where `` `the
grant [of authority] itself would be defeated unless [takings] power
were implied.' '' Section 207 does not expressly authorize the
Commission to permit the taking of private property, and we do not
believe that it is necessary to authorize a taking of private property
in order to comply with Congress' direction that we prohibit
restrictions that impair a viewer's ability to exercise his or her
rights under Section 207. The ``takings'' clause of the Fifth Amendment
provides: ``[N]or shall private property be taken for public use,
without just compensation.'' In general, there are two types of Fifth
Amendment takings: ``per se'' takings and ``regulatory'' takings. (See
generally Yee v. City of Escondido, 503 U.S. 519, 522-23 (1992).) Where
the government authorizes the permanent physical occupation of property
it constitutes a per se taking. Under Loretto, a permanent physical
occupation of property is a taking without regard to the public
interest that it may serve, the size of the occupation, or the economic
impact on the property owner.
17. Where the government does not authorize a physical occupation
of property but merely regulates its use, a court will examine the
following factors identified in Penn Central Transportation Co. v. City
of New York, 438 U.S. 104, 124 (1978) to determine whether a regulatory
taking has occurred: (1) the character of the governmental action; (2)
its economic impact; and (3) its interference with reasonable
investment-backed expectations. Moreover, where the private property
owner voluntarily agrees to the possession of its property by another,
the government can regulate the terms and conditions of that possession
without effecting a per se taking. In FCC v. Florida Power Corp., 480
U.S. 245, 252 (1987), the utility company voluntarily agreed to the
physical occupation of its poles by a cable operator's wires at certain
lease rates; the utility claimed that a subsequent rate reduction
ordered by the Commission for the occupation of its poles constituted a
per se taking under Loretto. Rather, such regulations are analyzed
under the Penn Central multifactor inquiry. As the Florida Power Court
stated:
[I]t is the invitation, not the rent, that makes the difference.
The line which separates these cases from Loretto is the unambiguous
distinction between a commercial lessee and an interloper with a
government license.
18. Applying the above framework to the property at issue here, we
agree with DIRECTV that a per se takings analysis would not apply to an
expansion of the Section 207 rules to a leasehold where a landlord has
invited a tenant to physically occupy and possess the property. In
Loretto, the Court identified three rights ``to possess, use, and
dispose of'' property that are destroyed by an uninvited permanent
physical occupation of the property. However, by leasing his or her
property to a tenant, the property owner voluntarily relinquishes the
rights to possess and use the property and retains the right to dispose
of the property. First, within his or her leasehold a tenant is an
invitee with a possessory estate interest in the property, not ``an
interloper with a government license.'' Second, to a large extent, the
property owner relinquishes its right to control the use of its
property when it leases the property. For example, tenants have the
right to ``make changes in the physical condition of the leased
property which are reasonably necessary in order for the tenant to use
the leased property in a manner that is reasonable under all
circumstances.'' Third, the property owner may retain the right to sell
the property even if the property is leased. Thus, none of the property
rights that Loretto held were ``effectively destroyed'' by a permanent
physical occupation of property would be compromised by expanding the
Section 207 rules to leased property, because the landlord voluntarily
relinquishes two of those rights (possessing and using) and is free to
retain the third right (disposing of the property) when entering into a
lease. In contrast, in Loretto, the physical possession was on the
building roof, possession of which was not leased to anyone but was
retained by the property owner, Ms. Loretto.
19. Accordingly, it does not constitute a per se taking to prohibit
lease restrictions that would impair a tenant's ability to install,
maintain or use a Section 207 reception device within the leasehold.
Indeed, prohibiting restrictions on the installation of a
[[Page 71030]]
satellite dish or other Section 207 device is not distinguishable in a
constitutional sense from prohibiting restrictions on the installation
of ``rabbit ears''--a Section 207 reception device--on the top of a
television set. The Loretto Court recognized that its per se rule would
not apply to regulations affecting a landlord-tenant relationship that
did not require the occupation of the landlord's property by a third
party; the Court acknowledged that such regulations would be analyzed
under the Penn Central regulatory takings standard.
20. Contrary to the argument set forth in the dissent, the limits
of the per se takings doctrine described in Florida Power are clearly
applicable here. Under that doctrine, any permanent, physical
occupation of property, no matter how small, constitutes a per se
taking. But the right to assert a per se taking is easily lost: once a
property owner voluntarily consents to the physical occupation of its
property by a third party, any government regulation affecting the
terms and conditions of that occupation is no longer subject to the
bright-line per se test, but must be analyzed under the multi-factor
inquiry reserved for nonpossessory government activity. In Florida
Power, for instance, the utility company was not required to lease pole
space to cable operators, but once it voluntarily did so, the
government could regulate the terms and conditions of that physical
occupation (i.e., the rates that the utility company could charge for
the pole space) without effecting a per se taking.
21. The dissent attempts to muddy this clear dichotomy by arguing
that a landlord retains the right to assert a per se taking claim
whenever the government modifies the terms and conditions set forth in
its lease. But this is the very argument that the Supreme Court
squarely rejected in Florida Power, where it was argued that the
utility company's consent to occupation of its pole space was based on
the payment of a certain lease rate. Whether the terms and conditions
of occupation relate to a lease rate (as in Florida Power) or to the
ability to place a Section 207 reception device within the leasehold
(as here), once a property owner voluntarily consents to the occupation
of its property it can no longer claim a per se taking if government
action merely affects the terms and conditions of that occupation. In
other words, the per se takings doctrine protects a property owner's
right to exclude all others from its property, but it does not protect
a property owner's desire to impose conditions on the use of property
that it has voluntarily invited others to occupy.
22. The dissent again confuses this crucial distinction by
asserting that if the terms of a lease help explain why we are not
giving tenants the right to place reception equipment on common and
restricted access property, the lease should likewise inform our
analysis within the leasehold itself. For takings purposes, the lease
is relevant in defining the physical area of consensual occupation
(e.g., the apartment but not the roof or exterior walls). Outside of
such areas of consensual occupation, the property owner may retain its
per se right to prohibit permanent occupation by third parties. Within
the area of consensual occupation, however, the terms of the lease are
no longer relevant to a per se analysis. As the Florida Power Court put
it, it is ``the invitation [i.e. whether the occupation is voluntary],
not the rent [i.e., the terms and conditions of that voluntary
occupation], that makes the difference.''
23. Given the conclusion that this expansion of the Section 207
rules does not constitute a per se taking, we therefore turn to whether
such an expansion of Section 207 rights would constitute a regulatory
taking under the Penn Central factors: the character of the
governmental action, its economic impact, and its interference with
reasonable investment-backed expectations. Because the expansion of the
Section 207 rules to leased property would not create an identifiable
class of per se takings, Bell Atlantic's narrowing construction of the
statutory authority does not apply to this situation. First, Section
207 promotes the substantial governmental interests of choice and
competition in the video programming marketplace. See Turner
Broadcasting System, Inc. v. FCC, 117 S.Ct. 1174, 1181 (1997)
(reaffirming important governmental interest in promoting fair
competition in the market for television programming). The specific
governmental action that we take today--the expansion of the rules to
leased property--will bring that choice and competition to an
additional segment of the population. Further, the expansion of the
rules will promote the important governmental interest in enhancing
viewers' access to ``social, political, esthetic, moral and other
ideas.'' The Supreme Court has ``identified a * * * `governmental
purpose of the highest order' in ensuring public access to `a
multiplicity of information sources.' ''
24. Second, there is no evidence in the record that the economic
impact on property owners will be significant. Generally, the amount of
money that property owners may derive from restricting the video
programming options of their residents is minimal in relation to their
other income. Indeed, some commenters argue that a rule prohibiting
restrictions on antenna usage enhances the value of the homeowner's
property to prospective purchasers who want access to video programming
services competitive with cable. Given property owners' ability to
continue to use their property to generate rental income, extension of
the Section 207 rules to restrictions on tenants' use of their
leasehold would not deprive property owners of ``all economically
beneficial or productive use'' of their property. Third, there is no
evidence in the record that the expansion of the rules will interfere
with reasonable investment-backed expectations.
