Private Operational-Fixed Microwave Service, et. al.; 2.1 and 2.5 GHz Frequency Use

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 21

[Gen. Dockets Nos. 90-54 and 80-113, MM Docket No. 94-131 and PP Docket

No. 93-253, FCC 96-130]

Private Operational-Fixed Microwave Service, et. al.; 2.1 and 2.5

GHz Frequency Use

Use of the Frequencies in the 2.1 and 2.5 GHz Affecting Private

Operational-Fixed Microwave Service, Multipoint Distribution Service,

Multichannel Multipoint Distribution Service, Instructional Television

Fixed Service, and Cable Television Relay Service; Filing Procedures in

the Multipoint Distribution Service and in the Instructional Television

Fixed Service and Implementation of Section 309(j) of the

Communications Act--Competitive Bidding.

AGENCY: Federal Communications Commission.

ACTION: Final rule; Third Order on Reconsideration and Order to

Clarify.

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SUMMARY: This Third Order on Reconsideration and Order to Clarify

resolves the issues raised in reconsideration petitions filed against

the Second Order on Reconsideration in Gen. Dockets No. 90-54 and 80-

113. The Second Order on Reconsideration essentially adopted three

changes. First, it enlarged the protected service area for Multipoint

Distribution Service (MDS) stations from 710 square-miles (the area of

a circle with a 15-mile radius) to approximately 3,848 square-miles

(the area of a circle with a 35-mile radius). Second, it revised the

rules for serving interference studies upon potentially affected

stations in the Instructional Television Fixed Service (ITFS). Third,

it clarified the use of frequency offset interference protection and

the MDS cut-off rule. In this Third Order on Reconsideration and Order

to Clarify, the Commission also provides clarification of provisions

set forth in the MDS Report and Order in MM Docket No. 94-131 and PP

Docket No. 93-253, including the interference study requirements for

pending ITFS applications and the statement of intention to be filed by

some winning bidders in the MDS auction. This Commission action 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.

EFFECTIVE DATES: June 24, 1996, except that the new or modified

paperwork requirements contained in Section 21.902(i), which are

subject to approval by the Office of Management and Budget (OMB), will

go into effect upon OMB approval. The Commission will issue at a later

date a public notice with this effective date.

FOR FURTHER INFORMATION CONTACT: Jerianne Timmerman at (202) 416-0881

or Sharon Bertelsen at (202) 416-0892.

The complete text of the Third Order on Reconsideration and Order

to Clarify follows. It is also available for inspection and copying

during normal business hours in the MDS public reference room, Room

207, at the Federal Communications Commission, 2033 M Street, N.W.,

Washington, D.C., and it may be purchased from the Commission's copy

contractor, International Transcription Service, Inc., 2100 M Street

NW., Suite 140, Washington, D.C. 20037, (202) 857-3800.

I. Introduction and Background

1. The Commission has before it three petitions for reconsideration

of the Second Order on Reconsideration in Gen. Docket Nos. 90-54 and

80-113, 10 FCC Rcd 7074 (1995), 60 FR 36737 (July 18, 1995) (``Second

Order on Reconsideration''), which revised the definition of the

protected service area of Multipoint Distribution Service (``MDS'') \1\

stations. In the Second Order on Reconsideration, the protected service

area for MDS stations was enlarged from 710 square-miles (the area of a

circle with a 15-mile radius) to approximately 3,848 square-miles (the

area of a circle with a 35-mile radius). Also revised were the rules

for serving interference studies upon potentially affected stations in

the Instructional Television Fixed Service (``ITFS''). In addition,

clarification was provided regarding frequency offset interference

protection and the MDS cut-off rule. Three petitions for

reconsideration of various aspects of the Second Order on

Reconsideration were timely filed with the Commission. The

reconsideration petitions include a request for clarification of

certain provisions of the order and a request for reconsideration of a

Commission public notice issued after the order was released, which

cited the order. Two oppositions were received, and no replies were

filed.

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\1\ Unless otherwise indicated, ``MDS'' includes single channel

Multipoint Distribution Service stations and Multichannel Multipoint

Distribution Service stations.

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2. The petitions for reconsideration principally raise issues

regarding the expanded protected service area for authorized and

previously proposed MDS stations. The major factors that prompted

adoption of the expanded protected service area in the Second Order on

Reconsideration included: (1) the many MDS operators that have been

serving areas larger than the 710 square-mile service area formerly

provided by the MDS rules; (2) the technological innovations in

reception equipment that have contributed to a significant increase in

the geographic area to which reliable MDS service can be provided; and

(3) the potential overcrowding of the MDS spectrum that would result

from continued use of the smaller service area. See Second Order on

Reconsideration at 7077-78. We also noted that the desirability of an

expansion of the protected service area had been enhanced by two

separate rulemakings: a 1995 ITFS rulemaking which established a fixed

35-mile distance as one of several criterion for ITFS receiver site

protection,\2\ and the Report and Order in Amendment of 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 and Implementation of Section 309(j) of the

Communications Act-Competitive Bidding, 10 FCC Rcd 9589 (1995), 60 FR

36524 (July 17, 1995) (``MDS Report and Order''), recon. granted in

part and denied in part, Memorandum and Order on Reconsideration,

Amendment of 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 and Implementation of Section

