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Technical Standardspr"(#44  Ur&0` `  a.,Spectral Maskpr"(#44  U?'0` `  b.,Frequency Tolerancepr"(#48  U (0` `  c.,Other Technical Considerationspr"(#50  U(0D.` ` Proposals Specifically Regarding Use of 125 kHz Channelspr"(#53  U)0E.` ` Issues Primarily Involving ITFSpr"(#57")P-**eep)"Ԍ U0` ` 1. Channel Swapping and Shiftingpr"(#57  U0` ` 2. Grandfathering of Excess Capacity Lease Provisionspr"(#59  U0` ` 3. Assignment of Excess Capacity Leasespr"(#62  Ug0F.` ` Booster Stationspr"(#63  U40` ` 1. HighPower Booster Operationspr"(#63  U0` ` 2. Treatment of CurrentlyLicensed Boosters pr"(#64  U0` ` 3. Booster Licensespr"(#67  Uh0IV.Digital Declaratory Rulingpr"(#68  U50A` ` Introductionpr"(#68  U0B.` ` Limited Exception to the Protected Service Area Definition for Modificationspr"(#69  U0C.` ` Rights of Licensees Where Digital Operation Affects Use of Frequency Offsetpr"(#73  U 0D.` ` ITFS Recapture Rightspr"(#76  U6 0V.Other Related Pleadingspr"(#77  U 0VI.Procedural Matters and Ordering Clausespr"(#78  Uj0Appendix A:` ` List of Petitioners  U70Appendix B:` ` Regulatory Flexibility Analysis  U0Appendix C:` ` Rules  U0 ` Appendix D:` ` Methodology for Predicting Interference From Response Station Transmitters and To Response Station Hubs and For Supplying Data on Response Station Systems(#`  U80  I. INTRODUCTION AND SUMMARY ă  U0 ` 1.` ` In our order in Amendment of Parts 21 and 74 to Enable Multipoint Distribution Service  U0 xand Instructional Television Fixed Service Licensees to Engage in Fixed TwoWay Transmissions, 13 FCC  Uq0 x`Rcd 19,112 (1998)("TwoWay Order"), we amended Parts 21 and 74 of our rules to provide licensees in  xthe Multipoint Distribution Service ("MDS") and Instructional Television Fixed Service ("ITFS") with  x$substantially increased operational and technical flexibility. Specifically, the rule changes were designed  xto allow these licensees, which had formerly provided primarily oneway video services, to provide a wide  xxrange of highspeed, twoway services to a variety of users. In this order on reconsideration, we make  xsome additional rule modifications which we believe will further facilitate the provision of these services.  UA0 xIn this order, we also resolve petitions for clarification filed in regard to our Declaratory Ruling and  xOrder, In the Matter of the Request for Declaratory Ruling on the Use of Digital Modulation by Multipoint  U0 x0Distribution Service and Instructional Television Fixed Service Stations, 11 FCC Rcd 18,839, 18,858  U0(1996)("Digital Declaratory Ruling").  UH0^ II. BACKGROUND ă  U 0 ` `2.` ` The MDS service historically has provided pointtomultipoint oneway video transmission  U!0 xto subscribers?! U$0ԍ 47 C.F.R  21.903.? that is often referred to as "wireless cable." ITFS licensees traditionally have utilized their  U}"0 x spectrum to transmit educational and instructional material to students.@}"h U&0ԍ 47 C.F.R.  74.932.@ The two services share spectrum  xPin the 25002686 MHz band, which is divided into groups of 6 MHz channels. Although the ITFS/MDS"J#lP-3)3)ee@#"  xspectrum is primarily used to provide either oneway video service to students or wireless cable service  xto subscribers, some of the subject spectrum has been used in recent years for the provision of twoway  U0service.7A U0 xԍ See Report and Order on Amendment of Parts 21 and 74 of the Commission's Rules With Regard to  xFiling Procedures in the Multipoint Distribution Service and in the Instructional Television Fixed Service  U0 xand Implementation of Section 309(j) of the Communications Act Competitive Bidding, MM Docket No.  U0 xT94131 and PP Docket No. 92253, 10 FCC Rcd 9589, 9619 (1995) ("MDS Auction Order"); 47 C.F.R.  21.903(b).7  U40 ` (3.` ` In order to subsidize their educational mission, ITFS entities may lease channel capacity  xdon their licensed spectrum, which they are not using, to MDS operators, subject to certain technical  xlimitations and programming requirements. As a result, there is a history of cooperation between ITFS  xllicensees and MDS operators, with MDS operators providing funding used by ITFS licensees for their  xDeducational mission in exchange for the extra channel capacity needed to make most MDS systems viable.  xIn light of this history of cooperation, the Commission adopted a new flexible deregulatory approach to  x8both services, premised on cooperation between all the parties involved rather than on close Commission involvement in every possible dispute that may arise, especially in regard to interference problems.  Ui 0 ` (4.` ` The proceeding which resulted in the TwoWay Order was commenced in response to a  U8 0 xpetition for rulemaking filed by a group of over one hundred participants in the wireless cable industry,8  U 0 xԍ A complete list of these parties (collectively "Petitioners") is contained in Appendix A. A list of parties who filed petitions for reconsideration is also contained in Appendix A.  x(including wireless cable system operators, MDS and ITFS licensees, equipment manufacturers and  U 0 xconsultants,  U0 xxԍ Petitioners filed their Petition for Rulemaking on March 14, 1997 and it was placed on Public Notice  xMarch 31, 1997. Pleading Cycle Established for Comments on Petition for Rulemaking to Amend Parts  x21 and 74 of the Commission's Rules to Enhance the Ability of Multipoint Distribution Service and  U 0 xpInstructional Television Fixed Service Licensees to Engage in Fixed TwoWay Transmissions, Public  U0 xNotice RM9060, DA 97637 (rel. March 31, 1997). We considered the comments and reply comments  U0 x filed in response to the March 31 Public Notice in its formulation of the proposals advanced in the Notice  xof Proposed Rulemaking in the Matter of Amendment of Parts 1, 21 and 74 to Enable Multipoint  xDistribution Service and Instructional Television Fixed Service Licensees to Engage in Fixed TwoWay  UL0 xTransmissions, 12 FCC Rcd 22,174 (1997) ("NPRM"). On June 12, 1998, we released a Public Notice  U'0 x requesting comment on several ex parte presentations made subsequent to the release of the NPRM under  U 0 xour "permitbutdisclose" ex parte rules. See 47 C.F.R.  1.1206. Those comments were due by July  U 0 x 2, 1998. See Establishment of Period to Comment on Ex Parte Presentations, Public Notice, 13 FCC Rcd  U!016,584 (1998). We adopted the TwoWay Order on September 17, 1998. who requested that the Commission amend its Rules to facilitate the provision of twoway  xcommunication services by MDS and ITFS licensees. Virtually all of the comments received in response  Ul0 xto that petition, as well as virtually all of the comments received in response to the NPRM,0ÍÍ,0ÍÍ that we  x@subsequently released, strongly supported amending our Rules to enhance the ability of licensees to";P-3)3)eel"  xprovide twoway service. Although there was some disagreement on the specifics of how best to proceed  U0in a twoway digital environment, support for the basic twoway concept was close to unanimous.vs U50 x0ԍ Following the release of the NPRM, the Wireless Cable Association International, Inc. ("WCA") and  U0 xHthe National ITFS Association ("NIA") crafted a Joint Statement which set forth a series of positions on  xPvarious issues including application processing, programming, recapture requirements and lease  xconsiderations in a twoway digital environment. In its petition for reconsideration, NIA argues that we  U0 x|should have adopted all of the recommendations contained in the Joint Statement without exception.  Uv0 xTAlthough we did adopt many of the recommendations of the Joint Statement, we did not adopt others,  xsuch as those relating to recapture rights. Instead, we adopted other solutions to the same issues that we  U) 0 xxbelieved served the public interest better than those proposed in the Joint Statement. For example, rather  U 0 xthan adopt the Joint Statement's recommendations on recapture rights, we adopted a rule specifying that,  xin a digital environment, 5% of an ITFS operator's licensed spectrum must be reserved for its own use.  U 0 xSee TwoWay Order, 13 FCC Rcd at 19,159. In a digital environment, this typically would result in  xgreater capacity being set aside for ITFS usage than mandated by the old recapture rules. Our approach  xtalso provides greater certainty to MDS operators as to what spectrum will be available for their longterm  UB0 xHuse and greater flexibility to ITFS operators to negotiate leases than the proposals of the Joint Statement  U0 xTwould provide. In any event, if we had simply adopted the Joint Statement verbatim and rejected other  xproposals that we found better served the public interest, we would have not been fulfilling our obligations.v  Ug0b III. DISCUSSION ă  U0 ` 5.` ` Following the release of the TwoWay Order, we received petitions for reconsideration  xwhich primarily focused on requests that we: (1) expand our streamlined application processing to cover  xXall ITFS modification applications; (2) adopt a method for the Commission to resolve interference  xcomplaints; and (3) make certain technical amendments to our rules. We address each of these and other issues in turn.  S0 A.` ` Application Processing Issues  Ul 0 ` 6.` ` In the TwoWay Order, we adopted a streamlined application processing system based on  x0applicant certifications of compliance with the technical and notice rules, timely notice to all potentially  U 0 xaffected parties and random audits of submitted applications.W  U0ԍ TwoWay Order, 13 FCC Rcd at 19,14650.W We believed that failure to adopt such a  U 0 xstreamlined system would be "seriously detrimental to the provision of twoway service."?  U 0ԍ Id. at 19,146.? We also  U 0 xconcluded that failure to provide twoway service would jeopardize the survival of the MDS industry.3  U#0ԍ Id.3"  P-3)3)ee "  xThe majority of reconsideration petitioners advocate expanding the use of the streamlined processing  U0system to all ITFS major modification applications.  U50 xԍ See, e.g., Petitions of Catholic Television Network ("CTN"), BellSouth Corporation ("BellSouth"),  xDand Petitioners. In contrast, the Instructional Television Foundation ("Foundation") argues that we should  U0 x<not have adopted the streamlined application processing system at all. See Foundation Petition. In the  U0 x TwoWay Order, we extensively discussed the public interest necessity for adopting a streamlined MDS  xapplication process and the safeguards built into such a process to prevent abuse and to protect against  xnonconsensual interference. It is unnecessary to repeat that discussion here. The Foundation has not offered any argument that persuades us to reconsider the adoption of the streamlined process.  Ug0 ` 7.` ` BellSouth and other parties argue that it may be necessary to modify the main MDS and  xITFS stations as operators reconfigure their systems for cellularization, sectorization and twoway  U0 xservices.=  U 0ԍ BellSouth Petition.= This could require major changes to ITFS stations that would be precluded under our present  xhrules without a filing window. These parties contend that the delay and uncertainty that would result from  xhaving to wait for such a window could prevent some systems from being built at all and thereby deny  Uh0 xservice to the public.b h  U0ԍ See, e.g., Petitions of BellSouth and Petitioners.b In contrast, the greater certainty that would result from simultaneous processing  U50 xwould enable business plans to be more reliable and operation timelines to be more predictable.3 5  U0ԍ Id.3 The  xparties contend these factors would encourage investment in the MDS industry, would increase the value  U0 xof ITFS spectrum and would facilitate service to the public.3  Uf0ԍ Id.3 In addition, as several reconsideration  xpetitioners note, by placing ITFS major modifications in the streamlined processing system, any ITFS  xmajor modification applications submitted during the initial oneweek filing window or any subsequent  xoneday rolling filing window that interfere with any simultaneously filed applications would not be treated  U 0 xas mutually exclusive and would not be subject to auction.d  U0 xԍ Petition of UT Television, oppositions of Petitioners and Region IV Educational Service Center, et al.  x("Region IV). As Region IV points out, subjecting mutually exclusive ITFS applications to auction would create an unfair burden on smaller educators with limited resources.d Finally, adopting the streamlined procedures  xPfor ITFS major change applications would be consistent with our streamlining goals. We agree with these arguments of the various petitioners and will implement the system as stated below.  U70 ` P8.` ` The procedure we adopted in the TwoWay Order will utilize a rolling, oneday filing  U0 x8window for MDS/ITFS applications for response station hubs and boosters.Q U[%0ԍ The streamlined application process is set out in the TwoWay Order at 13 FCC Rcd 19,14650. That procedure will now  xbe extended to all ITFS modification applications. Each applicant will have to provide interference  xprotection to all facilities existing or proposed prior to the filing of its application, but its application will  x$take precedence over all subsequently filed applications. Applications filed in the initial window or on"mXP-3)3)ee"  xthe same day, in the case of the oneday rolling window, will not be treated as mutually exclusive by the  xCommission, and it will be the responsibility of the parties to resolve any conflicts. Because parties will  xbe unable to offer reliable service without resolving such conflicts, we believe the incentive to reach a  Ug0resolution will be so great that Commission involvement will be unnecessary to resolve disputes.fg U0ԍ See also discussion at  16 to 21, infra.f  U0 ` 9.` ` The applicant will be required to certify that it has met all requirements regarding  U0 x`interference protection to existing and prior proposed facilities.k U= 0 xԍ We believe this certification requirement adopted in the TwoWay Order addresses CTN's concern that  U 0applicants be required to certify to the accuracy of their interference analysis. See CTN Petition. The applicant will also be required to  x\certify that it has served all potentially affected parties with copies of its application and with its  xengineering materials. The engineering analysis for twoway systems must comply with the methodology  U50 xset out in Appendix D to the TwoWay Order, which is also Appendix D to this document. The applicant  xmust also certify that it has obtained any necessary consent letters in lieu of interference protection. Any  xapplication that does not contain the proper certifications will be dismissed with prejudice and will lose its priority over subsequently filed applications.  U8 0 ` L 10.` ` The Commission will rely on the applicant's certifications in issuing licenses and will not  xconduct an independent engineering review of each application filed. The applicant will only be required  xtto file the application form with the Commission. However, in the interest of making sure that  xengineering information is available to all present and future affected parties, applicants will be required  xto provide copies of their applications, with all of their engineering materials, in both hard copy and on  U90 xdisk,+9M U0 xlԍ The document is to be filed in hard copy and on a 3.5" IBM formatted 1.44 MB DSHD computer  xdiskette in ASCII coding, and shall contain all necessary engineering showings for twoway systems as set out in Appendices C and D. + to the Commission's contractor for public service records duplication, International Transcription  xServices, Inc. ("ITS"), located in Portals II, 445 12th Street, S.W., Room CYB402, Washington, D.C.  U0 x20554 and to certify on their application they have done so.;  U0 xTԍ Our Rules require service of the engineering material on all potentially affected parties at the time of  xfiling in addition to service on ITS. This is to insure that the relevant material is available to all  xinterested parties. Because the twoway engineering showings will already be available to the public and  xbecause the staff will not be reviewing it absent a petition to deny or an audit, filing the data with the  U80Commission, as CTN requests, would simply be unnecessary duplication. See CTN Petition. Because the ready availability of complete  x applications to interested parties is essential to the functioning of the application processing system, failure  Um0 xto certify that the application and supporting material have been provided to ITS will result in dismissal.mh U"0ԍ Any twoway application that is incomplete in any respect will not be accepted for filing.  U0 ` d 11.