25. Moreover, the government has broad power to regulate interests
in land that interfere with valid federal objectives. In Seniors Civil
Liberties Ass'n v. Kemp, 761 F. Supp. 1528 (M.D. Fla. 1991), aff'd, 965
F.2d 1030 (11th Cir. 1992), the court found no taking in an
implementation of the Fair Housing Amendments Act (``FHAA'') that
declared unlawful age-based restrictive covenants, thereby abrogating
the homeowners' association's rules requiring that at least one
resident of each home be at least 55 years of age and forbidding
permanent residence to children under the age of 16. The court found
that the FHAA provisions nullifying the restrictive covenants
constituted a ``public program adjusting the benefits and burdens of
economic life to promote the common good,'' and not a taking subject to
compensation.
26. Finally, with regard to the argument of some commenters that
this rule will impair exclusive contracts between MDU owners and cable
companies, even assuming that this were the case, as we stated in the
Report and Order with regard to homeowners' associations, condominium
associations, and cooperative associations, Congress can change
contractual relationships between private parties through the exercise
of its constitutional powers, including the Commerce Clause (U.S.
CONST. art. I, Sec. 8, cl. 3). In Connolly v. Pension Benefit Guaranty
Corp., 475 U.S. 211 (1986), the Court stated:
Contracts, however express, cannot fetter the constitutional
authority of Congress. Contracts may create rights in property, but
when contracts deal with a subject matter which lies within the
control of Congress, they have a congenital infirmity. Parties
cannot remove their transactions from the
[[Page 71031]]
reach of dominant constitutional power by making contracts about
them.
If a regulatory statute is otherwise within the powers of
Congress, therefore, its application may not be defeated by private
contractual provisions. For the same reason, the fact that
legislation disregards or destroys existing contractual rights, does
not always transform the regulation into an illegal taking.
27. Accordingly, we conclude that interpreting Section 207 to reach
rental property, i.e. property within a leasehold over which a tenant
has possession, does not constitute an impermissible taking of private
property. This rule will prohibit lease or other restrictions (subject
to the other provisions of 47 CFR 1.4000, including the safety and
historic preservation exceptions) on leased property under the
exclusive use or control of the viewer. Typically, for apartments, this
new ruling will include balconies, balcony railings, and terraces; for
rented single family homes or manufactured homes which sit on rented
property, it will typically include patios, yards or gardens within the
leasehold. Generally, the lease of a house includes the land on which
the house is situated and the surrounding real estate necessarily
incident to its use as a home. This conclusion is similar to the
current application of the Section 207 rules to condominiums,
cooperatives and manufactured homes. In addition, while restrictions on
placement of antennas on manufactured homes are already covered by the
current rules, this new rule expands protection of the Section 207
rules to the leased property on which the manufactured home sits.
28. Because the record does not contain evidence that a university
has the same relationship to a dormitory resident as a landlord to a
tenant, that a dormitory room is a leasehold, that landlord-tenant law
applies equally to dormitories, or that the practical problems
associated with extending the rules to leaseholds can be similarly
resolved with respect to dormitories, the Section 207 rules will not
apply to college dormitories at this time. Where, however, the
relationship between a university and a viewer bears sufficient
attributes of a commercial landlord-tenant relationship (e.g., where a
university leases a single family home to a faculty member), the
Section 207 rules will apply. In addition, in response to commenters
who requested an exception to the rule for commercial lessees, note
that Section 207 does not provide an exception for commercial
properties.
29. While some commenters have requested that the Commission
preempt exclusive contracts between building owners and cable
companies, this issue will be addressed in In re Telecommunications
Services Inside Wiring, CS Docket No. 95-184. Exclusive contracts are
already unenforceable to the extent that they impermissibly impair a
viewer's rights under the currently effective Section 207 rules, and
will be further unenforceable to the extent that they impermissibly
impair a viewer's Section 207 rights upon the effective date of the
revised rules adopted herein.
Practical Considerations
30. The practical concerns with respect to installation within the
leasehold can be resolved under the current Section 207 rules, which
permit the enforcement of restrictions that address legitimate safety
objectives. In addition, unlike common areas, the leasehold (e.g., an
apartment including a balcony or terrace) generally is under the
exclusive use or control of one party (i.e., the lessee), thus enabling
that party to address liability concerns. Moreover, state landlord-
tenant law can address liability issues that may arise from incidents
arising on leased property.
31. The current rules resolve concerns regarding damage to the
building caused by installation. The rules prohibit restrictions that
unreasonably delay or prevent installation. A restriction barring
damage to the structure of the leasehold (e.g., the balcony to an
apartment or the roof of a rented house) is likely to be a reasonable
restriction on installation under 47 CFR 1.4000(a). Thus, for example,
tenants could be prohibited from drilling holes through the exterior
walls of their apartments. In addition, tenants could be prohibited
from piercing the roof of a rented house in any manner given the risk
of serious damage, and there are methods of installing a Section 207
device on a roof that do not require piercing; e.g, securing it to a
chimney or using ballast as a non-penetrating roof mount. On the other
hand, it would likely not be a reasonable restriction to prohibit an
installation that merely caused ordinary wear and tear (e.g., marks,
scratches, and minor damage to carpets, walls and draperies) to the
leasehold. We also note that the Order on Reconsideration clarifies
that a landlord or community association may restrict installation of
individual antennas based on the availability of a central or common
antenna, provided the restriction does not impose unreasonable delay,
unreasonable expense, or preclude reception of an acceptable quality
signal, including the particular programming service chosen by the
viewer.
Application of the Section 207 Rules to Common and Restricted Access
Areas
Scope of Section 207
32. Section 207 does not authorize the Commission to permit a
viewer to install a Section 207 device on common or restricted access
property over the property owner's objection or to require a landlord
to provide video programming reception equipment to tenants. As
discussed, Section 207 authorizes the Commission to remove
restrictions; Section 207 does not authorize the Commission to impose
independent affirmative obligations on a property owner or a third
party to enable the viewer to use a Section 207 device. Interpreting
Section 207 to grant viewers a right of access to possess common or
restricted access property for the installation of the viewer's Section
207 device would impose on the landlord or community association a duty
to relinquish possession of property. Just as the plain language of the
statute does not require a property owner to permit his or her neighbor
to install a Section 207 reception device on the owner's property
(e.g., if the neighbor were unable to receive an acceptable signal on
his or her own property), we do not believe the statute requires a
landlord or community association to relinquish possession of common or
restricted access property. There is no distinction in this regard
between a neighbor's property and a landlord's property that the
landlord has not leased to a tenant: both situations would impose
affirmative duties not intended by the statute.
33. Likewise, we disagree with commenters that the Commission can
require landlords to provide video programming reception equipment to
their residents. Requiring property owners to purchase and install
reception equipment for their residents' benefit does not remove a
restriction, but rather imposes an affirmative duty which is outside
the mandate of Section 207. Therefore, under the language of Section
207, the Commission cannot extend the Section 207 rules to reach common
and restricted access property.
Constitutional Considerations
34. As discussed above, Section 207 does not expressly authorize
the Commission to permit a taking in order to enable a viewer to
install Section 207 reception devices. In the context of common and
restricted access property, we do not believe that the statutory
directive to prohibit restrictions implies
[[Page 71032]]
a takings authority given that a taking requires the Commission to
impose affirmative duties on third parties which, as discussed above,
is not contemplated by Section 207.
