Filing Procedures in the Multipoint Distribution Service and in the Instructional Television Fixed Service, including Electronic Filing and Competitive Bidding

Federal RegisterDec 9, 1994

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 21 and 74

[MM Docket No. 94-131 and PP Docket No. 93-253, FFC 94-293]

Filing Procedures in the Multipoint Distribution Service and in

the Instructional Television Fixed Service, including Electronic Filing

and Competitive Bidding

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This document proposes a number of alternative procedures for

the filing of new station applications for single channel and

multichannel Multipoint Distribution Services (MDS). These procedures

are designed to expedite processing and facilitate development of

wireless cable, an industry that delivers video programming to

subscribers using MDS and Instructional Television Fixed Service (ITFS)

channels. This proceeding is intended to expedite more service to the

public and enhance opportunities for wireless cable to reach its

potential as a competitor to wired cable.

DATES: Comments must be received on or before January 9, 1995, and

reply comments must be received on or before January 24, 1995.

ADDRESSES: Comments and reply comments may be mailed to Office of the

Secretary, Federal Communications Commission, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Sharon Bertelsen at (202) 416-0892 or

Jerianne Timmerman at (202) 416-0881, Video Services Division, Mass

Media Bureau.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The following collection of information contained in these proposed

rules has been submitted to the Office of Management and Budget for

review under Section 3504(h) of the Paperwork Reduction Act. Copies of

the submission may be purchased from the Commission's copy contractor,

International Transcription Service, 2100 M Street, NW., Suite 140,

Washington, DC 20037, (202) 857-3800. Persons wishing to comment on

this information collection should direct their comments to Timothy

Fain, (202) 395-3561, Office of Management and Budget, Room 10102 NEOB,

Washington, DC 20503. A copy of any comments should also be sent to the

Federal Communications Commission, Office of Managing Director,

Washington, DC 20554. For further information contact William Cline,

Federal Communications Commission, (202) 418-0210. OMB Number: None. An

existing collection of information, OMB No. 3060-0402, titled

``Application for New or Modified Microwave Radio Station License Under

Part 21'' proposes changes to FCC Form 494. This Notice proposes to

create a separate paper application form to be used for a new MDS

facilities, and an electronic form to be used for new MDS and ITFS

facilities.

Title: Amendment of Parts 21 and 74 of the Commission's Rules with

Respect to Filing Procedures in the Multipoint Distribution Service and

in the Instructional Television Fixed Service.

Form: Undetermined.

Action: Proposed New Collection.

Respondents: Businesses or other for-profit, small businesses or

organizations.

Frequency of Response: On occasion.

Estimated Annual Response: On occasion.

Estimated Annual Response: 734-17,000, 4 hours per response.

Needs and Uses: This long-form is proposed to be limited to the

filing of applications and related amendments for new Multipoint

Distribution Service stations. The data would be used to ensure that

the respondent is qualified to become a Commission licensee.

The complete text of the Notice of Proposed Rulemaking follows. It

is also available for inspection and copying during normal business

hours in the FCC Reference Center, Room 239, at the Federal

Communications Commission, 1919 M Street, NW., Washington, DC 20554,

and it may be purchased from the Commission's copy contractor,

International Transcription Service, Inc., 2100 M Street, NW., Suite

140, Washington, DC 20037, (202) 857-3800.

1. By this action, the Commission proposes to streamline the

procedures by which applications for new facilities in the Multipoint

Distribution Service (MDS)\1\ are filed and processed. We propose to

adopt filing procedures consistent with our competitive bidding

procedures. To do this, we propose that applicants file short-form

applications for predetermined geographic areas and the successful

bidders file long-form applications. We believe that implementation of

this process would avoid the lengthy delay associated with licensing

stations site-by-site, and therefore would allow operators to enhance

their service more rapidly, providing more competition to wired cable.

However, we also invite comment on alternative filing procedures,

including a national filing window and one limited to existing

licensees and system operators. We solicit comment on the technical and

practical feasibility of utilizing a mandatory electronic filing

approach in conjunction with each of these filing approaches.\2\

Finally, we invite any other proposals that would allow the Commission

to process MDS applications for new stations more efficiently and

result in more MDS service opportunities becoming available to the

public. We limit the scope of this proceeding to revisions to our rules

and procedures that will improve the MDS application processes.\3\

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\1\In this proceeding, unless otherwise indicated, ``MDS''

includes single channel and multichannel applications and

authorizations collectively.

\2\There is now outstanding an Order and Further Notice of

Proposed Rulemaking in MM Docket No. 93-24, 9 FCC Rcd 3348 (1994),

59 FR 35665 (July 13, 1994), in which the Commission is considering

further improvements to the Instructional Television Fixed Service

(ITFS) licensing process, including adoption of a window filing

procedure. The only aspect of this proceeding which we propose to

apply to apply to ITFS is the electronic filing proposal.

\3\As noted in footnote 2, supra, the electronic filing proposal

if implemented would also apply to the ITFS application proceeding.

In response to a July 28, 1993 Public Notice, we received several

comments on ways the Commission could expedite the processing of MDS

applications. We have considered those views in our drafting of this

Notice of Proposed Rulemaking and we will incorporate those

materials in the public record of this proceeding.

