Report No. IN 98-40      INTERNATIONAL ACTION         July 17, 1998

       FCC UNANIMOUSLY AFFIRMS 1997 DEMS RELOCATION ORDER
                        (ET DOCKET 97-99)

     After conducting a comprehensive review of its earlier decision, the FCC has
unanimously affirmed its March 14, 1997, Order relocating the Digital Electronic Message
Service (DEMS) from the 18 GHz band to the 24 GHz band.  Commission affirmed its earlier
conclusion that all relevant procedural and substantive requirements were met, and that the
relocation decision best serves the public interest by facilitating the provision of DEMS on a
nationwide basis and promoting competition in the point-to-multipoint telecommunications
market.

     The 1997 relocation decision was made in response to a specific request from the
National Telecommunications and Information Agency (NTIA), acting on behalf of the
Department of Defense (DOD), which cited national security concerns.  The decision also
reflected the Commission's commitment to keeping DEMS on a uniform nationwide frequency
band.  

     The original relocation action was taken without public notice and comment.  The
FCC's DEMS relocation order was challenged based on the decision to forego notice and
comment procedures and the amount of replacement spectrum allocated to DEMS. 

     In January and March 1997, NTIA, acting on behalf of the DOD, requested that the
Commission protect military satellite communications systems operating in the 18 GHz band in
the Washington, DC, and Denver, CO, areas from interference.  NTIA stated that DEMS
licensees, then operating in the 18 GHz band, night cause harmful interference to the
government systems and that protection was, therefore, essential.  To facilitate a solution,
NTIA made 400 MHz of replacement spectrum available at the 24.25-24.45 GHz and 25.05-
25.25 GHz bands.

     Prior to the relocation, commercial DEMS was allocated 100 MHz of spectrum at 18
GHz, and employed five channel pairs that were each 10 MHz wide.  However, because of the
more problematic propagation characteristics at 24 GHz, and in view of the Commission's
desire to allow DEMS licensees to provide equivalent service using similar equipment, the
Commission allocated 400 MHz of spectrum at 24 GHz to DEMS and designated five channel
pairs 40 MHz wide.  Although, this allocations seemingly represented a four-fold in the
spectrum, this amount of spectrum at the higher 24 GHz frequency was deemed to be
equivalent to the previous allocation at 18 GHz for practical use.

     In forgoing notice and comment procedures, the Commission relied on the military and
good cause exceptions to the Administrative Procedure Act (APA).  Relocating DEMS from
the 18 GHz band to the 24 GHz band not only protected military systems from harmful
interference, but also benefited consumers by enabling DEMS licensees to develop competing
wireless local phone and data networks nationally.  

     The Commission found that the relocation of DEMS outside of Washington, DC, and
Denver, CO, was required.  It reasoned that addressing the interference problems  only in
Washington, DC, and Denver, CO, alone would preclude DEMS from being available in those
areas because it is unlikely that 24 GHz equipment could be manufactured economically solely
for those markets.   The Commission reasoned that such piecemeal relocation would not solve
sharing problems between DEMS and non-geostationary fixed satellite systems being
developed to provide broadband services in the 18 GHz band nationwide.

     The FCC also concluded that its decision to make a fourfold increase in the amount of
spectrum available for DEMS was proper.  The Commission found that DEMS requires at
least four times the amount of spectrum at 24 GHz to provide equivalent service using similar
equipment due primarily to less favorable radio propagation characteristics at 24 GHz.

     Action by the Commission July 9, 1998,  by Memorandum, Opinion and Order (FCC
98-155).  Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani.
 
                              -FCC-

     International Bureau contact: James Taylor at (202) 418-2113
     News Media contact: Rosemary Kimball or Audrey Spivack (202) 418-0500