35. The commenters raise serious concerns that the extension of the
Section 207 rules to common and restricted access property would
constitute a taking and assert that the Commission should interpret the
statute so as to avoid constitutional issues. While by virtue of a
lease a landlord invites a tenant to take possession of property within
the leasehold, the landlord does not invite the tenant to take
possession of common and restricted access property. If the Commission
were to extend the Section 207 rules to permit a tenant to have
exclusive possession of a portion of the common or restricted access
property where a lease has not invited a tenant to do so, the tenant
would possess that property as an ``interloper with a government
license'' thereby presenting facts analogous to those presented in
Loretto. Similarly in a community association, home and unit owners are
not invited to possess restricted access areas, such as the roof or
exterior walls, and are not granted exclusive or permanent possession
of common areas.
36. Under these circumstances, we agree with those commenters that
argue that the permanent physical occupation found to constitute a per
se taking in Loretto appears comparable to the physical occupation of
the common and restricted access areas at issue here. In Loretto, the
physical occupation of the landlord's property consisted of the direct
attachment of cable television equipment to the landlord's property,
occupying the space immediately above and upon the roof and along the
building's exterior. Likewise, the physical occupation here would
involve the direct attachment of video reception devices to common
areas such as hallways or recreation areas, or to restricted areas such
as building rooftops.
37. Loretto is not distinguishable on the grounds asserted by the
commenters. First, we disagree that the potential occupation in this
instance would be temporary, not permanent. In Loretto, the Court found
that the cable operator's occupation was ``permanent'' because so long
as the property remained residential and a cable company wished to
retain the installation, the landlord must permit it. The occupation
here would be similarly ``permanent'' because so long as an individual
viewer wished to receive one of the services covered by Section 207,
the property owner would be forced to accept the installation of the
necessary reception devices.
38. Second, we are not persuaded by those who contend that as long
as the entitlement under Section 207 belongs to the tenant and not to a
``stranger,'' Loretto does not apply. In advancing this argument,
commenters rely primarily upon the following statement in footnote 19
in Loretto:
If [the New York statute] required landlords to provide cable
installation if a tenant so desires, the statute might present a
different question from the question before us, since the landlord
would own the installation. Ownership would give the landlord rights
to the placement, manner, use, and possibly the disposition of the
installation.
39. This argument overlooks a critical aspect of footnote 19: that
ownership of the property (i.e., the hypothetically required cable
equipment) must rest with the landlord. So long as a tenant owns the
reception device placed in a common or restricted access area, and the
terms of the tenant's lease, the community association's bylaws, or
other agreement do not give the tenant the right to exclusively possess
any portion of this property, the landlord's or association's property
would be subjected to an uninvited permanent physical occupation. As
the Loretto Court stated: ``[T]he power to exclude has traditionally
been considered one of the most treasured strands in an owner's bundle
of property rights.'' This type of ``required acquiescence is at the
heart of the concept of occupation.'' Even giving the property owner
control over the installation and maintenance of the equipment, the
property owner would still lose the right to possess that space for its
benefit or the benefit of its other residents, and would lose the
ability to exclude others from that space. In contrast, where the
viewer has exclusive use of the property or it is within the viewer's
leasehold, the community association or landlord is already excluded
from the space and does not have the right to possess or use it.
40. Thus, because there is a strong argument that modifying the
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, the Commission
concludes that Section 207 does not authorize us to make such a
modification.
41. Nor is Florida Power on point. In Florida Power, the Court
assumed the utility company had voluntarily agreed to the cable
company's physical occupation; thus, the Court found that the
Commission's subsequent rate regulation did not effect a per se taking
but merely regulated the terms and conditions of the agreed-upon
occupation. Here, the agreed-upon scope of the physical possession is
set forth in the lease or other controlling document; individual
residents generally do not have the right to possess and use the common
areas for their exclusive benefit over the property owner's objection.
While the tenant may have been invited to use the common property for
certain purposes (e.g., ingress, egress, use of the exercise room),
these rights are voluntary and temporary; the proposal here, by
contrast, would be involuntary and--so long as the tenant wished to
keep his or her property in the common areas--permanent. In any event,
there can be no argument that the resident has been invited in any
manner to possess and use restricted access areas, such as rooftops.
Practical Considerations
42. We believe that commenters have raised several practical
concerns suggesting that, even in the absence of the Constitutional
takings issue, it may not serve the public convenience, interest and
necessity to extend the Section 207 rules to common and restricted
access property. First, it is difficult to discern what limits could be
set, if any, on the number of reception devices that a viewer could
install and maintain on common property. For instance, not only would
every tenant have the right to run wiring through the hallways and on
the roof of their apartment building in order to install reception
devices, but they would have the right to install the particular device
of their service provider (or providers) of choice. With potentially
hundreds of separate wires and antennas being installed in a single
building, we believe that space constraints could limit the number of
residents that would be able to install Section 207 devices, and
involve the Commission and local courts in countless disputes about the
feasibility of installing additional reception devices in a building.
Moreover, it would be difficult to determine whether any limit could be
set on how often a viewer could reasonably switch service providers and
require the property owner to suffer another disruption of the common
or restricted access areas. Any limits on these rights, such as
DIRECTV's proposal to require property owners to accommodate only two
MVPDs on the property, seem arbitrary and unsupported by the statutory
language.
43. These difficulties would not be solved by relying on the common
[[Page 71033]]
antenna option originally proposed by CAI. As clarified in the Order on
Reconsideration, a landlord or community association may prohibit
residents from installing individual antennas as long as this
prohibition does not impose unreasonable delay, unreasonable expense or
preclude reception of an acceptable quality signal, including the
programming an individual could obtain with an individual antenna. The
common antenna option is purely voluntary; a landlord or community
association could choose not to establish a common antenna and simply
permit any resident who wished to receive a Section 207 service to
install an individual antenna on the resident's own property. Giving
residents the right to use the common or restricted access areas, by
contrast, could require the association to maintain as many separate
antennas as there are service providers, without the option of simply
requiring the resident to install individual reception equipment on his
or her own property.
44. We are also concerned about the potential for structural damage
and injuries to third parties. It is not clear from the record that an
individual tenant could obtain liability insurance for common or
restricted access areas, and, even if it were possible, that such
insurance would be affordable. Further, not all of these issues can be
resolved by devising a rule that would indemnify the owner and place
liability on the tenant for injury or damage caused by the installation
of a Section 207 reception device.
45. In the context of a statutory provision that simply provides
for elimination of restrictions, the practical difficulties inherent in
giving viewers the right to install Section 207 reception devices on
common or restricted access property weigh heavily against an extension
of the rules to cover such property.
First Amendment and Equal Protection Claims
First Amendment
46. As discussed, the Supreme Court has found that ``assuring that
the public has access to a multiplicity of information sources is a
governmental purpose of the highest order, for it promotes values
central to the First Amendment.'' Turner Broadcasting System, 114 S.Ct.
at 2470. Additional sources of information enhance a viewer's access to
``social, political, esthetic, moral and other ideas.'' See Time
Warner, 93 F.3d at 975 (quoting Red Lion Broadcasting Co. v. FCC, 395
U.S. 367, 389 (1969)). Based in part on these important government
purposes, the Commission extended the Section 207 rules to prohibit
certain restrictions, subject to the terms and exceptions of the
Section 207 rules, on the placement of Section 207 devices within
rental property.
47. Despite our regard for these important government purposes, we
are not persuaded by the record that the First Amendment compels us to
interpret Section 207 without regard to the impact on third parties'
property rights, the creation of affirmative duties not intended by
Section 207, and the legitimate and serious practical concerns. To the
contrary, as noted above, Loretto held that a permanent physical
occupation of property is a taking without regard to the public
interest that it may serve.