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2. Our goal in instituting this proceeding is to facilitate

development of the wireless cable industry\4\ and to continue our

efforts to coordinate the processing of MDS and ITFS applications. The

Commission has consistently maintained that, in providing

communications services, the public interest is better served by

competition. A competitive industry framework promotes lower prices for

services, provides incentives for operators to improve those services

and stimulates economic growth. An essential component of competition

is choice. As we recognized in our recent report to Congress, consumers

in the market for video programming do not have enough choices.\5\

Although competing technologies have made major strides since the

previous report on cable competition in 1990, the cable television

market remains largely noncompetitive. With respect to wireless cable,

we reported that more systems are being built, the number of

subscribers has increased, and program access provisions and changes in

other regulations have given wireless cable operators a better foothold

in competition with wired cable, including the credibility to gain

access to financing. Competition Report at paras. 79, 80 and 90.

However, the difficulty of accumulating sufficient channel capacity

remains a major obstacle to many wireless cable operators. According to

the Competition Report, the combination of administrative improvements

in wireless cable licensing and the use of digital compression\6\

should help to alleviate this problem in the future. Id. at para. 90.

This rulemaking is one of several administrative improvements directed

toward enhancing the development of wireless cable operators as viable

competitors in the video programming marketplace. It will also further

the policies set forth by Congress in the 1992 Cable Act to ``* * *

promote the availability to the public of a diversity of views and

information through cable television and other video distribution

media.''\7\

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\4\``Wireless cable'' is the delivery of video programming to

subscribers using MDS and/or ITFS channels. Wireless cable resembles

cable television, but instead of coaxial cable, wireless cable uses

microwave channels. Our use of the term ``wireless cable'' does not

imply that it constitutes cable television for statutory or

regulatory purposes.

\5\Annual Assessment of the Status of Competition in the Market

for the Delivery of Video Programming (Competition Report), CS

Docket No. 94-48, FCC 94-235 (released Sept. 28, 1994). The

Commission is required to file such annual reports pursuant to the

Cable Television Consumer Protection and Competition Act of 1992

(1992 Cable Act), Pub. L. No. 102-385, Section 628(g), 106 Stat.

1460 (amending the Communications Act of 1934), codified at 47

U.S.C. 548(g).

\6\Digital compression is a technology that employs various

techniques to reduce the number of bits required to transmit a

program. Therefore, for a given channel bandwidth and digital

transmission rate, an operator may, depending on circumstances,

transmit a single uncompressed program or multiple compressed

programs. For example, a six-to-one compression ratio permits the

operator to offer six program channels from one 6 MHz frequency

bandwidth.

\7\1992 Cable Act Section 2(b)(1), 106 Stat. at 1463. An

essential element of the 1992 Cable Act is promoting increased

competition and diversity by fostering the development of

alternative multichannel video programming distributors (MVPD). The

term ``MVPD'' means ``a person such as, but not limited to, a cable

operator, a multichannel multipoint distribution service, a direct

broadcast satellite service, or a television receive-only satellite

program distributor, who makes available for purchase, by

subscribers or customers, multiple channels of video programming.''

Communications Act Section 602(12), 47 U.S.C. 522(12). In markets

where effective competition is present, the government will no

longer need to regulate cable rates, as required by the 1992 Cable

Act, because cable rates will be regulated by the marketplace.

Communications Act Section 623(a)(2), 47 U.S.C. 543(a)(2).

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3. When the Commission reallocated eight channels to MDS in 1983,

thereby creating wireless cable as a multichannel video distribution

medium, a variety of application procedures existed because wireless

cable system operators used a combination of channels accumulated from

a variety of Commission services with differing sets of rules,

procedures and policies.\8\ One of the major obstacles faced by

wireless cable operators over the years has been the difficulty

involved in accumulating the number of channels necessary to meet

subscriber demand and be able to compete with wired cable television

systems in the same area. There are a maximum of thirty-three microwave

channels available for wireless cable systems. This includes thirteen

MDS channels (Channels 1, 2 or 2A, E1-E4, F1-F4 and H1-H3) and the

excess capacity in the twenty ITFS channels (Channels A1-A4, B1-B4, C1-

C4, D1-D4 and G1-G4).\9\ In an effort to consolidate and promote the

expeditious processing of applications for licenses that may be used to

provide wireless cable services into one organization, the Commission

recently transferred responsibility for MDS from the Common Carrier

Bureau to the Mass Media Bureau. Amendment of Parts 0 and 1 of the

Commission's Rules to Reflect a Reorganization of Multipoint and

Multichannel Multipoint Distribution Services, 9 FCC Rcd 3661 (1994),

59 FR 38374 (July 28, 1994).

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\8\Report and Order in Gen. Docket No. 80-112, 94 FCC 2d 1203

(1983), 48 FR 33873 (July 26, 1983). Therein, the Commission

reallocated eight of the ITFS channels for use by MDS nationally,

grandfathered interference protection to existing E or F ITFS

applicants, permittees or licensees, approved cash payments by MDS

entities for vacating ITFS channels, and authorized ITFS licensees

to lease the excess capacity on their systems to wireless cable

operators.