` ` In order to monitor applicant compliance with our Rules and to protect the integrity of  xthe certification process, the staff will conduct random audits, either prior to the expiration of the 60day  xpetition to deny period, described below, or after a license has been issued in reliance on a certification.  xTIn the event that an audit reveals that an applicant improperly certified or that an application contains a  x4material error, the application could be subject to dismissal or the license subject to revocation. In";lP-3)3)ee"  x$addition, if there is evidence that a certification was made in bad faith, we delegate to the Mass Media  xBureau the authority to impose a monetary forfeiture or it may refer the matter to the Commission for designation for hearing.  U40 `  12.` ` The staff will review applications to make sure all required materials are included,  x4excluding all engineering showings submitted to ITS. Complete applications filed with the proper  U0 xcertifications will be placed on public notice without further review. As we stated in the TwoWay Order  xwe believe placing the applications on public notice without prior staff interference analysis will serve to  x@speed the review process by making the relevant data available to all interested parties as quickly as  U70 x$possible.nN 7 U 0 x ԍ In its petition, the Foundation asserts that we are abandoning our public interest obligations by not  xperforming a substantive engineering review of each application prior to its grant. Instead, the Foundation  xargues we should adopt a system where the staff performs sitespecific analysis of each application and  U' 0 x$then evaluates the relative merits of any conflicting applications. See Foundation Petition. We strongly  x0disagree. The system established here, with its certifications, notifications, audits, petitions to deny and  xthe requirement of immediate shutdown in the case of nonconsensual interference, will protect the public  xinterest in receiving interferencefree, reliable service and make it possible for such service to be delivered  xrapidly. In contrast, the approach advocated by the Foundation would slow processing to a crawl and  xwould threaten the competitive viability of this particular service. For the reasons discussed at  18,  U:0 xinfra, we also reject the Foundation's argument that the staff should evaluate the relative merits of  U0mutually exclusive applications.n Parties will have 60 days from the date of the public notice to file petitions to deny against  x`the application. Due to the complex nature of the engineering matters, we believe a 60day petition to  x<deny period is more reasonable than the usual 30day period. If no petitions to deny are received, the  xapplication shall be granted. However, after a complete and properly certified application is granted, if  xa new facility operated pursuant to that grant causes nonconsensual interference to any protected facility  xlit must immediately cease operations, regardless of whether any petitions to deny were filed against the  xapplication during the application process. The burden of proving that a facility is not causing non x consensual interference lies on the licensee following the filing of a documented complaint of interference  U 0by an affected party.  U0 x ԍ The definition of "documented complaint" and proposals for an interference resolution procedure are  UY0discussed at  16 to 19, infra.  U90 `  13.` ` As discussed in the TwoWay Order, it is likely that a large number of applications will  xhbe filed once the new rules become effective and that many of the applications submitted at that time may  x`conflict with others filed simultaneously. In order to smooth the transition to the rolling oneday filing  xwindow application processing system, we adopted a special oneweek initial filing window, the opening  x8of which will be announced by public notice. All applications filed during that week will be deemed filed  xlas of the same day. Following the publication of a public notice announcing the tendering for filing of  x`applications submitted during that window, applicants would have a period of 60 days to amend their  xapplications to resolve conflicts, provided such amendments do not result in any increase in harmful  xinterference to any previously proposed or authorized station (including facilities proposed during the  x,window), absent consent of the applicant for or licensee of the station that would receive such  xinterference. During this 60day period, no additional applications could be filed, affording those who  xxfiled during the oneweek window an opportunity to resolve any conflicts without fear that, during the pendency of settlement discussions, third parties will propose facilities that will have to be protected. " P-3)3)ee"Ԍ U0 `  14.` ` At the conclusion of that 60day period, we will release a public notice of the acceptance  xfor filing of all applications submitted during the initial window, as amended during the 60day period.  xInterested parties will then have 60 days from the date of that public notice to file petitions to deny.  x Following the 60day period, all properly certified, unopposed applications shall be granted. On the 61st day after the date of the second public notice, the rolling oneday filing window will be in effect.  U0 ` L15. ` ` We note here that we will not tolerate frivolous petitions to deny which are intended to  xdelay the streamlined process. Such petitions will be promptly dismissed and the parties subjected to  xappropriate sanctions. For example, a petition to deny based on the claim that an application is mutually  x|exclusive with a contemporaneously filed application will be frivolous and promptly dismissed. By  xcontrast, a petition to deny that asserts nonconsensual interference with a previously appliedfor facility  xwill invoke staff review of the subject application and result in its removal from the streamlined process.  xxIf the petition to deny is granted, the application will be denied and the applicant would have to refile,  xdlosing its filing priority. Therefore, it is essential for applicants to be certain of the accuracy of their  xfilings and to take every possible step to insure they will not create unwanted interference before they  xdeven file their applications. Except during the 60day period following the initial filing window, the  xstreamlined process does not allow for amendments to applications. To do so would throw the entire  x\process into chaos because parties would be unable to rely on the accuracy of previously filed applications  x,whose proposed facilities they are required to protect. An amendment to any one application could result  x$in a cascade of amendments to subsequently filed applications. Therefore, we strongly urge parties to  xcarefully review the accuracy of their applications and to resolve any potential conflicts that would make  xtheir applications subject to legitimate challenge. Otherwise, they risk denial of their applications and the loss of filing priority.  S80 B.` ` Interference Complaints  U0 ` <16.` ` Some petitioners have asked that the Commission adopt interference resolution  U0 xprocedures,Z U0ԍ See, e.g., Petitions of BellSouth and CTN.Z while other parties have asked us to abandon our decision to not treat any simultaneously  Ul0 xxfiled applications as mutually exclusive.>lk U0ԍ Foundation Petition.> In addition, other petitioners, including CTN, have asked that  xwe clarify the term "documented complaint." For the reasons stated below, we decline to adopt the  xhadvocated interference resolution procedures and decline to change our earlier decision regarding mutually exclusive applications. We will clarify, however, the term "documented complaint."  Um0 ` L17.` ` In the TwoWay Order and under our rules, we repeatedly emphasized that any twoway  xfacility that causes unauthorized that is, (nonconsensual) interference to any protected facility must  U 0 ximmediately cease operations.T o U|"0ԍ TwoWay Order, 13 FCC Rcd at 19,142.T This rule applies regardless of whether any petitions to deny were filed during the application process. Furthermore, we stated: "vP-3)3)ee"Ԍ XThe burden of proving that a twoway facility is not causing unauthorized interference lies  pon the twoway licensee following the filing of a documented complaint of interference  U0by an affected party.> U0ԍ Id. at 19,149.>   xConsidering the severity of the penalty for interference, the placing of the burden of proof, and the fact  x that a party cannot resume operation absent an appropriate determination authorizing such operation, we  xbelieve that the incentives for the parties to act as fast as conceivably possible to resolve such complaints  xalready exist. These incentives should result in complaints being resolved much more quickly than would  xbe the case if we adopted one of the proposed complaint resolution procedures, such as the almost five U50 x|month process proposed by BellSouth.=5k U 0ԍ BellSouth Petition.= These incentives should also provide more than adequate  x0protection to the interests of ITFS licensees. Since in most cases a simple onoff test will demonstrate  xwhether a facility is causing harmful interference and since such a test can be performed very quickly,  xxwe do not believe that MDS operators are seriously burdened by this process. In those very rare cases  xwhere Commission analysis is needed to resolve the complaint, we believe our existing processes are sufficient. Therefore, we will not adopt any new formal complaint resolution procedure.  U 0 ` 18.` ` The Foundation has proposed that we abandon our decision to never treat simultaneously  U 0 x filed ITFS and/or MDS modification applications as mutually exclusive.> o U0ԍ Foundation Petition.> The Foundation contends that  xHthe system we adopted could result in three possible outcomes: (1) one party builds, blocking service  xby the other, (2) both build, but are not able to offer reliable service, and (3) no one builds and the two  U0 x0parties between them block other construction.3s U{0ԍ Id.3 As we repeatedly emphasized in the TwoWay Order,  xthe system we have adopted is based in large part on the history of mutual cooperation between MDS and  U0 x<ITFS licensees and the very real interdependence, both technically and financially, of those entities._z U0ԍ See, e.g., TwoWay Order, 13 FCC Rcd at 19,147._ In  xalmost every instance, an MDS operator cannot be competitive without access to ITFS channels.  xTLikewise, few ITFS entities can build their facilities without income from MDS lessees. Therefore, the  x,three outcomes that the Foundation predicts are improbable as between MDS and ITFS licensees. In the  x$case of conflicted MDS operators, failure to resolve the conflict will create uncertainty in the ability of  x$the operators to offer service and will make it difficult for either party to finance system construction.  x4Failure to construct the relevant systems will result in continuing lost revenue for all of the affected  x(parties. These results will compel the parties to find a mutually satisfactory resolution as quickly as possible.  U0 ` t19.` ` We do agree with CTN and other parties that we need to clarify what is meant by a  x<"documented complaint." The bulk of our enforcement activities in this area will be based upon such  x"documented complaints" and guidelines need to be established for the form of such complaints. In order"< P-3)3)ee"  U0 xto invoke Commission action and to compel shutdown of an MDS facility,  Uh0 xlԍ We note here that it will rarely, if ever, be necessary to shut down an entire MDS system for causing  xunauthorized interference. Interference is most likely to be caused by one, or no more than a very few,  xtransmitters, most likely at response stations. In a case of nonconsensual interference, only the particular  x,site(s) alleged to be causing interference may have to be shut down. The notice requirements will provide  xlicensees of facilities harmed by the interference the knowledge to specify which twoway facility or combination of facilities are the probable source of the interference. a complaint must contain a  xcertification that the complainant has contacted the operator of the allegedly offending facility and tried  xto resolve the situation before filing. The complaint must then specify the nature of the interference,  xwhether the interference is constant or intermittent, when the interference began and the site(s) most likely  x\to be causing the interference. Where possible, complainants should submit a videotape or other evidence  xDshowing the effects of the interference. The complaint must also contain a motion for a temporary order  xto have the interfering station cease transmitting. The complaint must be filed with the Secretary's office  xxand served on the allegedly offending party. Service shall be in accordance with  1.4 and 1.47 of our  Uh0 x`Rules.!h U 0 xԍ CTN has proposed allowing service to be by either fax or email. Because there is no guarantee that  xanyone will be present to receive a fax or email at the time it is sent, we do not believe that either of those methods are sufficient to effect service on a party when very short response periods are involved.  Complainedagainst parties will have 2 business days from the date of filing to respond to the  U50 xHcomplaint. We emphasize again that the burden of proof lies with the complainedagainst party. If we  U0 x`find in favor of the complainant, we shall order immediate shutdown of the facility. The operator of the  xshutdown facility will be required to submit proof that the interference has been cured before it is allowed  U 0to recommence operations." T  U0 xԍ The complaint process shall apply to all interference complaints, including those based on brute force overload ("BFO").  S: 0 C.` ` Interference  S 0 ` ` 1. Protection of ITFS Stations  Un0 ` 20.` ` In the TwoWay Order, we granted a protected service areas ("psa") to every ITFS  U=0 xlicensee(#=0  Uq0 xԍ TwoWay Order, 13 FCC Rcd at 19,173. Prior to that decision, only ITFS licensees who leased excess  UL0spectrum capacity to a wireless cable operator were availed of the opportunity to enjoy psa protection. ( and granted individual protection to all receive sites registered through the date of adoption of  U 0 xdthe TwoWay Order.T$  U"0ԍ See, e.g., 47 C.F.R.  74.903(d).T We explained that the psa protection "shall comprise an area within a 35 mile  xdradius of the licensee's registered receive sites, [and] shall be in addition to the registered receive site" $P-3)3)ee4"  U0 xprotection currently enjoyed by ITFS licensees."% Uh0 xԍ TwoWay Order, 13 FCC Rcd at 19,173 n.296. Petitioners recognize that  74.903(d) of the new rules  xcrossreferences 47 C.F.R.  21.902(d)(1), which provides for a psa within a 35 mile radius from the  U0 xtransmitter site, as defining the area of the psa. See Petitioners Petition. Indeed, our definition of the  U0 xpsa recited in note 296 of the TwoWay Order is erroneous, and we clarify that the ITFS licensee's psa  xis a 35 mile circle centered either on the fixed reference point of the associated wireless cable system, or on the authorized ITFS main station transmitter site, as elected by the ITFS licensee. Based on these actions, we halted registration of ITFS receive sites.  Sg0` `  a.,Registration of ITFS Receive Sites  U0 ` 21.` ` CTN asks us to clarify that the Commission will continue to register ITFS receive sites.7& U 0ԍ CTN Petition.7  xInstead, we make clear that we will no longer do so. Although CTN acknowledges that 47 C.F.R.   x74.903(a)(5) states that receive sites more than 35 miles from the main transmitter are not entitled to  xinterference protection, it contends that this rule is designed to limit the ability of an ITFS licensee to  xextend protection unfairly beyond its actual service area, and can be waived if a licensee can demonstrate  U0 xthat a receive site farther from the main transmitter actually receives service.=' U0ԍ CTN Petition.