48. We disagree with the argument that Red Lion requires the
Commission to interpret Section 207 in such a way as to guarantee
viewers' access to the video programming service of their choice. Red
Lion does not require the Commission to promulgate regulations to
ensure that every viewer has access to every available video
programming service regardless of the constitutional and practical
burdens imposed on third parties.
49. Likewise, we disagree that Pruneyard Shopping Center v. Robins,
447 U.S. 74 (1980) provides authority that would permit the Commission
to issue a rule superseding a property owner's property rights.
Pruneyard was a 21-acre shopping center in which a group of students,
acting under color of a California state constitutional provision
providing access to shopping centers, placed a card table and began
soliciting petition signatures. Performing a Penn Central takings
analysis, the Court held that because the center was ``open to the
public at large'' and could adopt time, place and manner restrictions
to minimize any interference with the center's operations, Pruneyard's
property rights had not been unconstitutionally infringed: ``In these
circumstances, the fact that [the students] may have `physically
invaded' appellants' property cannot be viewed as determinative.'' The
Loretto Court explicitly distinguished Pruneyard from the permanent
occupation in Loretto by noting that ``the invasion [of the shopping
center] was temporary and limited in nature, and * * * the owner had
not exhibited an interest in excluding all persons from his property.''
Likewise, Pruneyard is distinguishable here because the evidence in the
record does not persuade us that rental buildings have taken on a
``public forum'' character, that the owners have invited an occupation
of their common property, or that the occupation would be temporary
instead of permanent.
50. The facts are altogether different regarding leaseholds. In
Pruneyard, because the students were invited to the shopping center,
the California constitution could require the shopping center to allow
the students to bring a card table with them for the duration of their
visit without infringing the shopping center's Fifth Amendment property
rights. Similarly, when a landlord invites a tenant to possess a
leasehold for the duration of the lease, permitting the tenant to have
a Section 207 device within the leasehold during the lease term does
not infringe the landlord's Fifth Amendment property rights.
Equal Protection
51. Because Section 207 does not provide access rights to common
and restricted access property, renters whose individual leaseholds
cannot accommodate a Section 207 device will be unable to gain access
to the full range of video programming providers. As a result, Section
207 may unintentionally have a disproportionate effect upon low income
and minority viewers, to the extent they may comprise a
disproportionate percentage of renters. However, the amended rule
eliminates any per se distinction between viewers who own and those who
rent and that many renters may avail themselves of the Section 207
rules by either installing a Section 207 reception device on a balcony
or any other outside area included in their leasehold or installing an
LMDS-type device inside their dwelling. While we are sympathetic
towards those renters who are unable to take advantage of the Section
207 rules, no Fifth Amendment equal protection violation results from
applying Section 207 according to its terms and not extending its
coverage to common and restricted access property.
52. A statutory classification that does not proceed along
``suspect lines'' or infringe upon a fundamental right will receive a
``strong presumption of validity'' and will be examined under a
``rational basis'' equal protection analysis. Heller v. Doe, 509 U.S.
312, 319 (1993); FCC v. Beach Communications, Inc., 508 U.S. 307, 314
(1993). Commenters have not adduced any authority that recognizes
renters or MDU residents as a protected class. Moreover, even if
minorities, who are a protected class, comprise a significant portion
of MDU residents, in a case alleging that a protected class is
[[Page 71034]]
harmed by the disparate impact of a facially neutral regulation, the
regulation will not be examined under strict scrutiny unless it can be
shown that the disparate impact was intentional. We do not believe that
such an intent has been alleged or demonstrated here. As noted above,
the distinctions made in this Second Report and Order were not made
based on race, but on the limitations on the authority granted by
Section 207. Moreover, any disparate impact on renters has been
mitigated by the new rules permitting renters to install Section 207
reception devices within their leaseholds.
53. Under the rational basis equal protection scrutiny, a
classification need only be rationally related to a legitimate
governmental interest. We believe that the Section 207 rules clearly
satisfy this standard because the language of Section 207 supports the
conclusion not to extend our rules to cover common and restricted
access property.
FINAL REGULATORY FLEXIBILITY ANALYSIS
54. As required by the Regulatory Flexibility Act (``FRA'') (5
U.S.C. 603), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the Further Notice. The Commission sought written
public comment on the proposals in the Further Notice, including
comment on the IRFA. The comments received are discussed below. This
Final Regulatory Flexibility Analysis (``FRFA'') conforms to the RFA.
Need for, and Objectives of, This Second Report and Order
55. The rulemaking implements Section 207 of the Telecommunications
Act of 1996, Pub. L. 104-104, 110 Stat. 56. Section 207 directs the
Commission to promulgate regulations to prohibit restrictions that
impair a viewer's ability to receive video programming services through
certain devices designed for over-the-air reception, including MMDS,
LMDS, DBS, TVBS and ITFS (``Section 207 devices''). This action is
authorized under the Communications Act of 1934 Sec. 1, as amended, 47
U.S.C. 151, pursuant to the Communications Act of 1934 Sec. 303, as
amended, 47 U.S.C. 303, and by Section 207 of the Telecommunications
Act of 1996.
56. On August 6, 1996, the Commission implemented part of Congress'
directive by releasing rules set forth in 47 CFR 1.4000 (``Section 207
rules'') that prohibit restrictions that impair a viewer's ability to
install, maintain and use devices designed for over-the-air reception
of video programming through Section 207 devices on property within the
exclusive use or control of the viewer in which the viewer has a direct
or indirect ownership interest. The rule exempts regulations and
restrictions which are clearly and specifically designed to preserve
safety or historic districts, allowing for the enforcement of such
restrictions even if they impair a viewer's ability to install,
maintain or use a reception device.
57. The rule adopted in this Second Report and Order prohibits the
same types of restrictions on a viewer who desires to place Section 207
devices on property that the viewer has leased and is within the
exclusive use or control of the viewer. The same exemptions applicable
to the initial Section 207 rules apply to this rule.
Summary of Significant Issues Raised by Public Comments in Response
to the IRFA
58. The Commission, in its Report and Order, invited comment on the
IRFA and the potential economic impact the proposed rules would have on
small entities. The only comment submitted was a joint response filed
by the National Apartment Association, et al. (collectively ``NAA'').
NAA argues that removing restrictions on a viewer's use of a Section
207 device in the viewer's leased dwelling constitutes a Fifth
Amendment taking of the property owners' rights. In addition, NAA
argues that, due to the small staffs and limited resources of small
businesses, the rules would interfere with the ability of small
businesses to ensure compliance with safety codes, to protect the
safety of other tenants, and to prevent damage to the building.
Finally, NAA argues that Congress did not intend for Section 207 to
preempt lease restrictions.
59. The Commission has taken the arguments and views of NAA into
account in this Second Report and Order. NAA's comments on behalf of
small businesses in response to the IRFA essentially track its
objections to the rule overall, which we have already fully addressed.
As analyzed in the Second Report and Order, the rules removing use
restrictions on Section 207 devices from leases do not constitute a
taking under the Fifth Amendment. Removing the use restrictions does
not constitute a per se possessory taking under Loretto because the
landlord has voluntarily entered into a commercial relationship with
the tenant and has given the tenant possession of the leased property.
Furthermore, removing restrictions on the use of leased property does
not constitute a Penn Central regulatory taking, given, as discussed
above, the character of the government action, the minimal economic
impact on the landlord, and the minimal impact on the landlord's
reasonable investment-backed expectations.
