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À ?        ? ? ?      ?    8?       ? ? ~  ?  ? ?  ? ?  ?    ?  ? ??  ?   ?   ? ??  ?   ?  ? ? ? ? ? ? ? ? ?  ? ?   ?   ?   ?  ?  ? ?? ? ? ??? ~?   ? ? ? ?? ? ??  ? ? ??  ?  ?  ?À? ? ?? ?? ?? ? ? ? ?? ?? ??? ? ?? ?? ? ? ?? ? ?? ??  ??  ???  ?  ?  ? ?? ??  ?  ?  >?  ?  ?? - ?: 9 4ǀ? ?4 4 4? 4 4 4 4 5? 5 4 ?4 ?4 5 5 5 ?1? ?1 ?1 ?1 ?0 1x 1 / /? ?/π / / / .? ??.? ?. <. - - - --,,?,,-?----?+?* ??* ?+,>,,,?,?,?,--.?.?.?.%?À%%%%%%?%%?%?%?%&&'''?'?'?''?'())))x)?)?)?))*+++ǀX? π? ? ??? ##?&#&#? %#0%#x?%#?x%#?|%#?%#?%#?%#?%#%#%#%# ?%# $# ?$#?$# $# ?$# $#$#$#$#$#$#$#$###??####?##?##?#$ ?#$'$?'$'*'*'+'++XC yO')C S' #&a\  P6G;/&P# Federal Communications Commission`(#jFCC 9782 ă   yxdddy ) O'tl#X}xP7mXP##&sxP7j[&P#PAGE ؃1Њ vfBefore the ă sA= #X~pmXp# #\  P6G;?P#Federal Communications Commission#Xj\  P6G; ߊXP#у FWashington, D.C.  X4  In the Matter of) )  X4 Rulemaking To Amend Parts 1, 2, 21, and 25)ppCC Docket No. 92297  X4Of the Commission's Rules to Redesignate)pp  Xt4The 27.529.5 GHz Frequency Band, To)pp Reallocate the 29.530.0 GHz Frequency)   Band, To Establish Rules and Policies for) Local Multipoint Distribution Service) And for Fixed Satellite Services) ) Petitions for Reconsideration of the) Denial of Applications for Waiver of the) Commission's Common Carrier Pointto) Point Microwave Radio Service Rules) )  Xw4Suite 12 Group Petition for)ppPP22 Pioneer Preference)  nAP  # R\  P6G; RP#Second Report and Order, l Order on Reconsideration, and  neA  Fifth Notice of Proposed Rulemaking # Xj\  P6G; ߊXP#у Adopted: March 11, 1997 Released: March 13, 1997  X. 'X` hp x (#%'0*,.8135@8:4x((fxoxxxxxxxppxx` ` x Incumbents and Public Interest (# p`"(#PARA-7E63׃  X'4((foxppe.` ` Incumbent Accommodation Alternatives (#` p`"(#PARA-7F69׃  X4((foxpp` ` (1) CoExistence with LMDS (# p`"(#PARA-7F69׃  X4((foxpp` ` (2) Relocation to 23 GHz Band (# p`"(#PARA-7G72׃  X4((foxpp` ` (3) Proposed BandSharing Plans (# p`"(#PARA-7H74׃  X!4((foxppf.` ` Spectrum Sharing Plan (#` p`"(#PARA-7I79׃  Xo#4((foxpp` ` (1) Segmentation (# p`"(#PARA-7J80׃  XX$4((foxpp` ` (2) LMDS Use and Protection (# p`"(#PARA-7K85׃"X$0*&&::""Ԍ X4((foxpp` ` (3) Incumbent Licensee Use and Protection (# p`"(#PARA-7L88׃  X4((foxpp` ` (4) Relocation and Modification Procedures (# p`"(#PARA-7M91׃  X4((foxpp` ` (5) Applications for New Authorizations and for(#  X4((foxpp` `  P P  @ @ Modifications or Renewals of Existing Licensesp`"(#PARA-7N94׃  X4x((fxoxxxxxxxppxx` ` (6)h Rules (# p!(#PARA-7O104׃  Xv4((foxppg.` ` Application of NEPA (#` p!(#PARA-7P106׃  XH4((fohxB.Licensing of Spectrum (#p!(#PARA-8116׃  X 4x((foxh1.ppNumber of Licenses per Geographic Area (#p!(#PARA-8116׃  X 4((foxppa.` ` Background; Commentsp!(#PARA-8116׃  X 4((foxppb.` ` Decision p!(#PARA-9125׃  X 4((fox2.ppSize of Geographic Service Areas p!(#PARA-10132׃  Xy4((foxppa.` ` Background; Comments p!(#PARA-10132׃  Xb4x((foxhppb.` ` Decision (#p!(#PARA-11135׃  X44((fox3.ppSpectrum Disaggregation and Geographic Partitioning p!(#PARA-12140׃  X4((foxppa.` ` Background; Comments p!(#PARA-12140׃  X4((foxppb.` ` Decision p!(#PARA-13144׃  X4((fox4.ppEligibility (#pp!(#PARA-14146׃  X4((foxppa.` ` Background p!(#PARA-14146׃  Xe4((foxpp` ` (1) NPRMs p!(#PARA-14146׃  XN4((foxpp` ` (2) Comments p!(#PARA-15152׃  X 4((foxppb.` ` Decision p!(#PARA-16157׃  X4((foxpp` ` (1) Basis for Eligibility Restrictionsp!(#PARA-16157׃  X4((foxpp` ` (2) Effects of LEC and Cable Company Eligibility on  X 4x((fxoxxxxxxxppxx` ` x xP P x x@ @ Competition: 1,150 Megahertz Licenses (#@ p!(#PARA-17162׃  X"4((foxpp` `  P P  (a) Market Structure for Local Exchange Telephony and                               MVPD p!(#PARA-18163׃  X#4((foxpp` `  P P  (b) LMDS As a Source of Competition p!(#PARA-19170׃  Xh$4((foxpp` `  P P  (c) Usefulness of ShortTerm Eligibility Restrictions p!(#PARA-20176׃"h$0*&&::""Ԍ X4ԙ((foxpp` ` (3) Effects of LEC and Cable Company Eligibility on  X4x((fxoxxxxxxxppxx` ` x xP P x x@ @ Competition: 150 Megahertz Licenses (#@ p!(# PARA-21182׃  X4((foxpp` ` (4) Effects of CMRS and MMDS Eligibility on Competition p!(#PARA-22183׃  X4((foxppc.` ` Eligibility Rules.p!(#PARA-23185׃  Xv4x((fxoxxxxx5.ppFlexible Service and Framework for Licensing (#pp!(#PARA-24200׃  XH4((foxppa.` ` Scope of Services (#` p!(#PARA-24200׃  X 4((foxpp` ` (1) Background; Comments(# p!(#PARA-24200׃  X 4((foxpp` ` (2) Decision(# p!(#PARA-25205׃  X 4((foxpp` `  P P  (a)0 0 Flexible Service Definition(#0 p!(#PARA-25205׃  X 4((foxpp` `  P P  (b)0 0 Telecommunications Services(#0 p!(#PARA-26210׃  X 4((foxpp` `  P P  (c)0 0 Video Programming Distribution and (#0  X4((foxpp` `  P P  @ @  0 0 x Other NonCommon Carrier Services(# p!(#PARA-27213׃  Xb4((foxppb.` ` Regulatory Framework for Licensing LMDS(#` p!(#PARA-28218׃  X44((foxpp` ` (1) Background; Comments(# p!(#PARA-28218׃  X4((foxpp` ` (2) Decision(# p!(#PARA-29221׃  X4((fox6.ppApplication and Operating Rules and Procedures for LMDS(#pp!(#PARA-30228׃  X4((foxppa.` ` Background; Decision(#` p!(#PARA-30228׃  X4((foxppb.` ` Application Forms(#` p!(#PARA-31231׃  X4((foxppc.` ` Public Notice(#` p!(#PARA-32236׃  X|4((foxppd.` ` Foreign Ownership Restrictions(#` p!(#PARA-33240׃  Xe4((foxppe.` ` Initial Applications(#` p!(#PARA-34244׃  XN4((foxppf.` ` Changing Regulatory Status(#` p!(#PARA-35245׃  X 4((foxpp` ` (1) Amendments to Pending Applications(# p!(#PARA-36246׃  X 4((foxpp` ` (2) Modification Applications(# p!(#PARA-37248׃  X4((foxppg.` ` Discontinuance, Reduction, or Impairment of Service(#` p!(#PARA-38252׃  X 4((foxpph.` ` Fees(#` p!(#PARA-39256׃  X!4((foxppi.` ` Equal Employment Opportunity(#` p!(#PARA-40258׃  X"4((foxppj.` ` License Terms(#` p!(#PARA-41259׃  X#4((foxppk.` ` Renewal Expectancy(#` p!(#PARA-42260׃  Xh$4((foxppl.` ` Construction Requirements(#` p!(#PARA-43263׃"h$0*&&::""Ԍ((fox  X4((foxpp` ` (1)h Background; Comments(# p!(#PARA-43263׃  X4((foxpp` ` (2)h Decision(# p!(#PARA-44266׃  X4  X4((foxC.Technical Rules and Requirements.p!(#PARA-45273׃ ((foxpp  Xv4((fox1.ppFrequency Coordination p!(#PARA-45273׃  XH4((foxppa.` ` Background; Comments p!(#PARA-45273׃  X14((foxppb.` ` Decision p!(#PARA-46277׃  X 4((fox2.ppPolarization p!(#PARA-47282׃  X 4((foxppa.` ` Background; Comments p!(#PARA-47282׃  X 4((foxppb.` ` Decision p!(#PARA-48284׃  X4((fox3.ppEquivalent Isotropically Radiated Power p!(#PARA-49285׃  Xb4((foxppa.` ` Background; Comments p!(#PARA-49285׃  XK4((foxppb.` ` Decision p!(#PARA-50289׃  X4((fox4.ppRF Emissions p!(#PARA-51292׃ ((foxpp  X4((fox5.ppSpectral Efficiency p!(#PARA-52297׃  X4((foxppa.` ` Background; Comments p!(#PARA-52297׃  X4((foxppb.` ` Decision p!(#PARA-53301׃  X|4((foxD.Competitive Bidding Rules and Procedures p!(#PARA-54302׃  XN4((fox1.ppUse of Competitive Bidding p!(#PARA-54302׃  X 4((fohxhppa.` ` Background; Comments (#p!(#PARA-54302׃  X 4((foxppb.` ` Decision p!(#PARA-55304׃  X4((fox2.ppCompetitive Bidding Issues p!(#PARA-56307׃  X!4((foxppa.` ` Competitive Bidding Design for LMDS Licenses p!(#PARA-56307׃  X#4((foxpp` ` (1) Background; Comments p!(#PARA-56307׃  Xh$4((foxpp` ` (2) Decision p!(#PARA-57309׃"h$0*&&::""Ԍ X4ԙ((foxppb.` ` LMDS Bidding Procedures p!(#PARA-58311׃ ((foxpp  X4((foxpp` ` (1) Bid Increments and Tie Bids p!(#PARA-59312׃  X4((foxpp` ` (2) Stopping Rules p!(#PARA-60315׃  X4((foxpp` ` (3) Duration of Bidding Rounds (#p!(#PARA-61317׃  X4((foxpp` ` (4) Bid Withdrawals p!(#PARA-62318׃  Xv4((foxpp` ` (5)8 Activity Rules (# p!(#PARA-63319׃  XH4((foxppc.` ` Procedural and Payment Issues p!(#PARA-64327׃  X 4((foxHpp` ` (1) Upfront Payments (#p!(#PARA-65328׃  X 4((foxXpp` ` (2) Down Payments, LongForm Applications, and Payment in Full (# p!(#PARA-66331׃  X 4((foxpp` ` (3) Bid Withdrawal, Default, and Disqualification Paymentsp!(#PARA-67333׃  X 4((foxppd.` ` Regulatory Safeguards (#p!(#PARA-68337׃ ((fo  X4((foxpp` ` (1) Transfer Disclosure (#` p!(#PARA-68337׃  Xy4((foxpp` ` (2) AntiCollusion Rules (#p!(#PARA-69338׃  XK4((fohxppe.` ` Treatment of Designated Entities (#p!(#PARA-70340׃  X4((foxHpp` ` (1) Overview (#p!(#PARA-70340׃  X4((foxXpp` ` (2) Installment Payments, Upfront Payments, Down(#  X4x((fxoxxxxxxxppxx` ` x xP P x x@ @ Payments, and Unjust Enrichment (#@ p!(#PARA-71344׃  X4((foxXpp` ` (3) Bidding Credits and Unjust Enrichment (#p!(#PARA-72355׃  X4((foxXpp` ` (4) Rural Telephone Companies (#p!(#PARA-73362׃  X4((foxE.Preemption p!(#PARA-74364׃  Xe4x((fox1.HppBackground; Comments(#pp!(#PARA-74364׃  XN4x((fxox2.ppDecision (#pp!