******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. In the Matter of ) ) Amendment of Parts 2, 15, and 97 of the) Commission's Rules To Permit Use of)ET Docket No. 94-124 Radio Frequencies Above 40 GHz for)RM-8308 New Radio Applications ) ) International Harmonization of Frequency) Bands Above 40 GHz ) ) Petition of Sky Station International, Inc.,) For Amendment of the Commission's) Rules To Establish Requirements for a)RM-8784 Global Stratospheric Telecommunications) Service in the 47.2-47.5 GHz and) 47.9-48.2 GHz Frequency Bands ) SECOND REPORT AND ORDER Adopted: May 2, 1997 Released: July 21, 1997 By the Commission: Table of Contents Paragraph I. INTRODUCTION AND SUMMARY . . . . . . . . . . . . . . . . . .1 II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . .6 III. DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . 19 A. Introduction . . . . . . . . . . . . . . . . . . . . . . . 19 B. Use of Stratospheric Platform Technology in 47 GHz Band 23 1. Sky Station Request and Petition; Sky Station Application. 23 2. Petitions To Deny, Dismiss, or Reject. . . . . . . . . . . 31 a. Nature of Service for Domestic and International Regulation 33 b. Technical, Financial, and Safety Qualifications . . . . . 38 c. Spectrum Sharing . . . . . . . . . . . . . . . . . . . . 41 C.Commercial Use . . . . . . . . . . . . . . . . . . . . . . 43 1. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 43 2. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 47 D. Flexible Licensing Framework . . . . . . . . . . . . . . . 50 1. Comments . . . . . . . . . . . . . . . . . . . . . . 50 2. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 61 E. Area-Wide Licensing and License Blocks . . . . . . . . . . 73 1. Comments . . . . . . . . . . . . . . . . . . . . . . . . . 73 2. Discussion . . . . . . . . . . . . . . . . . . . . . . . . 78 IV. PROCEDURAL MATTERS; ORDERING CLAUSES . . . . . . . . . . . 83 Appendix A -- List of Pleadings Appendix B -- Final Regulatory Flexibility Analysis I. INTRODUCTION AND SUMMARY 1. This action is part of an ongoing proceeding to open for commercial development portions of the spectrum known as the millimeter wave bands above 40 GHz. We initiated the pro ceeding by adopting a Notice of Proposed Rulemaking in 1994. The pleadings filed in response to this First NPRM are listed in Appendix A. 2. We adopt in this Order our proposal in the First NPRM to designate for commercial use on a licensed basis the 47.4-48.2 GHz band, together with the 47.2-47.4 GHz band made available in the First Report and Order, for a total of one gigahertz of spectrum (47 GHz band). Further, we adopt our proposals to establish a licensing framework that permits the full range of services allowed under the Table of Frequency Allocations (Allocation Table) in our rules and to define service rules based on our best judgment of what the dominant use of the spectrum is likely to be. We find that the most likely dominant use will be fixed, point-to-multipoint services delivered through the deployment of fixed platforms located in the stratosphere, without fore- closing the other uses under the Allocation Table. We adopt our proposal to license operations on an area-wide basis and we determine to divide the spectrum into five pairs of license blocks of 100 megahertz each, with each pair separated by 500 megahertz of spectrum. 3. We conclude that opening this spectrum for commercial licensed use under our licens- ing framework will stimulate the development of millimeter wave technology to provide new wireless communications services that are in demand by consumers. The broad degree of flexibility regarding the permissible range of services will ensure the ability of carriers to re- spond to the market, will promote competition, and will provide for the most efficient and effec- tive services. We will initiate a proceeding in the near future to propose service rules in order to implement our determinations in this Order for the licensing of the 47 GHz band. The proposed rules will include proposals relating to auctions. We also defer to future proceedings our consid- eration of the additional frequency bands above 40 GHz that we proposed for licensed use in the First NPRM, as well as the additional bands we proposed for unlicensed use that were not con- sidered in the First Report and Order. 4. It is our intent to complete the licensing of the 47 GHz band as quickly as possible to achieve our goal in the First NPRM to promote the commercial availability of millimeter wave technologies in providing the potentially valuable uses of licensed spectrum above 40 GHz. Our actions in this Order also are intended to facilitate the licensing of the 47 GHz band as part of the overall band plan we are developing to accommodate predominantly satellite and terrestrial wireless uses for the bands between 36 GHz and 51.4 GHz in the 36-51 GHz Band Plan NPRM released March 24, 1997. In that proceeding, we found that technological developments sparked new uses for the bands that were not contemplated in the First NPRM, including the stratospheric telecommunications system proposed by Sky Station International, Inc. (Sky Station), in the 47 GHz band. 5. Inasmuch as the record in response to the First NPRM is complete and the 47 GHz band is unchanged by our spectrum proposals in the 36-51 GHz Band Plan NPRM, we are able to proceed to final action in this Order on our proposal to open the band to commercial, licensed use. Our action will help advance the goals of that plan to manage the spectrum in a manner that promotes open entry, appropriate flexibility, technical innovation, and seamless networks in order to provide the public with the effective and efficient radiocommuncations services it seeks. In the 36-51 GHz Band Plan NPRM, we found no reason to postpone our final action in this pro- ceeding, believing such delay would unnecessarily delay introducing new services to the telecommunications market. II. BACKGROUND 6. In the First NPRM, we found that millimeter wave radio spectrum above 40 GHz generally is unused and that we had not previously adopted service rules to permit general use of the spectrum. Government-funded projects had resulted in a number of military and scientific applications that appeared to be useful for more general radio communications applications. In response to interest in commercial terrestrial uses for the millimeter wave technology, we proposed to open 18 gigahertz of spectrum between 40.5 GHz and 153 GHz for commercial use, most of which would be on a continued shared basis with Government operations. We held that opening these portions of the millimeter wave spectrum should stimulate new applications of the technology to the benefit of consumers, facilitate technology transfer from the military sector, create opportunities for economic growth and jobs, and promote American competitiveness inter- nationally. 7. We pointed out that the propagation of millimeter wave radio signals is more limited than that of radio signals at lower frequencies. Although the limited range of the signals may appear to be a disadvantage, we noted that the ability to reuse frequencies within very short distances will allow a higher concentration of transmitters to be located in a geographical area than is possible with lower-frequency transmitters. In addition, the wide bandwidth that is possible in the millimeter wave spectrum can support the operation of wireless communications links with capacity approaching that of coaxial cable and fiber optic systems. We thus anticipated that millimeter wave spectrum would be suitable for many types of short-range communications systems, and that the large amount of available spectrum could accommodate the wide channel bandwidth that is needed for rapid transmission of large volumes of data. 8. We proposed to allocate the 18 gigahertz of spectrum between licensed and unlicensed commercial terrestrial facilities. Specifically, we proposed that 6.3 gigahertz in nine bands should be allocated to licensed services, beginning with 40.5-42.5 GHz and 47.4-48.2 GHz in the lower bands, with the remaining bands extending between 71.0-71.5 GHz to 152.0-152.5 GHz. An additional 8.5 gigahertz of spectrum in eight bands would be designated for general unli- censed operations, while 3.2 gigahertz in four bands would be for unlicensed vehicular radar operations. Our proposal for unlicensed vehicular radar systems included the 47.2-47.4 GHz fre- quency band segment. We proposed that the 47 GHz band be used mostly for licensed services, inasmuch as the band is less than 10 gigahertz away from an existing band below 40 GHz with similar propagation characteristics and technology, but that we would also consider reserving the small portion in response to requests for the unlicensed radar operations. We expected that the significant demand for licensed services on frequencies below 40 GHz would indicate a demand for licensed spectrum in the nearby millimeter wave regions with similar characteristics. 9. We requested comment on the suitability of the specific bands, including 47 GHz, for commercial use by millimeter wave technologies. We requested suggestions for enhancing the use of such bands for particular services, and we requested comment on alternative approaches to dividing the proposed bands between licensed and unlicensed services. We noted that the final rules to be adopted may change significantly from our proposals because of the comments and recommendations that may be received in response to these requests. 10. For the licensed bands, we found that, despite range limitations and the current high cost of technology, there may be many potentially valuable uses of licensed spectrum above 40 GHz. We noted that the current allocations for these bands in the international and domestic Allocation Table include a wide diversity of terrestrial and satellite services of a fixed, mobile, or broadcasting nature. We found little information as to which potential services represent the highest valued use of this spectrum. Accordingly, we proposed to license the full range of services allowed under the Allocation Table and to permit any of the services currently listed in the Table for that frequency. 11. Because we proposed to permit such a wide range of services, we concluded that we would have to depart from our customary approach of determining licensing issues in the context of a specific service. We proposed to define service rules to govern the bands based on our best judgment of what the dominant use of the spectrum is likely to be, rather than designing them around a prescribed use. We determined that precision is less important because of the broad degree of flexibility we propose for licensees to provide service and adjust to the market. We believed that the important objective was to open the spectrum for commercial development and eliminate the current regulatory barriers that prevent the spectrum from being used. 12. We tentatively concluded in the First NPRM that many of the uses of millimeter spectrum are likely to be technically and operationally similar to those contemplated for Local Multipoint Distribution Service (LMDS) that was proposed for the 28 GHz band. These would be fixed point-to-point or point-to-multipoint services for video, voice, and data transmission to subscribers throughout an area. We therefore proposed to model any licensing rules for the bands after the rules and procedures proposed for LMDS in Part 21 of the Commission's Rules. 