60. Regarding the practical concerns of small businesses, as set
forth in the Second Report and Order, these practical concerns may be
addressed under the current rules. For example, safety restrictions are
permitted exceptions to the Section 207 rules. Likewise, a restriction
barring substantial damage to the building would likely be a reasonable
restriction under 47 CFR 1.4000.
61. Finally, we disagree with NAA's last argument that Congress did
not intend for Section 207 to cover lease restrictions. The express
language of Section 207 contains no such limitation. Moreover, the
legislative history of Section 207 demonstrates that Congress
acknowledged that there might be restrictions that would be covered by
Section 207 that it had not considered when adopting Section 207 into
law.
62. Although local governments did not file comments on the IRFA
contained in the Further Notice, they did file joint comments in
response to the IRFA's contained in International Bureau (IB) Docket
No. 95-59 (DBS Order and Further Notice) and in Cable Services Bureau
(CS) Docket No. 96-83 (TVBS-MMDS Notice), and we will consider those
comments with respect to the new rule. National League of Cities
(``NLC'') commented that the proposed preemption of restrictions on
property where the viewer had a direct or indirect property interest
and over which the viewer exercised exclusive use or control would have
a ``substantial economic and administrative impact'' on over 37,000
small local governments. NLC states that the proposed rule would
require ``local governments to amend their laws and to file petitions
at the FCC * * * for permission to enforce those laws.''
63. In the Report and Order, we addressed these concerns:
The Commission has modified its proposed rule and has addressed
the concerns raised by NLC by providing greater certainty regarding
the application of the rule, and by clarifying that local
regulations need not be rewritten or amended. The Commission
recognizes that some regulations are integral to local governments'
ability to protect the safety of its citizens. The rule that we
adopt exempts restrictions clearly defined as necessary to ensure
safety, and permits enforcement of safety restrictions during the
pendency of any challenges. In addition, limiting the rule's scope
to regulations that ``impair,'' rather than the proposed preemption
of regulations that ``affect,'' will minimize the impact on small
local
[[Page 71035]]
governments, while effectively implementing Congress' directive.
Finally, the inclusion in the Report and Order of examples of
permissible and prohibited restrictions will minimize the need for
local governments to submit waiver or declaratory ruling petitions
to the Commission, decreasing the potential economic burden.
We do not believe that preempting government restrictions on viewers
residing on rental property will have any greater impact than
preempting government restrictions on viewers residing on property that
they own.
64. The Commission also notes the positive economic impact the new
rule will have on many small businesses. The new rule will allow small
businesses that use video programming services to select from a broader
range of providers, which could result in significant economic savings;
because providers will be competing for customers, more services will
be available at lower prices. In addition, small business video
programming providers will be faced with fewer entry hurdles, and will
thus be able to develop their markets and compete more effectively,
achieving one of the purposes of Section 207.
Description and Estimate of the Number of Small Entities To Which
Rules Will Apply
65. The Regulatory Flexibility Act defines the term ``small
entity'' as having the same meaning as the terms ``small business,''
``small organization,'' and ``small governmental jurisdiction,'' and
``the same meaning as the term `small business concern' under Section 3
of the Small Business Act.'' The rule applies to small organizations,
small governmental jurisdictions, and small businesses.
66. The term ``small governmental jurisdiction'' is defined as
``governments of * * * districts, with a population of less than fifty
thousand.'' There are 85,006 governmental entities in the United
States. This number includes such entities as states, counties, cities,
utility districts and school districts. We note that restrictions
concerning antenna installation are usually promulgated by cities,
towns and counties, not school or utility districts. Of the 85,006
governmental entities, 38,978 are counties, cities and towns; and of
those, 37,566, or 96%, have populations of fewer than 50,000. One
commenter estimates that there are 37,000 ``small governmental
jurisdictions'' that may be affected by the proposed rule.
67. Section 601(4) of the Regulatory Flexibility Act 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. An industry association
estimates that there were 150,000 associations in 1993. Given the
nature of a neighborhood association, we assume for the purposes of
this FRFA that all 150,000 associations are small organizations.
68. 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). Industry sources estimate that the following SIC
codes apply to this industry: SIC Codes 6512 (operators of
nonresidential buildings), 6513 (operators of apartment buildings), and
6514 (operators of dwellings other than apartment buildings). The SBA
defines a small entity in each of these codes as one with less than
$5,000,000 in gross annual revenues. Based on census data that lists
businesses according to these SIC codes and their total revenue,
industry sources state that there are 28,089 operators of
nonresidential buildings and 39,903 operators of apartment buildings.
Industry sources state the Bureau of Census includes operators of
dwellings other than apartment buildings in the same category as other
types of businesses, but states that the figures for this category as a
whole show that the number of operators of dwellings other than
apartment buildings are similar to the numbers of operators covered by
SIC codes 6512 and 6513.
Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
69. The rules adopted will result in no changes to reporting,
recordkeeping, or other compliance requirements beyond those already
required under the Section 207 rules.
Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Rejected
70. In the Report and Order, the Commission analyzed steps to
minimize the impact on small entities, and because the steps the
Commission took in the Report and Order also minimize the impact on the
small entities impacted by the new rule, we reiterate here the steps
taken in the Report and Order:
The Commission considered various alternatives that would have
impacted small entities to varying extents. These included a
rebuttable presumption approach, the use of the term ``affect'' in
the rule, and a rule that allowed for adjudicatory proceedings in
courts of competent jurisdiction, all of which were adopted in the
DBS Order and Further Notice and proposed in the TVBS-MMDS Notice.
The rule we adopt today replaces the rebuttable presumption with a
simpler preemption approach, adheres to the statutory language by
using the term ``impair'' rather than ``affect'' in the rule, and
allows for adjudication at the Commission. * * * We believe that we
have effectively minimized the rule's economic impact on small
entities.
In the DBS Order and Further Notice and the TVBS-MMDS Notice, we
adopted and proposed, respectively, a rebuttable presumption
approach to governmental regulations, and proposed strict preemption
of nongovernmental restrictions. We acknowledged in the DBS Order
and Further Notice that a rule relying on a presumptive approach
would be more difficult to administer than a rule based upon a per
se prohibition, and we sought comment in the TVBS-MMDS Notice on
less burdensome approaches. Under the rebuttable presumption
approach, local governments would have been required to request a
declaratory ruling from the Commission every time they sought to
enforce or enact a restriction; and neighborhood associations would
not have been able to enforce or enact any restrictions that
impaired a viewer's ability to receive the signals in question. The
rebuttable presumption approach was adopted to ensure the protection
of local interests, including local governments. Based on the
record, the Commission recognizes that the burden of rebutting a
presumption could strain the resources of local authorities. The
Commission has rejected the rebuttable presumption approach for a
less burdensome preemption approach. In addition we have provided
recourse for both neighborhood associations and municipalities. The
rule we adopt today provides for a per se prohibition of
restrictions that impair a viewer's ability to install, maintain or
use devices designed for over-the-air reception of video programming
services. The Report and Order provides examples of reasonable
regulations that can be enforced without a waiver application. The
Commission believes that the Report and Order provides such clarity
as will make the enforcement of the rule the most efficient and
least burdensome for local governments, neighborhood associations,
and this Commission.
In adopting the new rule, the Commission rejected the
alternative of preempting all restrictions that ``affect'' the
reception of video programming services through devices designed for
over-the-air reception of TVBS, MMDS and DBS services. The new rule
prohibits only those local restrictions that ``impair'' a viewer's
ability to receive these signals and exempts restrictions necessary
to ensure safety or to preserve historic districts. In defining the
term ``impair'' we reject the interpretation that impair means
prevent because that definition would not properly implement
Congress' objective of promoting competition. We find that a
restriction impairs a viewer's ability to receive over-the-
[[Page 71036]]
air video programming signals, if it (a) unreasonably delays or
prevents installation, maintenance or use of a device used for the
reception of over-the-air video programming signals by DBS, TVBS, or
MMDS; (b) unreasonably increases the cost of installation,
maintenance or use of such devices; (c) precludes reception of an
acceptable quality signal. The use of the term impair will decrease
the burden on small entities while implementing Congress' objective.