= This position is  xinconsistent with the plain meaning of the rule. Limiting protection to a 35 mile radius provides certainty  U 0 xto cochannel and adjacent channel entities, especially now that booster stations can originate signals.Y(  UQ0ԍ See 47 C.F.R.  74.985(a) and (b)(2).Y  Ui 0 xNevertheless, we affirm that receive sites registered as of the adoption date of the TwoWay Order  xcontinue to receive protection of their specific parameters and that applicants for new or modified MDS  U 0 xor ITFS stations are required to demonstrate protection of such sites.c)  U0ԍ See 47 C.F.R.  21.902(i)(1) and 74.903(b).c Furthermore, we emphasize that  U 0a receive site is entitled to protection as of the filing date of the application listing it. * a  U0 xlԍ In a footnote to its petition, CTN poses that the new rules granting all ITFS licensees psa protection  x"appear to violate" the Administrative Procedure Act ("APA"), because, CTN asserts, they were not  UE0 xproposed in the NPRM. CTN casts the issue as follows: "In the [NPRM], the Commission did not  x8suggest that, aside from the twoway rules, it would adopt a rule which would change the procedures for  xpreparing interference analyses for ITFS stations generally, nor can these rules be considered logical  U!0 xloutgrowths of any proposals that were published." CTN Petition. In the TwoWay Order, we decided  xto grant all ITFS licensees psa protection "[i]n recognition of concerns such as those expressed by the  U#0 x`Foundation," a licensee of several ITFS systems. TwoWay Order, 13 FCC Rcd at 19,173. We depicted  x,how the Foundation sought redress of a subtle form of coercion of ITFS licensees and thus a potential  xaffront to their autonomy in that an ITFS licensee that offered broadband services pursuant to a lease  xwith a wireless cable operator would enjoy psa protection, but an ITFS licensee that provided exactly the  x<same services on its own would not. The Foundation feared that this discrepancy would mandate the  xleasing of excess channel capacity by ITFS licensees suspicious of incurring interference in a twoway"')P-3)3)='"  U0 xenvironment and in the absence of psa protection. Id.  In reaching this decision, we also were cognizant  xof the Foundation's argument that solely protecting registered receive sites of instructionalonly ITFS  xsystems would risk an erosion of coverage capability "in Swiss cheese fashion" by boosters and other newly proliferating sources of potential interference.  U0  These concerns of the Foundation, to which we responded in the TwoWay Order, themselves  U0 xwere a direct response to the NPRM (and, we note, were articulated in a section of its comments styled  x$by the Foundation "Insuring Autonomy for ITFS Licensees and the Viability of Instructional Service."  UY0 xDFoundation Comments at 14). As the Commission framed the issue in the NPRM: "[W]e seek additional  xcomment on specific potential threats to the engineering autonomy of ITFS licensees which could result  xfrom institution of the proposed twoway framework; in conjunction with such comment, we further seek  U 0 x\proposed solutions." NPRM, 12 FCC Rcd at 22,210. In addition, while CTN suggests that our adoption  xtof psa protection for all ITFS licensees is an "aside from the twoway rules," CTN Petition, the  xFoundation's Comments illustrate how such protection is necessitated by the nature and quantities of  Uo 0 xlinterference sources that will result directly from the rules adopted in the TwoWay Order and proposed  UJ0 xTin the NPRM. Finally, in an ex parte filing Petitioners addressed the proposal to grant all ITFS licensees  xdpsa protection, stating that they did not object to the proposal. Letter from Paul J. Sinderbrand to  U0 x(Magalie Romn Salas (March 5, 1998), Ex Parte Presentation. Subsequently, a Commission Public  U0 xNotice was issued establishing a comment period on the "ex parte presentations subsequent to February  U0 x89, 1998 in this docket." See "Establishment of Period to Comment on Ex Parte Presentations Responsive  xto Notice of Proposed Rulemaking to Amend Parts 1, 21 and 74 of the Commission's Rules to Enable  xMultipoint Distribution Service and Instructional Television Fixed Service Licensees to Engage in Fixed  U>0 xTwoWay Transmissions," Public Notice, 13 FCC Rcd 16,584 (Mass Media Bur. 1998). Thus, our granting of psa protection to all ITFS licensees is consistent with the APA. " *P-3)3)ee8 "Ԍ S0ԙ` `  b.,PointtoPoint ITFS Licensees   U0 ` p22.` ` BellSouth urges the Commission to create an exception to Section 74.903(d) of the new  xRules, stating that pointtopoint ITFS stations are not entitled to a psa, because psa protection is  xirrelevant to their institutional needs, results in overprotection and spectral inefficiency, and causes  xunintended adverse consequences. BellSouth also states that the Commission has accorded secondary  xTprotection to pointtopoint ITFS stations and adds that a pointtopoint ITFS licensee which seeks to  xhmodify its facilities to provide pointtomultipoint services can do so subject to the interference protection  xrights of incumbents. Although the Commission has licensed ITFS pointtopoint studio to transmitter links  U50 xon a secondary basis,J+>5 U*0 xԍ See Amendment of Parts 21, 43, 74, 78, and 94 of the Commission's Rules, Pertaining to Rules  xGoverning Use of the Frequencies in the 2.1 and 2.5 GHz Bands Affecting: Private OperationalFixed  xtMicrowave Service, Multipoint Distribution Service, Multichannel Multipoint Distribution Service,  xInstructional Television Fixed Service, and Cable Television Relay Service, Notice of Proposed Rule  U"0Making and Notice of Inquiry, 5 FCC Rcd 971, 974 (1990).J BellSouth's characterization of all ITFS pointtopoint operations as "secondary""5 [+P-3)3)ee,"  U0 x\is inaccurate.=,Q  Uh0 xLԍ See Amendment of Parts 21, 43, 74, 78, and 94 of the Commission's Rules Governing Use of the  xXFrequencies in the 2.1 and 2.5 GHz Bands Affecting: Private OperationalFixed Service, Multipoint  x0Distribution Service, Multichannel Multipoint Distribution Service, Instructional Television Fixed Service,  U0 xand Cable Television Relay Service, Report and Order, 5 FCC Rcd 6410, 6415 (1990) ("Wireless Cable  U0Order"). The Commission stated there:    We cannot find that displacement of pointtopoint ITFS services on ITFS frequencies by  |omnidirectional ITFS services will provide inherently more valuable or desirable service,  Deven though refusing to permit involuntary displacement in such circumstances may  reduce, in some cases, the ITFS excess capacity that might be leased to wireless cable operators if such displacement were permitted.= Furthermore, adopting BellSouth's requested exception would place an  xunacceptable burden on ITFS licensees who wish to convert from pointtopoint to pointtomultipoint  xtransmission in the future, perhaps even precluding such a change. Thus, we decline to adopt the exception to automatic psa protection requested by BellSouth for pointtopoint operations.  S0 ` ` 2. Response Stations: Advance Notification and Professional Installation  U0 ` |23.` ` In the TwoWay Order, we created a zone ("notification zone") with a radius of 1960 feet  x`around each ITFS registered receive site, and required that the associated hub station licensee notify the  xappropriate ITFS licensee by certified mail at least 20 days prior to the activation of any response station  xwithin such a zone. We stipulated that the notification must contain the street address and geographic  xcoordinates of the response station; a specification of the station's EIRP, antenna pattern, orientation,  xDpolarization, height above mean sea level ("AMSL") and channels to be used; and the name and telephone  xnumber of a contact person who will be responsible for coordinating the resolution of any interference  U8 0 xproblems.T-8  U0ԍ TwoWay Order, 13 FCC Rcd at 19,142.T We also required that all response station transmitters be installed professionally to minimize  U 0 xBFO,B.  U0ԍ See id. at 19,134.B to help prevent cochannel and adjacent channel interference,>/  U0ԍ Id. at 19,141.> and to minimize the risk of human  U 0exposure to potentially hazardous radiofrequency ("RF") emissions.>0  U0ԍ Id. at 19,128.>  Ul0 ` D24.` ` A number of the parties request that we modify these requirements. Several parties  xXmaintain that the advance notification and professional installation requirements pose a competitive  ximpediment because MDS operators will be alone in being unable to provide rapid installation or a retail  xHdistribution channel, unlike other services including cable television or satellite antenna master television  U0 x("SMATV").?1 U&0ԍ Petitioners Petition.? CTN regards these arguments as "flawed," in that these other services do not use  xradio-frequency transmissions for return paths, and thus interference issues are not a concern. Petitioners"m 1P-3)3)ee"  xrespond that "[p]rospective customers do not care about differences in technology or whether a service  U0provider is sharing spectrum with ITFS licensees they want their service immediately."V2 U50ԍ Dallas County Opposition; Petitioners Reply.V  Sg0 ` `  a.` ,Response Stations Operating at +18 dBW EIRP or less, and/or on  S40MDS Channels 1 or 2/2A (#  U0 ` 825.` ` Petitioners asked for reconsideration of our imposition of advance notification and  xequipment installation requirements for response stations utilizing a transmit power of 18 dBW EIRP or  Uh0 xless.?3hh U 0ԍ Petitioners Petition.? Petitioners argue that, when no more than 18 dBW is used at a response station with digital  xmodulation operating as part of a twoway cellularized system in the 25002686 MHz band, no 20day  xLnotification requirement or professional equipment installation requirement should be imposed for  U0 xprotection of ITFS receive sites.34l U?0ԍ Id.3 In lieu of these requirements, Petitioners propose that "improved"  xfrequency downconverters be provided by hub station licensees to all ITFS receive sites within 1960 feet  Ui 0 xof the hub station's response service area ("RSA").35i s U0ԍ Id.3 The proposed downconverters would be required  xxto suppress noncochannel and nonadjacent channel signals by an amount equal to, or greater than, (4  x A B) dB, where A represents the downconverter's maximum input power capability (in dBm) and B  U 0 x represents the sum of the power (in dBm) of the desired signals at the input of the downconverter.36 z UN0ԍ Id.3  x Petitioners additionally requested that the Commission reconsider, and eliminate, the requirements for  xadvance notification and professional installation of digital response stations operating as part of a twoway  U70 xcellularized system in the 21502162 MHz MDS band, irrespective of EIRP utilized.377  U0ԍ Id.3 Petitioners argue  xthat these requirements are unnecessary because interference to ITFS stations operating in the 25002686  U0MHz band should not occur due to the separation of over 300 MHz between these bands.38  U]0ԍ Id.3  Uk0 ` 26.` ` In response to Petitioners' proposal to install improved downconverters in circumstances  xwhere interference could occur, CTN states that they would not oppose an exemption from the notification  xhand installation rules for stations utilizing 18 dBW or less EIRP, provided that "the replacement  U0 xdownconverters meet an agreedupon standard for resistance" to overload.89 Ue%0ԍ CTN Opposition.8 Specifically, CTN  xrecommends the following standards for such downconverters: (1) a thirdorder intercept point of 30  xdBm; (2) a conversion gain of 32 dB, or the same gain as the existing downconverter, whichever is less;  xHand (3) a noise figure of no greater than 2.5 dB, or no more than 1 dB greater than the noise figure of"99P-3)3)ee"  U0 xDthe existing downconverter, whichever is greater.3: Uh0ԍ Id.3 Responding to this proposal, Petitioners state that they  xdo not object to CTN's specifications, and note that, if downconverter interference occurred despite  xinstallation of such a replacement unit, then the hub station operator would still be responsible for curing  xtsuch interference by deploying an even better downconverter and/or utilizing other interference mitigation  U40 xtechniques previously identified by Petitioners.<;4k U0ԍ Petitioners Reply.< Petitioners' request to exempt stations in the 21502162  xlMHz band from notification and installation requirements is opposed by CTN, which argues that such  U0stations still pose a threat of downconverter overload to ITFS stations in the 25002686 MHz band.:<o UA 0ԍ CTN Reply.:  Uh0 ` `27.` ` We believe the proposal for the replacement of existing downconverters with newer, more  x$interference resistant, models in certain circumstances and modifying the notification rules protects the  x|interests of ITFS stations while removing the competitive disadvantage to MDS operators. We are  xltherefore amending our rules to eliminate the notification and professional installation requirements for  xdigital response stations in twoway cellularized systems utilizing no more than 18 dBW EIRP, contingent  xupon the operator of the associated hub station providing and installing replacement downconverters at  xregistered ITFS receive sites within the outer edge of the RSA and beyond to a distance of 1960 feet.  xlThe technical specifications of the replacement downconverters shall, at a minimum, be consistent with  U 0 xthose set out in  26, supra. We are also adopting Petitioners' suggested procedures for implementation  xof such arrangements, namely: (1) the proposal to upgrade downconverters should be made in writing  xDand served on the affected ITFS licensee, conditional licensee or applicant at the same time the application  xfor the response station hub license is served on cochannel and adjacent channel ITFS parties; (2) any  x,objection by ITFS parties would have to be made within the 60day period allowed for petitions to deny  x,the hub station application, setting forth the specific reason(s) for the objection; (3) if no objection is filed,  xthe offer for downconverter replacement will be deemed to have been accepted; and (4) if an objection  xto downconverter replacement is filed, the hub station application would nevertheless be granted, subject  xto the Commission's requirements for notification and professional installation. This arrangement should  x`facilitate the installation of very large numbers of response stations without the need for notification or professional installation.  Un0 ` |28.` ` We are not adopting Petitioners' request to totally exempt response stations in the 2150 x82162 MHz MDS band from notification and professional installation requirements, although such stations  xutilizing no more than 18 dBW EIRP are included in the provisions above. We do not find, and  xPetitioners did not provide, good cause for exempting stations in this band utilizing more than 18 dBW  xxfrom these requirements. Despite the fact that this band is separated by over 300 MHz from the ITFS  x8channels, we agree with CTN that the potential for downconverter overload still exists, although it should  xHbe significantly easier to eliminate, such as with the use of relatively inexpensive filters. Moreover, with  xrespect to the equipment installation requirement, we are retaining this rule provision for all MDS and  x4ITFS stations using more than 18 dBW EIRP because of our concerns relating to the potential for  U0 xdeleterious effects from human exposure to highpower microwave emissions.k=s U&0ԍ TwoWay Order, 13 FCC Rcd at 19,129; 47 C.F.R.  1.1307.k The Commission has  xadopted specific regulations relating to RF exposure and we believe these provisions could be  xcompromised if professional installation requirements were eliminated for MDS and ITFS response"=z=P-3)3)eet"  U0 x stations operating at an EIRP in excess of 18 dBW.2> Uh0ԍ Id.2 For stations operating up to and including 18 dBW  xEIRP, we believe that the probability of harmful exposure is sufficiently limited that it should not be an impediment to implementing the exemption from professional installation sought by the Petitioners.  U40 ` 29.` ` Our provisions for limiting RF exposure in the MDS and ITFS bandsK?4k U0ԍ See 47 C.F.R.  1.1307.K require a routine  xenvironmental evaluation if: (1) a nonbuildingmounted antenna less than 10 meters above ground is used  x and the station EIRP is greater than 1640 watts; or (2) a buildingmounted antenna is used and the station  x EIRP is greater than 1640 watts. The professional installation exemption we are adopting is for response  x stations utilizing a maximum of 18 dBW EIRP, which corresponds to a power of 63 watts EIRP. Using  xthe formulation 20 log(D1/D2) = 10 log(P1/P2), where D1 = 10 meters, P1 = 1640 Watts EIRP, and  xP2 = 63 Watts EIRP, the term D2 can be calculated to be approximately 2 meters, which is the distance  xTat which a 63 Watt EIRP signal would produce an RF exposure level equivalent to that produced by a  x 1640 Watt EIRP signal at a distance of 10 meters. However, even this estimate for D2 is very  Ui 0 xconservative (i.e. too large) because, at that distance from a response station dish antenna, any object  U8 0 xTwould be in the "near field" of the antenna, i.e., within the area where the lobe of the antenna is not yet  xTfully formed and where the field of the antenna is dispersed over a relatively wide area as a fraction of  xxthe distance from the reflecting surface of the antenna. Moreover, as the antennas in these systems will,  xlof necessity, be mounted so as to have a lineofsight path to their associated booster and hub stations,  xit is reasonable to expect that they will be mounted at roof level or above, where there is little probability  xof RF exposure to humans. As an additional safeguard, however, the current provisions of Sections  x|21.909(m) and 74.939(o) of our Rules will be amended. These sections now provide that response  xstations can be operated only when engaged in communications with their associated hubs, boosters or  xDprimary stations, and radiation of unmodulated carriers or other unnecessary transmissions are prohibited.  