The Federal Communications Commissions issued proposed rules concerning the disposition of cable wiring located inside multiple dwelling unit buildings upon termination of a cable service contract.
Chicago area buildings operate on either a home run or loop-through cable wiring system.
The FCC rules concern the use of home run wiring, exclusively. The term home run does not describe that which a certain North Side baseball team lacked this year; but, rather, is a cable wiring system that runs from the outside of the building to a point outside an individual unit.
Each subscriber then has a dedicated line, called a home run, running to the unit from a common feeder line or riser cable. The feeder line or riser cable is the source for television signals for the entire building.
In a loop-through system, the cable wiring runs directly from unit to unit. The FCC is considering whether it should require cable operators to allow multiple unit buildings to purchase loop-through wiring in a situation where the building switches to a bulk rate contract for the entire building.
Under existing FCC rules, when an association terminates a cable television contract, the cable operator is required to notify the building that it may buy the wiring, and the per-foot charge.
Based on the development of the home run system and the recognition that multiple unit buildings prefer to use one set of wiring for successive cable operations, the FCC determined that rules were needed to enable a subscriber to purchase home run wiring.
Thus, when an association decides to convert the entire building to a new bulk cable contract, or merely seeks to switch cable operators offering service on a unit basis, the following rules will apply:
– The association must give the existing cable operator a minimum of 90 days notice of termination. The existing cable operator then has 30 days to notify the association, in writing, of its election to remove the wiring and restore the building to its former condition within the 90-day notice period; to abandon the wiring at the end of the 90-day period; or to sell the wiring to the building.
– If the building refuses to buy the wiring, the new cable company may buy it. Where the building elects to buy the wiring, the parties have 30 days to negotiate a price.
– For associations that switch cable companies without providing a bulk contract for the building, the association must provide 60 days notice to the current cable company, which then must advise the owner within 30 days of its decision to remove, abandon or sell the wiring to the building.
The main purpose of the rules is to give the association the option to negotiate for ownership and control of the home run wiring because it is responsible for the common areas of the building.
Association responsibility includes both preservation of safety and security, compliance with local building and electrical codes, and maintaining the appearance of the building.
The FCC places great significance on the importance of serving multiple dwelling units. Citing statistics from The Bureau of the Census, the commission noted that the number of multiple dwelling units is growing at a much faster rate than single family homes.
As of 1995, multiple dwelling units made up between 32 and 84 percent of the housing market in cities with the greatest number of households receiving cable service.
Following a comment period on the proposed rules, these regulations likely will remain substantially intact.
In Springfield
In the current session of the Illinois General Assembly, it is expected that electric deregulation will become law in some form.
Various groups have expressed concerns about the effect of this legislation on community associations. The legislation will allow electricity to be sold competitively.
For community associations, however, questions have arisen as to whether individual unit owners will be treated as separate customers for purchasing electricity, or whether the legislation will permit them to collectively buy electricity through their elected board of directors.
The measure has been criticized by some commentators as not allowing customers under control of one entity, such as an association board or management company, to purchase electrical service as a single unit.
Concerns also have been expressed as to whether community associations will be classified as residential or commercial users. In the latter case, savings given to residential customers should be given to multi-family buildings at the same rate.
Hearings are scheduled on the bill Oct. 9 through Oct. 16.
Representatives of community associations should specifically inquire as to the exact effect of the legislation; specifically whether individual unit owners or the association as a group will be considered one customer for utility service, and whether associations with other residential users will receive the cost benefits of electric deregulation at the earliest possible date.
Upcoming
The Association of Condominium Townhome and Homeowners Associations will present its Fall Conference and Trade Show Oct. 18 at the Diplomat West Hotel, Elmhurst. The program will include seminars on financial planning for associations, dealing with renters, and insurance. Tribune writer Pamela Dittmer McKuen will present a unique look at the concepts of harmony and stress in a community association. For further information, call 312-987-1906.
———-
Mark Pearlstein is a Chicago lawyer who specializes in condominium law. Write to him c/o Condominiums, Real Estate Section, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611. Sorry, he can’t make personal replies.
