# MDS and ITFS Two-Way Transmissions

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URL: https://www.frixlaw.com/law-library/documents/fr%3A98-31334

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** November 25, 1998
- **Citation:** 63 FR 65087

## Text

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 21 and 74

[MM Docket No. 97-217; FCC 98-231]

MDS and ITFS Two-Way Transmissions

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this Report and Order (``Order''), the Commission adopts
amendments to its rules to enable Multipoint Distribution Service
(``MDS'') and Instructional Television Fixed Service (``ITFS'')
licensees to engage in fixed two-way transmissions. These rule changes
enhance the flexibility of MDS and ITFS operations through facilitated
use of response stations, use of cellular configurations, use of signal
booster stations with program origination capability, and use of
variable bandwidth (``subchanneling'' or ``superchanneling''). As a
result of these rule changes, any MDS and ITFS frequencies in the 2 GHz
band may be used by licensees, or leased to wireless cable operators,
for broadband data, video or voice transmissions to and/or from
subscribers' premises, promoting the competitive position of the
wireless cable industry, augmenting the educational uses of these
frequencies by ITFS entities, and increasing services to consumers.

DATES: Effective January 25, 1999.

FOR FURTHER INFORMATION CONTACT: Michael J. Jacobs, (202) 418-7066 or
Dave Roberts, (202) 418-1600, Video Services Division, Mass Media
Bureau.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Report and Order, MM Docket No. 97-217, adopted September 17, 1998, and
released September 25, 1998. The full text of this Order is available
for inspection and copying during normal business hours in the FCC
Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C., and
also may be purchased from the Commission's copy contractor,
International Transcription Services, Inc., (202) 857-3800, 1231 20th
Street, N.W., Washington, D.C. 20036.

Synopsis of Report and Order on MDS and ITFS Two-Way Transmissions.

I. Introduction

1. This Order is adopted by the Commission after receiving and
evaluating comments and reply comments, including ``permit-but-
disclose'' ex parte comments, filed in response to the Commission's
Notice of Proposed Rulemaking (``NPRM'') in this docket. MDS and ITFS
Two-Way Transmissions, 62 FR 60025, Nov. 6, 1997, as corrected, 62 FR
60750, Nov. 12, 1997. The NPRM was issued after the Commission
initially sought comment on a petition for rulemaking filed by a group
of 111 educators and participants in the wireless cable industry
(collectively, ``Petitioners''), comprised of MDS and ITFS licensees,
wireless cable operators, equipment manufacturers, and industry
consultants and associations. Currently, MDS and ITFS licensees are
authorized to use digital technology in order to increase the number of
usable one-way channels available to them, leased ITFS frequencies and
MDS channels may be used for asymmetrical high speed digital data
applications so long as such usage complies with the Commission's
technical rules and its declaratory ruling on the use of digital
modulation by MDS and ITFS stations (``Digital Declaratory

[[Page 65088]]