13. We requested comment as to any modifications to the proposed LMDS rules that may be appropriate in the licensing of millimeter spectrum. Like LMDS, we proposed to au- thorize licenses on an area-wide basis. Unlike LMDS, we did not propose to use Rand McNally Basic Trading Areas as the service areas, because LMDS was more narrowly prescribed. We stated that we were proposing to allow a much broader range of uses and technologies in the millimeter wave bands, which might require larger service areas such as Rand McNally Major Trading Areas (MTAs). As our LMDS proposal at that time, we proposed to divide the available spectrum into two equal license blocks for exclusive assignment in each area. We noted that, for example, the 47.4-48.2 GHz licensed band would be divided into two 400 megahertz contiguous blocks. We requested comments on whether this is an appropriate division of spectrum in these various bands and whether the licensed blocks should be contiguous or further subdivided into paired blocks to facilitate duplex (two-way) transmission. 14. In addition, we proposed to use auctions to award licenses among mutually exclusive applications. We believed that the principal use of the spectrum to be licensed as proposed would likely be of a commercial nature and involve the receipt by the licensee of compensation from subscribers in return for service. We also sought comment on the sharing of spectrum between Government and non-Government users. In addition, because we proposed to allow licensees broad flexibility to choose the technologies and bandwidth of fixed applications to operate, we proposed that they be subject only to technical rules intended to minimize interference to other licensed users of these bands. We proposed to limit the power of licensed transmitters to 16 dBW equivalent isotropically radiated power (EIRP). We requested comment on the need for field strength limits at the boundaries or for rules requiring interference coordination, among other technical requirements. 15. On December 15, 1995, we released the First Report and Order addressing our proposals for vehicle radar systems operating below 80 GHz and for general purpose, unlicensed devices operating in the 59-64 GHz bands. We declined to adopt our proposal to designate the spectrum at 47.2-47.4 GHz for vehicular radar operations, but rather designated the 46.7-46.9 GHz band for such operations in order to provide for additional licensed operations in the 47 GHz band. The unlicensed commercial bands, which are at 46.7-46.9 GHz, 59-64 GHz, and 76- 77 GHz, would permit the development of vehicle radar systems and short-range, high capacity wireless radio systems that could be used for educational and medical applications, wireless access to libraries, or other information databases. We deferred our pending proposals related to bands for licensed services, vehicular radar operations above 80 GHz, and other unlicensed bands for consideration in future proceedings. 16. On June 23, 1995, we released the Above 40 GHz Public Notice requesting supple- mental comments regarding the desirability and feasibility of harmonizing the proposals we made in the First NPRM and the European frequency allocation table, and regarding whether any of the bands proposed in the First NPRM should be changed to facilitate worldwide marketing and use of radio transmitting equipment. Parties filing comments to the Public Notice are sepa- rately listed in Appendix A. 17. On March 20, 1996, Sky Station filed in this docket a Request To Establish New GSTS Service, Additional Comments, and Petition for Rulemaking (hereinafter cited as Request and Petition), which was the subject of a Public Notice. Sky Station requests that we authorize use of the spectrum at 47.2-47.5 GHz and 47.9-48.2 GHz for a new commercial, licensed service described as the Global Stratospheric Telecommunications Service (GSTS), and that we adopt service rules either in this proceeding or a separate rulemaking to implement the service. Sky Station filed concurrently an application (hereinafter cited as Application) for authorization to construct and operate its proposed service to provide a global network of wireless communica- tions services, subject to amendment pending the outcome of its Request and Petition. A Public Notice was issued accepting the Application for filing and accepting petitions, oppositions, and other pleadings filed in response to that Public Notice. Comments to the Request and Petition, and to the Application, are listed in Appendix A. 18. Subsequently, we released the 36-51 GHz Band Plan NPRM on March 24, 1997, to address the competing interests between satellite and terrestrial services for licensing the millimeter wave spectrum between 36 and 51.4 GHz. We set forth a broad plan in which the spectrum would be segmented between bands designated predominantly for satellite uses and bands designated predominantly for terrestrial uses in recognition that some satellite and ter- restrial systems cannot share the same spectrum without significant technical constraints. We proposed to continue to designate the spectrum at 47.2-48.2 GHz (47 GHz band) for terrestrial wireless commercial service. We found that Sky Station's proposal to implement a stratospheric radio relay repeater system from platforms is a terrestrial service that is to be considered in this ET Docket 94-124 proceeding. III. DISCUSSION A. Introduction 19. In this Order, we limit consideration of the bands we proposed to designate for commercial, licensed use in the First NPRM to the 47 GHz band. This band consists of the 47.4- 48.2 GHz segment originally set forth in the First NPRM and the adjoining 47.2-47.4 GHz seg- ment we made available for such use in the First Report and Order. We did not propose any changes to this band in the 36-51 GHz Band Plan NPRM, where we designated the band for predominantly wireless terrestrial services. We found that comments had already been received on this band segment in response to the First NPRM on which we could proceed to take action without delay. Thus, our proposals in the First NPRM as they apply to the 47 GHz band are ripe for disposition at this time. 20. The comments filed in this docket for our consideration in this Order consist of two sets. First, we have the comments filed in direct response to our proposals in the First NPRM, to the extent those comments are pertinent to the issues we resolve in this Order. Second, we have the comments filed in response to the respective Public Notices accepting the Request and Peti- tion, and the Application, filed by Sky Station on March 20, 1996, in this docket. Both the filings by Sky Station and the responsive pleadings concern our proposals to license the 47 GHz band, but were filed after the comment period to the First NPRM closed and raise issues not addressed in our proposals. Because the Sky Station filings and responsive pleadings are pertinent to the issues before us, we have decided to take these filings and pleadings into account in connection with the decisions we make in this Order. We do so in the following section, before turning to the disposition of the issues specifically raised in the First NPRM. 21. As more fully discussed below, we take final action on our specific proposals to open the 47 GHz band to commercial use on a licensed basis under a flexible licensing framework. We also take action on our proposal to determine the potential dominant use of the band in order to prescribe appropriate service rules. We will issue a Notice of Proposed Rulemaking in this docket in the near future in order to propose the service rules, including auction, technical, and other rules to implement our determinations in this Order. 22. We defer to that proceeding additional matters raised in the record as they pertain to implementing services on the 47 GHz band. These include the request of CORF that we ensure that commercial uses in 47 GHz do not interfere with radio astronomy and other passive uses under the existing allocations in the adjacent 48.94-49.04 GHz band. It also includes the request of NTIA, among others, that we consider the impact of licensing commercial uses on a band that is allocated to both Government and non-Government use on a shared co-primary basis, and that we ensure the band remains accessible to Federal agencies. In addition, some of the comments that support opening the spectrum above 40 GHz for commercial use otherwise re- quest that portions of the spectrum either be reserved for educational and public service uses or that we require commercial licensees to provide free or reduced-rate access for such uses. We intend to address these comments in our further proceeding on service rules for licensing in the 47 GHz band. B. Use of Stratospheric Platform Technology in 47 GHz Band 1. Sky Station Request and Petition; Sky Station Application 23. In its Request and Petition, and Application, Sky Station states that it has developed a new technology for delivery of a new paradigm of wireless telecommunications services that it identifies as GSTS, to compete with existing satellite and terrestrial wireless services. Sky Sta- tion explains that GSTS is based on the concept of using a network of platforms in the strato- sphere that are kept aloft in fixed positions by hydrogen or helium elements at an altitude of 30 kilometers, or 18 miles, above 99 percent of the atmosphere. Unlike satellite services, these plat- forms are not launched into orbit in space, but rather are lifted by balloons similar to dirigibles to an area in the stratosphere above flight patterns and below satellite orbits. 24. As explained in the Request and Petition and the Application, the platform would contain a communications payload consisting of transmitting, receiving, and other related equip- ment with a total weight of approximately 37 tons. The platforms are propelled by the Corona Ion Engine that uses the surrounding atmosphere and the sun as its fuel sources. The system is to cover the globe by positioning 250 platforms during a five-year period. The second component of the system is the GSTS control facilities, which are ground control and switching centers that serve as base stations and remain in line-of-sight contact with the platforms. A third component is the GSTS communicators, which are small personal communications devices used by the consumer and based on solid state Multilithic Microwave Integrated Circuits (MMICs) devel- oped by the Department of Defense. 