(#PARA-75370׃  X 4((foxppa.` ` NonCommon Carrier Services and Video Programming p!(#PARA-76374׃  X4((foxpp` ` (1) General Standards p!(#PARA-76374׃  X4((foxpp` ` (2) OvertheAir Reception Devices for Video Programming p!(#PARA-77376׃ ((foxpp` `  P P  @ @  0 0   X!4((foxppb.` ` Common Carrier Services and Telecommunications Services p!(#PARA-78378׃ ((fox  X#4((foxpp` ` (1) General Standards p!(#PARA-78378׃  Xh$4((foxpp` ` (2) Personal Wireless Service Facilities p!(#PARA-79381׃"h$0*&&::""Ԍ X4ԙIII.hxORDER ON RECONSIDERATION OF WAIVER(#  X4x((fxoxxxAPPLICATION DENIALS (#p!(#PARA-80383׃  X4((foxA.Background; Pleadings p!(#PARA-80383׃  X4((foxB.Decision p!(#PARA-81388׃  Xv4((fox1.ppEffect on Assigned Users (#pp!(#PARA-82391׃  X_4((fox2.ppEvaluation of Public Interest Arguments (#pp!(#PARA-83397׃  XH4((fox3.ppClaims Regarding Nature of Services and Types of Applicants (#pp!(#PARA-84402׃  X 4IV.hxFIFTH NOTICE OF PROPOSED RULEMAKING (#p!(#PARA-85407׃  X 4x((fxoxxA.hIntroduction (#p!(#PARA-85407׃  X 4x((fxoxxB.hDiscussion (#p!(#PARA-86410׃  X 4x((fxoxxxxx1.ppIn General (#pp!(#PARA-86410׃  X4x((fxoxxxxx2.ppAvailable License Area (#pp!(#PARA-87412׃  Xy4x((fxoxxxxx3.ppMinimum or Maximum Disaggregation Standards (#pp!(#PARA-88414׃  Xb4x((fxoxxxxx4.ppCombined Partitioning and Disaggregation (#pp!(#PARA-89415׃  XK4x((fxoxxxxx5.ppConstruction Requirements (#pp!(#PARA-90416׃  X44x((fxoxxxxx6.ppLicense Term (#pp!(#PARA-91418׃  X4x((fxoxxxxx7.ppCompetitive Bidding Issues (#pp!(#PARA-92420׃  X4x((fxoxxxxx8.ppLicensing Issues (#pp!(#PARA-93423׃  X4V.hxPROCEDURAL MATTERS (#p!(#PARA-96425׃  X4x((fxoxxA.hRegulatory Flexibility Analyses (#p!(#PARA-96425׃  X4x((fxoxxB.hPaperwork Reduction Analyses (#p!(#PARA-427X428׃  X|4x((fxoxxC.hEx Parte Presentations (#p!(#PARA-430X433׃  Xe4x((fxoxxD.hPleading Dates (#p!(#PARA-431X434׃  XN4x((fxoxxE.hFurther Information (#p!(#PARA-432X435׃  X 4VI.hxORDERING CLAUSES (#p!(#PARA-97436׃ ((fox  X4(p` P @ 0 xhXH8((p` P @ 0 xhXH8(APPENDIX A:P P Final Rules(#P  X4APPENDIX B:( xP P List of Existing Governmental and Private Business 31 GHz Licensees(#P  X 4APPENDIX C:( xP P Initial Regulatory Flexibility Analysis(#P  X!4APPENDIX D:P P Final Regulatory Flexibility Analysis(#P  X"4APPENDIX E:( xP P List of Pleadings(#P "h$0*&&::""Ԍ X4o< I. INTRODUCTION ă  X'(p` P @ 0 xhXH8(p` P @ 0 p`P@0  !"#$%p&`' A. Overview  X4p` P @ 0 p`P@0  !"#$%p&`'X` hp x (#%'0*,.8135@8: 'ԍ 47 CFR  1.402(h).? the Chief, Office of Engineering and Technology, will select a panel of experts to review CellularVision's technology and recommend whether the request should be granted. The Commission will establish, conduct, and seek the consensus of the panel pursuant to the Federal Advisory Committee Act, and will evaluate its recommendations in light of all the submissions and comments in the record. In addition, panelists will have the authority to seek further information pertaining to preference requests and to perform field evaluations, as appropriate.  X}44. The Commission makes no warranties about the use of this spectrum for particular services. Applicants should be aware that a Commission auction represents an opportunity to become a Commission licensee in this service, subject to certain conditions and regulations. A Commission auction does not constitute an endorsement by the Commission of any particular services, technologies, or products, nor does a Commission license constitute a guarantee of business success. Applicants should perform their individual due diligence before proceeding, as they would with any new business venture.  X4  X' B. Background X` hp x (#%'0*,.8135@8:i~ {O!'ԍ Id., Appendix C.@ Sierra, IMSA, SBA, and other commenters opposing our proposed redesignation of 31 GHz argue that we have significantly underestimated the number of licensees, as well as the volume and extent of the current 31 GHz services nationwide. "$>0*&&::"Ԍ X4,45.ؠ Specifically, Sierra states that we overlooked several licensees in the list of licens X4ees that were mailed copies of the Fourth NPRM and argues that our data base appears to be  X4incomplete.T? {OM'ԍ Sierra Comments to Fourth NPRM at 2.T IMSA submits a list of a number of current 31 GHz licensees that reflects 70 rows of names, generated from the Commission's data base, and asserts that there actually  X4may be more.d@Z {O'ԍ IMSA Reply Comments to Fourth NPRM at 8, Appendix A.d Sunnyvale submits a list of more than 40 electronic traffic control modules it has installed, and another list of more than 40 locations where a larger number of installations are in process. It further argues that the license count does not reflect the inherent time delay  Xa4in applying the technology to the traffic control environment.WAa {O 'ԍ Sunnyvale Comments to Fourth NPRM at 2.W ITE and USDOT assert that  XJ4about 40 communities have installed, or are installing, 31 GHz traffic control systems.fBJ~ yOy'ԍ ITE Letter of Sept. 6, 1996; USDOT Letter of Sept 26, 1996.f SBA asserts that it was informed by Sierra that there may be as many as 100 incumbent licensees, both public and private, in this band. SBA submits a list prepared by Sierra of 27 dealers and  X 4resellers of Sierra's equipment, which is used by incumbent licensees.aC  {O'ԍ SBA Reply Comments to Fourth NPRM at 4, Appendix.a  X 4-46. P46X נ We agree with Sierra and the other commenters that the number of licensees we  X 4included in the IRFA of the Fourth NPRM did not reflect the total number of current licensees under the existing 31 GHz rules. Based on a review of our current data base, we find a total of 86 licensees operating at 122 stations. We note that the list of licensees submitted by IMSA is similar, but outofdate and does not identify many of the licensees. Moreover, the list duplicates several licensees by identifying each application and counting it separately.  X84.47. PARA-43A נWe clarify that, in the IRFA, we were considering the number of incumbent licensees that are small governmental entities that would be affected by our proposal to designate 31 GHz for LMDS, rather than all of the incumbent licensees that might be small entities. A review of our current database reveals that existing licenses have been issued for three categories of 31 GHz services, as follows:  X4X` hp x (#%'0*,.8135@8:63. PARA-7E  In the Fourth NPRM, we sought comment regarding whether incumbents should be relocated to another band where interference protection is provided by our rules, such as the 23 GHz frequency band, or whether incumbents could be accommodated by other methods without affecting LMDS in the same band despite the fact that incumbents have assumed all  X4the risks of receiving interference.AW {O 'ԍ Id. at para. 102.A IMSA, SBA, Sierra, and Sunnyvale argue that our reliance on the present lack of interference protection at 31 GHz is no basis to displace the incumbent services from 31 GHz and subject them to interference, for the first time, that would  X4effectively eliminate their services. IMSA argues that we ignored in the Fourth NPRM both our intent in originally allocating the 31 GHz band and the practical reality of 31 GHz opera Xk4tions under currently applicable technical rules.YXk {O.#'ԍ IMSA Reply Comments to Fourth NPRM at 11.Y Sierra points out that, although 31 GHz"kX0*&&::W" users may have no legal protection against interfering cousers, they are afforded effective  X4protection against interference by the technical rules.Y {Ob'ԍ Sierra Comments to Fourth NPRM at 68; Sierra Reply Comments to Fourth NPRM at 78.  X4?64.ؠ All three categories of current licensees were licensed under rules that require they share the frequency on a coequal basis on a nonprotected basis, without protection from  X4harmful interference.WZZ yO'ԍ 47 CFR  101.103(b), 101.147(t).W However, as commenters assert, their operations in effect are free  Xv4from interference. In the Spectrum Utilization Second Report and Order, we concluded that the probability of causing or receiving harmful interference at 31 GHz would be small because of the technical requirements we imposed and the geographic diversity of use. Our goal was to provide for reduced licensing and coordination requirements for service providers utilizing the band, giving each licensee equal access and no rights to object to harmful interfer X 4ence being caused by any other licensed operation.j[  {O'ԍ  Spectrum Utilization Second Report and Order, at para. 10.j  X 4 @65.