* * *
Waiver proceedings will be paper hearings, allowing the
Commission to alleviate the negative potential economic impact from
costly litigation. Further, any regulations necessary to the
safeguarding of safety will remain enforceable pending the
Commission's resolution of waiver requests. The Commission believes
that the rule we adopt today effectively implements Congress' intent
while minimizing any significant economic impact on small entities.
Report to Congress: The Commission will send a copy of this Second
Report and Order, including this FRFA, in a report to Congress pursuant
to the Small Business Regulatory Enforcement Fairness Act of 1996, 5
U.S.C. 801(a)(1)(A).
Ordering Clauses
71. Accordingly, it is ordered that, pursuant to authority found in
Sections 4(i) and 303 of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), and 303, and Section 207 of the Telecommunications Act
of 1996, that the amendments to 47 CFR 1.4000 discussed in this Second
Report and Order are adopted. These amendments shall become effective
30 days after publication in the Federal Register.
72. It is further ordered that the Commission's Office of Public
Affairs, Reference Operations Division, shall send a copy of this
Second Report and Order, including the Final Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration in accordance with paragraph 603(a) of the Regulatory
Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. 601 et.
seq.
List of Subjects in 47 CFR Part 1
Antenna, Satellite, Telecommunications, Television.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Rule Changes
Part 1 of Title 47 of the Code of Federal Regulations is amended to
read as follows:
PART 1--PRACTICE AND PROCEDURE
1. The authority citation for Part 1 is revised to read as follows:
Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303(r), 309.
2. Section 1.4000 is revised to read as follows:
Sec. 1.4000 Restrictions impairing reception of television broadcast
signals, direct broadcast satellite services or multichannel multipoint
distribution services.
(a)(1) Any restriction, including but not limited to any state or
local law or regulation, including zoning, land-use, or building
regulations, or any private covenant, contract provision, lease
provision, homeowners' association rule or similar restriction, 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 that impairs the installation, maintenance, or use of:
(i) An antenna that is designed to receive direct broadcast
satellite service, including direct-to-home satellite services, that is
one meter or less in diameter or is located in Alaska;
(ii) An antenna that is designed to receive video programming
services via multipoint distribution services, including multichannel
multipoint distribution services, instructional television fixed
services, and local multipoint distribution services, and that is one
meter or less in diameter or diagonal measurement;
(iii) An antenna that is designed to receive television broadcast
signals; or
(iv) A mast supporting an antenna described in paragraphs
(a)(1)(i), (a)(1)(ii) or (a)(1)(iii) of this section;
is prohibited to the extent it so impairs, subject to paragraph (b)
of this section.
(2) For purposes of this section, a law, regulation or restriction
impairs installation, maintenance or use of an antenna if it:
(i) Unreasonably delays or prevents installation, maintenance or
use,
(ii) Unreasonably increases the cost of installation, maintenance
or use, or
(iii) Precludes reception of an acceptable quality signal.
(3) Any fee or cost imposed on a viewer by a rule, law, regulation
or restriction must be reasonable in light of the cost of the equipment
or services and the rule, law, regulation or restriction's treatment of
comparable devices. No civil, criminal, administrative, or other legal
action of any kind shall be taken to enforce any restriction or
regulation prohibited by this section except pursuant to paragraph (c)
or (d) of this section. In addition, except with respect to
restrictions pertaining to safety and historic preservation as
described in paragraph (b) of this section, if a proceeding is
initiated pursuant to paragraph (c) or (d) of this section, the entity
seeking to enforce the antenna restrictions in question must suspend
all enforcement efforts pending completion of review. No attorney's
fees shall be collected or assessed and no fine or other penalties
shall accrue against an antenna user while a proceeding is pending to
determine the validity of any restriction. If a ruling is issued
adverse to a viewer, the viewer shall be granted at least a 21-day
grace period in which to comply with the adverse ruling; and neither a
fine nor a penalty may be collected from the viewer if the viewer
complies with the adverse ruling during this grace period, unless the
proponent of the restriction demonstrates, in the same proceeding which
resulted in the adverse ruling, that the viewer's claim in the
proceeding was frivolous.
(b) Any restriction otherwise prohibited by paragraph (a) of this
section is permitted if:
(1) It is necessary to accomplish a clearly defined, legitimate
safety objective that is either stated in the text, preamble or
legislative history of the restriction or described as applying to that
restriction in a document that is readily available to antenna users,
and would be applied to the extent practicable in a non-discriminatory
manner to other appurtenances, devices, or fixtures that are comparable
in size and weight and pose a similar or greater safety risk as these
antennas and to which local regulation would normally apply; or
(2) It is necessary to preserve a prehistoric or historic district,
site, building, structure or object included in, or eligible for
inclusion on, the National Register of Historic Places, as set forth in
the National Historic Preservation Act of 1966, as amended, 16 U.S.C.
470, and imposes no greater restrictions on antennas covered by this
rule than are imposed on the installation, maintenance or use of other
modern appurtenances, devices or fixtures that are comparable in size,
weight, and appearance to these antennas; and
(3) It is no more burdensome to affected antenna users than is
necessary to achieve the objectives described in paragraph (b)(1) or
(b) (2) of this section.
(c) Local governments or associations may apply to the Commission
for a waiver of this section under Sec. 1.3. Waiver requests must
comply with the
[[Page 71037]]
procedures in paragraphs (e) and (g) of this section and will be put on
public notice. The Commission may grant a waiver upon a showing by the
applicant of local concerns of a highly specialized or unusual nature.
No petition for waiver shall be considered unless it specifies the
restriction at issue. Waivers granted in accordance with this section
shall not apply to restrictions amended or enacted after the waiver is
granted. Any responsive pleadings must be served on all parties and
filed within 30 days after release of a public notice that such
petition has been filed. Any replies must be filed within 15 days
thereafter.
(d) Parties may petition the Commission for a declaratory ruling
under Sec. 1.2, or a court of competent jurisdiction, to determine
whether a particular restriction is permissible or prohibited under
this section. Petitions to the Commission must comply with the
procedures in paragraphs (e) and (g) of this section and will be put on
public notice. Any responsive pleadings in a Commission proceeding must
be served on all parties and filed within 30 days after release of a
public notice that such petition has been filed. Any replies in a
Commission proceeding must be served on all parties and filed within 15
days thereafter.
(e) Copies of petitions for declaratory rulings and waivers must be
served on interested parties, including parties against whom the
petitioner seeks to enforce the restriction or parties whose
restrictions the petitioner seeks to prohibit. A certificate of service
stating on whom the petition was served must be filed with the
petition. In addition, in a Commission proceeding brought by an
association or a local government, constructive notice of the
proceeding must be given to members of the association or to the
citizens under the local government's jurisdiction. In a court
proceeding brought by an association, an association must give
constructive notice of the proceeding to its members. Where
constructive notice is required, the petitioner or plaintiff must file
with the Commission or the court overseeing the proceeding a copy of
the constructive notice with a statement explaining where the notice
was placed and why such placement was reasonable.
(f) In any proceeding regarding the scope or interpretation of any
provision of this section, the burden of demonstrating that a
particular governmental or nongovernmental restriction complies with
this section and does not impair the installation, maintenance or use
of devices designed for over-the-air reception of video programming
services shall be on the party that seeks to impose or maintain the
restriction.