Ruling,'' 11 FCC Rcd 18839 (1996)), and MDS licensees have been
permitted to provide two-way service on a limited basis. Response
channels, which currently are allocated in 125 kHz blocks for use in
association with most MDS and ITFS stations, must be individually
licensed under the Commission's existing rules. Prompted by the
petition for rulemaking, the NPRM anticipated that many MDS and ITFS
licensees and wireless cable operators engaging in two-way
transmissions will require more capacity for return paths than is
available through such 125 kHz channels, and recognized that the
individual licensing of such channels is too cumbersome and imposes too
great a financial burden on licensees seeking to implement two-way
wireless services. Instead, the NPRM proposed to implement a system
under which MDS and ITFS licensees would be permitted to utilize all or
part of a 6 MHz channel for return path transmissions from subscriber
premises, to cellularize their transmission systems to take advantage
of spectrally efficient frequency reuse techniques, and to employ
modulation schemes consistent with bandwidths either larger or smaller
than 6 MHz, all while providing incumbent MDS and ITFS licensees
interference protection equivalent to what they currently receive.
2. The comments and reply comments from wireless cable industry
participants generally support the NPRM's proposals, and include a
Joint Statement of Position (``Joint Statement'') supported by several
industry participants in an attempt to reach agreement primarily on
issues related to leasing of excess spectrum capacity by ITFS
licensees. While several commenters express concern over the details of
the proposals advanced in the NPRM and of the Joint Statement, the
comments and reply comments reflect unanimous support in the MDS and
ITFS communities for rules which would enable MDS and ITFS licensees
and wireless cable operators to offer a wide array of new, enhanced
services, including new digital and two-way communications services. As
a result, in this Order we: (1) permit both MDS and ITFS licensees to
provide two-way services on a regular basis; (2) permit increased
flexibility on permissible modulation types; (3) permit increased
flexibility in spectrum use and channelization, including combining
multiple channels to accommodate wider bandwidths, dividing 6 MHz
channels into smaller bandwidths, and channel swapping; (4) adopt a
number of technical parameters to mitigate the potential for
interference among service providers and to ensure interference
protection to existing MDS and ITFS services; (5) simplify and
streamline the licensing process for stations used in cellularized
systems; and (6) modify the ITFS programming requirements in a digital
environment. We believe that the rules that we adopt in this Order will
facilitate the most efficient use of the affected spectrum, enhance the
competitiveness of the wireless cable industry, and provide benefits to
the educational community through the use of two-way services, while
still permitting traditional use of the spectrum, thus giving both MDS
and ITFS licensees the flexibility they need to serve best the public
interest.

II. Technical Changes to Rules

A. Revised Definitions of Service

3. The ITFS/MDS spectrum is used primarily for the provision of
either one-way video service to students, in the ITFS context, or, in
the MDS context, wireless cable service to subscribers, which likewise
historically has constituted primarily the provision of one-way video
services. While our Rules already permit MDS licensees to provide non-
video services, under our current regulatory scheme, MDS operators
typically only provide two-way service to subscribers using telephone
return links or individually licensed subscriber premises stations.
This is an outgrowth of the basic one-way approach to MDS transmission
from which our current rules originated.
4. Changes that we adopt in the Order to MDS and ITFS service
definitions fully incorporate the concept of two-way transmission and
reflect the reorientation of the regulatory approach to a flexible
service, from that of an essentially one-way service. A regulatory
system is created authorizing the use of response station hubs and the
more flexible use of response stations, enabling the two-way operation
of wireless cable systems. Specifically, the definition of a ``response
station'' is amended to indicate that licensees may use all or part of
any of their 6 MHz channels as a response channel. Response stations
will be the means of transmission from a subscriber's premises, and can
use either separate transmitting antennas for return paths or combined
transmitting/receiving antennas. The concept of a response station hub
is added, and these hubs will serve as the collection points for
signals from the response stations in a multipoint-to-point
configuration for upstream signal flow. Thus, response stations would
not need to be licensed individually, and they could operate at lower
power because the response station hubs would be located closer to
subscriber premises than are current transmitter sites. Moreover, the
hubs are expected to improve service reliability and permit greater
frequency reuse than if each subscriber were required to communicate
directly with their associated main transmitter site.
5. We further amend the definition for ``signal booster stations''
to allow such stations to originate transmissions, as well as to relay
transmissions from other stations. Booster stations now may be used to
cellularize wireless cable operations in areas too large to be served
by a single station. High-power boosters are those which operate above
-9 dBW EIRP, while low-power boosters may operate at or below the -9
dBW threshold. Permitting boosters to originate as well as relay
programming will facilitate frequency reuse, cellular configurations,
two-way high speed Internet access and other services. Booster station
signals will receive interference protection within the booster's
service area, but not at receive sites beyond the booster's service
area, and booster stations may not have overlapping service areas. We
also agree with the Joint Statement and with the comments of several
parties that all booster stations should be licensed to the licensee of
the channels used by the booster station.
6. After receiving broad support in the comments and reply comments
to the NPRM, flexible subchannelization (i.e., the division of a
channel of a particular bandwidth into multiple, but not necessarily
equal, channels of smaller bandwidth) will be permitted to allow more
efficient channel reuse within a given service area, and
superchannelization (i.e., the combining of more than one channel into
a single, wider channel) will be allowed and may be used for the
transmission of high data rates and/or the use of spread spectrum
emissions. Superchannels also will be licensed to multiple entities in
many instances, due to the fact that the interleaved, non-contiguous
channels in this band generally are licensed to different entities.
Subchannels and superchannels will be limited to digital transmissions
with fixed uniform power spectral density across the bandwidth, in
order to make possible the use of spectral density analysis as part of
the interference analysis process. However, we are permitting the
maximum possible flexibility for digital subchannelization and
superchannelization. Such flexibility includes: subchannelization and