ؠ Thus, as IMSA argues, it would appear that incumbent 31 GHz licensees engaged in traffic control operations are not typical secondary spectrum users, inasmuch as all other categories of licensees in the band are not entitled to protection. And among the current licensees, the technical rules provide them with effective protection and immunity from the  X{4other licensed operators.\{| {O'ԍ Sierra Comments to Fourth NPRM at 67; Topeka Comments to Fourth NPRM at 2. Moreover, current licensing is not extensive, so that licensees experience little or no impact from other 31 GHz licensees. Despite their nonprotected status, incumbent licensees are not currently subject to interference and had no reason to anticipate a  X64large degree of interference under the existing licensing scheme.   X4X` hp x (#%'0*,.8135@8:. ~n^N>.~n^N >!."#n^^#hxP7%P##%^xP7&KP#31.00031.075 GHzƎ^8  pG'  75 megahertz #   8  ^^31.07531.225 GHzƎ^   150 megahertz  3  E  ^^31.22531.300 GHzƎ^E  pG '  75 megahertz 3 Eܗ$(#(#ww(#(# !w$  X4 !wX` hp x (#%'0*,.8135@8:0*&&::"Ԍ X4ԙX` hp x (#%'0*,.8135@8:Z0*&&:: " licensees to recoup some of their initial licensing and construction costs, while providing a method for entities with specific local concerns or insufficient capital to purchase rights for the entire service area, to acquire a portion of the geographic area originally licensed. We also determined that geographic partitioning may allow some areas, particularly rural areas, to  X4be served sooner than would otherwise be possible.H2 {O'ԍ Id. at 86 (paras. 8991).H  Xv4X` hp x (#%'0*,.8135@8: 2 {Ot'ԍ Market power is defined as the ability of a firm to set price profitably above competitive levels. #W*f9 xr G;X#See#X\  P6G;sP# D.  yO>'Carlton & J. Perloff,  Modern Industrial Organization 922 (1994).> of incumbent LECs and cable operators, and whether there are any other viable means of entry into the local exchange and cable markets. We asked whether there would be any inherent cost  X4advantages for incumbent LECs or cable companies due to economies of scope,QF2 yO'ԍ Economies of scope is defined as a situation in which it is less costly for a single firm to provide two  {OQ'products or services than for two specialized firms to provide them separately. #W*f9 xr G;X# Id.#X\  P6G;sP# at 920.Q or other efficiencies, such as billing and marketing of services. We inquired whether prohibiting incumbent LEC and cable operators from bidding on LMDS licenses in their geographic service areas would discourage investment in LMDS or the development of LMDS  X64technology.J62 {O'ԍ Fourth NPRM, at para. 128.J  X4151. We also sought comment in the Fourth NPRM concerning the nature of any eligibility restrictions that might be imposed. We solicited comment on the duration of any eligibility restrictions we might impose, but emphasized that eligibility restrictions would continue only until there is increased competition in local video and telephone exchange markets. In the cable context, we inquired whether the fourpronged test for effective  X4competition set forth in Section 623(l) of the Communications Act@2 2 yOz$'ԍ 47 U.S.C.  543(l).@ would be a reliable"B 0*&&::" indicator of appropriate levels of multichannel video programming. With respect to LECs, however, we noted that there is no standard test for effective competition in the local exchange market. We also sought comment on several practical, administrative decisions necessary to imposing any form of eligibility restriction, including defining the term ``incumbent,'' defining an attributable interest in an incumbent LEC or cable operator, and determining the relationship between limits on participation by incumbent LECs and cable operators in LMDS  Xv4and our proposal in the Third NPRM to allow partitioning and disaggregation.  XJ'X` hp x (#%'0*,.8135@8:%X yO 'ԍ 47 CFR  20.6(c).> That approach, however, was erroneously crafted in describing the rule as establishing a 20 percent benchmark. Second, we believe a 10 percent threshold is a better indicator of conflicting interests and, given the ability of a licensee to partition its license to come into compliance, a fair and more effective means of accomplishing the public interest goal of fostering competitive markets.  X 4188.ؠ Third, as we have found in the case of cellular and PCS providers, we believe that ``an overlap of less than 10 percent of the population is sufficiently small that the  X 4potential for exercise of undue market power by the . . . operator is slight.''O&Z DX yO'ԍ Amendment of Parts 20 and 24 of the Commission's Rules Broadband PCS Competitive Bidding and  yO'the Commercial Mobile Radio Service Spectrum Cap, WT Docket No. 9659, 11 FCC Rcd 7824, 7876 (para.  {Os'107) (1996) (Broadband PCS Report and Order).O Finally, we intended to adopt a rule that would conform with the overlap rule used in conjunction with the CMRS spectrum cap. We believe as a general matter that it is preferable to have rules for wireless spectrum that are as consistent as possible for the sake of overall simplicity, ease of compliance, and administrative efficiency. Therefore, we are adopting rules that consider an incumbent LEC or cable company to be ``inregion'' if 10 percent or more of the population of the BTA is within the LEC's authorized telephone service area or the cable company's franchised service area.  X4189. The Fourth NPRM also sought comment regarding what should constitute an attributable interest for an incumbent LEC or cable operator. We suggested that we would consider an ownership interest of at least 10 percent by an incumbent LEC or its affiliate, or an incumbent cable company or its affiliate, would be considered an attributable interest for  X4purposes of determining the applicability of any eligibility restrictions.J'f X {O!'ԍ Fourth NPRM, at para. 133.J Comments on this"U '0*&&::" aspect of the proposal from those supporting geographically limited restrictions generally  X4support using 10 percent ownership as an attribution threshold.(X {Ob'ԍ See, e.g., CPI Comments to #W*f9 xr G;X#Fourth NPRM#X\  P6G;sP# at 13.  X4190.ؠ We have decided to adopt attribution rules that apply when an ownership interest is at least 20 percent, for the following reasons. First, we have concluded that a 20 percent attribution rule provides the proper balance between ``encourag[ing] capital investment and  Xv4business opportunities'' in LMDS,o)vZX {O 'ԍ Broadband PCS Report and Order, 11 FCC Rcd at 7881 (para. 119).o and guarding against potential competitive harms associated with the exercise of undue influence by incumbent LECs and cable companies in connection with the operations of LMDS licensees. Second, we believe that one of the factors leading us to establish the 20 percent benchmark for CMRS also applies in the case of LMDS, namely, that ``increased flexibility in our rules will enable [LMDS] providers to adapt their  X 4services to meet customer demand.''G* X {O'ԍ Id. (footnote omitted).G  X 4191.ؠ Third, we also conclude that establishment of a 20 percent attribution level will facilitate a wide variety of service providers to enter the marketplace, thus promoting the competitive delivery of wireless services, with attendant benefits to consumers and the  X4national economy.7+~X {O'ԍ Cf. id.7 Finally, as with the geographic overlap issue discussed above, we believe there are good reasons to adopt rules that are consistent with existing rules governing wireless service licensees. The rules governing CMRS services use 20 percent as the ownership level that constitutes an attributable interest in a license. As a consequence of our decision, no entity having an ownership interest of at least 20 percent in an incumbent LEC or cable company will be permitted to hold a 20 percent or greater interest in a 1,150 megahertz inregion LMDS licensee.  X4192.ؠ In determining ownership interests, affiliate relationships will be quantified using a multiplier, and management and joint marketing agreements may be considered to be attributable interests under certain circumstances. The attribution rules, among other things, will provide that: officers and directors have an attributable interest in their company; nonvoting stock in excess of 20 percent is attributable; stock interest held in trust is attributable to those who have or share the power to vote or sell the stock; debt and instruments such as warrants with rights of conversion to voting interests are generally not attributable until conversion is effected; and limited partnership interests are attributable. " V+0*&&::"Ԍ X4193. In the Fourth NPRM, we proposed to restrict eligibility of incumbent LEC and  X4cable companies to obtain inregion LMDS licenses for a limited time.O,X {Od'ԍ  Fourth NPRM, at paras. 