(g) All allegations of fact contained in petitions and related
pleadings before the Commission must be supported by affidavit of a
person or persons with actual knowledge thereof. An original and two
copies of all petitions and pleadings should be addressed to the
Secretary, Federal Communications Commission, 445 12th St. S.W.,
Washington, D.C. 20554, Attention: Cable Services Bureau. Copies of the
petitions and related pleadings will be available for public inspection
in the Cable Reference Room in Washington, D.C. Copies will be
available for purchase from the Commission's contract copy center, and
Commission decisions will be available on the Internet.
Note: The following statements will not appear in the Code of
Federal Regulations:
Separate Statement of Chairman William E. Kennard
In the Matter of Implementation of Section 207 of the
Telecommunications Act of 1996:
Preempting Restrictions on Over-the-Air Reception Devices
Today we complete our proceeding to remove restrictions on
consumers' ability to access video programming offered by means
other than cable. I am proud of the Commission's work to expand the
Over-the-Air Reception Devices rule up to the limits of the
authority Congress gave us in Section 207 of the Telecommunications
Act of 1996.
As a result of Section 207 and our rules, thousands of consumers
now are able to receive television programming through small
satellite dishes, wireless cable or traditional ``stick'' antennas.
The action we take today extends that ability to consumers who rent
their homes or apartments and have a place within their rental
property to install an antenna. Our rule brings choice to renters
who live in high-rise buildings and have a balcony on which to
install an antenna, just as owners of condominium units may install
an antenna on their balconies and owners or renters of townhouses
may have an antenna on their patios. The Commission has thus
eliminated the have-and-have-not distinction that gave homeowners
access to the competitive video market but denied it to all
apartment dwellers.
I am disappointed that Section 207 did not permit us to go as
far as we might have to promote competition and eliminate barriers
for all consumers. In my view, it is vitally important that all
consumers have the ability to select the video programmer of their
choice. However, Section 207 directed us only to ``prohibit
restrictions'' on the receipt of video programming and, as this
Second Report and Order describes, prohibiting restrictions can only
take us part of the way. Section 207 does not authorize the
Commission to impose an affirmative duty on landlords to provide
access for competitive video providers, and the statute does not
clearly address the Constitutional requirement for ``just
compensation'' that may be necessary to give consumers access to the
roof or common areas of the landlord's property. Nonetheless, I am
committed to working toward a complete solution to this problem.
When we released the Fourth Annual Competition Report at the
beginning of this year, I mentioned my hope that Congress and the
Commission would work together to evaluate statutory proposals to
eliminate barriers to competition. I am especially interested in
working with Congress to find ways to provide access to competitive
video services for more consumers.
Statement of Commissioner Harold Furchtgott-Roth, Dissenting in Part In
the Matter of Implementation of Section 207 of the Telecommunications
Act of 1996, Restrictions on Over-the-Air Reception Devices: Television
Broadcast Service and Multichannel Multipoint Distribution Service, CS
Docket No. 96-83
I fully concur in the Commission's excellent decision not to
extend our section 207 rules to cover common and restricted access
property. I also join in the conclusions reached with respect to the
Equal Protection Clause and First Amendment. For the well-
articulated reasons that such property should not be governed by
these rules, however, neither should rental property. I therefore
respectfully dissent from that part of today's Report & Order
(``R&O'') which subjects leased property to regulation under section
207.
In deciding that application of our over-the-air reception
device (``OTARD'') regulations to common and restricted access
property would raise grave questions under the Takings Clause, the
R&O reasons that, as in Loretto v. Teleprompter Manhattan CATV Corp,
458 U.S. 419 (1982), ``the physical occupation here would involve
the direct attachment of video reception devices to'' the property.
Supra at para. 36. Such an attachment, the R&O continues, would
constitute a ``permanent physical occupation'' and consequently a
per se taking. Id. But the very same ``direct attachment of video
reception devices'' to property would occur in the rental property
context. Thus, the attachment of reception devices to rental
property is as much a ``permanent physical occupation'' within the
meaning of the Takings Clause as the attachment of such devices to
common and restricted access property.
Nevertheless, the R&O concludes that extension of the OTARD
rules to rental property would occasion no per se taking. For this
conclusion, the R&O relies on the proposition that when ``the
private property owner voluntarily agrees to the possession of its
property by another, the government can regulate the terms and
conditions of that possession without effecting a per se taking.''
Supra at para. 17 (citing FCC v. Florida Power, 480 U.S. 245
(1987)). Although the Commission attempts to frame this rule in
terms of ``possession,'' Florida Power clearly speaks in terms of
the ``occupation'' of the relevant property. See 480 U.S. at 252;
see also Yee v. Escondido, 503 U.S. 519, 527
[[Page 71038]]
(1992). Thus, the Commission's emphasis on possession does not exist
in the relevant case law. It is the occupation, i.e., the ``required
acquiescence,'' Florida Power, 480 U.S. at 252, that counts under
the Takings Clause. It is that act that could theoretically slice
through an owner's bundle of property rights--rights that include
the ability not just to possess, but also to use and dispose of
property. See Loretto, 458 U.S. at 435.
I must doubt the applicability of Florida Power, however, and
for this fundamental reason: the particular occupation to which the
landlord has ``voluntarily agree[d]'' is necessarily defined by the
terms of the lease. That legal document is the primary determinant
of the property rights that have, or have not been, transferred from
owner to tenant, and there are myriad allocations of property rights
to which landlords and tenants might agree. For this reason, I think
the R&O goes too far when it states that ``[t]ypically, for
apartments, [leased property under the exclusive possession of the
viewer] will include balconies, balcony railings and terraces'' and
that for ``rented single family homes or manufactured homes which
sit on rented property, it will typically include patios, yards or
gardens within the leasehold.'' Supra. We cannot prescribe general
federalized lease terms (although I fear that may be the logical
implication of this decision), and the very nature of contracts is
that their terms can be customized to suit the particular
circumstances in which the parties find themselves. Where a landlord
has expressly included lease provisions prohibiting the attachment
of certain equipment to rental property, it cannot be said that he
has consented to such an occupation of his property.
In other words, if the landlord has not agreed to a certain
occupation or use of his property, there can be no theory of consent
with respect to the prohibited occupation or use that would prevent
application of the Takings Clause. Cf. Declaration of Charles M.
Haar in Support of Reply Comments of National Apartment Association
et al., at 24-25 (``The notion of implied consent to use the
property * * * is not applicable here where the owners are careful
to delineate the boundaries of the demised property to exclude areas
such as the roof and exterior walls.''). Admittedly, a tenant who
occupies property subject to certain contractual limitations is not
a complete stranger to the property, but as far as contractually
restricted uses of that property are concerned, the law does indeed
deem him ``an interloper.'' Florida Power, 480 U.S. at 252.
Indeed, the R&O repeatedly recognizes this very point--namely,
that the government can regulate property use only within the
boundaries of the property rights that have actually been conferred
upon the tenant--in the discussion of common and restricted access
property. For instance, in rejecting the argument that the
Commission could strike down lease provisions limiting tenant usage
of, or access to, common and other property, the R&O correctly
explains that ``[s]o long as a tenant owns the reception device
placed in a common or restricted access area, and the terms of the
tenant's lease * * * or other agreement do not give the tenant the
right to exclusively possess any portion of this property, the
landlord's * * * property would be subjected to an uninvited
permanent physical occupation.'' Supra at para. 39 (emphasis added).