[[Page 18093]]

309(j) of the Communications Act-Competitive Bidding, FCC 95-445, MM

Docket No. 94-131 and PP Docket No. 93-253 (released October 27, 1995),

60 FR 57365 (Nov. 15, 1995), in which the Commission established

competitive bidding procedures to select among mutually exclusive MDS

applications. See Second Order on Reconsideration at 7079.\3\

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\2\ Report and Order, Amendment of Part 74 of the Commission's

Rules with Regard to the Instructional Television Fixed Service, 10

FCC Rcd 2907, 2921 (1995), 60 FR 20241 (April 25, 1995) (``ITFS

Filing Procedures Order''). A combination of ITFS and MDS

frequencies are used to provide a video entertainment service

popularly known as ``wireless cable.'' The rules for these two

services were initially developed independently. However, with the

increasing combined use of both service frequencies to provide a

single video service to consumers and to provide a competitor to

wired cable operators, coordination of the rules and policies for

both services has been encouraged. See Notice of Proposed Rulemaking

and Notice of Inquiry, Amendment of Parts 21, 43, 74, 78, and 94 of

the Commission's Rules, Pertaining to Rules Governing Use of the

Frequencies in the 2.1 and 2.5 GHz Bands Affecting: Private

Operational-Fixed Microwave Service, Multipoint Distribution

Service, Multichannel Multipoint Distribution Service, Instructional

Television Fixed Service, and Cable Television Relay Service, 5 FCC

Rcd 971 (1990), 55 FR 7344 (March 1, 1990).

\3\ In the Second Order on Reconsideration, we noted that ``[i]n

view of the competitive bidding procedures we are adopting * * *, we

have decided that it is even more important that an MDS station's

protected service area boundary be `easy to use and understand so

that the spectrum use rights of licensees are clear.' '' Second

Order on Reconsideration at 7079 (citing Amendment of Parts 21, 74

and 94 of the Commission Rules and Regulations with regard to the

technical requirements applicable to the Multipoint Distribution

Service, the Instructional Television Fixed Service and the Private

Operational-Fixed Microwave Service (OFS), 98 FCC 2d 68, 105-106

(1984), 49 FR 25456 (June 21, 1984)). As part of the new licensing

scheme, the Commission developed a plan under which MDS

authorizations would be auctioned for geographic areas called Basic

Trading Areas (BTAs). High bidders in the auction would be entitled

to seek authorizations to construct MDS stations on any usable

channels within their BTAs. Previously proposed and authorized MDS

stations within the BTAs would continue to provide service within

the expanded 35-mile protected service area provided in the Second

Order on Reconsideration.

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3. In addition to resolving the petitions for reconsideration filed

in response to the Second Order on Reconsideration in this order, we,

on our own motion, provide clarification of certain provisions set

forth in the MDS Report and Order, including the interference study

requirements for pending ITFS applications and the 30-day period for

the filing of either a MDS long-form application or a statement of

intention by winning bidders in the MDS auction. We also provide

guidance in respect to the instances that permit a winning bidder in

the MDS auction to file a statement of intention for an encumbered BTA.

See 47 CFR 21.956(a), Appendix C, MDS Report and Order, 10 FCC Rcd at

9702. We deal first with the petitions for reconsideration filed in

response to the Second Order on Reconsideration.

II. Discussion

4. Effective Date of Second Order on Reconsideration. A petition

for reconsideration was filed by the Law Offices of John D. Pellegrin,

Chartered (``Pellegrin''), on ``behalf of clients,'' in which Pellegrin

seeks clarification of the effective date of the revision of 47 CFR

21.902(d), which expanded the protected service areas for MDS stations,

as provided in the Second Order on Reconsideration. In the Second Order

on Reconsideration, the effective date of the revision of

Sec. 21.902(d) was stated as the ``60th day after publication of a

summary of [the] order in the Federal Register.'' Second Order on

Reconsideration at 7096.4 A summary of the Second Order on

Reconsideration was published at 60 FR 36736 (July 18, 1995). Pursuant

to 47 CFR 1.4 (e) and (j), the 60th day after July 18, 1995 is

September 18, 1995.

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\4\ 47 CFR 1.427(a) provides that ``[a]ny rule issued by the

Commission will be made effective not less than 30 days from the

time it is published in the Federal Register.''

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5. Pellegrin concedes that September 18, 1995, is the effective

date for this specific Sec. 21.902(d) revision. However, Pellegrin

claims that, although the effective date of the expanded protected

service area can be discerned from reading the text of the order

itself, clarification is sought in light of the use of dates other than

September 18, 1995, in the MDS Report and Order. We confirm Pellegrin's

understanding that the Second Order on Reconsideration provided that

the effective date of the revision of Sec. 21.902(d), which expanded

protected service areas for MDS stations, was September 18, 1995.