135136.O While we have determined that carefullytailored temporary restrictions on incumbent LECs and cable companies are necessary to help assure that competition in the LEC and MVPD markets is enhanced with the licensing of LMDS, we believe it is possible to be less restrictive than our proposal in one significant respect. We find no compelling public benefit to be achieved by foreclosing incumbent LECs and cable companies from participating fully in the auction of 1,150 megahertz LMDS licenses, including the auction of inregion licenses, so long as such firms subsequently come into compliance with our eligibility rules. As noted in reply comments from the Staff of the FTC, a cable MSO that owns a system contained entirely within a BTA should be able to sell this system to avoid competitive problems associated with  X 4this overlapping ownership interest.- ZX {O'ԍ See FTC Reply Comments to #W*f9 xr G;X#Fourth NPRM#X\  P6G;sP# at 11.  X 4194.ؠ This example highlights the possibility that incumbent LECs and cable companies might find it advantageous to obtain a large LMDS license and then to divest sufficient overlapping interests to bring them into compliance with our ownership  X4restrictions..X yO/'ԍ Such flexibility should be particularly useful for those rural LECs that may have overlapping ownership interests in a BTA. Although we anticipate that most rural LECs would not have sufficient overlap of their authorized service area with the LMDS service area to be affected by the eligibility restrictions we are adopting, the additional flexibility to divest such overlapping ownership interests should further ameliorate any potential negative impact on these entities.  Therefore, we are adopting rules that permit incumbent LECs and cable companies to participate fully in the auction of 1,150 megahertz licenses if they agree to divest overlapping ownership interests. LMDS licensees will have 90 days from the date of the final grant of their license to submit to the Commission an application to assign or transfer control of the conflicting portion of its LMDS license or to certify that it has come into compliance with the Commission's eligibility restriction in Section 101.1002(a) of the Commission's Rules.  X4195. As discussed below, we are providing LMDS licensees additional flexibility to disaggregate their LMDS licenses into smaller spectrum blocks. However, we will not permit licensees to use disaggregation as a means of divesting overlapping ownership interests to comply with the attribution rules for LMDS. The substantial flexibility LMDS licensees will have to use their spectrum to provide any service that is consistent with the broad technical parameters established for this service would make it impossible to develop and enforce a system that uses a reduction in the amount of licensed spectrum as an objective measure of compliance with our ownership restrictions. We note, however, that a licensee may transfer a"9W.0*&&::" portion of its ownership interest in order to meet the attribution limitations for LMDS. In addition, licensees will be permitted to geographically partition their spectrum in order to come into compliance with our eligibility restrictions.  X4196. We tentatively concluded in the Fourth NPRM that any restrictions on incumbent LECs and cable companies should be temporary, and proposed two alternatives. First, the restrictions could end when competition in the relevant market, LEC or MVPD, is such that the incumbent no longer has market power. Second, the restrictions could end on a date certain, such as three to five years hence, when it would be reasonable to assume that the market power of the incumbents would have been reduced sufficiently to allay our competitive concerns about their participation in the LMDS market. Those commenters that support limited restrictions generally agree with the concept of a competitionbased test to end restrictions on incumbents. There is no consensus, however, on the best means of measuring when competition is sufficient to permit incumbent entry.  X 4197.ؠ WebCel, for example, while recognizing the limitations of using the competitive checklist for RBOC entry into the interLATA and long distance markets for all LECs, and the fourpronged test for effective cable competition in Section 623(l) of the Communications  Xd4Act, would nonetheless use these tests because they would be relatively simple to apply.U/dX {O'ԍ WebCel Comments to Fourth NPRM at 25.U CPI, however, argues that neither of these tests is appropriate and that instead the Commission should place the burden on incumbents to demonstrate in each case that effective competition exists and would continue even if the incumbent were to enter the market as an LMDS  X4licensee.0ZX {O'ԍ CPI Comments to #W*f9 xr G;X#Fourth NPRM#X\  P6G;sP# at 1415. Only two commenters address the question of establishing a sunset date for incumbent restrictions, CPI and RioVision. CPI opposes establishing a sunset as too arbitrary and suggests instead that the Commission establish a date certain by which it would reevaluate  X4the need for the restrictions.1X {O`'ԍ Id.#W*f9 xr G;X##X\  P6G;sP# at 15. RioVision comments that five years may be a reasonable date  X4on which to end the restrictions.2~X {O'ԍ RioVision Comments to #W*f9 xr G;X#Fourth NPRM#X\  P6G;sP# at 3.  X~4198. We agree with those parties arguing that the competitive checklist would be inappropriate for use in determining whether conditions are suitable to allow LEC acquisition of inregion LMDS licenses. We think that there will be sufficient entry and increases in competition in the markets at issue here for us to be able to sunset the restrictions on incumbent LECs and cable companies three years after the effective date of the LMDS rules. Based on our assessment of the state of LMDS technology and estimates of when entry into" X20*&&::" the LEC and cable markets is likely, we believe three years is an appropriate initial period to keep these restrictions in place. Further, we have a statutory obligation to review all regulations every two years, beginning in 1998, to determine whether competition has  X4increased sufficiently to make these regulations unnecessary.=3X yO4'ԍ 47 U.S.C.  161.= Therefore, we will undertake a review of these eligibility restrictions and the relevant competitive developments in 2000 to determine if sufficient competition has emerged to allow sunset of the LMDS restrictions. The restrictions may be extended if we determine that the incumbent LEC or cable company still have substantial market power in the provision of those services.  X14199. PARA-189 נ In addition, we recognize that some incumbent LECs or cable companies might be able to show earlier than three years after the effective date of the rules we are adopting in this Order that the actual conditions in a particular market are sufficiently competitive and rivalrous so that the restriction is no longer necessary promote competition in the  X 4telecommunications marketplace.T4 XX {O'ԍ See para. P159G159, supra.T In considering a petition for waiver of or forbearance  X 4from the restriction, we will generally be guided by the 1992 Merger Guidelines, 5 X {OY'ԍ See Department of Justice & Federal Trade Commission, Horizontal Merger Guidelines (Apr. 2, 1992),  {O#'reprinted in 4 Trade Reg. Rep. (CCH)  13,104 (Apr. 7, 1992) (1992 Merger Guidelines).  because the competitive effects of an acquisition by an incumbent LEC or cable company of an inregion LMDS license are likely to be similar to the effects of a merger between that company  X{4and an actual or hypothetical company whose principal competitive asset is that license. In particular, some of the factors we will consider in determining whether a particular market actually is sufficiently competitive at the time of the petition are:  X4` hp x (#%p` P @ 0 p`P@0  !"