xdWe are amending these rules to also provide that response stations can only be initially activated, or  xPreactivated if relocated, by a signal from a booster or primary station, and that hub licensees have a means  x`to remotely deactivate any subscriber's response station transmitter within their RSA. These provisions  xshould give an added measure of control to system licensees useful for conducting interference tests and  xother system evaluations, and will result in a positive "interlock" feature that prevents inadvertent  x0activation of a newly installed response transmitter when the response antenna is not properly installed so as to receive signals from the associated main or booster transmitters.  U0 ` 30.` ` In its petition, Qualcomm Incorporated ("Qualcomm") requests that the Commission: (1)  xamend the rules to eliminate (1) the notification and professional installation requirements for MDS and  xITFS response stations with EIRP no greater than 6 dBW; (2) the requirement that response stations  x|utilize directional receiving antennas; and (3) the requirement that response stations utilize directional  U 0 xtransmitting antennas.3@ r U"0ԍ Id.3 Qualcomm argues that the notification/installation regulations should not apply  xto stations with an EIRP no greater than 6 dBW (1/4 watt) because such stations pose an extremely low"y@P-3)3)ee"  U0 xpotential threat for causing downconverter overload.3A Uh0ԍ Id.3 Virtually all parties commenting on the issue  U0support Qualcomm's request.rBk U<0ԍ Opposition of Petitioners and CTN. See, also, Petition of Dallas.r  Ug0 ` 31.` ` Qualcomm also argues that Section 21.906(d) of our Rules, which requires the use (except  xat hub stations) of directional receiving antennas at MDS stations, has "outlived its regulatory usefulness"  xand should be deleted. Qualcomm states that this rule conflicts with 47 C.F.R.  21.906(a), which  x`provides for omnidirectional transmitting antennas at some MDS stations in certain circumstances, and  x(is in conflict with recentlyadopted 47 C.F.R.  21.909(g)(4), which governs the use of transmitting  xantennas at MDS response stations. Qualcomm also wants 47 C.F.R.  74.937(b) amended to eliminate  x`what Qualcomm sees as an ambiguity within the rule and a possible inconsistency with a portion of 47  xC.F.R.  74.931. These rules require the use of directive transmitting antennas "whenever feasible" at  x certain ITFS stations, except that omnidirectional transmitting antennas may be used when the stations are  xleased to provide a commercial service. Qualcomm asks that the provisions of 47 C.F.R.  74.939(g)(4),  xwhich governs the use of transmitting antennas at ITFS stations, be referenced as an exception to the  xrequirements of 47 C.F.R.  74.937(b). Qualcomm argues that the sections of both Part 21 and Part 74  xof our Rules which it wishes amended are not appropriate for response stations in twoway systems, as  xPsuch stations "will utilize a common antenna for transmissions and reception," and it would be impractical  xTand unnecessary for a response station to have one antenna for transmitting and a separate antenna for  Uj0 x8receiving.<Cjr U0ԍ Qualcomm Petition.< Additionally, such a requirement would not be compatible, Qualcomm argues, with their low  xHpower response station, a small desktop unit with a short omnidirectional whip antenna, which will be  U0readily available for consumer purchase and installation.3Dv U~0ԍ Id.3  U0 ` 32.` ` We agree with Qualcomm, CTN and others who support elimination of the notification  xand installation requirements for stations with EIRP no greater than 6 dBW, and we are amending our  x\rules accordingly. The problems these requirements were meant to address, downconverter overload and  xunsafe exposure to RF emissions, are very unlikely to be caused by such low power stations, even those  x0within 150 feet of an ITFS receive site. Should such interference occur, it will still be the responsibility  xof the hub station licensee to provide a remedy. Therefore, response stations with an EIRP no greater  xPthan 6 dBW do not need to comply with the advance notification and professional installation  x8requirements; stations with an EIRP between 6 dBW and 18 dBW are subject to those requirements only  xwithin the notification zone subject to those exceptions set out herein; and stations with an EIRP greater  xthan 18 dBW are always subject to the professional installation requirements and, subject to some exceptions, to the notification requirements when within the notification zone.  U:0 ` $ 33.` ` With respect to Qualcomm's proposed amendments of the response station antenna rules,  xwe find the modifications as suggested would be contrary to the clear meaning of our proposals and  xhactions in this proceeding. Specifically, with respect to MDS response stations, we proposed and adopted  x47 C.F.R.  21.906(d), which requires that directional receiving antennas be used. This rule is  xcompletely consistent with 47 C.F.R.  21.909(g)(4) which states that "each response station shall employ  xa transmission antenna oriented towards the response station hub...." The unambiguous meaning of this";}DP-3)3)eet"  xlanguage is that the MDS response station transmitting antenna must also be directional, as the phrase  x,"oriented towards" would otherwise be meaningless. Qualcomm's reference to omnidirectional antennas  xin 47 C.F.R  21.906(a) is inapposite, as this section applies only to antennas at primary (and booster)  xMDS stations. With respect to ITFS response stations, 47 C.F.R.  74.937(a) calls for ITFS response  xstations to use directional receiving antennas and allows licensees to install receiving antennas with  xperformance superior to the specifications set forth at Figure I, Section 74.937(a). Also, 47 C.F.R.   x74.939(g)(4) states that "each ITFS response station shall employ a transmission antenna oriented towards  xHthe response station hub...." Clearly, as with MDS stations, the unambiguous meaning of this language  xis that the ITFS response station transmitting antenna must be directional. Qualcomm's reference to  xlanguage in 47 C.F.R.  74.931(e)(7) permitting omnidirectional ITFS transmitting antennas in certain circumstances is inapposite, as this text applies only to antennas at primary (and booster) ITFS stations.  U 0 ` |!34.` ` Although response stations in general are not permitted to use omnidirectional antennas,  xDstations operating at the very low EIRP proposed by Qualcomm will have little potential to interfere with  xother systems irrespective of the type of antennas used. Qualcomm's use of low power transceivers which  xtcan be placed on a desk or other convenient indoor location to provide high speed wireless internet access  xis, we believe, an appropriate and innovative use of this spectrum and should be accommodated if at all  xpossible. In consideration of these facts, we have decided, to waive our rules to the extent necessary to  xpermit the use of omnidirectional transmitting and receiving antennas at any ITFS or MDS response  xxstation with an EIRP no greater than 6 dBW. This action, we believe, is appropriate and warranted in  xthese circumstances and is fully consistent with our overall framework of encouraging expanding use of  xthis spectrum while, at the same time, providing adequate protection from harmful interference to all  xlsystems. The use of omnidirectional antennas under the provisions of this waiver does not exempt the  xlicensee from our existing requirement that interference calculations be based on the presumption that the  xresponse station utilizes a reference receiving antenna with minimum performance characteristics  xconforming to Figure I of 47 C.F.R.  74.937(a). Users of omnidirectional response station receiving  x`antennas will receive interference protection as if they were using a receiving antenna with the reference pattern and will not be protected from unwanted signal levels above those derived by use of this pattern.  S90` `  b.` ,Effect of Timing of Construction of ITFS Registered (#  S0XX` ` X X,Receive Site s (#  U0 ` "35.` ` Petitioners state that the advance notification and professional installation requirements  xshould not apply with respect to ITFS receive sites built after the filing of the associated response station  x$hub application. They argue that ITFS licensees now are on notice of the risk of BFO, and should be  U0 xdeploying downconverters better able to reject undesired signals.UE Uo0 xԍ Petitioners Petition. Petitioners also maintain that these requirements should not apply where the ITFS  xreceive site is registered after the filing of the application for the neighboring hub. Because we have ceased registration of receive sites, this issue is moot.U We decline to adopt Petitioners'  x,proposed exception. Interference protection rights within these services are based on a "first in time, first  xxin right" philosophy. Because all ITFS registered receive sites will have been registered before the filing  xof any response station hub applications, these sites are previouslyproposed and thus entitled to  xprotection. Our decision here is consistent with other provisions in the new rules which require such  U 0 xprotection.WF  U$&0ԍ See, e.g., 47 C.F.R.  21.909(g)(8).W We reiterate that the notification requirements will apply only to registered receive sites and those for which registration was applied for as of the date of adoption of the TwoWay Order. "!FP-3)3)ee!"Ԍ S0` `  c.,Consent of ITFS Licensees  U0 ` #36.` ` No party objects to allowing ITFS licensees to consent to waive the advance notification  Ug0 xand professional installation requirements, and we grant Petitioners' proposal to permit such consents.IGg U0ԍ See Petitioners Petition.I  U40 xTIndeed, the TwoWay Order specifically contemplates that consents will play a major role in the licensing  U0 xdof twoway MDS and ITFS facilities.Hk Ur0ԍ  See, e.g., TwoWay Order, 13 FCC Rcd at 19,148;  21.913(a) of the new rules. However, while individual ITFS licensees may forego their  x`receipt of advance notification of response station activation, we agree with CTN that the professional  xinstallation requirement may be nullified only where all potentially affected ITFS licensees consent.  xSpecifically, response stations operating above 6 dBW EIRP and no greater than +18 dBW EIRP need  x not be installed professionally so long as each and every ITFS licensee whose notification zone  x8encompasses such responses stations consents in writing to nonprofessional installation of those response  U0stations.Ir UG0 xԍ The consent exception to the professional installation requirement does not apply in any circumstances  U0where the response station is to operated exceeding +18 dBW EIRP.   Sk 0` `  d.,Timing and Method of Advance Notification  U 0 ` $37.` ` Some parties propose shortening the notification period to enhance the competitive position  xTof MDS operators and the Bay Area Consortium urges the Commission to dispense with the advance  xnotification rules altogether. CTN contends that the Bay Area Consortium's proposal, which would  xsimply require hub applications to be served on potentially affected ITFS licensees, "is of little use" given  xLthat the hub application may be filed months or years before a response station capable of causing  U0 xinterference is activated and would not identify a specific, problematic response station.9JN UX0ԍ CTN Opposition.9 Dallas County  x,opposes shortening the notification period, claiming that the benefits of retaining 20 days notice outweigh  U0 xany perceived competitive disadvantage.CKR  U0ԍ Dallas County Opposition.C Relatedly, Petitioners suggest that every response station hub  x application should be served on any ITFS licensee with a registered receive site in, or within 1960 feet  xof, the proposed RSA to assure that the activation notice is not the first time that an ITFS licensee learns  U0of plans to deploy response stations in the vicinity of its registered receive sites.?LV  Ua!0ԍ Petitioners Petition.?  U0 ` %38.` ` We will retain our advance notification requirement for response stations activated within  x01960 feet of ITFS registered receive sites, except for those activations which fall into any of the above  xexceptions. We also will limit the term of this notification to one business day in advance of such  x`activation. The main purpose of the advance notification requirement is to jumpstart the BFO source  xidentification process before BFO occurs, and we are persuaded that one business day is sufficient notice  xto achieve this purpose, while at the same time allaying the concerns expressed by some parties over the"Z LP-3)3)ee"  xanticompetitive effects of a longer notification period. We also adopt Petitioners' suggestion for service of response station hub applications on nonco and adjacent channel ITFS licensees.  Ug0 ` &39.` ` While the TwoWay Order requires that advance notification be performed by certified  xmail, Petitioners request that an ITFS licensee be permitted to elect to receive it by electronic mail (e U0 xdmail) or fax.jM Uk0ԍ Petitioners Petition See also Region IV; C & W Petition.j We will permit such notification provided that the ITFS licensee consents in writing.  xRegardless of the method used, notification should be timed so that it is received by the ITFS licensee at least one day in advance of activation.   S70` `  e.` ,Content of Advance Notification (#  U0 ` '40.` ` Petitioners propose that we limit the content of the notification to the ITFS receive site(s)  xpotentially affected by the new response station, the hub(s) with which the response station may  Uk 0 xcommunicate, and the name and telephone number of a contact person.ENk k U0ԍ Petitioners Petition.E Petitioners argue that the  xrequired content of the advance notification contains far more information than the ITFS licensee  xDreasonably needs, and that this content thus should be reduced to protect proprietary and market sensitive  U 0 xinformation.3O o UE0ԍ Id.3 However, CTN argues that it is unlikely that the location of response station transmitters  x0always could be hidden, and that no attempt has been made to show that a response station's physical location or operating specifications are in any way confidential.  U0 ` d(41.` ` We believe that the level of concern over predatory pricing by ITFS receiving notice, or  x by their lessees is unfounded. Reducing the advance notification period to one day minimizes any the  xdpotential for a competitor to utilize the information in the notification to the detriment of an MDS  xoperator. Therefore, the interest in providing the information called for by our advance notification  xrequirement to facilitate the identification of any BFO that may occur outweighs any of the concerns  U0expressed regarding possible anticompetitive effects.Pv U0 xԍ If a sufficient record of anticompetitive behavior arising from such notifications is developed subsequently, we may revisit the required content of the notifications.  U0 ` )42.` ` In addition, we are not persuaded by Petitioners' argument that it is impossible for  xxresponse station hub licensees to determine and supply in advance of response station activation certain  x<technical characteristics of the response station. For one thing, some of those characteristics should be  xpredetermined by virtue of the appliedfor parameters of the RSA, region and class pertaining to the  xparticular response station. We believe the activation process will require extensive coordination with the  xthub licensee or wireless cable operator, and from this the hub licensee will be able to derive the  xinformation required on the notification. Our adoption of rules requiring remote activation of response  xstations to prevent inadvertent activation of an improperly installed response transmitter also should facilitate recognition of the operating characteristics of the response station.  U0 ` *43.