25. Sky Station asserts that the platforms would be positioned above the 250 major met- ropolitan areas in the world to provide nearly universal coverage. Each platform provides cover- age in three concentric circles, defined as coverage contours, determined by the degree angle of elevation from the ground to a platform. The High Area Coverage Zone extends 30 miles, the Wide Area Coverage Zone extends 100 miles, and the Footprint Area Coverage Zone extends 350 miles from beneath each platform. The platforms will employ a high level of frequency reuse. The system would use digital coding and decoding standards to provide for good quality voice and video communications at a 64 kbps data rate, or use additional techniques to enhance performance. The systems will interconnect with the public switched telephone network in essentially the same way as other wireless systems. The systems also are planned to route calls via lasers that link the stratospheric platforms to each other. The systems will offer broadband Personal Communications Service (PCS) with video and Internet or World Wide Web access capabilities. 26. In the Request and Petition, Sky Station argues that opening up a portion of the 47 GHz band for the proposed system will promote the policy goals we established in the First NPRM and meet numerous environmental, economic, and social public interest objectives. It requests we adopt proposed technical, financial, implementation, and licensing standards that encourage commercial development of the unused 47 GHz band and promote competition consistent with the flexible framework we proposed in the First NPRM. The service rules advocated by Sky Station in its Request and Petition would enable all qualified applicants to con- struct and operate their own systems as part of the entire GSTS, and the GSTS would be designed to cover 80 percent of the world's population by a certain date. 27. Sky Station requests that we dedicate exclusively for GSTS that portion at 47.2-47.5 GHz for earth-to-stratosphere communications and 47.9-48.2 GHz for stratosphere-to-earth communications. It argues that a minimum allocation of 600 megahertz of spectrum is needed to support the global scope of the proposed service. It contends that the high elevation angles and high power of the platforms are uniquely suited for the 47 GHz band to provide useful and reliable communications links. It contends that the success of GSTS depends upon our allocating the spectrum as requested, because all other frequency bands it examined were incompatible, subject to restrictions, not allocated for fixed and mobile uses, or heavily encumbered. Sky Station argues that its service is covered by the Allocation Table, which provides for fixed and mobile service. However, it requests that we modify the Table to permit only fixed and mobile GSTS stations to operate in the two portions of the 47 GHz band, inasmuch as it contends that the service cannot share co-channel frequencies with conventional fixed, mobile, or fixed satellite services. It also requests that International footnote 901 be modified, as well as U.S. footnote 297, in order to eliminate sharing with broadcasting-satellite service feeder links, which also could interfere with GSTS and could operate elsewhere. 28. Sky Station requests authorization in the Application to implement its proposed service. It argues that the Application demonstrates that Sky Station is in compliance with the technical, financial, licensing, and other regulations it has requested we adopt in the Request and Petition. Sky Station reserves the right to amend this application to comply with any future rules we may adopt for its proposed service. The Application includes a request for a pioneer preference in the event that mutually-exclusive applications are filed. 29. On December 24, 1996, Sky Station submitted further comments to clarify its Re- quest and Petition. Sky Station argues that we should grant its alternative request in the Request and Petition to treat the filing as additional comments in response to the First NPRM, and that a new rulemaking proceeding to adopt separate service rules for its proposed stratospheric service is neither necessary nor appropriate. It requests we hold the Application in abeyance. Sky Station argues that our proposal for the commercial, licensed use of the 47 GHz band has been open for comment since the First NPRM and that its comments on the pending issues together with the other comments in this docket provide an adequate record on which to resolve the issues to be determined in this Order. 30. In its further comments, Sky Station argues that its proposed service is a fixed terres- trial service and that we need not allocate the requested spectrum to a new global stratospheric service, apart from other fixed service millimeter wave uses. It argues that a generic terrestrial allocation for a flexible fixed (non-satellite) service would suffice, so that it would compete with other aspiring fixed service providers in auctions for this spectrum. Sky Station argues that its proposed operations generally fit well within the service rules we proposed in the First NPRM to adopt for licensed services above 40 GHz, including the 47 GHz band, which rules are now con- tained in Part 101. Sky Station submits modifications to the proposed rules that it argues are minor but necessary to accommodate its proposed service in the 47 GHz band, including segmentation of the band to prevent sharing with other services, license blocks of 100 megahertz paired blocks separated by 500 megahertz, and larger area-wide licensing, among other operating and technical rules. 2. Petitions To Deny, Dismiss, or Reject 31. In response to the Application, Motorola filed a petition to dismiss or deny, HCI filed a petition to deny, and TIA filed a petition to defer the Application. Lockheed Martin filed com- ments in which it argues that the Application cannot be granted at this time. Sky Station filed a consolidated opposition to the petitions. Motorola and HCI each filed a reply to the consolidated opposition. In response to the Request and Petition, Motorola filed an opposition and request to reject the Petition, and HCI filed an opposition. TIA filed comments requesting that we resolve several issues before granting the Request and Petition. Harris filed comments in support of HCI and TIA. USSB requests that we require a technical evaluation on the disruptive effect of plat- forms on the reception of direct broadcast satellite (DBS) signals on the surface of the earth. Sky Station filed reply comments, and HCI and Motorola each filed a reply to the reply comments. 32. We grant Sky Station's alternative request to accept its Request and Petition as late- filed comments in this proceeding. In addition, we will also accept the Application as part of the comments, inasmuch as Sky Station acknowledges that the Application is filed preliminarily and is intended to illustrate the service it could provide under its proposals in the Request and Petition. As discussed more fully below, petitioners do not raise issues that prevent us from including the Sky Station filings for consideration together with other comments filed in re- sponse to our proposals in the First NPRM to open the 47 GHz band for commercial, licensed use. a. Nature of Service for Domestic and International Regulation 33. TIA argues that the nature of Sky Station's proposed service must be identified to determine how to classify the service and find the appropriate regulatory niche before we may adopt its proposals. TIA contends that the filings are contradictory regarding whether the service is terrestrial or satellite, fixed or mobile. It contends that the service does not fit the international service definition that defines Radio-Relay Systems to be fixed services operating via terrestrial stations. TIA argues that the proposed service would be similar to a satellite based system as an interference source, that the platform qualifies as a Space Station under the definitions, and that it should be considered to be a Mobile-Satellite System. 34. TIA proposes that the Commission and the 1997 World Radio Conference (WRC-97) establish a new service category for any airborne service operating in the stratosphere or below, apart from aviation services, that would be defined as a Global Airborne Telecommunications Service. The category would stimulate innovative airborne services and would be consistent with allocation requirements. Harris agrees that the nature of the service should be clarified and that the Global Airborne category might be the solution to accommodating various airborne services that will have characteristics similar to the Sky Station proposal. 35. Motorola also argues that the proposed service requires a new allocation. It contends that terrestrial fixed and mobile service allocations do not contemplate stratosphere-to-earth and earth-to-stratosphere communications provided by means of stratospheric balloon-supported platforms. It asserts that the platforms should be disqualified as fixed or mobile terrestrial services because of their placement above the earth's atmosphere, and should instead be defined as spacecraft. Motorola further argues that the platforms would lie within sovereign airspace, and that countries may view the proposed service as an infringement of their rights. It contends that we should refrain from pursuing an international allocation for the proposed service. 36. In the 36-51 GHz Band Plan NPRM, we determined that Sky Station's proposed use of spectrum in the 47 GHz band for its stratospheric radio relay repeater system is considered to be a terrestrial service. In its Further Comments, Sky Station has clarified its previous filings, which TIA points out are contradictory, in order to demonstrate that the proposed service is a terrestrial, fixed operation. Users permanently mount their terminals or antennas, which communicate with the repeaters located on the platforms. We disagree with TIA and Motorola that the platform qualifies as a space station and that the proposed service should be considered to be a satellite service. The platforms proposed for use by Sky Station clearly are not satellites and, unlike satellites, will not be in earth orbit. Although the platforms will be located 30 kilometers above the earth's surface, they still will be within the earth's atmosphere and will rely on atmospheric lift to keep them at that fixed altitude, which is far below the location of the lowest satellite orbit. 