#$%p&`'o(1)the number and capacity of competing providers of local telephone or multichannel video services, especially those with independent means of distribution, that are available to a significant number of consumers in the geographic region at issue;(#  X4o(2)the substitutability of the services of those competing providers with the local telephone and multichannel video services offered by the incumbent LEC or cable firm;(#  Xg4o(3)evidence as to whether the LEC or cable company could or would lose a significant  XP4portion of its subscribers to its competitors if it unilaterally increased its prices or  X94lowered the quality of its services;(# ""YF50*&&::"Ԍ X4o(4)the regulatory environment for competing providers in the relevant geographic region; and(#  X4o(5)whether the LEC or cable company has in fact experienced a significant loss in market share due to the entry of new competitors or the expansion of existing  X4competitors.O6Z  {O'ԍ See Policy and Rules Concerning the Interstate, Interexchange Marketplace, CC Docket No. 9661, Second Report and Order, FCC 96424, released Oct. 31, 1996, at paras. 2128; Motion of AT&T To Be Classified as a NonDominant Carrier, Order, 11 FCC Rcd 3271, 330309 (paras. 5773) (1995).O(# If the LEC or cable company is successful in making such a demonstration, then such showing will constitute a sufficient basis for the Commission to waive or forbear from applying the eligibility restrictions that apply to that LEC or cable company. We will  X 4entertain such showings after the initial award of licenses.# Xj\  P6G; ߊXP#p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`' # Xj\  P6G; ߊXP#p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`'  X '# Xj\  P6G; ߊXP#p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`'o 5. Flexible Service and Framework for Licensing  X 'p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`' oa. Scope of Services  X'p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`'o(1) p` P @ 0 p`P@0  !"#$%p&`'X` hp x (#%'0*,.8135@8:$2 yOy'ԍ Amendment to the Commission's Regulatory Policies Governing Domestic Fixed Satellites and Separate International Satellite Systems, IB Docket No. 9541, Notice of Proposed Rulemaking, 10 FCC Rcd 7789, 7795 {O '96 (paras. 3033) (1995), Report and Order, 11 FCC Rcd 2429, 2436 (paras. 4550) (1996) (DISCO I Report and  {O'Order).ğ In another proceeding, we have adopted streamlined rules in Part 25 for satellite services to use a simplified procedure to change licenses from noncommon carrier status to common carrier  X4status.g?Z2 yO 'ԍ Streamlining the Commission's Rules and Regulations for Satellite Application and Licensing Procedures, IB Docket No. 95117, Notice of Proposed Rulemaking, 10 FCC Rcd 10624 (1995), Report and Order, FCC 96 {O '425, released Dec. 16, 1996 (paras. 3234) (Satellite Rules Report and Order).g When we implemented DBS systems under interim rules we adopted a policy to  X4permit the dual provision of common and noncommon carrier services, @2 yO+ 'ԍ Inquiry into the Development of Regulatory Policy in Regard to Direct Broadcast Satellites for the Period Following the 1983 Regional Administrative Radio Conference, Gen. Docket No. 80603, Notice of Proposed Policy Statement and Rulemaking, 86 FCC 2d 719, 750 (1981), Report and Order, 90 FCC 2d 676, 706  {O'(1982) (Interim DBS Report and Order), aff'd sub nom. National Assoc. of Broadcasters v. F.C.C., 740 F.2d  {OM'1190 (1984).  which continues  X4under the permanent rules.AX 2 yO'ԍ Revision of Rules and Policies for the Direct Broadcast Satellite Service, IB Docket No. 95168, PP Docket No. 93253, Notice of Proposed Rulemaking, 11 FCC Rcd 1297 (1995), Report and Order, 11 FCC Rcd 9712 (1995). The flexibility we adopt for LMDS is consistent with the treatment accorded these services.  XH4207.ؠ To ensure the flexibility in LMDS service offerings that commenters seek and we proposed, we will permit any fixed terrestrial uses that can be provided within the technical parameters for LMDS. We conclude that, for now, our significant allocation of spectrum under such a broad and flexible service definition should permit licensees to satisfy a broad array of their customers' communications needs, whether through one or multiple service offerings. Although LMDS is allocated as a fixed service, we know of no reason why we would not allow mobile operations if they are proposed and we obtain a record in support  X 4of such an allocation.B 2 yO'ԍ We would at that time also revisit our decision not to include LMDS in CMRS spectrum for purposes of the spectrum cap. We believe this would be consistent with our goal of providing LMDS licensees with maximum flexibility in designing their systems. We have authorized other wireless services to include mobile and fixed services, depending on whether"y]B0*&&::/" developments in the service and related equipment demonstrate a need for changing the rules  X4and a capability for mobile and fixed services to coexist in these bands.wCZ2 yOb'ԍ Amendment of Part 95 of the Commission's Rules to Allow Interactive Video and Data Service Licensees to Provide Mobile Service to Subscribers, WT Docket No. 9547, Report and Order, 11 FCC Rcd 6610  {O'(1996) (IVDS Report and Order); CMRS Flexible Service Report and Order, 11 FCC Rcd at 8965.w  X4208. We give applicants and licensees the flexibility to design their service offerings in response to market demand. The service offering that is selected would determine the extent to which the applicant or licensee is subject to regulation. If a service offering falls within the statutory definition that encompasses common carrier status, the application and the subsequent license is subject to Title II and the common carrier licensing requirements of Title III of the Act and our Rules. Otherwise, services are provided on a noncommon carriage basis, and the application and the licensee would be subject to Title III and certain other statutory and regulatory requirements, depending on the specific characteristics of the service. A licensee is required to adhere to the pertinent requirements in conducting its operations, depending on whether the operations are common carriage or not.  X 4209. Telecommunications services and video programming distribution services have been identified by commenters as the likely uses for LMDS spectrum over the short term. Since our issuance of notices of proposed rulemaking in this proceeding, the regulatory status of these and related services has been addressed and modified in the 1996 Act. The impact of the 1996 Act on the nature of these services for LMDS is discussed below to assist applicants in determining their choice of regulatory status.  X4X` hp x (#%'0*,.8135@8:4 2 {O'ԍ Id. at 21, 23.>   X4276. NYNEX recommends that the Commission establish an independent technical advisory committee to establish technical rules. CellularVision opposes any rule requiring LMDS operators to use active power control and interlock techniques in their systems. It"v 0*&&::" contends that these approaches are not necessary, and that they will only complicate LMDS  X4designs and serve to drive up equipment costs to consumers.b2 {Ob'ԍ CellularVision Reply Comments to Third NPRM at 34.b  X4X` hp x (#%'0*,.8135@8:'ԍ See, e.g., BellSouth Comments to Third NPRM at 13; CellularVision Comments to Third NPRM at 25 {O'26; ComTech Comments to Third NPRM at 10; TI Comments to Third NPRM at 22.  ComTech also argues that such signals will help avoid  X 4interference to satellite systems.U 2 {O'ԍ ComTech Comments to Third NPRM at 10.U Parties in opposition argue that because the Commission proposed to require frequency coordination between LMDS licensees, a restriction on the use  X4of various signal polarizations is unnecessary.2 {O'ԍ See, e.g., Endgate Comments to Third NPRM at 6; HP Comments to Third NPRM at 8. Those commenters note further that, although the limit may be appropriate now, future system developments may require different polarization schemes. NASA adds that because of orientation relationships of LMDS and FSS antennas, there is not likely to be any significant signal polarization isolation between these  X84systems.U84 2 {O'ԍ NASA Comments to Third NPRM at 1920.U  X 'X` hp x (#%'0*,.8135@8:319. PARA-63  In the Competitive Bidding Second Report and Order, we adopted the MilgromWilson activity rule as our preferred activity rule where a simultaneous stopping rule is  XM4used.~M~2 {O|'ԍ Competitive Bidding Second Report and Order, 9 FCC Rcd at 237273 (para. 144).~ The MilgromWilson approach encourages bidders to participate in early rounds by limiting their maximum participation to some multiple of their minimum participation level.  