` ` The Bay Area Consortium depicts the existing advance notification requirements as huge  xburdens for ITFS licensees on both sides of the notification. Not only would the provider of the"pR PP-3)3)ee"  xnotification be obligated to expend resources to prepare notifications, but the receiver also would be  U0 xobligated to review potentially thousands of notifications.GQ U50ԍ Bay Area Consortium Petition.G However, we agree with those other parties  xwho state that the need for interference protection outweighs the burdens. The fact that the notification  xzone extends only onethird of a mile from the registered receive site, coupled with the exceptions to the  xTnotification requirement that we have carved out here, should greatly limit the number of notifications.  U0 xFurthermore, we adopt the proposal by Dallas County,CRh Um0ԍ Dallas County Opposition.C to require identification of the potentially affected  xregistered ITFS receive sites and the response station hub(s) with which the newly activated response station may communicate because it will lessen the burden on parties reviewing the notification.  S50` ` 3. Technical Standards  S0` `  a.,Spectral Mask  Ui 0 ` 0+44.` ` Spike Technologies, Inc. ("Spike") asks the Commission to reconsider and amend the rules  xrelating to the definition of the spectral mask applicable to digital emissions used at MDS and ITFS  U 0 xstations.9S l Us0ԍ Spike Petition.9 The spectral mask establishes the amount of attenuation which is required for the portions of  x$the transmitted signal which fall beyond the upper and lower edges of the channel in use. Specifically,  xSpike argues that there is an inconsistency between the emission limits given in 47 C.F.R.  21.908(a),  x(b), (d) and the formulas in 47 C.F.R.  21.908(e) which, according to Spike, "could be interpreted as  U70 xbeing 18 dB more restrictive than intended...."T7p U0 x@ԍ This issue also involves the ITFS emissions limits given in 47 C.F.R.  74.936(c), (d), (f) and (h). Our consideration of the MDS spectral mask equally applies to the mask for ITFS stations. The text of Sections (a), (b) and (d) sets out the specific  xattenuations for outofband emissions relative to the "licensed average 6 MHz channel power level."  x,Section 21.908(e) sets out two mathematical formulas that define two alternative measurement  xpmethodologies which can be used for determining compliance with Sections (a), (b) and (d). Spike  Uk0 xcontends that the formulaic attenuation schema is inconsistent with the relevant proposals in the NPRM  U:0 xand with the Commission's decisions in the Digital Declaratory Ruling.aU:L  U0ԍ Digital Declaratory Ruling, 11 FCC Rcd at 18,858.a Spike argues that their  U 0 x understanding of our requirements for suppression of outofband emissions in the Digital Declaratory  U0 xtRuling and in the NPRM is that the magnitude of the outofband emissions (as measured in the  xappropriate resolution bandwidth) is to be compared to the magnitude of the total licensed average power  xwithin a 6 MHz channel, and that a ratio of these two magnitudes would yield the requisite suppression.  x<Spike offers alternative formulas which, they say, present the correct methodologies for calculating the  xrequired outofband attenuations. In their opposition, Petitioners state that Spike fundamentally  xmisunderstands how the text and formulas of the rule are to be correctly interpreted and that, in fact, there  xdis no inconsistency between them and they are both correct. Petitioners argue that the rule text and  x,formulas, as adopted, are completely consistent with the procedures used in connection with the emission  UB0 xtests which formed the basis for the Digital Declaratory Order; that Spike's alternative formulas are  xtincorrect and inapplicable; and that implementation of the spectral mask rules in conformance with Spike's"S UP-3)3)ee\"  x\interpretation would result in a serious degradation of the MDS/ITFS band due to much greater levels of adjacent channel interference.  Ug0 ` `,45.` ` The text of 47 C.F.R.  21.908 in both the NPRM and the TwoWay Order in this  U60 xproceeding is a direct carryover of the text in the Digital Declaratory Order, where we said "Acceptable  U0 x,levels of outofband emissions shall reference the average transmitter output power."3V Um0ԍ Id.3 Referencing out  xofband emissions to the measured average power within a portion of a 6 MHz channel (the resolution  xbandwidth) with uniform spectral density is an acceptable methodology and, most significantly, is the  Ul0 xmethod used by the Petitioners, for the emissions test in support of our Digital Declaratory Ruling. We  xstated, by way of clarification, that "the relative power of outofband emissions shall be measured with  U0 x100 kHz resolution bandwidth."3Wk Uw 0ԍ Id.3 The purpose of this statement was to highlight the fact that the  x`resolution bandwidth of the measurement instrument must be taken into account when comparing the  xmagnitudes of inchannel and outofchannel power. In the tests conducted by the Petitioners, the most  Uo 0 xcommon resolution bandwidth used was 100 kHz, and, as the Digital Declaratory Order was based on  xXthese tests, that bandwidth was specified as the measurement standard. Subsequently, as a result of  U 0 xtquestions raised by comments to the NPRM, Petitioners proposed two generalized mathematical formulas  xwhich could be used to evaluate the relative levels of outofband emissions irrespective of the particular  xchannel width and resolution bandwidth(s) involved. Those formulas were adopted by the Commission  xat 47 C.F.R.  21.908(e) and they state, quantitatively, how the measurement of a spectral mask must  xbe made in order to comply with the requirements of 47 C.F.R.  21.908(a), (b) and (d). We agree with  xPetitioners that Spike is incorrect in their assertion that the text and formulas are inconsistent. The  U0 x,purpose of the text is as statement of what is to be measured, and the purpose of the formulas is to show  U0 xthe two alternative means for how the measurement is to be taken in order to produce consistent and  xcorrect results. Spikes's proposed alternative formulas are meant to compare the total amount of power  xin a 6 MHz wide channel against outofchannel power measured within a 100 kHz bandwidth. The  xformulas which we adopted are meant to compare the power in a segment within the 6 MHz channel (for  x,example, a 100 kHz segment) against the outofchannel power measured within a bandwidth segment at  xthe point of interest. The difference in the results of these two approaches amounts to approximately 18  Uz0 xPdB for a resolution bandwidth of 100 kHz, i.e. 10 log(6 MHz/100 kHz), with Spike's formulas permitting  xoutofchannel power to be 18 dB greater than that permitted by the rule which we adopted. Thus, the  x8interpretation suggested by Spike would result in a degradation of the emission mask by 18 dB and could result in unacceptably high levels of adjacent channel interference in the MDS/ITFS band.  U}0 ` -46.` ` Although we find Spike's interpretation of the formulas in 47 C.F.R.  21.908(e) to be  xdincorrect, we believe that Spike's misunderstanding of our measurement schema warrants a general  xclarification of the applicability of these formulas to the digital emissions already approved for MDS/ITFS  U0 xand those that might be approved in the future.Xr UZ#0 xԍ The confusion over this issue may stem from the reference to the phrase "licensed average 6 MHz channel power level" in Sections 21.908 and 74.936 of our rules. We will clarify these rules accordingly. Specifically, Spike states in their petition for  xreconsideration that the formulas "mistakenly reference the [spectral] mask to the "flat top" of the digital  x<wave form." In fact, this reference to the "flat top" of the digital emission's wave form is correct and  xessential for establishing the correct portion of the signal to be measured when using relative power  x8measurements for determination of the shape of the spectral mask. By "flat top," we are referring to that  U 0 xHportion of the digital emission which falls at the center of the occupied bandwidth of the emission, e.g." NXP-3)3)ee "  xat the center of a 6 MHz channel, at which center point a measurement of the power spectral density of  xthe emission should yield, within a resolution bandwidth such as 100 kHz, a value which is not exceeded  x4at any other point within the emission when measured within the same resolution bandwidth. For  xemissions such as 64QAM, which have a relatively uniform power spectral density, a power  xmeasurement within a 100 kHz resolution bandwidth taken at the "flat top" or within any other 100 kHz  xsegment that is not located proximate to the 6 MHz channel edge, should yield values which are  x<essentially equal. However, for emissions such as QPSK and 4QAM, this will not be true, as the "flat  xtop" measurement value will exceed the value found from measurements taken at points between the  x8center of the emission and the channel edges. This is true because QPSK has a "Sin X/X" power spectral  U50 xdensity configuration, i.e., the emission is "dome shaped," with more power concentrated near the center of the channel and less power concentrated towards the edges of the channel.  U 0 ` .47.` ` Thus, for emissions such as QPSK and 4QAM, the "flat top" portion of the signal is the  Uk 0 xonly point within the channel at which a correct comparison of the relative levels of inband and outof xband power can be taken. We would also emphasize that such emissions are constrained in terms of  xmaximum permissible EIRP by the degree to which they are nonuniform. The interference protection  x<rules which we proposed and adopted for digital emissions were premised on those emissions having  xuniform power spectral density, and thus, at any measurement point inside the occupied channel,  xHpresenting a uniform radiated power (EIRP) to which the 45 dB cochannel and 0 dB adjacent channel  U;0 xxinterference protection criteria could be applied. In this way, the licensed EIRP (e.g. 2000 watts) would  U 0 x be uniformly distributed across a 6 MHz channel (e.g. 333 watts/MHz) and no more EIRP would be  xpresent within the measurement resolution bandwidth at the channel center than would be present within  U0 x8the resolution bandwidth offset to a point removed from the center, e.g. within 1 MHz of the edge of the  xchannel. For QPSK and similar emissions this will not be the case. For these emissions there will be,  x0as discussed above, more power near the center of the emission than near its edges. The result of this  x<concentration of power is that the center portion of the emission presents a greater level of potentially  xHinterfering EIRP than do the portions away from the center. For equal EIRP's 64, a QPSK signal will  xhave more interfering power near its channel center than will a uniform emission, such as over a 6 MHz  xchannel QAM, a result which would be contrary to the premises of our interference protection standards  x0especially with regard to subchanneling, which is permitted on uniform spectral density. We therefore  xHcaution applicants and licensees that the transmitter power limits in 47 C.F.R.  21.904 and 74.935 are  xmaximum values which, as applied to digital emissions, are permissible only when those emissions have  xuniform power spectral density. For other emissions, such as QPSK and 4QAM, the maximum  xpermissible EIRP value will be lower, dependant on the actual power spectral distribution of the signal.  xDSpecifically, for nonuniform emissions, the maximum permissible total channel power is that value which  xDresults in a "flat top" power level no greater than the "flat top" power level which would be produced by  xla uniform digital emission using the same channel width. For purposes of measuring "flat top" power  xPlevels for nonuniform emissions within a 6 MHz channel, we will assume the use of a 100 kHz resolution  xHbandwidth in a 6 MHz channel. We have amended Sections 21.904 and 74.935 of our Rules to clarify these power reduction requirements.  S 0` `  b.,Frequency Tolerance  Uy"0 ` /48.` ` Spike and Cisco Systems, Inc. ("Cisco") object to the imposition of a +/ 1 kHz  xfrequency tolerance requirement on MDS and ITFS primary and highpower booster stations which utilize  U$0 xdigital modulations other than VSB.GY$ U{&0ԍ Petitions of Spike and Cisco.G These parties argue that frequency tolerance is not relevant to non xVSB digital modulations because these emissions do not have a carrier frequency, and that imposition of  xsuch a requirement will significantly increase the cost of transmitters at primary and highpower booster"%hYP-3)3)ee%"  xstations because the frequency determining circuitry in these units will require the use of an ovenized  xcrystal oscillator, rather than a simpler and much less expensive temperaturecompensated crystal  xoscillator. Cisco asserts that the required frequency tolerance cannot be justified as a means of facilitating  xfrequencyoffset amelioration of cochannel interference because interference caused by carrierless digital  xdemissions is not amenable to such a remedy. Spike argues that the frequency tolerance requirement  U0 xadopted in the TwoWay Order is inconsistent with our actions in both the Digital Declaratory Ruling and  U0 xthe NPRM in this proceeding, and that "not a single commenter in the proceeding advocated the  x imposition of frequency tolerance standards on nonVSB digital transmissions." Cisco suggests, as an  xalternative to the +/ 1 kHz requirement, that the Commission amend its rules to require a tolerance of  x0.001% for nonVSB digital emissions, arguing that this looser standard will not adversely affect adjacent  xchannel interference protection requirements because all transmitters will still be required to comply with  xthe Commission's spectral mask regulations for digital emissions. Petitioners responded to these parties,  x saying that frequency tolerance is important for all digital emissions and arguing that Spike is incorrect  Um 0 xin its assertion that the +/ 1 kHz requirement was not supported in the comments to the NPRM, pointing  xlout that Petitioners themselves both recommended and supported this requirement consistently in their  U 0 xfilings in connection with the Digital Declaratory Ruling, the NPRM, and the TwoWay Order.AZ  Uq0ԍ Petitioners Opposition.A While  xPsupporting retention of a tolerance requirement, Petitioners also stated that they would not be opposed to  xa relaxation of the requirement "to levels that can be achieved without using ovenized crystal  Ur0oscillators."3[rh U0ԍ Id.3  U 0 ` 049.` ` With few exceptions, the Commission has routinely imposed frequency tolerance  x<requirements on transmitters used in all services, including MDS and ITFS. This requirement has been  ximposed as a means for assuring that the signal from the transmitter will stay within its assigned channel  xor bandwidth and, using frequency offset techniques, as a means for ameliorating some instances of  xcochannel interference between analog stations. Frequency tolerance is specified in terms of the stability  x<of the "carrier" signal generated by the transmitter, and is typically expressed in absolute terms, such as  x<+/ 1 kHz, or in relative terms, such as 0.001%. For emissions which do not involve the transmission  xof a carrier as part of their modulated output, such as the digital emission QAM, the relevance of  x@frequency tolerance is significantly diminished. In this proceeding, the Commission proposed, and  xsubsequently adopted, rules applying the preexisting +/ 1 kHz analog emission tolerance requirement  xto all digital emissions, although lowpower booster stations and all response stations using digital  xemissions were exempted from the requirement, based on their limited potential for causing interference  U0 xwhich might result from a lack of frequency stability.`\o U 0ԍ See 47 C.F.R.  21.101(a) and  74.961(a))` Our rationale for continuing to apply a tolerance  xstandard to digital emissions used at primary and highpower booster stations was that "there is a much  xmore significant potential interference impact and we believe that requiring the emissions from these  U0 x0stations to be held steady within their assigned channels is much more important."T]v U$0ԍ TwoWay Order, 13 FCC Rcd at 19,127.T Upon  xreconsideration, we find that this concern remains valid and should continue to be a basis for imposing  xa tolerance requirement on these stations. However, we agree with Cisco that amending the requirement  xto 0.001% would be appropriate, as this would not increase the potential for interference from these  xstations and would reduce the cost of manufacturing the oscillators used in these transmitters very"C}]P-3)3)eet"  xsignificantly. In absolute terms, a 0.001% tolerance would amount to 26 kHz for a transmitter operating  xon a frequency of 2600 MHz. Within a 6 MHz wide MDS or ITFS channel, a variation of 26 kHz is  xXinsignificant and should have no impact on the interference environment. We are applying this rule amendment to all currentlyapproved digital emissions for MDS and ITFS stations.  