[[Page 65089]]

superchannelization of 6 MHz and 125 kHz channels; permitting such
techniques both for point-to-multipoint (downstream) and response
channel use; subchannelization of superchannels, e.g., an 18 MHz
superchannel could be redivided into two 9 MHz channels or any other
combination which sums to 18 MHz; division of superchannels into
partially overlapping subchannels which sum to greater than the width
of the superchannel, e.g., an 18 MHz channel subdivided into three
channels each 8 MHz wide, thus producing two overlapping areas of 3 MHz
each; and permitting licensees to use either static (fixed and
unchanging) or dynamic (not fixed and changing) bandwidths at their
stations, so as to optimize the efficiency and speed of information
flow. We will continue to issue individual authorizations to individual
licensees for 6 MHz and 125 kHz channels, and we will not issue
specific authorizations for superchannels or subchannels.
7. Finally, after receiving support from most commenters, we adopt
rules in accordance with the most flexible framework proposed in the
NPRM for use of the 125 kHz channels. Such flexibility includes:
permitting the 125 kHz channels to be used as response channels and/or
for point-to-multipoint transmissions, which promotes greater options
for two-way system design and more efficient use of the spectrum;
allowing licensees to swap 125 kHz channels and removing requirements
that each 125 kHz channel be used solely in conjunction with a
specifically associated 6 MHz channel, which together present
opportunities for licensees to create channels with bandwidths
exceeding 125 kHz; and, as suggested by the Instructional
Telecommunications Foundation, Inc. (Foundation), allowing the content
of those channels to be independent of that transmitted on related 6
MHz channels. For the sake of simplicity and consistency with the MDS/
ITFS database, we also redesignate the 125 kHz channels as the I
channels. In adopting this flexible approach towards the 125 kHz
channels, we deny the request of the Catholic Television Network (CTN)
that we reallocate all of the 125 kHz channels to ITFS and use them
solely for response transmissions, and we also deny the University of
Maryland's request that we mandate that any non-ITFS use of I channels
licensed to an ITFS entity be secondary to ITFS use. Where the I
channels are used for downstream transmissions, they will be afforded
interference protection in the same manner as other point-to-multipoint
MDS and ITFS facilities. An MDS or ITFS licensee or applicant wishing
to use its I channels for downstream transmissions shall apply for such
authority using FCC Form 331, and shall prepare interference showings
and serve them on potentially affected parties.