X4In the Third NPRM, we tentatively concluded that the MilgromWilson activity rule should be  X 4used in conjunction with the proposed simultaneous stopping rule for LMDS auctions.b 2 {O'ԍ  Third NPRM, 11 FCC Rcd at 10912 (paras. 157165).b We believed that the MilgromWilson approach would best achieve the Commission's goals of affording bidders flexibility to pursue backup strategies, while at the same time ensuring that  X4simultaneous auctions are concluded within a reasonable period of time.32 {O!'ԍ Id.3  X4?320. In its comments, ComTech urges the Commission to adopt bidder activity rules that assume only one license covering 1 gigahertz of spectrum for each service area and"4 0*&&::" which establish the number of households covered as the activity criterion. That is, bidders  X4would declare their eligibility solely in terms of households.U2 {Ob'ԍ ComTech Comments to Third NPRM at 13.U  X4@321. For LMDS auctions, we will use the MilgromWilson activity rule with some variations. Milgrom and Wilson divide the auction into three stages. We will set, by announcement before the auction, the minimum required activity levels for each stage of the auction. We retain the discretion to set and, by announcement before or during the auction, vary the required minimum activity levels (and associated eligibility calculations) for each auction stage. Retaining this flexibility will improve our ability to control the pace of the auction and help ensure that the auction is completed within a reasonable period of time.  X 4A322. For the LMDS auctions, we will use the following transition guidelines: The auction will begin in Stage One and will generally move from Stage One to Stage Two and from Stage Two to Stage Three when the auction activity level is below ten percent for three consecutive rounds. Under no circumstances can the auction revert to an earlier stage. However, we retain the discretion to determine and announce during the course of an auction when, and whether, to move from one auction stage to the next, based on a variety of measures of bidder activity, including, but not limited to, the auction activity level as defined above, the percentage of licenses (measured in terms of bidding units) on which there are new bids, the number of new bids, and the percentage increase in revenue.  X4B323. To avoid the consequences of clerical errors and to compensate for unusual circumstances that might delay a bidder's bid preparation or submission in a particular round, we will provide bidders with a limited number of waivers of the abovedescribed activity rule. We believe that some waiver procedure is needed because we do not wish to reduce a  X4bidder's eligibility due to an accidental act or circumstances not under the bidder's control.Z2 {O'ԍ See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2373 (para. 145).  X4C324. We will provide bidders with five activity rule waivers that may be used in any  X|4round during the course of the auction.H|2 {O'ԍ Id. at 2373 (para. 146).H If a bidder's activity is below the required activity level, a waiver will be applied automatically. That is, for example, if a bidder fails to submit a bid in a round, and its activity from any standing high bids (that is, high bids at the end of the previous round) falls below its required activity level, a waiver will be automatically  X 4applied. A waiver will preserve current eligibility in the next round. ~2 yOO$'ԍ However, an activity rule waiver cannot be used to correct an error in the amount bid. An activity rule waiver applies to an entire round of bidding and not to a particular BTA service area. Initial" 0*&&::" eligibility is determined by the amount of the upfront payment received and the licenses identified in the applicant's FCC Form 175, which are discussed below.  X4D325. PARA-314  Bidders will be afforded an opportunity to override the automatic waiver mechanism when they place a bid if they intentionally wish to reduce their bidding eligibility  X4and do not want to use a waiver to retain their eligibility at its current level.2 {O'ԍ See Competitive Bidding Fourth Memorandum Opinion and Order, 9 FCC Rcd at 6861 (paras. 815). If a bidder overrides the automatic waiver mechanism, its eligibility will be permanently reduced, and it will not be permitted to regain its bidding eligibility from a previous round. An automatic waiver invoked in a round in which there are no new valid bids will not keep the auction open. Bidders will have the option of entering a proactive activity rule waiver during any  X 4round. Z2 yO% 'ԍ Thus, a ``proactive'' waiver, as distinguished from the automatic waiver described above, is one requested by the bidder. If a bidder submits a proactive waiver in a round in which no other bidding activity occurs, the auction will remain open.  X 4E326. PARA-315  We retain the discretion to issue additional waivers during the course of an auction for circumstances beyond a bidder's control. We also retain the flexibility to adjust by Public Notice prior to an auction the number of waivers permitted, or to institute a rule that allows one waiver during a specified number of bidding rounds or during specified stages  Xy4of the auction.y2 {O'ԍ See Competitive Bidding Second Report and Order, 9 FCC Rcd at 2373 (para. 145).  Xb4  XK'X` hp x (#%'0*,.8135@8: 2 {O#'ԍ City of New York v. F.C.C., 486 U.S. 57 (1988) (City of New York).r The Commission may preempt nonFederal regulations when the nonFederal body ``has created an obstacle to the">0*&&::k" accomplishment and execution of the full purposes and objectives'' of the Commission acting  X4within its congressionally delegated authority.w?2 yOb'ԍ Fidelity Federal Sav. & Loan Ass'n v. De La Cuesta, 458 U.S. 141, 156 (1982).w  X4v375.ؠWe have considered preemption petitions filed under these standards, as Bell Atlantic points out, and we subsequently adopted the proposed rules that preempt certain State  X4and local regulation after weighing both the Federal and nonFederal interests.D@ZX2 yO'ԍ Preemption of Local Zoning Regulation of Satellite Earth Stations, IB Docket No. 9559, DA 91577, 45DSSMISC93, Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 5809, 581012  {O& '(paras. 1015) (1996) (Earth Station Report and Order). D We rely on Section 1 of the Communications Act, which mandates access to communications services by all people in the United States, together with numerous powers granted by Title III of the Act and any other statutory provisions pertinent to the service all would establish the existence of a Federal interest in promoting the service. Whether local regulations interfere with any Federal objectives and there is a local interest to protect are matters for petitioners to demonstrate. Our focus is on the effect of the local interest on the Federal interest and the appropriate accommodation of the local interest involved.  X 'X` hp x (#%'0*,.8135@8: 1640 W EIRP"  pG'Rooftop antennas:Power > 1640 W EIRP" LMDS licensees are required to attach a label to subscriber transceiver antennas that (1) provides adequate notice regarding potential radio frequency  pGc 'safety hazards, e.g., information regarding the safe minimum separation distance required between users and transceiver antennas; and (2) references the applicable FCC radio frequency emission guidelines contained in FCC OST Bulletin 65, 2d Edition.    pG$'  Xz%4#&Xj\  P6G; ߊXP#"z%10*''\\t&"ԌSubpart Q or Part 1 of Subchapter A of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows:  X' PART 1 PRACTICE AND PROCEDURE  X43. Section 1.77 is amended by revising paragraph (i) to read as follows:  X_'X` hp x (#%'0*,.8135@8:T$# G\  P6G;']P##'SxP7,۽P# c Fddxt<  !LLZ c "    " && "u International table"United States table"[FCC use designators&   & && "Region 1 alloca tion GHz"t"Region 2 allocaHtion GHz" Region 3  allocation GHz"`Government"NonGovernment":Rule part(s)""Specialuse "frequencies(   ("6 .o(1)l"T (2)l"  q  (3)l"YAllocation GHz w(4)|" Allocation GHz (5)|"Xt P(6)|"# #(7)(   ( && "2*"+*"  *"{K*"*"TK*"#*&    |& &&  27.529.5  dB'27.529.5  dB'FIXED    SATELLITE  dB' (Earthtospace)  dB'MOBILE      27.529.5 &   27.529.5 FIXED FIXEDSATELLITE (Earthtospace) MOBILE r   SATELLITE COM MUNICATIONS (25) FIXED MICROWAVE (101)r  &    & && "2* "+* "  * "{K* "* "TK* "#*&    r & &&  31.031.3 31.031.3 FIXED MOBILE Standard Frequency and Time SignalSatellite (spacetoEarth) Space Research  31.031.3 Standard Frequency and Time SignalSatellite (spacetoEarth) 31.031.3 FIXED MOBILE Standard Frequency and Time SignalSatellite (spacetoEarth)   FIXED MICRO WAVE (101)  &      & &&  "* < +T*<  *< Kt{*< *< KtT*< ##*   ܦ X\+&&\\y(3` '#C/ax( hX  X4  # Xj\  P6G; ߊXP#Part 74 of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows:  X46. In  74.602, paragraph (h) is removed and paragraphs (i) and (j) are redesignated as paragraphs (h) and (i). Part 78 of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows:  X_47. In  78.18, paragraph (a)(5) is removed and paragraphs (a)(6) through (a)(8) are renumbered as paragraphs (a)(5) through (a)(7). Part 95 of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows:  X 48. In  95.1, paragraph (b) is removed and paragraph (c) is redesignated as (b). Part 101 of Chapter I of Title 47 of the Code of Federal Regulations is amended as follows:  X' PART 101 FIXED MICROWAVE SERVICE ă  Xb49. The authority citation for Part 101 continues to read as follows: AUTHORITY: 47 U.S.C.  154, 303, 309(j), unless otherwise noted.  