S0` `  c.,Other Technical Considerations  U0 ` 150.` ` CTN requests that the Commission reconsider its references in the rules pertaining to  xinterference calculation requirements with respect to use of the terms "free space" and "unobstructed  xxpath." CTN notes, and we agree, that there is an inconsistent use of these terms in the rules adopted in  U0 xthe TwoWay Order and in Appendix D attached thereto. CTN suggests that these terms be replaced by  xthe term "terrain sensitive methodology," which would include both obstructed and unobstructed paths.  x$We agree that this terminology is superior to that now used and we are therefore amending 47 C.F.R.  x| 21.902 and  74.903 accordingly. This will reflect the fact that we have permitted the inclusion of  xterrain factors in interference calculations for MDS and ITFS systems and will continue to do so. When  xprepackaged terrainsensitive software is used in which keys can be set for such factors as ground  xreflection and clutter environment, and/or when pathspecific factors such as ground conductivity or  xhdielectric constant can be entered, this information must be clearly stated within the interference  xcalculation submission attached to the application(s) being filed so that it is available for independent  xTverification. We are also amending our application processing procedures for MDS and ITFS licenses  xto regard changes in antenna elevation pattern, as well as changes in antenna azimuth pattern, as falling  xwithin the meaning of the phrase "in any direction" found in 47 C.F.R.  21.23(c)(1)(vi), 21.42(c)(8),  x0and 74.911(a)(1). This recognizes the valid concern raised by CTN that a modification to the elevation  xpattern of an MDS or ITFS antenna, as a result of electrical (or mechanical) beam tilt or array  xreconfiguration, can be a potential source of interference to neighboring stations even though the pattern of the antenna, as viewed in terms of its horizontal directivity, may not have changed.  U0 ` 251.` ` CTN also requests a clarification of 47 C.F.R.  21.909(o) and 74.939(q) with respect  xto what signal propagation model(s) are permissible for use in connection with Appendix D. CTN argues  xthat Appendix D, which sets out in detail the methodology for calculating interference for response and  xhub stations, and which includes a lengthy discussion of the EpsteinPeterson signal propagation model,  xis ambiguous as to whether propagation models other than EpsteinPeterson may be used for Appendix  xD calculations. CTN states that we "should resolve this ambiguity in a way that does not favor a  Uo0 xparticular model."7^o U0ԍ CTN Petition.7 The specific language which the Commission used in Appendix D was as follows:  x\"When analyzing interference from response stations to other systems and from other systems to response  xstation hubs, a propagation model shall be used that takes into account the effects of terrain and certain  U0 x(other factors."T_h UB!0ԍ TwoWay Order, 13 FCC Rcd at 19,265.T The Commission then went on, at length, to describe the propagation model (i.e.  U0 xDEpsteinPeterson) which is to be used. Responding to concerns paralleling those now raised by CTN, we  x`stated our intention of requiring uniformity in response and hub station interference calculations, saying  x"Nor do we agree that applicants should be free to choose any methodology they wish for making  xinterference calculations, as this would drastically slow the evaluation of applications and almost certainly  xresult in many Petitions to Deny, as licensees and applicants struggled to understand the differing and  U!0 x$potentially incompatible assumptions and calculations incorporated into the various methodologies."D`!o U(0ԍ Id. at 19,140.D "!v`P-3)3)ee!"  xInasmuch as the propagation calculations are an integral and indispensable part of the interference  xcalculation methodology of Appendix D, we reject CTN's contention that there is any ambiguity in our  xposition, and we remain unable to discern any benefit to the flexibility sought by CTN which would offset  xthe increased complexity of requiring applicants and licensees to be conversant with multiple propagation  xcalculation schemes if they wished to be able to review the applications filed by neighboring systems  xwhich could potentially be sources of interference. It should be noted, however, that mandatory use of  xthe EpsteinPeterson model applies only to calculations performed in accordance with the requirements  xof Appendix D, and does not apply to calculations not involving twoway cellularized systems of response  xhand hub stations. Those calculations may continue to be performed using any appropriate terrainsensitive model.  U0 ` ,352.` ` With respect to another portion of Appendix D, which deals with the collection of  xinformation to be submitted at the time of filing of an application, CTN requests modifications of and  Ui 0 xadditions to certain data fields.7ai  U 0ԍ CTN Petition.7 Specifically, CTN asks that fields be added for electrical beam tilt and  x0for the direction (azimuth) of mechanical beam tilt of the station antenna, as well as replacing the term  U 0 x"azimuth of main lobe" with the term "azimuth of main lobe or azimuth of symmetry."3b h Uo0ԍ Id.3 CTN also  xlrequests that the specification of antenna elevation patterns be from 90 degrees to +90 degrees, rather  xhthan from 0 to 359 degrees as now required. We agree that these modifications and additions are justified  xand Appendix D is being amended appropriately. The fields which CTN requests as additions were  x8inadvertently omitted in the drafting of Appendix D and are clearly necessary elements in the specification  xdof antenna characteristics at MDS and ITFS stations. Adding the term "azimuth of symmetry" will  x4account for multilobed symmetrical antennas which do not have a single "azimuth of main lobe."  x0Antenna elevation patterns are typically specified as suggested by CTN, with angles below the horizon  Uk0 x4defined as positive numbers, e.g. a "depression angle of 2 degrees" would be shown as +02. With  xrespect to Appendix D as a whole, CTN requests that the Commission provide sample interference  xcalculations which could be used for future reference for similar calculations necessary in connection with  x<the filing of applications and the evaluation of applications filed by competing parties. We believe this  xhis unnecessary because, although the procedures set out in Appendix D are complex, the complexity stems  xprimarily from the number of calculations which must be undertaken, rather than from any inherent complexity in the calculations themselves.  S0 D.` ` Proposals Specifically Regarding Use of 125 kHz Channels  Uo0 ` 453.` ` In the TwoWay Order, we adopted rules in accordance with the most flexible framework  U>0 xproposed in the NPRM for use of the 125 kHz channels, which included inter alia redesignating these  U 0 xchannels as the I Channels.~c o U"0ԍ 13 FCC Rcd at 19,14346. The I Channels compose the bulk of the 26862690 MHz band.~ On reconsideration, CTN requests that the Commission permit applications  xfor "traditional returnpath use" of I channels to be filed under the streamlined application processing  U0 xrules, as are applications for downstream use of I channels.7ds U&0ԍ CTN Petition.7 We grant this request as consistent with  xour decision to broaden the field of MDS and ITFS applications subject to streamlined processing and"twdP-3)3)ee"  xxspecify that any application to use I channels for upstream transmissions should be filed on FCC Form 331 and included in our new streamlined application processing system.  Ug0 ` 554.` ` In addition, CTN contends that our rules may have the effect of limiting the flexibility  U40 xlavailable to ITFS licensees to provide twoway analog services.3e4 U0ԍ Id.3 CTN explains that for ITFS stations  xchoosing to continue analog operations the I channels offer the only opportunity to provide response  xtransmissions in their networks. CTN argues that allowing I channels to be used either for upstream or  xdownstream transmissions complicates the interference environment for any analog I channel use and the  xability of an ITFS licensee to use an I channel for analog response transmissions may be lost.  xAccordingly, CTN requests that the Commission modify 47 C.F.R.  74.939(l) to make all downstream use of the I channels secondary to upstream use.  U 0 ` 655.` ` In response, Petitioners counter that we should not adopt rules that would reduce  Ui 0 xdownstream operations on the I channels to secondary status.Afi k U0ԍ Petitioners Opposition.A Petitioners contend that adoption of CTN's  xcurrent proposal would frustrate the deployment of downstream use of the I channels because licensees  xwould be reluctant to develop pointtomultipoint facilities if they could be required to cease operations  xat a moment's notice in order to protect a newcomer using I channels for upstream transmissions. The  xresult, Petitioners warn, would be to undermining the "more efficient use of the spectrum" envisioned by  Uj0the TwoWay Order.  U0 ` 756.` ` We disagree with CTN that upstream uses of I channels should be automatically primary  U0 xto pointtomultipoint uses. Contrary to CTN's assertions,7go UF0ԍ CTN Petition.7 we believe that retaining the flexibility that  U0 x\we established in the TwoWay Order for I channels usage actually will enhance the value of the I  xchannels, most of which have lain fallow in an analog environment. In the digital twoway environment,  xwhere channels of varying bandwidth will be utilized, we believe that the I channels will provide valuable  xspectrum to an operator who uses them either for downstream or upstream transmissions. If anything,  xadopting CTN's proposal would undermine the value of the I Channels, because it would detract from the  xcertainty that licensees and operators enjoy in the interference protection rights otherwise safeguarded by  xour rules. MDS and ITFS licensees long have had the ability to initiate response transmissions; we  xhemphasize that those who do so before the initial oneweek window for twoway applications have rights  x4as previous filers. Moreover, ITFS licensees who seek to establish new analog I channels response  x0stations subsequent to our opening of the initial window will have the same timebased rights as other  xcontemporaneous applicants, and also may swap channels with licensees employing digital transmissions,  Uq0or lease to others employing digital transmissions, to assist in avoiding interference conflicts.hqs U"0 xԍ C & W submits that the new rules implementing the regulation of 125 kHz channels are insufficiently  x\clear as to who may be the applicant for use of these frequencies, and requests that the Commission revise  x0these rules to clarify that only the current licensee will be permitted to file for use of these channels. C  xX& W Petition. Section 74.939(j) of the new rules provides that "[t]he 125 kHz channels listed in the  x<following table shall be assigned to the licensees of MDS and ITFS stations . . . in accordance with the  xtable." In addition, Section 21.909(a), 21.949(a) and 74.949(a) of the new rules all specifically refer to  x 74.939(j), which is part of the rule otherwise governing ITFS response stations. While we believe that"'gP-3)3)'"  x4our rules are sufficiently clear, we emphasize here that the licensee of the associated main station as  x delineated in the table in Section 74.939(j), or the licensee with whom the originallyassociated licensee has swapped 125 kHz channels, may apply for use of these frequencies."qhP-3)3)ee"Ԍ S0ԙ E.` ` Issues Primarily Involving ITFS  S0 ` ` 1 . Channel Swapping and Shifting  U40 ` P857.` ` In the TwoWay Order, we amended our rules to permit ITFS licensees to fulfill their  xeducational usage requirements on other channels within the same wireless cable system, regardless of  xwhether these channels are licensed to an MDS or ITFS entity ("channel shifting"), and to allow ITFS  xlicensees to trade some or all of their licensed spectrum for spectrum licensed to MDS entities ("channel  Uj0 xswapping").Wij U 0ԍ TwoWay Order, 13 FCC Rcd at 19,16271.W We found that these approaches would maximize flexibility by greatly assisting operators  xpin assembling the contiguous frequency blocks which are essential to a twoway architecture. While  xpermitting any intraITFS channel swap, we specified that channel shifting and channel swapping would  xHbe available only to licensees utilizing digital transmissions, leasing excess capacity to an operator which utilizes digital transmissions, or swapping channels with a licensee which utilizes digital transmissions.  U8 0 ` 958.` ` Some parties have asked us to permit channel shifting by ITFS licensees that solely utilize  x,analog transmissions and do not lease to an operator employing digital technology, and to permit channel  xHswapping between ITFS and MDS licensees where both licensees only utilize analog transmissions and  U 0 xdo not lease to a lessee that employs digital technology.{j  U0ԍ See Region IV Petition; C & W Petition; UT Television Petition.{ Those parties claim there is no reason to treat  xdigital and analog systems differently in this respect. We agree with these parties and find that permitting  xTsuch channel shifting and channel swapping will further maximize flexibility of the services and thereby  xTbenefit the public. Therefore, we will permit channel shifting and channel swapping among MDS and  xITFS licensees without regard to whether the entities at issue employ digital technology or lease to a lessee using digital technology.  S:0` ` 2. Grandfathering of Excess Capacity Lease Provisions  U0 ` X:59.` ` In the TwoWay Order, we generally grandfathered preexisting ITFS excess capacity lease  xagreements for their duration in order to minimize disruptions to existing relationships caused by the need  Up0 xto comply with our new rules.Wkp& U 0ԍ TwoWay Order, 13 FCC Rcd at 19,18183.W However, this protection did not apply to leases entered into, renewed,  xxor extended after March 31, 1997 because parties to such leases would have had imputed notice of the  xlimpending rule changes following the release of our Public Notice announcing the filing of the petition  U0for rulemaking which initiated this proceeding.lc-  U%0 x ԍ "Pleading Cycle Established for Comments on Petition for Rulemaking to Amend Parts 21 and 74 of  xpthe Commission's Rules to Enhance the Ability of Multipoint Distribution Service and Instructional  U&0 xTelevision Fixed Service Licensees to Engage in Fixed TwoWay Transmissions," Public Notice, RM9060, DA 97637 (rel. March 31, 1997)."lP-3)3)ee"Ԍ U0 ` ԙ;60.` ` CTN states that many excess capacity leases adopted under our former 10year term  xlimitation contain a provision that automatically extends the initial term of the lease to the maximum  xallowed in the event that the Commission permits longer terms, so that some of these leases were extended  Ug0 xpautomatically due to the new 15lyear lease term that we approved in the TwoWay Order.[mg U0ԍ See TwoWay Order, 13 FCC Rcd at 19,18384.[ CTN is  U60 x$concerned that a literal reading of the TwoWay Order would treat these leases as extended after March  xl31, 1997 and require them to be brought into compliance with all of the rule changes governing excess  xcapacity leases, even though they may have been negotiated years before the twoway rules were  U0 xproposed. In the TwoWay Order, we did not intend to force a mass wave of lease renegotiations where  xLthe parties had no notice of the forthcoming twoway rules at the time they entered into the leases.  xBecause many of these leases may have been negotiated prior to March 31, 1997, the trigger date for  x`when we impute parties to have had notice that twoway operations were contemplated for ITFS and  xMDS, such leases should retain grandfathered status in the particular circumstances depicted by CTN.  xExtending the grandfathered status of leases in these circumstances by five additional years allows the  xparties to continue to realize the benefits of the bargains that they originally negotiated at a time when  xhtwoway operations were not factored into the equation, yet ensures that successor leases will comply with  U 0the rules that we adopted in the TwoWay Order within a reasonable time frame.  U 0 ` <61.