37. Motorola and TIA point out that there are international definitions and other interna- tional concerns that require that Sky Station's proposed service be considered in the appropriate international forums. In that context, we further point out that world spectrum management ex- perts recently participated in the work of ITU-R WP4-9S and WP 9B and concluded that a radio- relay service like Sky Station's proposed service that uses stratospheric-based repeaters is in the fixed service. The groups developed two Proposed Draft New Recommendations (PDNRs) relating to platform-based stratospheric radio relay repeaters in the fixed service. Moreover, in the 36-51 GHz Band Plan NPRM we noted that the Ad Hoc Millimeter Wave group of the Commission's WRC-97 Advisory Committee had discussed, among other things, the possibility of satellite and fixed terrestrial services, as well as other terrestrial services operating from alternative delivery platforms, sharing spectrum in the band. Thus, the use of such strato- spheric-based platforms for a global service is being addressed in the appropriate forums, where issues of sovereignty and other concerns will be examined. We deny the requests of Motorola, Harris, and TIA to establish a separate allocation category for any airborne terrestrial wireless communications service as unnecessary and inefficient, inasmuch as the spectrum Sky Station seeks to use is the subject of this proceeding in which rules can be proposed to accommodate its service, as well as other terrestrial services in 47 GHz. b. Technical, Financial, and Safety Qualifications 38. HCI and Motorola argue that the Application and the Request and Petition leave open many technical, financial, and safety concerns that must be addressed before we can act on Sky Station's request and allocate the spectrum it requests. They argue that it fails to demonstrate the technical feasibility of the service or its financial qualification to undertake and support an endeavor estimated to cost $4.2 billion. They contend that we should apply no less stringent fi- nancial qualification standards than we found were necessary for analogous global satellite appli- cants. They point out that Sky Station has filed no application fee nor provided any significant part of the technical and financial detail required from such similar applicants. On reply, Sky Station asserts that it intends to comply fully with any financial or technical qualifications we may impose on applicants when we develop service rules, and requests that we base such rules on the unique requirements of its proposed service, which it argues would be less expensive than satellite systems. 39. HCI and Motorola argue that there are significant public safety risks posed by the use and size of the platforms, their untested technology, and their location over major metropolitan areas and in aircraft flight paths. HCI requests that the procedures used for reducing public safety risks from commercial aviation and satellites should at least be addressed by Sky Station. Motorola argues that the proposal requires thorough study from the public safety, environmental, and aviation communities before we should consider allocating any spectrum to Sky Station. On reply, Sky Station argues that the public safety issues are readily resolvable and do not justify delay of its filings. It describes several design and technical features of the platforms to reduce safety concerns, states that it is coordinating with Federal Aviation Administration officials for approval, and submits an analysis from a technical expert. 40. We intend to solicit comment on the necessary technical and financial requirements for platform-based stratospheric services at the time we consider service rules, in a separate No- tice of Proposed Rulemaking. At the same time we will seek comment on the safety concerns that the platforms raise. These matters are important features of the service rules that we must adopt before any service in the 47 GHz band can be implemented. They need not be considered in this Order, however, which is limited to deciding whether to open the band to commercial, li- censed use under a flexible licensing framework. The matters that HCI and Motorola seek us to address now are not factors in that decision. c. Spectrum Sharing 41. HCI, Lockheed Martin, and Motorola are concerned that, as members of the satellite community, they will not be able to share the 47 GHz band with Sky Station's proposed service. They argue that, although the band is unused and unlicensed, it is contrary to efficient spectrum management to allocate the spectrum to a service that precludes their use of the band for future Fixed Satellite Service (FSS) and Broadcast Satellite Service (BSS) use, which is provided in the Allocation Table. TIA, which is supported by Harris, is concerned that fixed point-to-point users also would be displaced from the band. They argue that we should defer consideration of the proposal until we consider the impact of the proposal on spectrum management. 42. Since the filings of these pleadings, we have initiated a spectrum plan in the 36-51 GHz Band Plan NPRM in order to address the competing demands between satellite and ter- restrial interests for spectrum allocations for provision of commercial services. Although we maintained the 47 GHz band for predominantly wireless services, we identified additional bands for predominantly satellite services that include the adjacent 48.2-50.2 GHz bands, among others. Thus, the spectrum management issues raised by petitioners here are matters addressed in that proceeding and are not a basis for delaying this proceeding. As for the additional matters the parties seek to raise here concerning licensed uses of the band, we will include those comments in our consideration of licensing issues in the following sections of this Order. C. Commercial Use 1. Comments 43. Numerous comments to the First NPRM, as a general matter, support our initiative to open the identified frequency bands above 40 GHz, which includes 47 GHz, for commercial use. AAR and HCP commend our proposal as farsighted in clearing a path to facilitate the in- troduction of new technologies and providing important public benefits. Hughes argues that the response to opening the bands above 40 GHz will be similar to our previous proposals to open the fallow 38 GHz band, when numerous manufacturers quickly took steps to meet the demand for 38 GHz equipment. Hughes contends that other countries are turning to the bands above 40 GHz as a means to serve their terrestrial broadband needs, including broadband video services, and that licensing these bands in the United States will promote competitiveness internationally by stimulating the development of technology for potential uses in other parts of the world. 44. Several commenters argue that technology for commercial use of spectrum above 40 GHz is now feasible. NTIA contends that millimeter wave frequencies were not desirable for commercial use in the past due to the high cost of equipment to operate in these bands, but that advances in semiconductor technology have resulted in declining equipment costs and new uses. It argues that commercial use will permit the development of systems with greater capa- bilities that will benefit a large variety of users, including the Federal Government. MACOM contends that millimeter wave technology has advanced to the point where devices and sub- systems will be available to support commercial exploitation if we open up the radio spectrum above 40 GHz. HP agrees, and argues that regulatory permission and international coordination are necessary for private industry to risk the investment required to develop commercial products and sell them abroad. Avant-Garde provides commercial shorthaul services in the 38 GHz band and argues that the band exhibits propagation characteristics similar to other bands above 40 GHz, demonstrating that commercial use of millimeter wave transmission is practical. 45. Sky Station argues that its proposal to provide a stratospheric-based service will encourage the commercial development of the unused millimeter wave band and promote our policy goals stated in the First NPRM. Sky Station contends that its service will position the United States as a world leader in stratospheric telecommunications technology and promote substantial job opportunity and economic growth by creating a new market for stratospheric plat- forms, millimeter wave chipsets, 47 GHz transmission equipment, and global broadband wireless services. It argues that the large service capability of each platform and the five-year implementation schedule for deployment of 250 platforms will provide global coverage for the wireless personal telecommunications services that consumers and developing countries seek at an inexpensive rate. Sky Station submits in the Application extensive information that it argues demonstrates the technical and operational feasibility of the platforms, including the mechanical, power, telecommunications links, and operational concerns. 46. Approximately 30 letters were filed by individuals, groups, and a few foreign rep- resentatives in support of Sky Station's proposal. Of them, certain technology developers, such as U.S. Robotics, argue that the proposed service will encourage the development of new tech- nologies that would create new methods for broadband and portable wireless access. Certain financial institutions, such as JPMorgan, support Sky Station's technology as a potential breakthrough in providing low cost telecommunications. Other letters from potential users, such as CARE and WWF, argue that a global, low-cost telecommunications service such as that proposed would enable them to monitor their international projects and achieve their goals more efficiently and effectively. In addition, TIA supports the introduction and implementation of new technologies that fully exploit the bands above 40 GHz, and generally does not oppose the services proposed by Sky Station. 2. Discussion 47. We adopt our proposal to open the 47 GHz band for commercial applications and technologies. As we stated in the First NPRM, the millimeter wave bands such as 47 GHz are a major resource that essentially is undeveloped and unavailable today for commercial use. We find that there is broad consensus that our proposal to open frequency bands above 40 GHz to commercial development will provide the public with access to new products and communica- tions services and provide new opportunities for business and economic growth. 48. Despite the different characteristics of millimeter wave frequencies from lower fre- quencies, the comments demonstrate that technology for commercial use of the 47 GHz band essentially is available today and that adopting our proposals will spur rapid development of even more advanced technology in the near future. It has been our experience that opening regions of the spectrum to commercial use stimulates investment and technological development in the spectrum that brings benefits to consumers and the national economy in the form of new communications services, lower costs, and a more competitive industry. The comments in this proceeding suggest that this will be the case with respect to the 47 GHz band. Developers of technology point out that this frequency band is not far from the commercial frequencies below 40 GHz, and that commercial use of such nearby bands is practical and feasible. 