X4 10. Section 101.1 is amended by revising paragraph (a) to read as follows:  X'p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`'  101.1ppScope and authority. (#p p` P @ 0 p`P@0  !"#$%p&`'P X(`0h 8"#%p&x(a) The purpose of the rules in this part is to prescribe the manner in which portions of the radio spectrum may be made available for private operational, common carrier, and Local Multipoint Distribution Service fixed, microwave operations that require transmitting facilities on land or in specified offshore coastal areas within the continental shelf. * * * * *  X 4 11. Section 101.3 is amended by revising the two paragraphs in alphabetical order to read as follows: * * * * *  X"4Local Multipoint Distribution Service Hub Station. A fixed pointtopoint or pointtomultipoint radio station in a Local Multipoint Distributution Service System that provides one"#0*%%\\!"ԫway or twoway communication with Local Multipoint Distribution Service Subscriber Stations. * * * * *  X4Local Multipoint Distribution Service System. A fixed pointtopoint or pointtomultipoint radio system consisting of Local Multipoint Distribution Service Hub Stations and their associated Local Multipoint Distribution Service Subscriber Stations. * * * * *  X 4 12.ؠSection 101.5 is amended by revising paragraph (d) to read as follows:  X 'P X(`0h 8"#%p&p` P @ 0 p`P@0  !"#$%p&`'  101.5ppStation authorization required.(#p  X 4  X 4p` P @ 0 p`P@0  !"#$%p&`'X` hp x (#%'0*,.8135@8:e4 {O'ԍ Id., SIC 4841.> The size data provided by SBA do not enable us to make an accurate estimate of the number of telecommunications providers which are small entities because it combines all" z0*%%\\"  X4radiotelephone companies with 500 or more employees.X4 yOy'ԍ U.S. Small Business Administration 1992 Economic Census Employment Report, Bureau of the Census, U.S. Department of Commerce, Table 3, SIC 4812 (radiotelephone communications industry data adopted by the SBA Office of Advocacy).  We therefore use the 1992 Census of Transportation, Communications, and Utilities, conducted by the Bureau of the Census, which is the most recent information available. This document shows that only 12 radiotelephone firms out of a total of 1,178 such firms which operated during 1992 had 1,000 or  X4more employees.Xy4 yO= 'ԍ U.S. Bureau of the Census, U.S. Department of Commerce, 1992 Census of Transportation, Communications, and Utilities, UC92S1, Subject Series, Establishment and Firm Size, Table 5, Employment Size of Firms:  S 41992, SIC 4812 (issued May 1995).#X~ps7VX# X # Xj\  P6G; ߊXP## Xj\  P6G; ߊXP## X~ps7VX##Xj\  P6G; ߊXP# Likewise, the size data provided by SBA do not enable us to make a meaningful estimate of the number of cable and pay television providers which are small  Xv4entities because it combines all such providers with revenues of $11 million or less.>v)4 {OP'ԍ Id., SIC 4841.> We therefore use the 1992 Census of Transportation, Communications, and Utilities (Table 2D), conducted by the Bureau of the Census, which is the most recent information available. This document shows that only 36 of 1,788 firms providing cable and pay television service have a revenue of greater than $10 million. Therefore, the majority of LMDS entities to provide video distribution and telecommunications services may be small businesses under SBA's  X 4definition# Xj\  P6G; ߊXP## X~ps7VX#.#Xj\  P6G; ߊXP#  X 4 The Commission has not developed a definition of small entities applicable to LMDS licensees, which is a new service being licensed in the Order. The RFA amendments were  X4not in effect until shortly before the Fourth NPRM was released, and no data has been received establishing the number of small businesses associated with LMDS. However, in  Xi4the Third NPRM we proposed to auction the spectrum for assignment and requested information regarding the potential number of small businesses interested in obtaining LMDS spectrum, in order to determine their eligibility for special provisions such as bidding credits and installment payments to facilitate participation of small entities in the auction process. In the Order we adopt criteria for defining small businesses for purposes of determining such eligibility. We will use this definition for estimating the potential number of entities applying for auctionable spectrum that are small businesses. As discussed in Section II.D.2.e. of the Order, we adopt criteria for defining small businesses and other eligible entities for purposes of defining eligibility for bidding credits and installment payments. We define a small business as an entity that, together with affiliates and controlling principals, has average gross revenues not exceeding $40 million for  XW4the three preceding years (paras. P342X345 and P348X348 of the Order). Additionally, bidding credits"W0*%%\\[" and installment payments are available to applicants that, together with affiliates and controlling principals, have average gross revenues for the three preceding years of more  X4than $40 million but not more than $75 million (paras. P349G349 and P352X358 of the Order).  X4SBREFA was not in effect until the record in the Third NPRM closed, and we did not seek comment on the potential number of prospective applicants for LMDS that might qualify as small businesses. Therefore, we are unable to predict accurately the number of applicants for LMDS that would fit the definition of a small business for competitive bidding purposes. However, using the definition of small business we adopted for auction eligibility, we can estimate the number of applicants that are small businesses by examining the number of applicants in similar services that qualified as small businesses. For example, MDS authorizes noncommon carrier services similar to what may be developed through LMDS. The MDS rules provide a similar definition of a small business as an entity that, together with its affiliates, has annual gross revenues for the three preceding years not in  X 4excess of $40 million.  4 yO9'ԍ Amendment to Parts 21 and 74 of the Commission's Rules with Regard to Filing Procedures in the Multipoint Distribution Service and in the Instructional Television Fixed Service, MM Docket No. 94131, and Implementation of section 309(j) of the Communications Act Competitive Bidding, PP Docket No. 93253, Report and Order, 10 FCC Rcd 9589 (1995). A total of 154 applications were received in the MDS auction, of which 141, or 92 percent, qualified as small businesses. We plan to issue 2 licenses for each of the 492 BTAs, excluding New York, that are the geographic basis for licensing LMDS. Thus, 984 licenses will be made available for authorization in the LMDS auction. Inasmuch as 92 percent of the applications were received in the MDS auction were from entities qualifying as small businesses, we anticipate receiving at least the same from LMDS applicants interested in providing noncommon carrier services.  X4  There is only one company, CellularVision, that is currently providing LMDS video services. Although the Commission does not collect data on annual receipts, we assume that CellularVision is a small business under both the SBA definition and our proposed auction  X4rules.  