6. Delay of the Effective Date of Second Order on Reconsideration.

Pellegrin also requests that the Commission postpone the effective date

of the revision of Sec. 21.902(d) to a minimum of 120 days after the

July 18, 1995, publication date of the summary of the Second Order on

Reconsideration in the Federal Register. The effective date suggested

by Pellegrin would be November 15, 1995, 36 days after the October 10,

1995, deadline for the filing of applications to participate in the MDS

auction and two days after November 13, 1995, the first day of

competitive bidding in the MDS auction.5 Pellegrin argues that,

due to limited engineering resources, additional time is needed to

prepare modification applications which would be filed with the

Commission prior to September 18, 1995. Pellegrin concludes, without

elaboration, that a later effective date ``will not delay any

prospective MDS auction.''

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\5\ Public Notice, FCC Announces Auction of Multipoint

Distribution Service, Report No. AUC-95-06 (released September 5,

1995), 60 FR 48110 (Sept. 12, 1995) (``MDS Auction Public Notice''),

at 1-2.

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7. In selecting an effective date for the revision of

Sec. 21.902(d), the Commission balanced two goals: (1) affording the

expanded protected service area to previously proposed and authorized

stations as soon as possible; and (2) providing additional time to file

modification applications under the former protected service area

rules. The effective date was fully considered in the Second Order on

Reconsideration. We also note that the record strongly supported the

selection of an effective date prior to the first application filing

opportunity provided under the new competitive bidding licensing

procedures. The party who filed the petition for partial

reconsideration that initiated the Second Order on Reconsideration,

argued persuasively that the expanded protected service area should

become effective before the Commission lifted the freeze on the filing

of new applications.6 Pellegrin did not file an opposition or any

type of response to that petition for partial reconsideration.7 In

addition, the majority of the parties filing responses to a 1993 public

notice, in which we announced our then-future intention to lift the

freeze on the filing of new MDS applications,8 also requested that

the effective date of any expanded protected service area be prior to

the Commission's lifting of the freeze on the filing of new

applications.9 Pellegrin also did not file a response to this 1993

Public Notice, although responses were encouraged.10 The

Commission announced on September 5, 1995, that the filing deadline for

short-form applications (FCC Form 175-M) to participate in the MDS

auction would be October 10, 1995.11

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\6\ See December 13, 1991 Petition for Partial Reconsideration

of the Wireless Cable Association International, Inc. (``WCA''). In

its December 13, 1991 petition, WCA argued:

The current [protected service area] is a ticking time-bomb set

to explode in the wireless [cable] industry's future. So far, the

Commission's temporary freeze on new MMDS applications has protected

wireless cable operators from the inadequacy of the [protected

service area] definition. Once that temporary freeze is lifted, the

only protection a wireless cable system operator will have to

protect its subscriber base against harmful interference is the

[protected service area] definition--a definition that is woefully

inadequate.

WCA Petition for Partial Reconsideration at 2-3.

\7\ See Second Order on Reconsideration at 7075 n. 1.

\8\ Public Notice, MDS/MMDS Applications Filing Freeze, Mimeo

No. 34165 (released July 28, 1993) (``1993 Public Notice'').

\9\ See Response of WCA to 1993 Public Notice at 8-15; Response

of the Coalition of Wireless Cable Operations to 1993 Public Notice

at 10. See also Response of United Telephone Mutual Aid Corp., et

al. to 1993 Public Notice at 4. Parties filing comments in response

to the Notice of Proposed Rulemaking for the MDS Report and Order,

which raised the issue of interference protection, also requested an

effective date prior to the lifting of the freeze against the filing

of MDS applications for new stations. See Comments of WCA to NPRM

for MDS Report and Order at 10-25; Reply Comments of CAI Wireless

Systems, Inc. at 2; Reply Comments of Hardin and Associates, Inc. at

2-3; and Reply Comments of Heartland Communications at 2.

\10\ The public was asked to file responses to the MDS issues

raised and the approaches and resolutions suggested in the notice.

1993 Public Notice at 2.

\11\ MDS Auction Public Notice at 2.

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[[Page 18094]]

8. Moreover, we find that the September 18, 1995, effective date of

the expanded protected service area did provide an adequate amount of

time for conditional licensees and licensees to prepare and file

modification applications based on the former 710 square-mile protected

service area. The release date of the Second Order on Reconsideration,

June 21, 1995, provided licensees with nearly three months within which

to file modification applications. In response to Pellegrin's claim

that a ``log jam of orders for consulting services'' will be created

due to the ``short FCC deadline'' and the limited number of qualified

consulting engineers who can prepare the engineering analyses required

for modification applications, WCA asserts that it has ``informally

canvassed consulting engineers and wireless cable operators and has

uncovered no evidence that those who acted promptly in response to the

release of the [order] are encountering the difficulties in securing

consulting services that [Petitioner] predicts.'' 12 Indeed,

Pellegrin's complaint was voiced by no other commenter. Thus, we find

Pellegrin's claims of hardship to be speculative and belied by the

evidence before us.

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\12\ WCA Opposition to Pellegrin Petition at 3.

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9. MDS conditional licensees and licensees were in no way

prohibited from filing MDS modification applications after September

18, 1995. No freeze has been imposed upon the filing of MDS

modification applications. A conditional licensee or licensee may file

an application requesting the same type station design, location or

status modifications that were permissible prior to the September 18,

1995, effective date of the Sec. 21.902(d) revision provided in the

Second Order on Reconsideration. We, therefore, reject Pellegrin's

argument that the effective date may not have provided licensees an

adequate amount of time to prepare modification applications. Pellegrin

has failed to persuade us to reverse our earlier determination and

further delay implementation of this new interference protection

standard.