\9\In some locales, there are twenty-eight ITFS channels due to

the 1983 grandfathering of ITFS entities. In 1991, the Commission

reallocated the H-group channels from the Operational Fixed Service

to MDS and made MDS operators eligible for authorization on vacant

ITFS channels with specified restrictions. Second Report and Order

in Gen. Docket No. 90-54, 6 FCC Rcd 6792, 6793-94, 6801-06 (1991),

56 FR 57808 (Nov. 14, 1991). In 1992, the frequency spectrum of 2160

MHz to 2162 MHz (of the former frequency allocation of 2156 MHz to

2162 MHz, MDS Channel 2) was reallocated to emerging technologies,

leaving MDS Channel 2A, a 4 MHz channel. Redevelopment of Spectrum

to Encourage Innovation in the Use of New Telecommunications

Technologies, ET Docket No. 92-9, 7 FCC Rcd 6886, 6889 n.22 (1992),

57 FR 49020 (Oct. 29, 1992).

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4. For a number of years, the Commission has been concerned that

the volume of MDS applications filed by speculators has caused delays

in the licensing process and has overburdened the Commission's limited

resources. A rule revision aimed at addressing this problem was adopted

in the Report and Order in Gen. Docket Nos. 90-54, 80-113, 5 FCC Rcd

6410, 6424 (1990), 55 FR 46006 (Oct. 31, 1990); Order on

Reconsideration, Gen. Docket Nos. 90-54, 80-113, 6 FCC Rcd 6764 (1991),

56 FR 57596 (Nov. 13, 1991), petition for review filed, United States

Independent Microwave Television Association v. FCC and United States

of America, No. 91-1637 (D.C. Cir. filed Dec. 20, 1991) (held in

abeyance by Court Order of February 21, 1992, pending action on the

second set of reconsideration petitions). The rule, commonly referred

to as the ``same calendar day rule'' is found in Section 21.914 of the

Commission's rules, 47 CFR 21.914. Under this rule, an MDS application

for a new station that is acceptable for filing will be mutually

exclusive with any other MDS application which is acceptable for filing

for the same service area and frequency if it is received by the

Commission on the same calendar day as the first such MDS application

received by the Commission. This rule change eliminated the opportunity

for speculators simply to copy applications that were previously filed

and resubmit them under different names. However, because of our rules

authorizing lotteries and settlement groups, the filing of applications

for new MDS stations was nevertheless appealing to speculators, who

continued to file a large number of applications up to the time the

Commission imposed a freeze on the filing of applications for new

facilities in the Notice of Proposed Rulemaking, PR Docket No. 92-80, 7

FCC Rcd 3266 (1992), 57 FR 24006 (June 5, 1992).\10\ At the time of the

freeze, there was a backlog of tens of thousands of applications, the

majority believed to be speculative. Id. at 3267.

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\10\The Commission adopted a number of rule changes to deter

systematic abuse by speculators in Report and Order in PR Docket No.

92-80, 8 FCC Rcd 1444 (1993), 58 FR 11795 (Mar. 1, 1993).

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5. The Commission has recently stated that all mutually exclusive

MDS applications for new stations filed after the lifting of the freeze

will be subject to the competitive bidding process. Implementation of

Section 309(j) of the Communications Act--Competitive Bidding, Second

Report and Order in PP Docket No. 93-253, 9 FCC Rcd 2348, 2359 (1994),

59 FR 22980 (May 4, 1994) (Second Report and Order), recon. granted in

part, Second Memorandum Opinion and Order, FCC No. 94-215 (released

Aug. 15, 1994), 59 FR 44272 (Aug. 26, 1994). Therein, the Commission

determined that the use of competitive bidding for MDS would further

the objectives described in 47 U.S.C. 309(j)(3). The use of competitive

bidding would speed the development and further deployment of MDS for

the benefit of the public, with minimal administrative or judicial

delays. The proposals set forth for consideration in this proceeding

are designed to avoid the backlogged applications and legal protests

that have delayed and stifled the deployment of MDS in the past. We

believe that accelerated processing permitted by electronic filing and

data collection, along with competitive bidding procedures, will reduce

the likelihood of speculative filings and generally expedite the

initiation of new service.

6. In the discussion that follows, we invite comment on several

alternatives for acceptance of MDS applications after the processing

freeze is lifted next year. The Commission favors a filing approach

which is based upon specific predetermined geographic area, such as

Metropolitan Statistical Areas (MSA) and Rural Service Areas (RSA) or

Areas of Dominant Influence (ADI). This filing approach would utilize

short-form applications to identify mutually exclusive applicants for

competitive bidding purposes. Second Report and Order in PP Docket No.

93-253, 9 FCC Rcd 2348, 2376 (1994), 59 FR 22980 (May 4, 1994). Another

filing approach would restrict applications to Commission-identified

vacant E, F and H channels. Here, the Commission would also identify

mutually exclusive situations through the use of short-form

applications. Under another alternative, the Commission would

periodically open national filing windows, and there would be no

geographic restrictions on filing for available MDS channels. One

option to the national filing window approach would be to limit

eligibility to file in the first window to existing system operators

and licensees. These two national window proposals would require long-

form applications, containing the applicant's complete technical

proposal, to determine mutual exclusivity before competitive bidding

procedures are implemented.