49. In addition, there may be many new and innovative commercial uses for this band that we did not contemplate in the First NPRM. As we noted in the 36-51 GHz Band Plan NPRM, technological developments have cleared the path for new applications for 47 GHz since the First NPRM, including Sky Station's proposed service. We pointed out in the First NPRM that Section 7 of the Communications Act directs us to encourage the provision of new technolo- gies and services to the public. Opening the 47 GHz band for commercial use that includes such novel uses of the stratosphere furthers our goals to encourage and facilitate further technology transfer from the military sector, create opportunities for economic growth, and promote United States competitiveness internationally by enabling development of technology for potential use in other parts of the world. D. Flexible Licensing Framework 1. Comments 50. Many comments address, as a general matter, our proposal in the First NPRM to designate the bands for licensed use authorizing the full range of services allowed under the Allocation Table and to prescribe the service rules for licensing the spectrum based on the likely dominant use of the band. NTIA commends our flexible proposal to retain in those licensed bands the full range of services presently allowed under the Table. It supports our proposal as consistent with its goal of promoting the principles of flexibility in licensed uses, which require that systems not be licensed according to technical and service rules specific to a service, but rather according to other users' interference rights. In developing technical and operational regulations for the bands above 40 GHz, Metricom requests that we rely on a flexible regulatory approach and adopt only broad and general rules to promote the most efficient operations in a band, while providing the requisite protection from harmful interference. 51. mmWAG identifies a number of potential uses for the bands above 40 GHz. It envi- sions that the bands could be used for broadband capabilities in concert with fiber and other information communications techniques. They could serve the emerging PCS industry as a means for major backhaul links. LMDS-type applications could include video distribution to businesses and homes for interactive services and information access. The bands could meet the requirements for wireless premises area communications networks and support extremely high speed applications, such as SONET speeds and beyond. 52. Motorola, in response to the First NPRM, states that it does not comment on the pro- posed licensing framework because the proposals do not encompass satellite technologies. It as- serts that, inasmuch as we found the potential dominant use to be a terrestrial service and proposed to define licensing rules to reflect that dominant use, the licensing rules would make no sense for satellite services. Motorola points out that it is well established that satellite services are not amenable to licensing rules for terrestrial services. HP points out that, since the comments from satellite interests do not propose rules to include satellite services among the users in the frequencies above 40 GHz and they do not appear to have an interest in these bands, we should concentrate on multipoint distribution, point-to-point communication, premises communication, and the vehicular radar terrestrial services at issue. 53. Other commenters support our proposal to provide for broad-based flexible service as long as their interest in short-range, fixed, point-to-point links is accommodated by expanding the spectrum to be allocated to include additional bands. AT&T, HP, and mmWAG request that we modify our proposal to license the 47 GHz band by allocating an additional 2 gigahertz of spectrum from 48.2-50.2 GHz. HP argues that the proposal provides an opportunity for expand- ed multipoint distribution service of the LMDS type as well as fixed point-to-point licensed ser- vices. Alcatel, Harris, and TIA also request that we modify our proposal for the 47 GHz band by adding the band at 48.5-51.4 GHz for point-to-point services. To accommodate these additional services, they request we establish a 500 megahertz guardband between the new services and the licensed uses we proposed for the 47 GHz band by shifting the 47 GHz band to 47.0-48.0 GHz. 54. TIA supports our goal to encourage innovation and worldwide competitiveness, and agrees that our proposal for broad area-based licensing would give flexibility to fixed point-to- point microwave users. It requests that the spectrum it seeks to be added at 48.5-51.4 GHz be dedicated to non-area based, link-per-link, traditional licensing not subject to auctioning, which services it argues otherwise would be overlooked in our "open market" licensing by auction. HCP agrees that there is a need for additional spectrum that can serve the purposes similar to LMDS in providing point-to-multipoint service and that the basic regulatory framework we pro- posed, that includes auctioning wide bandwidths on an area-wide basis, is appropriate for such li- censed uses. 55. Sky Station argues that its technology is designed to take advantage of frequency in the 47 GHz band and that, unlike many other proposed services, its service is uniquely suited for the band and allowed under the Allocation Table. It argues that a unique feature of the stratospheric-based platform is its high elevation angles and high power, enabling useful com- munication links to be provided with high reliability in the 47 GHz region, despite the high water vapor attenuation and dry air path losses occurring in the millimeter wave band. It expects to provide a global broadband personal communications service that interconnects with the Internet's World Wide Web in competition with cellular and PCS wireless services, as well as future satellite services. The operations constitute fixed services, although Sky Station expects to include mobile services. The stratospheric platforms are fixed, as are the base stations, and many of the subscribers will be fixed. Depending on their location within the Sky Station cover- age areas, subscribers will use fixed or portable communicators with varying antenna profiles to interconnect with the public switched telephone network or communicate with another Sky Station communicator, computers, or other compatible devices that are linked to the Sky Station system via Sky Station earth stations. 56. Several of the letters filed in support of its proposed service urge us to permit Sky Station to implement its competitive service. Representatives of three foreign countries and several advocates for the developing world seek access to inexpensive communications service to improve the lives and opportunities of consumers around the world. BET and Eden, as entertainment companies, support access to a wireless interactive communications system. 57. Sky Station states that the proposed service cannot share co-channel frequencies with conventional fixed, mobile, or satellite services and requests that we dedicate to its exclusive use the portions of the band at 47.2-47.5 GHz for earth-to-stratosphere and 47.9-48.2 GHz for strato- sphere-to-earth to ensure its success and maximize use of the spectrum. It argues that only the dedication of 600 megahertz of spectrum will support the multiple, global services it proposes. It requests that we modify the Allocation Table to permit only fixed and mobile stratospheric systems to operate in these sub-bands. It also requests that Footnote 901 and US Footnote 297 be modified to identify its exclusive use in these bands and exclude broadcast satellite service (BSS) feeder links, as well. 58. In reply to Sky Station's filing, HCI and Motorola argue that, although the band is not used today for the fixed satellite service (FSS) or BSS, the band provides much needed expan- sion capacity to accommodate future use requirements of those services. They argue that the band provides a basis for growth in the satellite sector and that we should ensure that sufficient spectrum remains available for FSS and BSS. TIA argues that Sky Station does not need the entire 600 megahertz it requests for exclusive use, but rather demonstrates that a minimum of 20 megahertz would be sufficient. It argues that Sky Station and the supporting letters fail to explain how the proposed service would be implemented or how the spectrum could be managed with such a service to protect other users of the bands where Sky Station would be operating. 59. Avant-Garde argues that, depending on the anticipated uses for the spectrum and changed circumstances, we may need to reexamine our proposal to rely on the same service rules we proposed for LMDS in the 28 GHz band. It contends that our remaining proposals concerning license territory size and amount of spectrum to be awarded to each licensee, among others, are potentially affected by the intended use of the spectrum. Avant-Garde questions whether the licensing scheme originally proposed for LMDS would be appropriate for the bands above 40 GHz, or whether some other licensing methodology would better meet the needs of the com- mercial service providers reflected in the comments. It contends that we must ensure that any of the bands we may license are not artificially constrained in the manner in which they are licensed or used in order to maximize public interest benefits. 60. EndGate and MACOM, as suppliers and developers of millimeter wave equipment, essentially argue that the millimeter wave technology is available for services above 40 GHz that are similar to the point-to-multipoint services proposed for the 28 GHz band, but that the technology would evolve differently to reflect the different frequency characteristics. MACOM contends that the 28 GHz band is well suited for a video distribution service to the general pub- lic, which employs wide beam, low gain transmitting antennas rather than the narrower beam, higher gain antennas that would provide a more specialized service. 2. Discussion 61. We adopt our proposal to license the 47 GHz band for commercial service and we find that our proposal to allow any use under the Allocation Table reflects the best approach to li- censing this band. As a ``frontier'' band located in the frequencies above 40 GHz that are yet to be opened for commercial development, the exact nature of the services to emerge from the de- velopment of the 47 GHz band cannot be predicted in the comments. As a general matter, the comments identify as a potential use the short range, high speed, point-to-point communications links that are the traditional applications for millimeter wave frequencies. In seeking to use the general spectrum for such service, HCP, HP, and other commenters confirm that there is a demand to use the band for the broader fixed, point-to-multipoint services we have expected. The comments demonstrate that, although the point-to-multipoint services would not be based on the same technology as LMDS, the technology is available for development to exploit 47 GHz for such point-to-multipoint services and provide the commercial services in demand. Although Motorola and HCI do not seek to use the spectrum now for satellite services, they seek to retain access to the band in case of future needs. 62. In addition, there could be many new and innovative licensed uses for 47 GHz that cannot be predicted. Sky Station contends that the 47 GHz band is an appropriate frequency for it to deploy its stratospheric-based platforms for a new, unique delivery system for a global wireless communications system. Although the system provides a fixed, point-to-multipoint service, the technology is new and may eventually involve mobile services. As currently envisioned, the system relies on the use of the platform fixed at 18 miles above the earth, rather than the traditional tower, in a central location for transmitting to, and receiving transmissions from, multiple stations within its service area. The record supports the view we expressed in the First NPRM that there is not sufficient information to establish the exact uses that licensees in the 47 GHz band would develop for the licensed spectrum. 