10. We also reject Pellegrin's arguments that postponing the

effective date would not have delayed the MDS auction. Although

delaying the effective date of the revision of Sec. 21.902(d) to expand

the MDS protected service area would not have made it technically

impossible to begin the MDS auction on November 13, 1995, it would have

made it commercially impracticable. We do not agree with Pellegrin's

characterization that the Commission adopted a ``caveat emptor'' policy

for the MDS auction. The record reflects that the Commission advised

potential bidders in the MDS auction that they were responsible for

investigating the status of markets due to the heavily encumbered

nature of the service. Over the past several months, we have repeatedly

encouraged interested bidders to thoroughly review all Commission

orders, public notices, MDS file information and other documentation

prior to making a final determination to bid on authorizations for

BTAs.13 Because high bidders in the auction must choose

transmitter sites and design stations so as to protect each point

within the protected service area of all previously proposed and

authorized stations from harmful interference, it is important that the

Sec. 21.902(d) revision which expanded the MDS protected service area

become effective on a date well before the first day of bidding.

Delaying the effective date of the expanded service area to a date

beyond the first day of bidding in the MDS auction would cut against

the goal of market certainty and would be incongruent with the auction

licensing scheme. Accordingly, and for all the reasons discussed, we

deny Pellegrin's request for a delay of the effective date of the

revision of Sec. 21.902(d) to expand the protected service area for MDS

stations.

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\13\ See, e.g., MDS Report and Order at 9604; MDS Auction Public

Notice at 4; MDS Bidder Information Package at 21-22.

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11. Filing of Applications for New ITFS Stations. On August 3,

1995, the Commission announced by public notice that the Mass Media

Bureau would accept ITFS applications for major modifications for a

limited period of time from August 3, 1995, through September 15,

1995.14 In a separate petition for reconsideration, Pellegrin

requests that for applicants who would file pursuant to 47 CFR

Sec. 74.990(a), the Commission permit the filing of applications for

new ITFS stations during this filing window for modification

applications by defining the term ``major change'' to include new

applications filed pursuant to Sec. 74.990(a).

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\14\ Public Notice, Notice of Limited Period to File

Instructional Television Fixed Service Applications for Major

Changes in Existing Facilities, Report No. 23564A (released August

3, 1995).

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12. It appears, however, that Pellegrin's request for an

opportunity to file applications for new ITFS stations was addressed

and resolved by the public notice released the day after the August 3,

1995, public notice was issued. On August 4, 1995, the Commission

announced by public notice that the Mass Media Bureau would open a

window from October 16, 1995, through October 20, 1995, for the filing

of applications for new ITFS stations.15 All those eligible to

file applications for new ITFS stations, including those filing

pursuant to 47 CFR 74.990(a), were permitted to file during that time.

Therefore, Pellegrin's concern about having a filing opportunity before

the issuance of the first BTA authorization has been addressed. We,

therefore, dismiss as moot Pellegrin's reconsideration petition on this

issue as the relief sought was previously granted.

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\15\ Public Notice, Notice of Instructional Television Fixed

Service Filing Window From October 16, 1995 Through October 20,

1995, Report No. 23565A (released August 4, 1995).

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13. Strict application of requirements for ITFS requests for

extension of time to construct. The Commission announced in the Second

Order on Reconsideration that it would strictly scrutinize requests for

extensions of time to construct ITFS and MDS stations in order to

address concerns over the ``economic blackmail'' 16 that allegedly

occurs when construction permittees and conditional licensees

repeatedly delay station construction over substantial periods of time,

while demanding protection from potential harmful electromagnetic

interference caused by subsequently proposed neighboring licensees.

Second Order on Reconsideration at 7081. The Law Firm of Schwartz,

Woods & Miller (``Schwartz, Woods''), on behalf of its ITFS clients,

requests reconsideration of this policy as it applies to ITFS extension

applicants, suggesting that the Commission has not set out a public

interest reason sufficient to justify the new strict review

policy.17 Schwartz, Woods argues that the Commission has

recognized that, due to the nature of educational institutions, it

generally takes ITFS construction permittees longer than it would

commercial entities to raise funds for construction, thereby causing a

delay in completion of construction.18 ITFS construction

[[Page 18095]]

permittees rely heavily upon MDS operators for construction financing,

Schwartz, Woods argues, and MDS operators frequently delay ITFS

construction financing until their own MDS systems generate profit.

Therefore, Schwartz, Woods asserts, ITFS construction extension

applications should be routinely granted.

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\16\ In response to the 1993 Public Notice, WCA commented: [A]

few * * * entities are abusing the ITFS interference protection

rules * * * and proposing stations that appear to have no other

purpose than to frustrate the ability of wireless cable systems in

adjacent communities to add ITFS stations to their systems. Clearly,

the word is out that the interference protection rules permit

economic blackmail.* * * [T]he legitimate wireless cable operator

will have to reach an accommodation if it is to continue providing a

viable service to the public.