If placement of a reception device on property such as a balcony or
exterior wall adjoining a tenant's apartment is barred by the rental
contract, however, then the landlord would be equally subject to an
``uninvited'' invasion of his property--the forced introduction of
the prohibited attachment--if the tenant nevertheless affixed a
device on that property. Just as ``the landlord does not invite the
tenant to take possession of common and restricted access
property,'' supra at para. 35, so too the landlord has not invited
the tenant to use the property for the attachment of reception
devices. Accordingly, to say that the attachment of devices to
rental property is like the attachment of ``rabbit ears'' to a
television set, see supra at para. 19, does not advance the ball in
this game: the critical question is whether the person who owns the
equipment is the same person who owns the property to which it is
permanently affixed, which the R&O makes clear in its section on
restricted access property. See supra at para. 39 (noting
``critical'' issue that ``ownership of the property (i.e., the
hypothetically required cable equipment) must rest with the
landlord''). And, if the rabbit ears are the property of some third
party and their placement is mandated by the government, that would
raise the issue of a per se Taking.
Similarly, in declining to rely on Florida Power in the context
of restricted and common property, the R&O notes that ``the agreed-
upon scope of the physical possession is set forth in the lease or
other controlling document.'' Supra at para. 41. As noted, supra, it
is the permanent, physical occupation of the owner's property (which
could be a number of different kinds of invasions), not just the
extent of the possession of the property (which is only one of
several kinds of property rights that might be adversely affected by
an occupation of the property), that triggers the Takings Clause. As
discussed above, the same is true in the rental property situation.
Location of a reception device on an exterior wall when such action
is barred by the lease is no more ``agreed-upon'' than placement of
a reception device on a rooftop when that particular action is
prohibited by the lease. In both cases, what matters is the
``agreed-upon scope'' of the tenant's legal rights with respect to
the property in question. Although the majority counters that
``[f]or takings purposes, the lease is [only] relevant in defining
the physical area of consensual occupation (e.g., the apartment but
not the roof or exterior walls),'' supra at para. 22, no support for
that assertion is provided.
Given the primacy of the lease agreement in defining the
respective property rights of landlords and tenants in leased
property, the standard adopted in this Order--namely, that tenants
can attach devices to property ``within their leasehold,'' supra at
para. 8--is entirely circular. The property rights that are ``within
a leasehold'' can only be ascertained by reference to the lease, but
this item prohibits any lease restrictions that impair attachments,
and so it is impossible to limit our regulation in this area to
property rights actually possessed by the leaseholder. Accordingly,
it is hard to see, as a matter of black letter contract law, what it
means for attachment to be authorized ``within a leasehold'' and yet
undertaken ``without the landlord's permission.'' Supra at 11.
I question the force of Florida Power in the context of this R&O
for another reason: that case was about what the Supreme Court
called ``economic regulation'' of commercial agreements. As the
Court explained, ``statutes regulating the economic relations of
landlords and tenants are not per se takings'' under Loretto. 480
U.S. at 252 (emphasis added). While it is certainly true that simple
price regulation would fall within this standard--and those were the
facts in Florida Power--this item, by contrast, does not involve the
regulation of the economic status of landlords with respect to
tenants. Rather, it involves the regulation of their respective
property rights; it transfers from the landlord to the tenant a
previously unpossessed and intentionally retained aspect of the
right to use the property. And it does so without providing for any
compensation to the landlord, much less ``just'' compensation. What
I question here, primarily, is the logic of the distinction that the
majority has drawn in concluding that the application of OTARD rules
presents a per se taking in one area where a tenant lacks the
necessary property rights but not in the other. Even if there is no
per se Taking in these situations, however, the extension of section
207 to rental property certainly creates a potential regulatory
taking. See Declaration of Charles M. Haar in Support of Reply
Comments of National Apartment Association et al., at 6-9 (arguing
that, under the factors set forth in Penn Central Transportation Co.
v. New York City, 438 U.S. 104 (1978), subjecting rental property to
OTARD regulation would occasion a regulatory taking).
If the foregoing does not create a Takings Clause problem, then
at least the circularity of the amendment adopted today indicates
that, as a structural matter, section 207 was probably never
intended to apply to viewers who had no ownership interest in the
relevant property. When section 207 is limited to governmental and
homeowners' association limits on reception devices, as opposed to
lease restrictions, this problem of circularity disappears.
Finally, I note that in erecting its distinction between the
legal significance of attaching devices to rental property and to
common/restricted access property, the R&O appears to assume that
just because a landlord has agreed to the exclusive possession of
certain property by a tenant, he has thereby transferred to the
tenant an absolute right to use that property. This is in error.
A landlord is not obliged to turn over to a tenant the entire
``use'' strand in his bundle of property rights. If he chooses, and
the tenant agrees, he can confer a limited right to use upon the
tenant. Even the language of the R&O belies this fundamental
premise. See, e.g., para. 18 (noting that ``to a large extent [but
not entirely, if contractual usage
[[Page 71039]]
limitations exist!], the property owner relinquishes its right to
control the use of its property when it leases the property''); id.
(noting ``that (absent a valid restriction) a tenant may put the
leased premises to whatever lawful purpose it so desires'')
(citation omitted). In fact, use restrictions on property that
tenants have the exclusive right to occupy and possess are
commonplace. For example, I may possess the exclusive right to
occupy the patio adjacent to my apartment, and I may also have an
exclusive right generally to use it. But the landlord can, by power
of private contract, restrict my use of the balcony: that is,
notwithstanding my exclusive right to occupy and generally use the
balcony, I may not be legally entitled to, say, hang laundry on its
rails or store my bicycle there. The landlord has chosen not to
bargain away those aspects of his right to use the property and thus
retains them.
I do not think that section 207 authorizes us to deprive
landlords of their right to retain aspects of the right to use their
property. Conversely, I do not think that section 207 authorizes us
to bestow new property rights upon tenants--here, the right to use
property for certain purposes--at the expense of landlords. Although
the item reasons that the statute does not ``direct the Commission
to impose affirmative duties on'' non-viewers ``to grant access to
restricted areas to permit the installation of'' reception devices,
supra, that is exactly what the rules governing rental property do.
They require landlords to transfer certain usage rights to tenants
in order to allow them to attach devices; that is surely an
affirmative act and, now, a federal obligation.
To be sure, the language of section 207 is exceedingly broad,
obliging us to adopt regulations ``to prohibit restrictions that
impair a viewer's ability to receive video programming services
through devices designed for over-the-air reception'' of services.
But we should always read these kinds of statutes against the
backdrop of the Takings Clause, as Bell Atlantic Co. v. FCC teaches.
See 24 F.3d 1441 (D.C. Cir. 1994). Because of the Takings issues
that are at least arguably raised here, I would stop short of
extending these rules to viewers who lack an ownership interest in
the property to which they wish to affix reception devices. There is
no question but that the Commission met its obligation under section
207 in the first R&O by outlawing governmental and homeowners'
association rules that impair viewers' abilities to employ reception
devices. There is no statutory need to go further and create
constitutional problems by extending the rules to property in which
viewers lack any ownership interest.
To sum up, it is not clear to me that there is a significant
difference, for purposes of Takings Clause analysis, between lease
provisions that prohibit the installation of reception devices in
common/restricted access areas and lease provisions that do so in
other rental property areas. Under Florida Power, the
constitutionality of the OTARD rules in either context turns on the
question of consent and, thus, on the terms of the particular
agreement between the landlord and the tenant. It seems to me that
if one of these situations presents Takings problems, as this item
concludes, then so does the other. Moreover, the circularity of the
standard adopted today suggests that section 207 was never meant to
apply outside the context of property in which the viewer has an
ownership interest. For these reasons, and because the decision to
extend OTARD rules to leased property is a generally unnecessary
incursion on private property rights, I respectfully dissent.
[FR Doc. 98-33869 Filed 12-22-98; 8:45 am]
BILLING CODE 6712-01-U