X~4  Xg' D8B. Estimates of LECs and Cable Companies Ineligible X` hp x (#%'0*,.8135@8:&10*''\\\$"ԌForesight Communications GHz Equipment Company, Inc. (GEC) Gilio, Robin V. GTE Service Corporation (GTE) Guy, Frederick R. Haddon, Perry W. Hornby, Harold Hughes Space and Communications Co. and Hughes Network Systems, Inc. Joplin Beepers, Inc. King Broadcasting Associates Kingswood Associates Linz, Robert M., P.E. Levin, Michael H. Loral/Qualcomm Partnership, L.P. (Loral/Qualcomm) M3 Illinois Telecommunications Corporation (M3ITC) M/ACom, Inc. (M/ACom) Metrocom Telecasting Mettler Communications, Inc. Milani, Patricia B. Motorola, Inc. Motorola Satellite Communications, Inc. and Iridium, Inc. (Motorola) MultiMicro, Inc. National Aeronautic and Space Administration (NASA) National Association for the Advancement of Colored People National Captioning Institute New York Department of Public Service Norris Satellite Communications, Inc. NYNEX Mobile Communications Company Pacific Telesis Group, Pacific Bell and Nevada Bell RioVision of Texas, Inc. (RioVision) Rochester Telephone Corporation Rock Hill Telephone Company, Fort Mill Telephone Company and Lancaster oTelephone Company RSW Communications, Ltd. Rumore, Victor Seiter, Steven P. Senvista General Partnership Sprint Corporation on behalf of Sprint Communications Company, L.P. and the United and oCentral Companies (Sprint) Stephenson, Todd Subscriber TV Partners"h$0*%%\\""ԌSuite 12 Group Technology Engineering Company Telephone and Data Systems, Inc. (TDS) Total TV, Inc. United States Telephone Association (USTA) University of California University of Colorado University of Texas System US West, Inc. (US West) Utilities Telecommunications Council Video/Multipoint, Inc. Video/Phone Systems, Inc. (Video/Phone) Virginia Communications, Inc. Western Sierra Bancorp Wireless Cable Association International, Inc. (WCA) Wireless Cable, Ltd.  Xy' Reply Comments Anchorage Telephone Utility Bell Atlantic Calling Communications Corporation Coalition for Wireless Cable Cole, Raywid & Braverman Comcast Corporation, Jones Intercable, Inc. and Cablevision Industries Corporation DMC Eagle Engineering & Communications Group, Inc. GEC GTE Hughes Space and Communications Co. Leaco Rural Telephone Company M3ITC Motorola, Inc. Motorola NASA National Association of Regulatory Utility Commissioners (NARUC) National Council of LaRaza New York Department of Public Service Public Broadcasting Service RioVision Rumore, Victor"h$0*%%\\""ԌSeiter, Steven P. Senvista General Partnership Sprint Suite 12 Group TDS Thomas & Associates Video/Phone USTA WCA  X ' Third Notice of Proposed Rulemaking# Xj\  P6G; ߊXP#   X ' Comments Airtouch Communications, Inc. (Airtouch) Alcatel Network Systems, Inc. (Alcatel) Ameritech Andrew Corporation (Andrew Corp.) Association of America's Public Television Stations and Public Broadcasting Service (PTV)  XK4Bell Atlantic  X44BellSouth Boeing CellularVision USA, Inc. (CellularVision) ComTech Associates, Inc. (ComTech) Constellation Communications, Inc. (Constellation)  X4Cox Enterprises Inc., et al. (Cox) DMC Duncan Weinberg Miller & Pembroke, P.C. (Duncan) Endgate  Xg4Entertainment Made Convenient International, Inc. (Emc3) GE American Communications, Inc. (GE) GEC GTE Harris Corporation-Farinon Division (Harris) Hewlett-Packard Company (HP) Hughes Communications Galaxy, Inc. (Hughes) Lockheed Martin Corporation (LMC) Loral Aerospace Holdings, Inc. (Loral) Loral/Qualcomm M3ITC Motorola"j$0*%%\\""ԌNASA National Cable Television Association (NCTA) Northern Telecom, Inc. (Nortel) NYNEX Corporation (NYNEX) Orion Network Systems, Inc. (Orion) Pacific Telesis Wireless Broadband Services (PTWBS) Panamsat Corporation (Panamsat) RioVision Satellite Industry Association (SIA) Summit Communications, Inc. (SCI) Telecommunications Industry Association (TIA) Teledesic Corporation (Teledesic) TDS Texas Instruments, Inc. (TI) Titan Information Systems Corporation (Titan) TRW, Inc. (TRW) WCA  Xb' Reply Comments Bell Atlantic BellSouth CellularVision ComTech  X4Emc3 GE GEC Hon. Mark Hatfield Hughes Loral Loral/Qualcomm Motorola NetSat 28 Company, L.L.C. (NetSat) NYNEX Orion PTWBS SCI TIA Teledesic TI TRW"h$0*%%\\""Ԍ X'ԙ Fourth Notice of Proposed Rulemaking# Xw PE374WXP# Đ  X4 Comments  Y4 Ad Hoc Rural Telecommunications Group (Ad Hoc RTG) Allied Associated Partners and GELD Information Services (Allied/GELD) Ameritech PTV Bell Atlantic Corporation and SBC Communications, Inc. (Bell Atlantic/SBC)  Y14BellSouth CellularVision CellularVision Technology and Telecommunications, L.P. (CVTT) City of Long Beach (Long Beach) City of San Diego (San Diego) City and County of Honolulu (Honolulu) City of Palm Springs (Palm Springs) City of Topeka (Topeka) Competition Policy Institute (CPI) Comstat Communications, Inc. (Comstat) ComTech Endgate  Y4Farmers Telephone Cooperative, Inc. (Farmers Tel) GE HP Hughes ICE-G, Inc., dba International Communications Electronics Group (ICEG) Institute of Transportation Engineers (ITE) Japan, Government of (Japan) LMC M/ACom MCI Communications Corporation (MCI) Mobile Source Air Pollution Review Committee (MSAPRC) NCTA National Telephone Cooperative Association (NTCA) Opportunities Now Enterprises (ONE) Pacific Telesis Group Pioneer Telephone Association, Inc. (Pioneer) Puerto Rico Telephone Company (PRTC) RioVision Roseville Telephone Company (Roseville) Sierra Digital Communications, Inc. (Sierra)"h$0*%%\\~&"ԌSkyoptics, Inc. (Skyoptics) Sunnyvale General Devices and Instruments, Inc. (Sunnyvale) TI USTA US West Webcel Communications, Inc. (Webcel) WCA  XH4 Reply Comments Ad Hoc RTG Ameritech Attorneys General of Connecticut, Delaware, Florida, Idaho, Illinois, Iowa, Massachusetts, oMinnesota, Missouri, New York, Oklahoma, Pennsylvania, Rhode Island, Virginia, oWashington, West Virginia, and Wisconsin (Attorneys General) CellularVision Comcast Corporation (Comcast) CPI Endgate Federal Trade Commission (FTC) GE HP Hughes ICE-G Independent Alliance (Alliance) International Municipal Signal Association (IMSA) M/A-Com Midwest Wireless Communications, L.L.C. (Midwest) Motorola NCTA NYNEX Organization for the Protection and Advancement of p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`' oSmall Telephone Companies (OPASTCO) Public Service Telephone Company (Public Service Telco) PTV Sierra Small Business Administration (SBA) Sunnyvale TI Titan United States Department of Justice (DOJ)"h$0*%%\\&"ԌUSTA US West Webcel  X4 Petitions for Reconsideration of Waiver Application Denials  Alliance Associates Birnbaum, Stevan (Birnbaum) BMW Associates (BMW) Buchwald, Joseph B. (Buchwald) Celltel Communications Corporation (Celltel) Chester, Linda (Chester) City of Gustine, California (Gustine) Clark, Thomas F. (Clark) Committee to Promote Competition in the Cable Industry (CPCCI) Connecticut Home Theater Corporation (CHT) Cornblatt, Arnold (Cornblatt) CT Communications Corporation (CTC Corp) Evanston Transmission Company (Evanston) Feinberg, Judy (Feinberg) Fraiberg, Lawrence (Fraiberg) Freedom Technologies, Inc. (FTI) GEC Goldberg, Rosalie Y. (Goldberg) Hall, Harry A. (Hall) L.D.H. International, Inc. (LDH) Hascoe, Lloyd (Hascoe) Likins, Paul R. (Likins) Lonergan, William (Lonergan) M3ITC Meeker, Herbert S. (Meeker) Melcher, James L. (Melcher) Myers, Frederick (Myers) Northeast Wireless, High Band Broadcasting Corp., FM Video Broadcasters and Western p` P @ 0 p`P@0  !"#$%p&`'p` P @ 0 p`P@0  !"#$%p&`'oSierra Bancorp (Joint Petitioners) Peyser, Frederick M. (Peyser) PMJ Securities, Inc. (PMJ) Robert E. La Blanc Associates, Inc. (La Blanc) Robertson, Jeanne P. (J. Robertson) Robertson, Sanford B. (S. Robertson) Rosenkranz, Robert (Rosenkranz)"h$0*%%\\&"ԌR&R Telecommunications Partners (R&R) SCNY Communications, Inc. (SCNY) Seaview Telesystems Partners (Seaview) Siegel, Lewis W. (L. Siegel) Siegel, Michael S. (M. Siegel) Sloan, Kim (Sloan) SMC Associates (SMC) Snelling, Charles D. (Snelling) Telecom Investment Corp. (TIC) Telecommunications/Haddock Investors (THI) University of TexasPan Am (UTPA) and RioVision, jointly (Texas Petitioners) Video Communications Corporation (VCC) Video/Phone Wechsler, Diane (Wechsler)  Y 4Wolff, Ivan (Wolff) l"q   Y 4  l"q   Yy4L"} Y4  ` $#4K2pPG;8#News media Information 202 / 4180500 `$8FaxOnDemand 202 / 4182830 `$NInternet: http://www.fcc.gov `c!$ ftp.fcc.gov  L'#8&h2pPG;9p&#Federal Communications Commission 1919 M Street, N.W. Washington, D. C. 20554  c#9^2pPG;:#y:  dddy  M8{h#:^2pPG;:##:,92pPG;;J,#This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).  y: 5 dddhy  M8h U 1  1 ; Figure 1  Figure 1 ;y!HHhh@Uddfcclogo.wpgHHy! Xz dd8k @#;S2pPG;