7. MSA/RSA/ADI Approach. As our preferred filing approach, we

invite comment on whether we should adopt a procedure under which

applications for new MDS stations would be filed for predetermined,

discrete areas, similar to Cellular Radio's Metropolitan Statistical

Areas (MSA) and Rural Service Areas (RSA), or the television Areas of

Dominant Influence (ADI).\11\ The Commission would release a public

notice announcing auctions by MSA/RSA/ADI, and the time, place and

method of competitive bidding to be used, including the applicable

bidding procedures. Applicants would file for all usable E, F and H

channels. They would be allowed to operate facilities on these channels

anywhere throughout the service area provided the specific engineering

design of their wireless cable facility meets the Commission's

interference protection standards to any previously proposed or

authorized MDS facilities. The public notice would also specify the

filing period for short-form applications (FCC Form 175)\12\ and

deadlines for submitting the applicable filing fee and the upfront

payment, and the amounts. Applicants would file a short-form

application for all usable channels in a particular MSA, RSA or ADI and

those applications would be treated as mutually exclusive and subject

to the competitive bidding process. Mutually exclusive applicants would

bid for all usable channels in a particular area as a package, enabling

operators to amass large channel groups.

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\11\MSAs and RSAs are standard geographic areas used by the

Commission for administrative convenience in the licensing of

cellular radio systems. All of the 306 MSAs and 428 RSAs and the

counties they comprise are listed in Public Notice Report No. CL-92-

40 ``Common Carrier Public Mobile Services Information, Cellular

MSA/RSA Markets and Counties,'' DA 92-109, 7 FCC Rcd 742 (1992). See

also 47 CFR 22.909 (effective Jan. 1, 1995). ADIs are standard

geographic areas developed by Arbitron Ratings Company. Under this

market definition, each county in the continental United States is

placed within one of 210 ADIs, the lowest numbered ADI having the

highest population.

\12\Form 175 contains the applicant's name, the licenses on

which the applicant wishes to bid, the persons authorized to make or

withdraw a bid, whether the applicant is qualified as a designated

entity under 47 CFR 1.2110, certifications that the applicant is

legally, technically, financially and otherwise qualified, and

identification of all parties involved in agreements, or

certification that no agreements exist, relating to the conditional

licenses being auctioned or the bidding process.

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8. We seek comment on whether our current 15 mile radius definition

of an MDS licensee's protected service area would be appropriate for

licenses granted on an MSA/RSA/ADI basis. In particular, we request

comment on whether the MSA/RSA/ADI boundary should become the protected

service area of the wireless cable system. If this definition of

protected service area were adopted, how would our current interference

protection standards, defined by desired-to-undesired signal strength

ratios, be applied? Would these standards permit service to the areas

adjacent to the borders between geographic license areas? If not, are

there modifications to the rules that might serve the public interest,

for example, permitting parties to negotiate interference rights to

enable interference-free service in the border areas? We also request

comment on the impact of our protected service area decision on the

ordering in which service areas should be auctioned. For example,

depending on the definition of protected service areas, service areas

auctioned earlier may be able to secure border area interference

protection rights. In this case, should service areas be auctioned in

descending order of population?

9. The auction winner would have several responsibilities and

rights. For instance, an auction winner would be required to submit a

down payment within five business days after the close of the auction.

The auction winner would be required, by a specified date, to file a

long-form MDS application which includes a complete engineering

proposal. This long-form would include a demonstration that the

proposed MDS stations would not cause harmful interference to any

previously proposed or authorized MDS stations, and applicants would

have the opportunity to cure any such defects in their engineering.

Long-form applications found to be acceptable would be proposed for

grant by a Commission public notice. This public notice would trigger a

thirty-day period for the filing of petitions to deny. See 47 U.S.C.

Section 309(b). If there are no petitions filed, or upon resolution of

petitions that have been filed, and if the applicant is otherwise

qualified under 47 CFR 21.32 (e.g., FAA clearance), the conditional

license would be granted. If the conditional license was granted

following an auction, the grant would be conditioned upon the winner

making full payment of the balance of the winning bid within five

business days following the grant (except for small businesses allowed

to make installment payments).\13\ Since applicants would receive

conditional licenses for all usable channels in a particular area as a

package, we seek comment as to the appropriateness of allowing mergers

and other transfers prior to the completion of construction.

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\13\The definition of ``small business'' is discussed in

paragraph 24, infra.

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10. The Commission believes that this framework provides the most

manageable and efficient system to disseminate MDS licenses. The use of

short-form applications prior to the auction reduces the administrative

burdens on applicants and the Commission, and minimizes the potential

for delay. In addition, this type of filing approach, coupled with

competitive bidding procedures, would encourage universal coverage and

afford the greatest likelihood of rapidly promoting the development of

MDS as a viable competitive service. This approach is also likely to

deter speculation because auction methodologies are designed to ensure

that the party who most highly values the spectrum obtains the license,

not a speculator. We solicit comment on whether we should adopt this

proposal, and if so, which geographic areas are most suitable for MDS

to utilize.

11. E, F and H Identified Sites. An alternative filing approach,

which is somewhat more restrictive than our preferred approach, would

limit applications to predetermined sites. We invite comment on a

procedure pursuant to which multiple public notices would identify

sites where there are vacant E, F or H channels available. The

Commission would identify such sites based upon the location of an

already authorized E, F or H channel. Pursuant to this proposal,

applicants for the vacant channels at these identified sites would file

a short-form application to identify mutually exclusive situations for

purposes of competitive bidding. Thereafter, the auction winner would

be required to file a long-form MDS application which contains a

complete engineering proposal, specifying compatible station design and

demonstrating a lack of harmful interference to co-channel and

adjacent-channel previously proposed or authorized MDS stations in

nearby areas. We request comment on this alternative, which also

promotes streamlined application processing and works well with

competitive bidding procedures.