` ` Petitioners ask that the Commission clarify that a lease that is otherwise grandfathered  x<does not lose that status because it includes a provision under which the lease is renewed automatically  U?0 xafter March 31, 1997.An?k U0ԍ Petitioners Opposition.A Petitioners' request theoretically could yield a result where a lease may avoid  xcompliance with the new rules into perpetuity. Because Petitioners' request thus controverts the intent  U0 x of the TwoWay Order's admonition that leases renewed after March 31, 1997 be brought into compliance  U0with the rules that we adopted in the TwoWay Order, we deny Petitioners' requested clarification.doo U0 x(ԍ In the TwoWay Order, we required that any lease already having been entered into, renewed, or  U0 xtextended after March 31, 1997 be brought into compliance with the rules and policies adopted in the Two U0 xWay Order within 75 days of Federal Register notice of the TwoWay Order. TwoWay Order, 13 FCC  U0 xRcd at 19,182 n.354. Upon further consideration subsequent to our adoption of the TwoWay Order, we  xrealized that this edict could lead to the unduly burdensome result of parties having to revisit their leases  xDtwice, depending on whatever rule and policy changes that we were to adopt here. Balancing the interests  xtof avoiding unnecessarily burdensome mandates while providing a date certain for the compliance of such  U0 xleases with the rules and policies that we adopted in the TwoWay Order, as modified here, we extend  U0 xthe compliance date for any lease falling into this category until 15 days after Federal Register notice of  U0the effectiveness of all of the rules adopted in this proceeding, including those subject to OMB approval.d  SD0` ` 3. Assignment of Excess Capacity Leases  U0 ` =62.` ` BellSouth and other parties have asked us to reconsider our decision not to permit ITFS  xexcesscapacity lease terms that would require assumption of the lease obligations by any license assignee  x,or transferee. CTN, among others, opposes any change arguing that it would create an undue burden on  xlicensees. We agree with CTN that any such lease provisions would place an unreasonable impediment  U0 xon the assignment or transfer of the ITFS facility.lp U3(0ԍ See Central Cass Public School District, 10 FCC Rcd at 3168.l We believe that this rationale applies, because"$pP-3)3)ee0"  xbanning such provisions enhances the ITFS licensee's flexibility in finding a buyer should it decide to sell.  xWe note that we do permit restrictions on excesscapacity leases that would require ITFS licensees who  xare not seeking a buyer, but who simply wish to surrender their licenses, to permit the lessee six months  Ug0to locate an acceptable buyer.Tqg U0ԍ TwoWay Order, 13 FCC Rcd at 19,185.T  S0 F.` ` Booster Stations  S0 ` ` 1. HighPower Booster Operations  U50 ` l>63.` ` Petitioners state that the Commission should amend 47 C.F.R.  21.913(b) and   x74.985(b) of the new rules to eliminate the requirements that only a response station hub licensee,  xconditional licensee or applicant may hold a highpower booster license, and that highpower boosters may  U 0 x`operate only utilizing digital modulation. Petitioners maintain that there is no indication in the TwoWay  Uk 0 x Order that these restrictions were intended and they appear to be contrary to the general theme of licensee  xflexibility. Furthermore, according to Petitioners, there still is a demand for highpower analog booster  U 0 x stations to expand the coverage area of analog downstream video transmission facilities._r k Uv0ԍ Petitioners Petition. See also C & W Petition._ We agree and  xwe amend our Rules to make clear that highpower boosters may utilize digital and/or analog modulation, and that twoway operations are not a prerequisite for licensing a highpower booster.  S;0` ` 2. Treatment of CurrentlyLicensed Boosters  U0 ` $?64.` ` C & W requests that the Commission clarify that it intended that currently licensed booster  x,stations will be able to operate pursuant to the new twoway rules upon their enactment. C & W reasons  x<that to find differently would only result in creating the unnecessary administrative burden of requiring  x booster licensees to refile for their currently authorized stations under the new rules, and may lead to  U 0 x`an inequity to ongoing operations if they result in a mutual interference situation with another station.9s r U0ԍ C & W Petition.9  xPetitioners, on the other hand, ask that the Commission make clear that boosters licensed under the old  x$regime are not entitled to protection within a booster service area (BSA) at this juncture. Instead, they  xpropose that in order to secure a BSA, a booster licensee should be required to submit a notification  xHduring the initial filing window which sets forth the information specified in Sections 21.913(b)(4) (6)  xHor 74.985(b)(2), (3) and (6) of the new rules, relating to highpower boosters, or Sections 21.913(e)(1)  x (3) or 74.985(e)(1) (3) of the new rules, relating to lowpower boosters, as appropriate. Petitioners  U0 xtadd that a BSA delineated during the initial window would not be entitled to protection vis!vis  x(applications proposed during the window, but would be entitled to protection against subsequent  U@0proposals.At@v U#0ԍ Petitioners Opposition.A  U0 ` @65.` ` We generally support C & W's request, except we find some merit in Petitioners' counter xrequest with respect to interference protection rights. Specifically, we agree with Petitioners that  xcurrentlylicensed highpower boosters do not automatically receive BSA protection upon the effective date  xdof the highpower booster interference protection rules, and we concur with Petitioners' proposed"AztP-3)3)eet"  xprocedures for establishing highpower booster BSAs and with their recitation of the relative interference  xprotection rights accorded to such BSAs. We disagree with Petitioners, however, that these same  xprocedures and rights apply to the establishment of lowpower BSAs, because our Rules, both current and  ximpending, entail that notification of the construction of a lowpower booster is not relegated to a filing  xwindow nor subject to our new streamlined application processing procedures. Therefore, any notification  xof the construction of a lowpower booster, that is submitted following the effective date of new   xp21.913(e) and 74.985(e) of our rules, may establish a BSA for the lowpower booster station that is  U0covered by the notification.}u U0 xhԍ Consistent with Petitioners' proposed procedures, licensees of currently operating lowpower boosters  xmay, at any time following the effective date of Sections 21.913(e) and 74.985(e) of the new rules, submit  xnotifications containing the information specified in Sections 21.913(e)(1) (3), (5)(iv) or 74.985(e)(1)  x(3), (5)(iv) of the new rules, as appropriate, in order to establish BSAs for these lowpower boosters.  xlAll lowpower booster BSAs established after the effective date of Sections 21.913(e) and 74.985(e) of  xthe new rules, regardless of whether the underlying stations are currently licensed or are to be newlyinstalled, are entitled to protection relative to subsequently filed applications and subsequent notifications.}  U50 ` A66.` ` While we agree that currentlylicensed highpower boosters may not establish BSAs until  xxthe initial filing window, it does not follow that they are left completely unprotected against subsequent  xapplications, including those filed in the initial window; after all, most still will benefit at least to some  xdegree from the protection accorded the psa or Basic Trading Area ("BTA") in which they are located.  xNevertheless, we anticipate that current licensees of highpower boosters will seek to establish BSAs for  x8these boosters, and the following procedures will apply when they attempt to do so: The booster licensee  x@should submit a notification of establishment of a BSA, on FCC Form 331, to the Commission in  xWashington, DC. The licensee also should submit contemporaneously to the Commission's duplication  xcontractor the information called for in Sections 21.913(b)(4) (6) or 74.985(b)(2), (3) and (6) of the new  Uj0 xrules, as appropriate, along with a copy of the FCC Form 331 submitted to the Commission.v`jx U0 xԍ The materials submitted to the Commission's copy contractor also must include a certification that they  x<were served upon potentially affected parties pursuant to Section 21.913(b)(7) or Section 74.985(b)(7),  xas appropriate, and as if the notifying licensee was filing an application for a new highpower booster station. We  x\further specify that current highpower booster station licensees may seek to secure BSAs for their stations  xeither during the initial filing window or in the subsequent rolling, oneday filing window, and that these  xxsame procedures apply regardless of when the relevant notifications are submitted. Likewise, the same  xrelative interference protection rights attach to newlyestablished BSAs regardless of whether the relevant  xnotifications are submitted during the initial window or the subsequent rolling window, and these rights  xare consistent with Petitioners' pronouncements on them. Finally, we stress that while currently licensed  xhighpower boosters may not have BSAs established until the initial filing window at the earliest, licensees  xof these stations are not responsible for demonstrating anew, during the process of attempting to secure BSAs, interference protection to neighboring stations.  S90` ` 3. Booster Licensees  U0 ` B67.` ` Several partieshw  U&0ԍ See, e.g., Petitions of BellSouth and Petitioners.h have objected to our decision to require that licenses for all downstream  xbooster stations and any associated return paths that employ ITFS licensed channels be held by the ITFS" wP-3)3)ee"  U0 xlicensee.Tx Uh0ԍ TwoWay Order, 13 FCC Rcd at 19,119.T These parties say that it would create greater system flexibility and administrative efficiency  xto permit a single party to hold all booster station licenses throughout a service area. Other parties oppose  xPany change in our decision because to do so would "undermine the educational nature of the ITFS service  Ug0 xand result in a de facto reallocation of spectrum for purely commercial use."9ygk U0ԍ CTN Opposition.9 We believe that we can  xaddress both of these concerns by permitting ITFS excesscapacity lessees to apply for booster stations  xon ITFS frequencies with two conditions: (1) the lessee must obtain the written consent of the main  xstation licensee before applying for such a booster, and (2) the lease must contain provisions that require  xthe lessee to offer to assign the booster licenses to the main station licensee for purely nominal  xconsideration upon termination of the lease. This will enable ITFS excesscapacity lessees to benefit  xfrom the flexibility and efficiencies of having all of the booster licenses for their systems held by a single entity, but not cause ITFS licensees to risk permanently losing part of their licensed spectrum.  S 0~  IV. DIGITAL DECLARATORY RULING Đd  S: 0 A.` ` Introduction   U 0 ` C68.` ` The Commission also has before it petitions for clarification of the MDS and ITFS Digital  U 0 x4Declaratory Ruling. In the Digital Declaratory Ruling, the Commission interpreted its rules and policies  xTto allow the utilization of digital transmissions by MDS and ITFS licensees on a noninterference basis,  xadopting an interim approach to the use of QAM or VSB digital modulation upon application by individual  U 0 xMDS or ITFS entities. Petitions for clarification of the Digital Declaratory Ruling were filed by WCA,  U0 xBellSouth, and NIA. A grouping of wireless cable operators and investors (Commenters)Bzo UN0 x ԍ The Commenters included: Cross Country Wireless, Inc., Pacific Telesis Enterprises, CAI Wireless  xpSystems, Inc. (CAI), CS Wireless Systems, Inc., People's Choice TV Corporation, National Wireless Holdings, Inc., Bell Atlantic Corporation, and NYNEX.B and WCA  xtseparately submitted comments in support of BellSouth's petition. The Foundation filed comments which  xsupport BellSouth's petition and which support in part and oppose in part Commenters' positions. We  xPwill grant those aspects of the petitions and comments related to clarification and expansion of the limited  xtexception with respect to grandfathering of interference within the protected service areas of ITFS stations  xland MDS incumbent stations. However, we refrain at this time from addressing the rights of licensees  xwhen digital operation by them and/or neighboring cochannel licensees forcloses the opportunity to use  x frequency offset techniques to enhance interference protection, and we deny as moot NIA's proposal regarding recapture rights of ITFS licensees.  S0 B.` ` Limited Exception to the Protected Service Area Definition for Modifications  Uw0 ` hD69.` ` Paragraphs 23 and 24 of the Digital Declaratory Ruling describe a limited exception to  xthe 56.33 km (35 mile) psas of MDS "incumbent" stations, and apply this exception to modification  U0 xhapplications of MDS incumbents and "ITFS incumbents" seeking use of digital technology.{# U:&0 xHԍ "Incumbent" stations are those authorized or proposed on or before September 18, 1995, and are entitled as of that date to protected service areas of 35 miles. This limited  U0 xexception was initially set out in the Second Wireless Cable Reconsideration Order, where we expanded" {P-3)3)ee"  xTthe psa of MDS stations. Pursuant to the limited exception, a modifying applicant can secure a waiver  xof the 35 mile psa definition and maintain "grandfathered" interference where six conditions are met: (1)  xDthe modification application is filed after the effective date (September 18, 1995) of the expanded 35 mile  x$psa; (2) the station being modified was authorized or proposed on or before the effective date of the  U40 xexpanded psa; (3) the station being interfered with (the desired station)|4 U0 xTԍ We hereinafter refer to the station seeking to modify its own parameters as the "undesired station," and to the station potentially affected by these proposed modifications as the "desired station." was authorized or proposed on  xor before the effective date of the expanded psa; (4) the predicted interference does not occur within the  xxformer 710 square mile psa of the desired station; (5) the modification does not increase the size of the  x0area suffering harmful interference; and (6) the modification does not result in any new interference to  Uh0 xthe desired station's psa.s}h@ U 0ԍ Second Wireless Cable Reconsideration Order, 10 FCC Rcd at 708384.s In describing this limited exception in paragraph 23 of the Digital Declaratory  U70 xRuling, we stated that "there would be situations in which two expanded service areas would overlap.  x(Accordingly, we adopted a limited exception to the 35 mile psa definition to govern modification applications of MDS incumbents, where two psas overlap."  Um 0 ` E70.` ` As urged by petitioning parties, we clarify that the psa overlap stipulation in paragraph  U: 0 x(23 of the Digital Declaratory Ruling was intended merely as an example of a situation where waivers  xpursuant to the limited exception would be granted. We also are persuaded that we may expand the  U 0 x|exception, for any modification not resulting in any new interference to the desired station's psa nor  xincreasing the size of the area suffering harmful interference to effectively nullify the fourth condition of  x@the exception and allow preexisting interference even within the former 710 square mile psa which  U?0 xpertained prior to September 18, 1995.~?G U0 xԍ For a station using an omnidirectional antenna, the former protected service area was a 24.1 km (15 mile) radius from the protected station's transmitter site. Petitioning parties and the Commenters argue that this  x extension is important because without it licensees would face business or operational impediments when  xDseeking to implement digital operations or to make changes to digital systems that do not have an adverse  U0 ximpact on the existing interference environment.# U0 xԍ See Engineering Statement of T. Lauriston Hardin, P.E. in Support of Petition for Clarification of BellSouth Wireless Cable, Inc., at 2.; Commenters Comments at 5. Staking its position on the implicit or explicit  xhagreement of the nonmodifying licensee to accept interference from a previously proposed station, WCA  x`adds that "[a]s a matter of course," the Commission's staff has authorized subsequent modifications to  xlpreviously proposed stations even if the modifications do not eliminate the interference within the pre xexpansion psa or at registered ITFS receive sites, so long as the modifications did not increase  U0 x`interference.E  U"0ԍ WCA Comments at 2 n.5, 34.E In establishing the fourth condition of the exception, we were primarily concerned that  x"[n]o modification will be allowed which would cause existing stations to adapt to additional  UA0 xinterference."pA  UK&0ԍ Second Wireless Cable Reconsideration Order, 10 FCC Rcd at 7084.p As discussed in the Second Wireless Cable Reconsideration Order, the limited exception  x@set out there was designed to be similar to the approach which the Commission utilized in 1984 in"! P-3)3)eex"  xPadopting the former 710 square mile psa: that "it would not be useful to disturb existing situations" where  U0MDS operators had adapted to interference.