Comments of WCA to the 1993 Public Notice at 9.

\17\ Schwartz, Woods filed the petition on behalf of 26

educational institutions, many of which hold multiple ITFS station

licenses.

\18\ See Schwartz, Woods Petition at 13.

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14. Section 73.3534(c) of the Commission's rules provides that:

Applications for extension of time to construct * * *

Instructional TV Fixed stations will be granted upon a specific and

detailed showing that the failure to complete was due to causes not

under the control of the permittee, or upon a specific and detailed

showing * * * sufficient to justify an extension.

47 CFR 73.3534 (1994). As recently as February 1995, in an ITFS

rulemaking order, we explained with greater particularity the type of

showing an educator must make to obtain an extension of time within

which to construct, including showings that: ``(1) construction is

complete and testing of facilities has begun; (2) substantial progress

has been made; or (3) reasons clearly beyond the applicant's control,

which applicant has taken all possible steps to resolve, have prevented

construction.'' ITFS Filing Procedures Order, 10 FCC Rcd at 2921. In

denying a request to shorten the 18-month ITFS station construction

period to 12 months in order to prevent speculative filings, we

responded that application of our existing rules have ``operated

sufficiently to prevent abuses by frequency speculators.'' Id. Our

statement in the Second Order on Reconsideration that we intend to

strictly apply the ITFS extension requirements merely underscores our

previous statements.

15. It has long been Commission practice to consider a request for

extension of time within which to construct ITFS stations ``on its

merits.'' Applications of Public Broadcasting Service, 96 FCC 2d 555,

558 (1983). In keeping with the priorities of maximum utilization of

ITFS frequencies and expeditious licensing of ITFS stations, Amendment

of Part 74 of the Commission's Rules and Regulations in regard to the

Instructional Television Fixed Service, 98 FCC 2d 925, 935 (1984), 49

FR 32590 (Aug. 15, 1984), we will continue to process or grant ITFS

extension requests that meet the requirements of Sec. 73.3534. When we

stated that the requirements for ITFS extensions of time to construct

would be strictly applied, we did not change our rules to heighten the

requirements for extension requests. The Commission will continue to

apply our extension rules fairly, including denying and dismissing

those applications that do not demonstrate compliance with our rules.

16. Schwartz, Woods argues that the Report and Order, Amendment of

Parts 2, 21, 74 and 94 of the Commission's Rules and Regulations in

regard to frequency allocation to the Instructional Television Fixed

Service, the Multipoint Distribution Service and the Private

Operational Fixed Microwave Service, 94 FCC 2d 1203 (1983), 48 FR 33873

(July 26, 1983) (``MMDS Allocation Order'') recognizes the Commission's

responsibility to take into consideration funding complexities when

reviewing extension requests. However, the Commission was actually

discussing the rationale for creating a spectrum reserve for ITFS and

was not discussing the reasons ITFS construction extension requests

should be granted. MMDS Allocation Order, 94 FCC 2d at 1224-25.

Nevertheless, we agree that public funding complexities are the type of

circumstances, when proven by a specific and detailed showing as

required by Sec. 73.3534, that are likely to be sufficient to support

grant of an extension request. Indeed, a public educational institution

which is denied funding by a state legislature should provide a

detailed and specific showing of the circumstances and a showing that

the lack of funding is beyond its control (e.g., that it submitted a

budget request). In the alternative, an educator can submit a showing

that it attempted to solicit funding from other sources by providing

copies of grant proposals.

17. Schwartz, Woods argues that the greatest difficulty in meeting

ITFS construction requirements results from financing arrangements with

MDS operators. However, MDS operators are accustomed to construction

requirements and extension request standards that are more stringent

than the ITFS requirements.\19\ Therefore, MDS operators should be

cooperative in ensuring that ITFS permittees meet construction

deadlines, especially if the MDS operator's lease arrangement will be

impacted by denial of an ITFS extension request, which subsequently

results in a cancellation of the ITFS authorization for failure to

construct. As we stated in the ITFS Filing Procedures Order, 10 FCC Rcd

at 2907, it is our intention to continue to follow our existing

processing standards and methods, which complement our new wireless

cable licensing scheme and related new procedures. We intend to grant

ITFS requests for extension of time within which to construct ITFS

stations that meet the stated standards, and deny those that do not.

We, therefore, deny Schwartz, Woods' request to exempt ITFS stations

from our policy of stricter application of the requirements for

extension requests.

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\19\ The MDS station construction period is 12 months. 47 CFR

21.43(a)(2). Lack of financing is specifically listed in the MDS

rules as an unacceptable basis for a grant of a extension request.

47 CFR 21.40(b). In addition to other showings, MDS licensees must,

with every extension request, submit a verified statement outlining

the actions taken to construct the facility. Id.

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18. Other Issues and Clarification of the MDS Report and Order.