12. National Filing Window Proposal. Under this proposal, windows

would be opened periodically in order to provide opportunities for

filing applications for new MDS stations.\14\ The Commission would

issue a public notice announcing the filing window for available

channels which would remain open for a specified period of time, and

applications for new MDS stations would be filed within that stated

window. Under this approach, there would be no geographic restrictions

upon filing for available MDS channels. Accordingly, the applicant

would initially be required to file a long-form MDS application, with

the applicant's complete engineering proposal, to enable the Commission

to determine mutual exclusivity. After the close of the window, each

application would undergo an acceptability review, which includes an

engineering interference analysis. To be acceptable for filing, the

application would have to contain all of the data and other information

necessary to allow processing of the application. See Appendix, Items

1-20. An application would be considered unacceptable for filing and

returned if, inter alia, its proposed facilities are predicted to cause

harmful interference to any part of the protected service area of an

authorized station or a facility proposed in an application filed prior

to the opening of a particular filing window. See 47 CFR 21.31, 21.902

and 21.914. Applications found to be acceptable and not mutually

exclusive with any other acceptable application would be proposed for

grant by a Commission public notice. This public notice would trigger a

thirty-day period for the filing of petitions to deny. See 47 U.S.C.

309(b). If there are no petitions filed and if the applicant is

otherwise qualified, the conditional license would be granted.

Applications found acceptable for filing and mutually exclusive with

another would be subject to competitive bidding. Under the national

window approach, applications may be amended while the window is open.

After the close of the window and up until the close of the auction, no

amendment may be filed which corrects any defect in an application that

is unacceptable for filing on the last day of a filing window. We

propose that the Commission only accept the following two types of

amendments after the close of the window and up until the close of the

auction: (1) Amendments filed pursuant to 47 CFR 1.65 to furnish

updated information, and (2) minor amendments as defined by 47 CFR

21.23, including pro forma changes in ownership or control. Following

the auction, the Commission would provide the auction winner the

opportunity to cure any defects in its engineering proposal.

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\14\A similar procedure is currently being used by the low power

television service. Report and Order in MM Docket No. 83-1350, 102

FCC 2d 295 (1984), 49 FR 47837 (Dec. 7, 1984).

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13. We believe that since this approach would likely result in a

larger number of mutually exclusive applications, implementation would

require significant resources and take a substantial amount of time to

conduct the competitive bidding process. We request comment on how to

resolve the ``daisy-chains'' (interlinking application proposals at

different locations) that might arise under this proposal. We invite

commenters favoring a national window approach to discuss these

concerns, how far in advance we should announce the opening of a window

and the appropriate length of the window.

14. First Window: Accumulation of ``Critical Mass'' of Channels. As

an option to the national filing window, the first window could be

limited to existing system operators and licensees. Under this

approach, we would require that applications be filed by a licensee or

system operator who, at the time the application is filed, is operating

a minimum number of channels, such as four, six, eight or ten. Where

the existing system operator is not a licensee, we would require a

certification that lease agreements have been executed between the

operator and the licensee. We would require such applicants to keep

copies of lease agreements and make them available upon the request of

the Commission. This ``critical mass'' approach would encourage

enhancement of existing wireless cable operations, and thus accelerate

opportunities for competition with wired cable systems in various

locales. Such an approach is well within our legal authority. See,

e.g., United States v. Storer Broadcasting Co., 351 U.S. 192, 202

(1956); Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 333 n.9 (1945);

Hispanic Information & Telecommunications Network v. FCC, 865 F.2d

1289, 1294 (D.C. Cir. 1989). We solicit comment on whether we should

adopt this proposal, and if so, who should be eligible to file

applications in this window.

15. Interference Criteria and Mutual Exclusivity. As a complement

to the various filing proposals and electronic procedures, infra, we

propose to adopt a technical equation as the basis for the ``free

space'' interference protection calculations. The following formula is

currently used by the Commission's MDS engineers and is recognized by

engineering consulting firms that represent the wireless cable

industry:

The received signal power level (RSL)dBW at the output of the

FCC reference receiving antenna is obtained from the following:\15\

\15\Leon W. Couch II, Digital and Analog Communication Systems,

p. 384 (3rd ed. 1990).