63. We conclude that all identified uses of the 47 GHz band may be valuable and should be permitted. The record also confirms that both the technology and potential applications of millimeter wave spectrum will continue to evolve rapidly. Since we initiated this proceeding we have seen important new technologies proposed for the millimeter wave spectrum, and it is likely that other technologies also will be developed. Under the circumstances, we conclude that we should not limit the types of services that can be offered in the band. 64. Accordingly, we adopt our proposal to license the 47 GHz band based on the services currently allowed under the Allocation Table. The spectrum from 47.2 to 50.2 GHz is allocated domestically for Government and non-Government Fixed, Fixed-Satellite, and Mobile uses, and internationally for the same uses. We find that the range of services covers all of the services identified as potential uses of the 47 GHz band. We confirm the view that we expressed in the First NPRM that a broadly defined service allocation coupled with the licensing, technical, and operating rules to be proposed in a subsequent rulemaking will provide the best means of assur- ing that this spectrum will be used to the greatest benefit of the public. 65. We deny the requests of AT&T, HP, mmWAG, Alcatel, Harris, and TIA to expand the band to include spectrum up to 51 GHz in order to provide for point-to-point services. That additional spectrum in the adjacent bands will be addressed in response to the 36-51 GHz Band Plan NPRM, in which we proposed to designate the portion 48.2-50.2 GHz for predominantly satellite use. We point out that point-to-point services may be provided in the 47 GHz band under the allocations for that band. 66. We disagree with TIA's assertion that licensing on such an "open-market" basis, which provides licensees with broad flexibility to engage in any uses under the Allocation Table, evades our statutory responsibilities under Section 303(c) and, in light of our proposal to auction the spectrum, is inconsistent with Section 309(j) of the Communications Act. The Commission has broad authority under the Communications Act to designate spectrum usage, as well as the authority to perform any and all acts necessary in the execution of our functions. Our designation of more than one service for the 47 GHz band is consistent with the Commission's authority and obligations under the Communications Act. Section 303 of the Communications Act does not restrict the Commission's discretion to prescribe the nature of the service to be rendered over radio frequencies or our authority to allocate frequencies to the various classes of stations or assign spectrum to stations for more than one permissible use. We have already discussed this issue in other decisions and our action here is consistent with precedent. With respect to allocation decisions, courts have accorded ``substantial deference'' to Commission determinations. Commission precedent also supports the permissibility of allocating spectrum in a manner that allows for a range of uses. 67. In light of the range of possible uses, the likelihood that new uses can be developed in the future, and the lack of a record for specific service designations that would better serve the public interest and the goals of the Communications Act, our broad service designation comports with the public interest and with our statutory authority. Our decision to designate this spectrum in this manner is unrelated to our proposal in the First NPRM to award licenses through competi- tive bidding. The designation is not entirely open-ended and will be subject to technical rules we will adopt. Therefore, we have not delegated to private parties our responsibility to allocate spec- trum and adopt appropriate technical standards. 68. We find that, when we propose licensing and other service rules for the 47 GHz band, we will follow the approach proposed in the First NPRM to tailor the rules to reflect what we expect will likely be the dominant use of this spectrum, while retaining the flexibility allowed under the Allocation Table. Especially for ``frontier'' bands such as those above 40 GHz, this ap- proach should set allocation and licensing rules that promote rapid, efficient use of this spectrum to meet all the communications needs advanced by commenters, while allowing the market to adjust to changing needs and technologies and providing scope for innovative uses. It will also minimize regulatory barriers and requirements that might otherwise hamper entrepreneurial efforts to develop effective commercial uses of this spectrum. 69. However, we do not find that the dominant use of spectrum in the 47 GHz band is likely to be similar to LMDS in the 28 GHz band, as we proposed. As Avant-Garde requests, we have reexamined our proposal, and we have taken into account the anticipated uses and changed circumstances reflected in the record for purposes of determining whether another licensing methodology would better meet the needs posed by those anticipated uses. Only Sky Station has submitted comments that propose specific uses for the 47 GHz band, apart from the general millimeter wave uses otherwise expressed in the comments or the general support confirming our expectation of fixed, point-to-multipoint services in the band. We find that the dominant use of the 47 GHz band is likely to be a fixed, point-to-multipoint service that employs stratospheric platforms at fixed locations. 70. We emphasize, however, that we anticipate that ongoing technological developments can be expected to generate other types of delivery systems for fixed, point-to-multipoint ser- vices in the band. Thus, while we will seek to tailor our licensing rules to accommodate the likely dominant use we have identified based on the current record, we will not foreclose other uses permitted by the Allocation Table, including new and innovative uses and technologies. 71. We deny Sky Station's request that we dedicate to its exclusive use two portions of the 47 GHz band for its service and modify the Allocation Table to that effect. Sky Station is concerned about interference to its stratospheric signal when it is in the main path of a conventional fixed co-channel signal of greater power. The problems of interference do not necessarily require a change in the service allocation, but rather are the subject of operational and technical mitigation techniques that can be included in our service rules to be used to reduce or eliminate these types of interference problems. Accordingly, Sky Station should ensure that its concerns are addressed when we seek to adopt appropriate service rules in a subsequent proceeding to implement services under the Allocation Table. 72. Similarly, we defer the request of USSB that we accept a service rule requirement submitted by Sky Station to protect DBS-TV from interference from Sky Station's service. USSB requested we consider the impact of Sky Station's proposed platform-based service on the operations of other telecommunications services and, in particular, on the reception of DBS signals on the surface of the earth. We will consider the requested restriction when we consider the need for other use restrictions to ensure the performance of the authorized services under appropriate service rules. 73. We also deny the request of TIA for a guardband of 500 MHz to ensure adequate signal selectivity between the licensed services in the 47 GHz band and the fixed point-to-point services that TIA requests we designate for use in the adjacent band at 48.5-51.4 GHz. The adjacent band is under consideration in the 36-51 GHz Band Plan NPRM and TIA's request can be addressed there. We will consider the need for protections of licensed users from interference in developing service rules that govern the uses of 47 GHz. E. Area-Wide Licensing and License Blocks 1. Comments 74. In the First NPRM, we pointed out that fixed point-to-point and point-to-multipoint services, which we expected in the bands above 40 GHz to be like LMDS, are provided to sub- scribers throughout a geographic area. We sought comment on the extent to which there is a sig- nificant commercial interest in obtaining exclusive, area-wide use of millimeter wave spectrum and, if so, what size licensing areas and spectrum blocks should be used. 75. In requesting us to expand the proposed bands to provide for point-to-point services, Alcatel, HCP, HP, Harris, mmWAG, and TIA do not oppose the area-wide licensing we pro- posed for the 47 GHz band to allow for the services we expected would be the primary com- mercial use of the band. HCP states that the proposed bands would be for wide area services, while TIA states that the 47 GHz band would be retained for the licensed uses we proposed. HP and mmWAG suggest that an expanded 47 GHz band could be used for expanded multipoint distribution service. They request that, under their proposal to expand the band to 50.2 GHz, we authorize at least one gigahertz to each license and retain flexibility in granting broader bandwidths so that multi-gigahertz services will be possible. HP favors the licensing of large service areas. It argues that they afford a licensee more flexibility in designing a network and greater incentive to make the investments required to take full advantage of millimeter wave technology. Such areas also minimize the boundaries across which standard protocols and interference levels would have to be addressed. 76. Pacific Bell supports our proposal to allocate the 47 GHz band for licensing under the proposed framework. However, it asserts that the proposed licensing areas and blocks are for broadband interests and it is concerned that narrowband interests not be excluded from our consideration. Pacific Bell requests some additional division in the 47 GHz band to accommo- date some narrowband applications. It argues that there should be provisions for point-to-point microwave links in blocks similar to our rules for 38 GHz. Pacific Bell also argues that smaller areas, such as BTAs, may be more appropriate for narrowband applications than the MTAs we proposed for licensing areas, which it argues are much larger and appropriate for such wideband uses as LMDS. Pacific Bell requests that we consider carefully what service area is most appropriate for the bandwidth available in a particular frequency band. 77. P-Com requests that we divide the spectrum allocations carefully to reflect the pro- posed usage of the spectrum. Paired blocks with maximum frequency separation are required for fixed service, two-way links. It contends that the larger the percentage frequency separation, the easier is the RF filter implementation, but that separation at higher frequencies would require a greater total amount of spectrum to be available. P-Com argues that for point-to-multipoint applications, contiguous blocks of spectrum are required to allow the use of multichannel operation within a given service area. 78. Sky Station supports area-wide licensing to accommodate its service proposal within the United States and requests that we adopt rules similar to the rules for Personal Commu- nications Services (PCS) that provide for larger areas, such as national or super-regional areas, to reflect the broad scope of its proposed services. Sky Station requests that we clarify that, like the PCS rules, we will authorize a blanket license for each market and frequency block that allows a single station to serve an entire service area rather than individual sites. Sky Station argues that, for its service, licenses should be divided into pairs of 100 MHz each, with a separation of at least 500 MHz. 2. Discussion 79. We adopt our proposal to issue area-wide licenses for services in the 47 GHz band as a necessary component of the flexible licensing framework we are adopting. We have found that the predominant use of the band is a fixed point-to-multipoint service, which is a service provided on a point-radius basis within an area and not on a fixed point-to-point basis. However, fixed point-to-point service is not precluded and may be provided within the area. Moreover, authorization of a geographic area is consistent with the Allocation Table for the 47 GHz band, which also provides for mobile services in addition to fixed services. We do not decide the size of the geographic area in this Order, inasmuch as that is a matter for the service rules. 