Finally, on our own motion, we amend our rules to require service of

new MDS station applications (long-form applications) filed by BTA and

Partitioned Service Area authorization holders, as well as modification

applications filed by incumbent MDS licensees, upon ITFS applicants

with applications pending. In the Second Order on Reconsideration, we

changed the date on which MDS long-form applications must be served

upon ITFS licensees and construction permittees to on or before the

date an application is filed. Second Order on Reconsideration at 7089-

90. In the MDS Report and Order, we adopted a rule that prohibits BTA

and Partitioned Service Area authorization holders from proposing and

operating stations that would cause harmful electromagnetic

interference to ITFS station sites (and these stations' protected

service areas) proposed in pending ITFS applications. See 47 CFR

21.938(b)(3), Appendix C, MDS Report and Order at 9696. We did not in

either order, however, require that MDS applicants prepare studies of

the potential interference to facilities previously proposed in ITFS

applications, or serve ITFS applicants with a copy of the long-form

applications and interference studies. We take this opportunity to

amend Sec. 21.902 to require such service and to require the

preparation of studies of the potential interference to the facilities

proposed in pending ITFS applications by BTA and Partitioned Service

Area authorization holders filing long-form applications and by

incumbent MDS applicants filing modification applications. We believe

that this ITFS service requirement will further our goal of providing

notice to all parties potentially affected by new or modified MDS

facilities. See MDS Report and Order at 9624 (MDS applicants required

to prepare interference analyses and serve them on ``potentially

affected parties'').

19. Also on our own motion, we correct 47 CFR 21.956(a) to clarify

that the period within which a winning bidder in the MDS auction must

file

[[Page 18096]]

either an initial long-form application or a statement of intention

after being notified of its status as a winning bidder is 30 business

days. Section 21.956(a) provides that the period is ``30 days'' from

the time a bidder is notified of its status as a high bidder, 47 CFR

21.956(a), Appendix C, MDS Report and Order at 9702, whereas the text

of the MDS Report and Order provides that the period is ``thirty

business days.'' MDS Report and Order at 9655-56. Through this

amendment, we clarify that only business days will count toward the

completion of this 30-day filing period.

20. We next provide guidance regarding the filing of a ``statement

of intention.'' In particular, we want to give examples of situations

in which the Commission will consider a BTA so heavily encumbered that

the winning bidder for that BTA would not be required to file a long-

form application for a new MDS station within the prescribed 30

business day period, but rather would be permitted to file a statement

of intention, describing the encumbrances and the plan to make possible

the filing of a long-form application. See 47 CFR 21.956(a) in Appendix

C, MDS Report and Order at 9702. In the MDS Report and Order, we noted

that:

[A] number of BTA service areas may be so encumbered that the

winning bidder for such a BTA may be unable to file a long-form

application proposing another MDS station within the BTA while

meeting the Commission's interference standards as to all previously

authorized or proposed MDS and ITFS facilities * * *. The winning

bidder for a BTA service area so heavily encumbered that it believes

it cannot file an acceptable long-form application proposing an MDS

station with average transmitted power within its BTA * * *. Must

file with the Commission, in lieu of a long-form application for an

MDS station license, a statement of intention with regard to the BTA

service area, showing the encumbered nature of the BTA, identifying

the incumbents, and describing in detail its plan for obtaining the

previously authorized or proposed MDS stations within the BTA.

MDS Report and Order at 9656-57. The degree to which encumbrances

preclude new MDS stations in a BTA varies widely and depends on factors

such as the size and shape of the BTA, proximity of accessible

transmitting antenna sites to unserved communities in the BTA, and

proximity to neighboring MDS and ITFS facilities in adjacent BTAs,

which also must be protected. Additionally, terrain conditions are an

important factor, as are the relative locations of multiple protected

areas slicing through a BTA, perhaps preventing the use of antenna

cross polarization as an interference abatement technique. Thus, we

cannot, nor do we wish, to prescribe rigid technical criteria from

which we would accept or reject statements of intention. Rather, each

statement of intention will reflect the unique geographic and

demographic conditions in that BTA, and the existing and proposed use

of MDS and ITFS channels in that region. We will examine statements of

intention on a case-by-case basis, working with auction winners to

obtain any needed clarification or supporting documentation.

21. We believe it would be helpful for the Commission to offer

examples of what we would normally consider to be heavily encumbered

situations for which we would likely approve statements of intention.