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(RSL)dBW=(EIRP)dBW-(LFS)dB+(GAR)dB

where the free space loss (LFS)dB is

(LFS)dB=20 log (4d/) dB

In these equations, (RSL)dBW is received power in decibels

referenced to one watt, (EIRP)dBW is equivalent isotropically

radiated power in decibels above one watt, d is the distance of the

signal path in meters, is the wavelength of the signal in

meters, and GAR is the gain of the reference receiving antenna, as

obtained in 47 CFR 21.902(f)(3), Figure 1. We propose to formalize the

above equations by adopting them as a rule provision, much like the

equation at 47 CFR 21.902(d)(2). In so doing, we are not proposing

significant changes in the substantive requirements regarding

interference showings. To facilitate our plans for computerized

interference studies, we will require proposed facilities to meet the

45 dB and 0 dB co-channel desired to undesired signal strength ratios

at points along the service contours of protected facilities which were

authorized under the current interference standards. With regard to

long-form applications, we propose to retain the rules requiring that

the applicant perform analyses of the potential for harmful

interference and serve the interference studies upon the previously

proposed or authorized station applicants, conditional licensees or

licensees required to be studied. 47 CFR 21.902. On the electronic

application form, the applicant would supply certain crucial data

elements describing the station parameters, such as antenna

polarization and the station equivalent isotropically radiated power

(EIRP), while the Commission staff would perform the interference

analysis using a computer program. In this service, there are two rules

that currently defined mutual exclusivity: Section 21.31 and Section

22.901(d)(5). See 47 CFR 21.902. In light of the proposed computer-

assisted interference studies that will readily determine whether an

application is mutually exclusive with another, under our national

window proposals, the second rule, Section 21.901(d)(5), is no longer

necessary. We would not require the submission of any types of

interference or other engineering analyses to the Commission at the

time the application is filed. Nor would we require the submission of a

list of each applicant, conditional licensee or licensee served at the

time the application is filed. We propose to require the applicant to

make the records available for Commission inspection upon request. We

invite comment on whether we should adopt this formula as a rule. We

also seek comment on whether we should eliminate signal contour maps as

a required part of interference studies.

16. We are also proposing to improve the current application form

used for new MDS stations, FCC Form 494,\16\ by excluding certain data

elements which have yielded information that is no longer necessary or

of only marginal utility. Further, such modifications should serve to

facilitate the proposed computer-assisted process. For instance, we

propose to eliminate queries regarding the antenna vertical sketch and

the narrative description of why grant of the application would be in

the public interest. We also generally propose to exclude the following

parameters of the transmission system: transmitter manufacturer and

model number, transmitter output power, transmitting antenna gain and

the specification of transmission line and other transmission losses.

With regard to transmitters, we are only concerned that MDS licensees

operate transmitters that are ``type-accepted'' by the Commission for

use in this service. Although we propose to eliminate the requirement

that the applicant identify the transmitter make and model, we intend

to require conditional licensees to certify the use of a type-accepted

transmitter in their certification of construction, currently FCC Form

494A. Transmitter output power, system loss, and antenna gain are the

parameters used to calculate a station's maximum EIRP. The MDS rules

were recently changed to provide for a maximum EIRP, rather than a

maximum value for transmitter output power. See 47 CFR 21.904. The

critical parameter in free space signal propagation analysis is EIRP.

Applicants, therefore, would be permitted to use any transmitter output

power necessary to achieve the desired EIRP, provided the EIRP remained

within the limits given in the Commission's rules. Thus, we believe

that it is not necessary to require applicants to specify the equipment

parameters used to calculate the EIRP, i.e., transmitter power, antenna

gain and transmission losses. We also propose to allow changes to these

transmission parameters without notification to the Commission,

provided the resulting EIRP would not change. The station power to be

specified on the form would be the maximum EIRP in the horizontal

plane, i.e., the EIRP at an angle of zero degrees in the vertical

plane. Electrical beam tilting of antennas will be permitted; however,

in all cases, applicants would be required to specify the EIRP in the

horizontal plane. In most instances, this value of EIRP closely

approximates the power radiated to the radio horizon which is most

relevant to interference analysis. Also, by proceeding in this manner,

it would not be necessary for us to collect data on antenna vertical

radiation patterns. We invite commenters to discuss these and other

possible changes to an application form for MDS facilities and the

related issues introduced in this proceeding.

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\16\Since Form 494 is a multi-purpose form that is used for

other services, to the extent that we are proposing changes, we

intend to create a different form to be used for MDS.

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17. An Electronic Application Form. We propose to modify further

the long-form MDS application in an effort to make the form compatible

with an electronic filing system. The proposed electronic version of

the long-form application for news MDS stations would consolidate

information from FCC Form 494 and FCC Form 430, the License

Qualification Report, and be formatted in a manner appropriate for

electronic data capture. For example, we would retain engineering data

elements necessary for analysis of interference or possible air safety

hazards, and we would retain applicant responses which demonstrate

compliance with a particular statutory requirement, such as an

environmental assessment. In terms of specific items, the Appendix

lists proposed data elements and other informational items for our new

electronic application form. These include general, engineering and

legal elements. The engineering parameters of proposed stations are

generally limited to variables used in our interference analysis or air

safety determinations, such as transmitting antenna site coordinates,

EIRP, antenna polarization, site elevation and antenna structure height

above ground. Other data may be used to verify an applicant's

compliance with a particular Commission rule. For example, antenna beam

width is used to calculate the maximum allowable EIRP of a station

using a directional transmitting antenna. Applicants proposing to

locate stations in areas where notification or coordination with Canada

or Mexico is required by international agreement would be required to

submit the following additional technical data, which is not proposed

as standard data elements in the electronic application form:

transmitter output power transmitting antenna gain and transmission

line loss. It may be possible to specify this data in a textual exhibit

in the electronic long-form application. If not, a paper supplement to

the application would be submitted as directed by the Commission staff.

We seek comment on our proposed elements for the electronic filing

process.