80. As HP points out, area-wide licensing is important to achieving the flexible licensing framework we are adopting for 47 GHz. In licensing wireless services under similar frameworks, we have concluded that licensing based on pre-defined service areas poses significant advantages over site-based licensing for entities providing subscriber-based services because of the greater operational flexibility it gives licensees and the greater ease of administration for the Commis- sion. Licensing on the basis of geographic service areas facilitates operation of a broad range of new services and promotes their introduction in the most rapid and efficient manner. It also simplifies system expansion and reduces administrative burdens on the licensees and the Com- mission by permitting licensees to construct and operate stations anywhere within the area. We conclude that these benefits should also be available to commercial users of the 47 GHz bands in order to promote the most efficient use of the spectrum. 81. We also adopt our plan to divide the spectrum into license blocks for exclusive assignment in each area. However, we modify our proposal to divide the entire band into only one contiguous pair and instead divide it into five separated pairs, based on the comments we received in response to our inquiry into whether the licensed blocks should be contiguous or further subdivided into paired blocks to facilitate two-way transmission. As P-Com argues, we should divide the spectrum into license blocks that reflect the uses, which are predominantly fixed point-to-multipoint operations but may include any service under the Allocation Table. We find that our original proposed division into one paired block would not be appropriate and would inhibit the most efficient and effective use of the 47 GHz band. 82. We find that Sky Station's proposal to divide the entire block into five pairs of 100 MHz channels each, separated by 500 megahertz, effectively accommodates the predominant use as well as the other likely uses of the band. That includes point-to-multipoint uses based on traditional tower-based equipment as well as the stratospheric-based platforms proposed by Sky Station. Although HP requests much larger blocks of one gigahertz each, that was based on our adopting its proposed expansion of the band to three gigahertz, rather than the one gigahertz we adopt here. We find that paired 100-MHz channels would provide adequate bandwidth for the dominant use, while fostering competition and diversity of uses among licensees. Separating the paired channels by 500 MHz provides the maximum frequency separation within the band in order to facilitate system design and reduce interference problems without affecting the use of multichannel operation that are accommodated in the pairs. 83. In the First NPRM, we proposed to impose a spectrum cap and limit each licensee to a single spectrum block in each band in the same area, so that the licensee would not be permit- ted to own both licenses in the same band in any area. We will address any spectrum limitation in the proceeding to establish the service rules to implement the framework we adopt here, which proceeding we will initiate shortly. IV. PROCEDURAL MATTERS; ORDERING CLAUSES 84. The Final Regulatory Flexibility Analysis, as required by Section 604 of the Regu- latory Flexibility Act, is set forth in Appendix B. 85. IT IS ORDERED that the actions of the Commission herein ARE TAKEN pursuant to Sections 4(i), 257, 303(r), and 309(j) of the Communications Act of 1934, 47 U.S.C.  154(i), 257, 303(r), 309(j). 86. IT IS FURTHER ORDERED that these actions SHALL TAKE EFFECT sixty days after publication of a summary of this Second Report and Order in the Federal Register. 87. IT IS FURTHER ORDERED that the Request and Petition and Application filed by Sky Station, the Further Comments filed by Sky Station, and the comments and reply comments filed in response thereto, ARE ACCEPTED in this record as late-filed comments. 88. IT IS FURTHER ORDERED that the spectrum 47.2-48.2 GHz (47 GHz band) IS DESIGNATED for licensed, commercial use on the basis of area-wide licenses in accordance with the terms of this Order. 89. IT IS FURTHER ORDERED that a division of the spectrum for license blocks IS ADOPTED for the 47 GHz band that divides the band into five spectrum blocks of 200 mega- hertz each for licensing, with each block consisting of a pair of 100 megahertz channels sepa- rated by 500 megahertz. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary APPENDIX A List of Pleadings Comments and Replies to First Notice of Proposed Rulemaking Comments Alcatel Network Systems (Alcatel) American Automobile Manufacturers Association (AAMA) American Council on Education, American Association of Community Colleges, California State University, Sacramento Education Network of Maine, State of Wisconsin Educational Communications board, and University of Wisconsin System (Educational Parties) American Radio Relay League, Inc. (ARRL) Apple Computer, Inc. (Apple) Association for Promotion of Vehicular Radar Bands (APMDU) AT&T Corp. (AT&T) Avant-Garde Telecommunications, Inc. (Avant-Garde) CellularVision Clarendon Foundation (Clarendon) ComTech Associates, Inc. (ComTech) Endgate Technology Corporation (Endgate) Epsilon Lambda Electronics Corp. (Epsilon Lambda or Epsilon) Fujitsu Limited (Fujitsu) Fujitsu Ten Limited (Fujitsu Ten) GE American Communication (GE Americom) General Motors Corporation and GM Hughes Electronics (GM) GHZ Equipment Co., Inc. (GEC) Harris Corporation-Farinon Division (Harris) Hewlett-Packard (HP) Honda R&D, Ltd. and Honda R&D North America, Inc. (Honda) Hughes Aircraft Company, Communications Products Business Unit (HCP) Hughes Communications Galaxy, Inc. (Hughes) Martin Marietta Corporation (Martin Marietta) Metricom, Inc. (Metricom) Millimeter Wave Advisory Group (mmWAG) Mitsubishi Electric Corporation (Mitsubishi) National Academy of Sciences through the National Research Councils Committee on Radio Frequencies (CORF) National Aeronautics and Space Administration (NASA) Pacific Bell Mobile Services and Telesis Technologies Laboratory (Pacific) P-Com, Inc. (P-Com) Rand McNally & Company (Rand McNally) Research and Development Center for Radio Systems (RCR) Rockwell International Corporation (Rockwell) Southwest Microwave Inc. (Southwest Microwave) Fixed Point-to-Point Communications Section, Network Equipment Division of the Telecommunications Industry Association (TIA) Teledesic Corporation (Teledesic) Toyota Motor Corporation (Toyota) Troy State University Montgomery (TSUM) TRW Inc. (TRW) United States Department of Commerce, National Telecommunications and Information Ad ministration (NTIA) UTC, the Telecommunications Association Vorad Safety Systems, Inc. (VORAD) Replies AEL Industries, Inc. (AEL) Alcatel AAMA ARRL AT&T Ameritech Apple Association for Promotion of Millimeter-wave Development and Utilization (APMDU) Association of American Railroads (AAR) Association of America's Public Television Stations (APTS) and Public Broadcasting Service (PBS) Bell Atlantic CellularVision ComTech Digital Microwave Corporation (DMC) Dudley Lab Ford Motor Company (Ford) GE Americom GM Harris HP HCP Hughes Hughes, Electron Dynamic Division Intelligent Transportation Society of America (ITS America) Lockheed Sanders, Inc. (Lockheed Sanders) M/A-COM, Inc. (MACOM) mm-Tech, Inc. (mm-Tech) mmWAG The Minority Media and Telecommunications Council (MMTC) Motorola Satellite Communications, Inc. (Motorola) NASA National Rural Telecommunications Cooperative (NRTC) Pacific UK Radiocommunication Agency Teledesic TIA Texas Instruments (TI) Titan Information Systems Corporation (Titan) Toyota TSUM TRW Video/Phone Systems, Inc. (Video/Phone) Western Cooperative for Educational Telecommunications June 23, 1995, FCC Public Notice Supplemental Comments on the Need to Harmonize the Proposed Spectrum Allocations with the European Spectrum Allocations (Above 40 GHz Public Notice) AAMA Alcatel ARRL CellularVision DMC Harris HP TIA April 1, 1996 FCC Public Notice Request to Establish New GSTS Service, Additional Comments, and Petition for Rulemaking (Request and Petition) Sky Station International, Inc. Letters B. W. Hammond, Head, Information Systems Department, Britain's Overseas Development Administration Olympic Family Clinic Medical Corporation DB Management Company U.S. Robotics Corporation (US Robotics) Association of Air Medical Services Sygma Photo News Magnet Photo News James P. Leape, Senior Vice President, World Wildlife Fund (WWF) Arq. Ignacio Cabrera Fernandez, President of Mexican Movimiento Ecologista de Sonora, A.C. (MESOM) Dr. Donald B. Easum, Vice President, Global Business Access, Ltd. Wayne L. Sterling, Director, Virginia Department of Economic Development Los Angeles Urban League Business Development & Information Technology Center Volunteers in Technical Assistance (VITA) Climate Institute Eden Entertainment Ltd (US/UK) (Eden) Oliver Davidson Fernando de Cordova, Vice President, Morgan Guaranty Trust Company of New York (JPMorgan) Y. Rahmat-Samii, Professor, UCLA Chuan S. Liu, Professor, University of Maryland Paul Hommeyer, Vice President-Investments, PaineWebber John R. Reid, Senior Director, Information Services, CARE (CARE) Theodore W. Jones, Program Manager, The Alliance to Save Energy Claes Nobel, Founder & Chairman, United Earth The National Institute for Urban Search and Rescue Claude I. Salem, Sr. Public Sector Management Specialist, Human Resources and Social Development, Asia Technical Department, World Bank Center for Public Service Communications Kym H. Davis, Managing Director, AUSPROJECT Internation Pty. Ltd. (Australia) Mercy Medical Airlift Philip Leung Ph.D, Independent Consultant BET