BTA auction winners for whom these situations apply need only document

their applicability. This approach will simplify the showing in

statements of intention, easing the burden on applicants and the

Commission's MDS processing staff. We offer as an example of an

encumbered BTA for which a statement of intention could be filed one

that is entirely covered by the 56.33 kilometer (35 mile) service area

of a previously authorized or proposed (``protected'') cochannel or

adjacent channel incumbent MDS or ITFS facility, which will preclude

the use of at least one of the 13 MDS channels. We will also consider a

BTA to be heavily encumbered where all communities in the BTA are

located: (1) Within 64.4 kilometers (40 miles) of the 56.33 kilometer

(35 mile) service area of a protected MDS or ITFS facility or within

64.4 kilometers of the boundary of an adjacent BTA not held by the same

BTA winner, or (2) within 24.4 kilometers (15 miles) of the 56.33

kilometer (35 mile) service area of a protected station operating on an

adjacent D- or G-group channel; provided further, that there are no

intervening terrain barriers that would completely shield such

protected service areas or adjacent BTAs. A BTA winner may file a

statement of intention if the use of at least one MDS channel is

precluded by such encumbrances throughout that BTA. We note that the

64.4 kilometer distance is merely a guideline, and, as such, does not

necessarily preclude the filing of statements of intention where the

service areas of protected stations are further away from a BTA. We

chose this distance because it is the distance to the otherwise

unobstructed horizon for a transmitting antenna height of 159 meters

(522 feet), an ample antenna height for serving most communities.\20\

The 24.4 kilometer (15 mile) distance guideline for adjacent channels

assumes line-of-sight transmissions within a protected 56.33 kilometer

(35 mile) service area, copolarized antennas, and a desired-to-

undesired signal strength ratio of 0 dB. These conditions would be met,

for example, from an MDS station radiating 350 watts toward the

protected service area and protecting a weak desired signal level of

-108 dBw. Obviously, as the distance from the protected area increases

beyond 24.4 kilometers, there is greater flexibility to operate an MDS

facility without causing adjacent channel interference.

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\20\ Site location and antenna height are the major MDS station

design factors that determine the line-of-sight distance to the

horizon, beyond which the potential for interference is greatly

reduced.

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22. Our distance guidelines notwithstanding, there may be

situations where communities in a BTA are located more than 64.4

kilometers from protected service areas, but cannot be adequately

served without possibly interfering with other MDS or ITFS

operations.\21\ BTA auction winners may use any means to show the

preclusive effects of encumbrances in such cases. A statement of

intention may be supported by showing that any one of the MDS channels

could not be used by a new station to serve a community in that BTA.

The BTA auction winner's analysis may include desired-to-undesired

signal strength calculations, using the authorized or previously

proposed facilities of protected stations. A BTA winner may assume that

any hypothetical station it would operate would require sufficient

power and antenna height to not only serve a community, but also

support an economically feasible operation. A BTA winner who is also an

incumbent MDS operator in the same BTA may use the authorized

parameters of the incumbent system to show that it could not add an

additional channel to that system.\22\ In addition to interference-

related encumbrances, BTA winners (particularly for the smaller BTAs)

might be able to show that no reasonable facility could be operated in

conformance with the limiting signal strengths at the BTA boundaries.

See 47 CFR 21.938, Appendix C, MDS Report and Order at 9696.

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\21\ A community in an area characterized by large heights above

average terrain may be an example of such a situation.

\22\ We note that any such additional channel would be

encompassed by the BTA authorization, and the protected service area

for that channel would extend to the borders of the BTA.

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23. There may be situations where there are one or more communities

within a BTA for which an MDS station

[[Page 18097]]

could be constructed and operated on all MDS channels in full

compliance with the Commission's MDS interference rules (excluding

channel 2 outside of the cities where its use is permitted, see 47 CFR

21.901), but that the winning bidder is unable to provide service for

other reasons.\23\ In such cases, the winning bidder's statement of

intention should detail those reasons, together with factual

documentation.

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\23\ For example, any such MDS facility complying with our

interference rules would be too small to serve the community

effectively, or the community or other populated area might be too

small to support an economically viable wireless cable system.

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24. With regard to the showings in support of statements of

intention, we would like to clarify that, at a minimum, specific and

detailed narrative descriptions are required and must include the

information and supporting documentation outlined in the MDS Report and

Order, 10 FCC Rcd at 9657, including identification of encumbering

stations or applications for all MDS channels (even though the

statement of intention may be filed if only one channel is encumbered).

Statements of intention that detail a winning bidder's objective to

purchase previously authorized or proposed stations and/or ITFS leases

within a BTA should include such information as the estimated date for

conclusion of negotiations and consummation of sales, and should

identify the parties with whom the winning bidders are engaged in

negotiations. We encourage BTA auction winners to file maps, charts,

diagrams, sketches, technical analyses or any other documents that,

together with the narrative descriptions, would best explain the status

of a BTA and the BTA winner's plan for initiating service in the BTA.

25. We emphasize that we do not want statements of intention to

become a regulatory burden for BTA auction winners or the Commission's

MDS processing staff. We will make every effort to issue BTA

authorizations on the basis of factually supported statements of

intention, and, as deemed necessary, we may request additional

information from a BTA winner, such as a map of the BTA showing the

protected circles of encumbering MDS and/or ITFS facilities. We note

that the five-year build-out period for the BTA begins with the

granting of the BTA authorization, whether such authorization is

granted on the basis of a long-form application or a statement of

intention. See MDS Report and Order at 9613; 47 CFR 21.930, Appendix C,

MDS Report and Order at 9692. We believe that the running of the five-

year build-out period from the date of the BTA authorization grant will

encourage auction winners who obtain BTA authorizations by initially

filing statements of intention to resolve encumbrances, file long-form

application(s), and initiate service in their BTAs in a timely fashion.