18. Electronic Filing Process. In 1992, Congress amended the

Communications Act of 1934 to permit the electronic filing of license

and construction permit applications. Telecommunications Authorization

Act of 1992, Pub. L. No. 102-538, Section 204, 106 Stat. 3533, 3543,

codified at 47 U.S.C. 308(b) and 319(a). Such applications may be

signed ``in any manner or form, including by electronic means, as the

Commission may prescribe by regulation.'' Id. The Commission currently

accepts license applications electronically in the private land mobile

radio service (FCC Form 574) and we are here considering a proposal to

accept electronically applications for new MDS stations.\17\ We would

modify our handwritten signature requirement, 47 CFR 1.743 and 21.6(d),

and other rules as necessary to implement such an electronic filing

system.

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\17\Amendment of the Commission's Rules to Modify Signature

Requirement for License Applications in the Private Radio Services,

8 FCC Rcd 2662 (1993), 58 FR 21405 (Apr. 21, 1993). Until we have

gained some experience with electronic filing procedures, we propose

to limit its use to the filing of applications and related

amendments for new MDS stations. Certifications of completion of

construction, applications for assignment or transfer of control of

licenses, license renewals, signal boosters, extensions and

modifications pursuant to 47 CFR 21.40, 21.41, 21.42 and 21.910,

would continue to be filed in paper format according to existing

procedures.

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19. We envision the use of communication links, such as a Value

Added Network (VAN), that would allow the exchange of data between

applicants and the Commission. VANs as offered by private entities and

may require an applicant to establish an account. The use of a VAN is

particularly attractive as a method of electronically filing

applications because of its high degree of efficiency and security in

transferring information. Although our intent is to implement an

electronic filing system without creating additional burdens, we

recognize that VANs may impose an added cost to filing an application.

For example, to establish an electronic mailbox from a VAN may cost as

much as $300 with added monthly and per use fees. To minimize the costs

to individuals, an electronic mailbox could be established by a

representative group, such as a law firm or engineering consulting

firm, as a service to its customers.

20. In designing an electronic filing system that will work

efficiently, we believe that it will be necessary to eliminate the

filing of paper to the maximum extent possible. Such a system would

consist of data on a series of computer screens, translated into a

transaction format, together with electronically prepared exhibits. We

envision an electronic form designed for personal computers using a

windows-based environment. Essentially, the data would be uploaded from

a personal computer to a VAN or other type of electronic mailbox, then

downloaded to a Commission mailbox in the correct format. Although it

appears that VANs may have the capability to transfer text

electronically, a possible limitation concerns the difficulty or

expense associated with electronic maps or other graphics

representations. For routine applications, we hope to eliminate the

need for paper submissions completely, at least during the initial

application acceptance stage of processing. Implementing such a system

would expedite the application process in several ways. First and

foremost, it would eliminate the need for manual entry of application

data into the Commission's several databases, resulting in instant

databases that are current and accurate. Our intent is for the public

to have on-line viewing access to MDS databases through a third-party

vendor and the Commission's public reference room. Second, an

electronic filing system, coupled with the proposed computer-assisted

processing program, would eliminate the need for manual review by the

Commission's engineering staff of engineering analyses currently

submitted by applicants under 47 CFR 21.902 and 21.904. This manual

review is very time-consuming. Finally, the staff would be able to

handle, with reasonable speed, the anticipated increase in the number

of applications to be processed. In balancing these multiple factors,

we believe that the benefits of implementing an electronic filing

system outweigh the associated costs. We invite comment on the

feasibility of using a mandatory electronic filing system for new MDS

station applications in connection with the application filing

procedures discussed above. We also solicit comment on whether ITFS

applicants should be required to file applications for new stations

electronically on a combined application form, and whether there should

be a paper exception for those educators that are not financially

supported by a wireless cable operator.

21. Electronic Fee Payments. Regarding payments of application

fees, we will use the current methods of payment for application fees

under 47 CFR 1.1109. The methods include check, bank draft, money

order, wire transfer, electronic customer-initiated payments and Visa

or Master Card credit card. The Commission recently amended 47 CFR

1.1108 and 1.1109 to permit the electronic filing of fee payments,

initially on an experimental basis. Implementation of Section 9 of the

Communications Act, Report and Order in MD Docket No. 94-19, FCC No.

94-140 (released June 8, 1994), 59 FR 30984 (June 16, 1994) at para.

50-51. In addition to the existing payment methods available, we

propose to accept electronic payments under Section 1.1109. Pursuant to

subsection (a)(1) of that section, procedures for the electronic

payment of fees will be announced by Public Notice. We request comment

on a fee system where applicants use a unique fee payor number, such as

a federal employer identification number together with an appropriate

service code, and a suffix in cases where applicants file multiple

applications. This would link the fee payment with the electronically

filed application. Applicants would be permitted to prepay their

application fee after public notice of any national filing window until

the close of the filing window, using any currently acceptable form of

payment. When the applicant makes the fee payment to the Commission's

lockbox bank, the applicant's unique identification number is supplied

with the fee payment, and the applicant uses the same number on the

electronic application for a new station. We seek comment on this

proposal.