<A U50 x|ԍ Amendment of Parts 21, 74 and 94 of the Commission's Rules and Regulations with regard to the  x technical requirements applicable to the Multipoint Distribution Service, the Instructional Fixed Television  U0 xXService and the Private OperationalFixed Microwave Service (OFS), 98 FCC 2d 68, 111 (1984)  U0 x(hereinafter MDS Technical Order); see Second Wireless Cable Reconsideration Order, 10 FCC Rcd at 7084.<  Ug0 ` XF71.` ` Like the Commenters, the Foundation seeks to expand the exception further, albeit in a  xdifferent way, to include applications for digital emission designators where the modifying station or the  U0 xldesired station was proposed after the effective date of the expanded psa. The Foundation particularly  x`discusses ITFS circumstances which, it argues, warrant expansion of the exception. Now that we have  xgranted all ITFS licensees psas, expanding the exception per the Foundation's request brings the policies  xLand procedures for ITFS stations into conformance with those for incumbent stations with similar  xinterference protection requirements, thus enhancing the compatibility for wireless cable operators who  U0 x use ITFS and MDS channels.h U0ԍ See Digital Declaratory Ruling, 11 FCC Rcd at 18,85354.h Furthermore, as discussed above, the exception is designed primarily  xto at least maintain the interference status quo, so retaining the safeguards against interference in new  xareas will ensure that the modification does not harm the desired station, no matter when the modifying  x`station or the desired station was originally proposed. We believe that these rationales apply regardless  xof whether or not the proposed modification is for digital transmissions. Therefore, we further extend  U 0 xPthe exception in the manner prompted by the Foundation, but as it relates to any modification application, not merely digital modification applications.  Un0 ` G72.` ` Thus, the limited exception set out in paragraphs 2425 of the Second Wireless Cable  U=0 xReconsideration Order and paragraphs 2324 of the Digital Declaratory Ruling is modified accordingly,  xTto permit any MDS or ITFS station modification predicted to cause interference to any portion of the  U0 xdesired station's 35 mile psa, or to any of its receive sites that are registered previously,f U0 xԍ Just as we also applied this exception to ITFS incumbent licensees in the Digital Declaratory Ruling,  xspecifically grandfathering existing interference to ITFS receive sites will further our goal of enhancing  xPthe compatibility of ITFS and MDS policies and procedures for wireless cable operators which use ITFS  U@0and MDS channels. See Digital Declaratory Ruling, 11 FCC Rcd at 18,85354. no matter  xwhen the modifying station or the desired station was originally proposed, so long as such station  x,modification is filed after the effective date of the expanded psa and adheres to the stricture that it would  xcause no new interference to the desired station. We further clarify, on our own motion, that the  xexception also applies to grandfathered adjacent channel interference, defined with respect to the predicted  U0 x\0 dB desiredtoundesired (D/U) signal ratio contour line, even though the Second Wireless Cable  U0 xhReconsideration Order only makes explicit reference to the cochannel 45 dB D/U standard.wj  U$0ԍ See Second Wireless Cable Reconsideration Order, 10 FCC Rcd at 708384.w We""qP-3)3)ee"  xreiterate that the limited exception applies only to interference already existing between the modifying  U0station and desired station as to each other. U50 x4ԍ See id. at 7084; see also MDS Technical Order, 98 FCC 2d at 11213. In its petition for  U0 xreconsideration and clarification of the TwoWay Order, C & W asserts that clarification is needed  xregarding how grandfathered interference rights of incumbent stations relate to the filing of twoway  xapplications. C & W notes the limited exception described above, and requests that the Commission  x declare that this exception will apply to interference analyses submitted by response station hub applicants  xLregarding upstream transmissions from response stations. C & W Petition at 8. We agree that this  xexception applies with respect to upstream transmissions, where all of the criteria from the exception, as clarified above, are met.  Si0 C.` ` Rights of Licensees Where Digital Operation Affects Use of Frequency Offset  U0 ` H73.` ` Frequency offset is an interference amelioration technique in which the carrier frequencies  xof two cochannel signals are adjusted so that they are not identical, thus reducing the potential for  x$interference to either signal caused by the other. Frequency offset techniques are generally of no utility  Uj0 x0in reducing interference caused by a station employing digital modulation,pjV U0ԍ See Digital Declaratory Ruling, 11 FCC Rcd at 18,856 n.53.p though we expressed our  U70 xbelief in the Digital Declaratory Ruling that there may be some utility in frequency offset operation  xinvolving "pilot" carriers in VSB digital transmissions to prevent interference to analog stations on lower  U0adjacent channels.>]  U40ԍ Id. at 18,859.>  Um 0  I74. Petitioning parties argue that a station using frequency offset which seeks to convert to digital  xmodulation should only be required to seek consent from the other offset station when there is a written,  x binding and bilateral agreement between the two stations to employ frequency offset. They state that  xxcurrently, such an agreement is required prior to the grant of an application that fails to meet the 45 dB  U 0 xD/U standard with respect to another station.L d  U 0ԍ See BellSouth Petition at 6.L Petitioning parties add that because the parties voluntarily  x4surrendered their rights in the agreement, only in this instance, pursuant to the agreement, is there a  xrational basis for allowing a licensee or applicant to bar another station from converting to digital  U0 xmodulation.?k Uw 0ԍ See id. at 78.? Petitioning parties specify two scenarios where the desired offset station should not be able  x$to bar the digital modification of the applicant station, because, they claim, the subsequently proposed  xdesired station in effect accepted whatever cochannel interference it might receive from the other  Uo0 xxstation.?or U$0ԍ See id. at 67.? In the first scenario, ITFS stations were authorized based upon interference protection ratios"o#yP-3)3)ee"  xas low as 28 dB, coupled with the applicant's unilateral representation that it would use frequency  U0 xoffset. Uh0 xԍ Petitioning parties maintain that MDS proposals to utilize frequency offset in lieu of satisfying the 45 dB D/U standard were not granted in the past. Petitioning parties contend that in this instance, the stations were authorized on an offset basis  U0 x,to protect the reception of the offset incumbent stations. In the second scenario, MDS and ITFS stations  Ug0 xunilaterally proposed offset in order to protect their own reception.Pgs U0 xԍ Regarding this scenario, WCA reiterates that unilateral assertion does not entitle the newcomer to any  xdadditional rights under the rules, as the neighboring station was under no obligation to maintain the frequency offset absent an agreement between the parties.P Conversely, WCA additionally  xtargues that the ITFS relative newcomer who seeks to convert to digital modulation must either protect the  x(previously proposed offset station at the 45 dB D/U level, or obtain the consent of the previously proposed  xstation's licensee in order to modify. The Foundation concludes that without Commission acceptance of  xthe agreementonly bar to a previously proposed station's digital modification application, "it will be  Uh0impossible to implement digital service in many major metropolitan areas."Ch' U0ԍ Foundation Comments at 3.C  U0 ` |J75.` ` Very few of the Commission's rules governing the MDS and ITFS services deal directly  xwith utilization of frequency offset techniques. Those that do primarily concern situations where one  xplicensee seeks to have the Commission involuntarily impose frequency offset operations on another  Ui 0 xcochannel licensee in order to avoid or minimize interference.ri + U0ԍ See, e.g., 47 C.F.R.  21.905(c), 21.939(a), and 74.961(c).r Thus, the treatment of frequency offset  xPin MDS and ITFS has been largely a matter of pronouncements in rulemaking proceedings and cases, and  x0has undergone several changes. At first blush, clarification of the relative rights of the parties using the  xtechniques may seem appropriate. However, apparently belying the ardor with which petitioning parties  U 0 xpsought such a clarification, in the nearly three years since the period for filing petitions on the Digital  Ul0 xDeclaratory Ruling expired, we have not been made aware of any actual offsetbased conflicts which have  xTprecluded any licensee's efforts to modify its station for digital operations. Because of our experience,  xwe believe that delineating here a solution to a problem that we have not found to hamper the industry  xwould not be the prudent course at this juncture. Nonetheless, should this issue make or break a  xlicensee's attempt to convert to digital transmissions in a market, we are prepared fully to analyze the  xmerits on an individualcase basis. Notwithstanding our caution in addressing alleged past offsetbased  xconflicts, we specify that all future offset arrangements are to be governed by binding agreements between  xthe parties, unless the Commission explicitly grants a waiver or imposes involuntary frequency offset  U0 xoperations on a licensee.i2  U !0 xԍ See Amendment of Parts 21 and 74 of the Commission's Rules With Regard to Filing Procedures in  xthe Multipoint Distribution Service and in the Instructional Television Fixed Service and Implementation  U"0 x8of Section 309(j) of the Communications Act Competitive Bidding, Report and Order, 10 FCC Rcd 9589,  U#09719 (1995); Canistota Public Schools, 10 FCC Rcd 13,649, 13,650 (1995). However, given the anticipated digital future of MDS and ITFS, requests for  xwaiver of interference standards through use of offset techniques for analog transmissions will be viewed  Up0 xwith the utmost scrutiny. Likewise, in the spirit of the Second Wireless Cable Reconsideration Order,`p U;'0ԍ Second Wireless Cable Order, 10 FCC Rcd at 7093.`  xwhile we will continue to evaluate involuntary frequency offset proposals on a casebycase basis, we will"?$P-3)3)ee"  U0 xentertain such proposals only in the most compelling of circumstances.M Uh0ԍ Cf. Canistota Public Schools.M Finally, we stated in the Digital  U0 xDeclaratory Ruling, as an interim measure subject to the outcome of a future rulemaking proceeding, that  xwe will not mandate a particular frequency offset or tolerance for the pilot carrier stations utilizing VSB digital modulation.  S0 D.` ` ITFS Recapture Rights  U0 ` K76.` ` In the Digital Declaratory Ruling, we declined to impose any changes in ITFS educational  Un0 xusage requirements and deferred consideration to a future rulemaking.bnk U 0ԍ Digital Declaratory Ruling, 11 FCC Rcd at 18,873. b NIA filed a petition seeking  U;0 xreconsideration of this decision. In the TwoWay Order, we thoroughly reevaluated our ITFS educational  U 0 x usage requirements.b r U0ԍ See TwoWay Order, 13 FCC Rcd at 19,15262. b In light of our decisions in the TwoWay Order, we need not address the  U0arguments advanced by NIA in its petition for reconsideration of the Digital Declaratory Ruling.fy UV0 xԍ In the NPRM, the Commission also rejected an assumption, expressed by one of the parties  U10 xDcommenting on the March 31 Public Notice, that any rules adopted in the twoway transmissions  xproceeding would not foreclose consideration of a separate petition filed by NIA regarding ITFS  U0educational usage requirements. 12 FCC Rcd at 22,204 n.60.  Su 0  V. OTHER RELATED PLEADINGS d  U 0 ` PL77.` ` Shortly after release of the Digital Declaratory Ruling, the Mass Media Bureau released  U 0 x|a Public Notice interpreting the Digital Declaratory Ruling to allow MDS and leased ITFS frequencies  x authorized for digital transmissions to carry pointtomultipoint data transmissions without any additional  xauthorization by or notification to the Commission. However, the Bureau specified at the time that the  UG0 xDigital Declaratory Ruling did not contemplate use of such frequencies for upstream digital data  U0 xtransmissions.D  U%0 xԍ "The Mass Media Bureau Implements Policy for Provision of Internet Service on MDS and Leased  U0 xdITFS Frequencies," Public Notice, 11 FCC Rcd 22,419 (Mass Med. Bur. 1996) (hereinafter October 17  U0Public Notice).D On November 18, 1996, CAI filed an application for review of the October 17 Public  U0 xNotice, requesting that the Commission clarify that "wireless cable operators retain the flexibility to  U0 xprovide twoway voice, data and video services"K U}"0ԍ CAI Application for Review at 6. K so that MDS and leased ITFS frequencies may be used  xto provide those services on a permanent basis, without entailing costly and timeconsuming waivers. In  UN0 xlight of our actions in the TwoWay Order, we find that CAI's application for review is moot, and we dismiss it.  S0  VI. PROCEDURAL MATTERS AND ORDERING CLAUSES "%P-3)3)ee"Ԍ U0 ` ddM78.` ` Accordingly, IT IS ORDERED that the abovereferenced petitions for reconsideration  U0 xand/or clarification of the Order ARE GRANTED IN PART AND DENIED IN PART, as described above.  U60 ` N79.` ` IT IS FURTHER ORDERED that the abovereferenced petitions for clarification of the  U0 xtDigital Declaratory Ruling ARE GRANTED IN PART AND DENIED IN PART, and that the  R0 x`Declaratory Ruling on the Use of Digital Modulation by Multipoint Distribution Service and Instructional  U0 xTelevision Fixed Service Stations IS MODIFIED AND CLARIFIED to the extent specified above. These  Un0modifications and clarifications shall be effective upon the release of this order.\n U0ԍ See 47 C.F.R.  1.4(b)(2) and 1.103. \  U0 ` O80.` ` IT IS FURTHER ORDERED that the application for review of the October 17 Public  U0Notice, filed November 18, 1996 by CAI Wireless Systems, Inc., IS DISMISSED AS MOOT.  Us 0 ` lP81.` ` IT IS FURTHER ORDERED that, pursuant to the authority contained in Sections 4(i) and  x(j), 301, 303(f), 303(g), 303(h), 303(j), 303(r), 308(b), 403, and 405 of the Communications Act of 1934,  xas amended, 47 U.S.C.  154(i), 154(j), 301, 303(f), 303(g), 303(h), 303(j), 303(r), 308(b), 403, and  U 0 xT405, this Report and Order on Reconsideration IS ADOPTED, the Order IS MODIFIED AND  xCLARIFIED to the extent specified above, and Parts 21, 74, and 101 of the Commission's Rules, 47 C.F.R.  21, 74, and 101, ARE AMENDED as set forth in the attached Appendix C.  U0 ` Q82.` ` The action contained herein has been analyzed with respect to the Paperwork Reduction  xAct of 1995 and found to impose new or modified reporting and recordkeeping requirements or burdens  xon the public. Implementation of these new or modified reporting and recordkeeping requirements will  xbe subject to approval by the Office of Management and Budget (OMB) as prescribed by the Act. The  UD0 xnew or modified paperwork requirements contained in this Report and Order on Reconsideration (which  xare subject to approval by OMB) will go into effect upon OMB approval. However, IT IS FURTHER  xORDERED that the rule amendments set forth in Appendix C not pertaining to new or modified reporting  xor recordkeeping requirements WILL BECOME EFFECTIVE 60 days after their publication in the Federal Register.  U0 ` <R83.` ` As required by Section 604 of the Regulatory Flexibility Act, 5 U.S.C.  604, the  xCommission has prepared a Supplemental Final Regulatory Flexibility Analysis of the possible impact on  U0 xsmall entities of the rules and policies adopted in this document. See Appendix B. IT IS FURTHER  x<ORDERED that the Commission's Office of Public Affairs, Reference Operations Division, SHALL  UJ0 x|SEND a copy of this Report and Order on Reconsideration, including the Supplemental Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. ` `  ,hh^FEDERAL COMMUNICATIONS COMMISSION ` `  ,hh^Magalie Romn Salas ` `  ,hh^Secretary