III. Final Regulatory Flexibility Analysis

26. Pursuant to the Regulatory Flexibility Act of 1980 (Pub. L. No.

96-354, 94 Stat. 1164, 5 U.S.C. Section 601 et seq. (1981)), the

Commission's final analysis is as follows:

27. Need and purpose of this action: This third reconsideration

order upholds the Commission's decision to make effective on September

18, 1995, revisions of the rule governing the Multipoint Distribution

Service, in order to expand the area within which MDS stations will be

protected from harmful electromagnetic interference, and to increase

the efficiency of processing MDS applications. This action also

maintains the Commission policy of strict application of the

requirements for requests for extensions of time within which to

construct ITFS stations. In adopting this order, the Commission's goals

of promoting efficiency in the allocation, licensing and shared use of

the electromagnetic spectrum are furthered.

28. Summary of the issues raised by the public comments in response

to the Initial Regulatory Flexibility Analysis: There were no comments

submitted in response to the Initial Regulatory Flexibility Analysis

and none in connection with this third reconsideration order.

29. Significant alternatives considered: The Commission considered

all the alternatives raised by petitioners and discussed herein. In

response to these petitions, we decided to maintain the September 18,

1995, effective date of the expanded protected service areas provided

to MDS stations in order to enhance the potential for effective

competition with traditional wireline cable systems. On

reconsideration, it was also requested that we reverse our policy of

strict application of the requirements for requests for extensions of

time within which to construct ITFS stations. We decided to maintain

our strict application policy.

30. The Secretary shall send a copy of this Third Order on

Reconsideration, including the Final Regulatory Flexibility Analysis,

to the Chief Counsel for Advocacy of the Small Business Administration,

in accordance with paragraph 603(a) of the Regulatory Flexibility Act.

IV. Ordering Clauses

31. In view of all the foregoing, we affirm our adoption of the

Second Order on Reconsideration. Reconsideration of the order is not

justified. Accordingly, it is ordered that pursuant to the authority

contained in Secs. 4(i) and 303(r) of the Communications Act of 1934,

as amended, 47 U.S.C. Secs. 154(i) and 303(r), and Sec. 1.429(i) of the

Commission's rules, 47 CFR 1.429(i), and for the reasons set forth

above, petitioners' requests for reconsideration are hereby denied in

part, and dismissed as moot in part, as discussed herein. Clarification

of the Second Order on Reconsideration, where requested, has been

provided.

32. It is further ordered that Sections 21.902(i) and 21.956(a) of

the Commission's rules, 47 CFR 21.902(i) and 21.956(a), are amended, as

discussed herein and as provided below.

33. It is further ordered that the rule amendments set forth below

will become effective June 24, 1996, except that the new or modified

paperwork requirements contained in Section 21.902(i), 47 CFR

Sec. 21.902(i), which are subject to approval by the Office of

Management and Budget (``OMB''), will go into effect upon OMB approval.

The Commission will issue at a later date a public notice with this

effective date.

List of Subjects in 47 CFR Part 21

Communications common carriers, Communications equipment, Radio,

Reporting and recordkeeping requirements, Television.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Part 21 of Chapter I of Title 47 of the Code of Federal Regulations

is amended as follows:

PART 21--DOMESTIC PUBLIC FIXED RADIO SERVICES

1. The authority citation for Part 21 continues to read as follows:

Authority: Secs. 1, 2, 4, 201-205, 208, 215, 218, 303, 307, 313,

314, 403, 404, 410, 602; 48 Stat. 1064, 1066, 1070-1073, 1076, 1077,

1080, 1082, 1083, 1087, 1094, 1098, 1102, as amended; 47 U.S.C. 151,

154, 201-205, 208, 215, 218, 303, 307, 313, 314, 403, 602; 47 U.S.C.

552, 554.

2. Section 21.902 is amended by revising paragraphs (i)(1) and

(i)(2) to read as follows:

[[Page 18098]]

Sec. 21.902 Frequency interference.

* * * * *

(i) (1) For each application for a new station, or amendment

thereto, or modification application, or amendment thereto, proposing

Multipoint Distribution Service (MDS) facilities on the E, F, or H

channels, filed on October 1, 1995, or thereafter, on or before the day

the application or amendment is filed, the applicant must prepare, but

is not required to submit with its application or amendment, an

analysis demonstrating that operation of the MDS applicant's

transmitter will not cause harmful electrical interference to each

registered receive site of any existing D, E, F, or G channel

Instructional Television Fixed Service station licensed, with a

construct permit, or proposed in a pending application on the day such

MDS application is filed, with an ITFS transmitter site within 50 miles

of the coordinates of the MDS station's proposed transmitter site.

* * * * *

(2) For each application described in paragraph (i)(1) of this

section, the applicant must serve, by certified mail, return receipt

requested, on or before the day the application or amendment described

in paragraph (i)(1) of this section is initially filed with the

Commission, a copy of the complete MDS application or amendment,

including each exhibit and interference study, described in paragraph

(i)(1) of this section, on each ITFS licensee, construction permittee,

or applicant described in paragraph (i)(1) of this section.

* * * * *

3. Section 21.956 is amended by revising the introductory portion

of paragraph (a)(1) to read as follows:

Sec. 21.956 Filing of long-form applications or statements of

intention.

(a)(1) Within 30 business days of being notified of its status as a

winning bidder, each winning bidder for a BTA service area will be

required to submit either:

* * * * *

[FR Doc. 96-9874 Filed 4-23-96; 8:45 am]

BILLING CODE 6712-01-P