22. Competitive Bidding Procedures. In light of the proposals set

forth above, we invite further comment on the Notice of Proposed

Rulemaking in PP Docket No. 93-253, 8 FCC Rcd 7635 (1993), 58 FR 53489

(Oct. 15, 1993), and the Second Report and Order, 9 FCC Rcd 2348

(1994), 59 FR 22980 (May 4, 1994), recon. granted in part, Second

Memorandum Opinion and Order, FCC No. 94-215 (released August 15,

1994), 59 FR 44272 (Aug. 26, 1994), regarding competitive bidding

procedures with respect to MDS. Specifically, we invite comment on

which of the alternative competitive bidding procedures adopted in the

Second Report and Order is best suited to MDS.

23. The Second Report and Order in the competitive bidding

proceeding sets forth three primary auction methods from which the

Commission may choose in selecting an appropriate competitive bidding

design:

(1) Simultaneous multiple round auctions;

(2) Sequential oral auctions (open outcry); or

(3) Sealed bid auctions (either sequential or simultaneous). 9 FCC

Rcd at 2366-67. We seek comment on the suitability of these methods for

the auctioning of MDS licenses. There appears to be some geographic

interdependence due to coordination of interference at the borders.\18\

However, as the value of and interdependence between MDS licenses in

different geographic areas may not be sufficiently high to justify the

use of simultaneous multiple round bidding, we tentatively conclude

that this type of bidding design is less appropriate for MDS than

either sequential oral or sealed bid auctions. In commenting on this

tentative conclusion, commenters should consider the relative value of

MDS licenses, the importance for wireless cable operators of

aggregating as many channels as possible within particular geographic

areas, and the significance for operators of accumulating channels

across diverse geographic areas. We additionally request comment on the

relative advantages and disadvantages of utilizing either oral bidding

or sealed bidding to auction MDS licenses. In commenting on the

suitability of oral or sealed bidding for MDS, commenters should focus

their discussion on the following factors:

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\18\Licenses are interdependent when the value of a license to

the bidder depends on the degree to which licenses are substitutes

or complements. Second Report and Order at 2364.

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(a) The value and interdependence of MDS licenses;

(b) The number of MDS channels that remain available for auction;

(d) The administrative ease of implementing the auction design

selected; and

(e) The expected number of bidders for each area. As explained in

paragraph 7, supra, our preferred approach will utilize predetermined

geographic service areas and contemplates auctioning all usable

channels in each area together. We seek comment on this approach.

24. Section 309(j) of the Communications Act, which gave the

Commission express authority to employ competitive bidding, also

mandated that the Commission ``ensure that small businesses, rural

telephone companies, and businesses owned by members of minority groups

and women are given the opportunity to participate in the provision of

spectrum-based services.'' 47 U.S.C. 309(j)(4)(D). To implement this

statutory mandate, the Commission established a menu of preferences,

including installment payments, tax certificates, bidding credits and

spectrum set-asides, to choose from in selecting preferences that will

be applicable to particular services. Second Report and Order at 2389-

92. We request comment on these various preferences, which entities

should be eligible to receive them, and their appropriateness in light

of the characteristics of MDS. In particular, with regard to

determining eligibility for installment payments, we invite comment on

the appropriate definition of ``small business'' to be employed, taking

into account the capital requirements for MDS. Commenters may want to

address the standard definition of ``small business'' utilized by the

Small Business Administration is appropriate for MDS,\19\ or whether we

should establish a different standard based on a business' gross

revenues.\20\ We additionally seek comment on whether spectrum set-

asides are appropriate for MDS. We also request comment on how to

implement to bidding credit or payment discount program for MDS. In

connection with preferences for designated entities, commenters may

also wish to address measures designed to prevent unjust enrichment by

trafficking licenses acquired through the use of preferences.

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\19\The Small Business Administration standard definition

permits an applicant to qualify for financial assistance based on a

net worth in excess of six million dollars with average net income

after federal income taxes for the two preceding years not in excess

of two million dollars. 13 CFR 121.802.

\20\For the broadband and narrowband Personal Communications

Services, small businesses are defined as those with average gross

revenues for the three preceding years of less than $40 million. It

may be that this $40 million gross revenue standard is too high for

MDS, given the more modest capital requirements of MDS operators.

Third Memorandum Opinion and Order and Further Notice of Proposed

Rulemaking in PP Docket No. 93-253, FCC No. 94-219 (released Aug.

17, 1994), 59 FR 44058 (Aug. 26, 1994) at para. 46; Fifth Report and

Order in PP Docket No. 93-253, FCC No. 94-178 (released July 15,

1994), 59 FR 37566 (July 22, 1994) at para. 13.

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25. In addition to commenting on auction methods and preferences,

commenters should address other issues related to competitive bidding

for MDS. Commenters may want to comment on payment issues, particularly

the appropriate amount of the upfront payment submitted prior to an

auction, and the amount of the default penalty on winning bidders who

fail to make their required down payments on licenses, fail to make

final payments for licenses, or are disqualified after the close of an

auction. Commenters may also wish to address the advisability of

setting a reservation price, below which a license subject to auction

will not be awarded. Provisions designed to prohibit collusive conduct

in the context of competitive bidding may additionally be addressed, as

should any other issues related to competitive bidding for MDS.

26. As required by Section 603 of the Regulatory Flexibility Act of

1980, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq., the

Commission has prepared the following Initial Regulatory Flexibility

Analysis of the expected impact on small entities of the proposals