Holdings, Inc. (BET) Comments HCI Motorola TIA United States Satellite Broadcasting Company (USSB) Reply Comments Harris Corporation - FARINON Division (Harris) Motorola Sky Station TIA USSB April 22, 1996, FCC Public Notice File No. 96-SAT-/LA-96 (March 20, 1996) Application of Sky Station International, Inc. (Application) Letters Russell F. Imrie (Mohawk), Resource Coordinator/Internet Costanoan Indian Research, Inc. Gerald Musarra, Senior Director, Commercial Programs, Lockheed Martin Corporation Comments Petition to Deny, HCI Petition to Dismiss or Deny, Motorola Petition to Defer, TIA Reply Comments HCI Motorola Sky Station Consolidated Opposition Further Comments Sky Station APPENDIX B Final Regulatory Flexibility Analysis As required by the Regulatory Flexibility Act, 5 U.S.C.  603 (RFA), an Initial Regu- latory Flexibility Analysis (IRFA) was incorporated in the First NPRM in this proceeding. The Commission sought written public comments on the proposals in the First NPRM, including on the IRFA. The Commission's Final Regulatory Flexibility Analysis (FRFA) in this Second Report and Order (hereinafter in this Appendix referred to as the Order) conforms to the RFA, as amended by the Contract with America Advancement Act of 1996 (CWAAA), Pub. L. No. 104- 121, 110 Stat. 846 (1996). I. Need for and Objectives of Action We proposed in the First NPRM to open spectrum in the 47.4-48.2 GHz band for commercial, licensed use on an area-wide basis in a paired license block in order to promote the use of the millimeter wave region of the spectrum above 40 GHz. We adopt our proposals, with modification to the licensing blocks, for the entire 47.2-48.2 GHz band (47 GHz band) in order to achieve our goal to expedite the commercial development of this spectrum. Advances in millimeter wave technology will enable new commercial uses to be achieved and will help meet consumer demand for a wide range of potential commercial services, which would stimulate research and the growth of technology. We adopt a licensing framework that allows the full range of services in the Table of Frequency Allocations to provide licensees the flexibility to provide the most efficient and effective services. We identify the potential dominant use of the 47 GHz band to ensure that the service rules we will propose in a future proceeding are adequate and appropriate. Licensing on the basis of a geographic area will ensure that licensees have the flexibility to provide new services in the most rapid and efficient manner. Dividing the spectrum into five separated pairs of spectrum blocks for licensing ensures that li- censees in the 47 GHz bands are able to offer the predominant service, as well as other potential services, in the most efficient manner. II. Summary of Significant Issues raised by the Public Comments in Response to Initial Regulatory Flexibility Statement Avant-Garde and MACOM are small entities that generally support opening the bands above 40 GHz for commercial use to take advantage of the developments in millimeter wave technology. They argue that the technology is available for commercial uses and that we should designate any of the bands for commercial use in order to stimulate market demand for their products. Sky Station argues that its proposal to provide a fixed, terrestrial, global service in the 47 GHz band using stratospheric-based platforms will meet many commercial uses and promote the growth of a new stratospheric-based technology, rather than traditional tower-based technology, for delivery of service. Metricom requests that we adopt a flexible regulatory approach for licensed operations that includes very broad and general rules to encourage the development of equipment and services. Avant-Garde argues that the spectrum to be made available for licensing should not be artificially constrained in the manner in which it is licensed or used. It requests that we reexamine our proposal to use the LMDS service rules to govern the predominant uses of the bands above 40 GHz in light of the anticipated uses and changed circumstances reflected in the filings. It questions whether the licensing scheme we proposed remains appropriate or whether some other methodology would better meet the needs of commercial service providers. Sky Station argues that its stratospheric-based platforms would deliver point-to- multipoint services that can be licensed under the terrestrial, flexible rules we proposed to adopt for 47 GHz. It argues that its technology is uniquely suited to take advantage of the characteristics of the 47 GHz band and will promote the maximum use of that spectrum. Sky Station argues that the service cannot share co-channel frequencies with other services and re- quests we dedicate the segments of the band at 47.2-47.5 Ghz and 47.9-48.2 GHz to its exclusive use and modify the Table of Frequency Allocations accordingly. Sky Station supports the use of area-wide licensing and requests that we adopt large service areas that are super-regional in size. Sky Station opposes our proposal to adopt a single pair of contiguous license blocks, and argues that the spectrum should be divided into five pairs of 100 MHz each that are separated by 500 MHz to ensure flexibility. P-Com argues that we should be careful to divide the spectrum to reflect the proposed use, and that paired blocks with maximum frequency separation are required for fixed service, two-way links such as point-to- multipoint operations. III. Description and Estimate of the Number of Small Entities to Which Rules Will Apply The determinations we adopt to open 47 GHZ for commercial use under a flexible licens- ing framework authorizing any service under the Table of Frequency Allocations on an area-wide basis would apply to all entities that apply for a license, including small entities. The definition that SBA has developed that approximates most closely the services that may be provided by the licensees would be the definition applicable to radiotelephone compa- nies. The definition of radiotelephone companies provides that a small entity is a radiotelephone company employing 1,500 or fewer persons. The size data provided by SBA do not enable us to make an accurate estimate of the number of telecommunications providers which are small entities because it combines all radiotelephone companies with 500 or more employees. We therefore use the 1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau of the Census, which is the most recent information available. This document shows that only 12 radiotelephone firms out of a total of 1,178 such firms which operated during 1992 had 1,000 or more employees. Therefore, the majority of entities to provide telecommunications services in the 47 GHz band may be small businesses under SBA's definition. The Commission has not developed a definition of small entities applicable to licensees in the 47 GHz band, because the band is being opened for the first time for commercial, licensed use in this Order and has not been subject to licensing. The RFA amendments were not in effect when the First NPRM was released, and no data has been received establishing the number of small businesses to be associated with services in the band. Although we proposed to auction the spectrum for assignment, we did not request information regarding the potential number of small businesses interested in obtaining licenses. We do not adopt in the Order our proposal to auction the spectrum, and instead will seek additional comment in a future Notice of Proposed Rulemaking in which we will also propose the service rules to implement services in the 47 GHz band. Thus, we are unable to estimate the potential number of entities that may apply for a license that may be small businesses. IV. Description of Projected Reporting, Recordkeeping, and Other Compliance Require- ments We do not adopt any rules that entail reporting, recordkeeping, and third party consul- tation. Until we adopt service rules to govern the licensing, operating, and technical aspects of our decision, there are no requirements to impose on any entities. V. Significant Alternatives to Proposed Rules Which Minimize Significant Economic Im- pact on Small Entities and Accomplish Stated Objectives We agree with many small entities that opening up the 47 GHz band for commercial uses is timely and feasible, and would be in the public interest. Small entities, such as Avant-Garde and MACOM, see many future market opportunities and have developed equipment, or expect to readily modify equipment, to meet consumer demand for the kinds of services to be provided. Sky Station has developed an innovative technology that uses platforms fixed in the stratosphere to deliver services in an efficient and effective manner. They and other small or new entities will benefit from the demand for commercial applications of their technologies. We agree with commenters, such as Avant-Garde and Metricom, to adopt the flexible li- censing framework we proposed that authorizes any service allowed under the Table of Fre- quency Allocations. We find that a broadly defined service allocation assures that the 47 GHz band will be used to the greatest benefit of the public by giving licensees, including small entities, the flexibility to meet demands. We also adopt our proposal to prescribe service rules for the licensing of the band based on what the dominant use is likely to be, as demonstrated by the comments. We agree with Avant-Garde to reexamine the likely uses and find that, while the predominant uses are the fixed point-to-multipoint uses we predicted, they would not be based on LMDS-type technology but rather on millimeter wave technology based on stratospheric plat- forms for delivery of service as proposed for the 47 GHz band by Sky Station. We deny Sky Station's request to modify the Table of Frequency Allocations to protect its service, and find that its need for protection from interference is properly addressed in the future proceeding in which we will establish the technical and operational service rules to govern the authorized services in the band. We decide to adopt our proposal to license on the basis of geographic areas in order to enable the broadest range of uses for the band and ensure efficient and effective operations. Area-based licensing provides greater operational flexibility and ease of administration that is particularly beneficial to small entities. We defer questions about the appropriate size of the area as raised by Sky Station to our consideration of service rules in a future proceeding. Because of the change in the potential predominant use for the band, we do not adopt our proposed channelization plan and instead revise the subdivision of the spectrum to reflect the proposed uses, as P-Com requests. We agree with Sky Station to divide the bands into five pairs of 100 megahertz channels, with each pair separated by 500 megahertz. This provides adequate bandwidth to accommodate the predominant uses. VI. Report to Congress We will submit a copy of this Final Regulatory Flexibility Analysis, along with the Order, in a report to Congress pursuant to 5. U.S.C.  801(a)(1)(A). A copy of this FRFA will also be published in the Federal Register.