B. Interference Considerations

8. Spectral Mask. In the Digital Declaratory Ruling, the Commission
waived its rules with respect to out-of-band emissions and permitted
the use of a somewhat relaxed spectral mask for digital transmission
modes. This action was taken because the Commission concluded that the
application of the current analog emission mask to digital emissions
would be unnecessarily restrictive and could increase the cost of
digital equipment while providing no benefit. In addition, the results
of laboratory tests submitted in connection with the Commission's
consideration of this issue demonstrated that a digital station using
the relaxed mask is less likely to cause interference than an analog
station using the existing, more restrictive, mask.
9. As proposed in the NPRM, and subject to slight modifications
based on comments of the General Instrument Corporation (formerly
NextLevel Systems, Inc.) which we believe will have no impact on the
interference environment, we permanently incorporate into the Rules the
digital spectral mask waiver provisions of the Digital Declaratory
Ruling, specifically for main station, high-power booster and response
station transmitters which operate on a single 6 MHz channel; masks
also are specified, albeit with certain further modifications, for sub-
and superchannels, 125 kHz channel stations, and high-power booster
stations transmitting using analog or digital modulation on multiple
non-contiguous channels simultaneously carrying separate signals
(``broadband boosters''). Furthermore, as in the Digital Declaratory
Ruling, all spectral mask calculations involving digital emissions will
use the average power of the emission across its bandwidth, and steps
must be taken to ensure substantially uniform power spectral density
across the bandwidth in use, including constant power per unit of
bandwidth for sub-and superchannels, with 6 MHz as the reference
bandwidth, and continuous energy dispersal during times of no
modulation. We also incorporate into the Rules formulas provided by
Petitioners for consistent spectral mask measurement and
interpretation, and based on comments by CTN and as a result of
technological advances over the past year, we eliminate the exception
proposed in the NPRM to the mask for response stations, which would
have allowed for discrete spurious emissions. No spectral mask
whatsoever will be applicable to low-power booster stations using
analog or digital modulation, but such transmitters will be shut down
if it is established that they are causing harmful interference.
10. Power. As requested by Petitioners, we will permit response
stations to use up to 33 dBW EIRP. While the Commission had proposed in
the NPRM to place a limit of 18 dBW EIRP on response station
transmitters in cellularized systems, and although we continue to be
concerned about interference, we concur with the conclusions of
Petitioners' propagation analysis that the proposed 18 dBW power limit
would adversely impact system range and reliability, thereby increasing
the number of stations needed and increasing system costs. As a
practical matter, however, we do not expect that all, or even most,
response stations will utilize the maximum power permitted. In
addition, while current MDS and ITFS rules limit booster power to 18
dBW EIRP, henceforth we allow boosters to operate up to 33 dBW EIRP,
the maximum power level for MDS and ITFS. The 33 dBW power limit is
predicated on a bandwidth of 6 MHz, and the power limit for stations
using lesser bandwidth must be reduced proportional to that bandwidth.
We also retain frequency tolerance requirements for digital and analog
main station and high-power booster station transmitters, while
declining to impose such requirements for low-power booster and
response station transmitters; retain rules requiring type
certification of main and booster transmitters, and adopt rules
requiring type certification of response station transmitters, subject
to exceptions set forth in the Digital Declaratory Ruling regarding the
use of existing analog equipment for digital emissions; and adopt rules
protecting against excessive radio frequency (``RF'') emissions
exposure from MDS/ITFS return path transmissions, in a manner similar
to the approach that we adopted for LMDS.
11. Interference Protection Criteria. The Commission's current
regulations in ITFS and MDS for interference protection were designed
to minimize the potential for destructive cochannel and adjacent
channel interference between systems located in proximity to each
other. The specific criteria for protection are of two forms, namely,
(1) cochannel and adjacent channel

[[Page 65090]]

desired-to-undesired signal (D/U) ratios and (2) limits on the
magnitude of a station's free space field as measured at the edge of
the station's protected service area. For cochannel interference
protection, an applicant must configure its system so that the signals
from each of its transmitters are at least 45 dB weaker than the
signals of the existing licensee's transmitters within the licensee's
protected service area and/or, in the case of ITFS licensees, at the
licensee's protected receiver sites. For adjacent channel protection,
the ratio must be at least 0 dB. In order to meet the second form of
protection, an applicant generally must be able to demonstrate that the
magnitude of the free space radiated field from each transmitter does
not exceed a particular limit (i.e., a power flux density -73 dBW/
m2) at the boundary of the applicant's service area.
12. As proposed in the NPRM, and as supported by all parties
commenting on this issue, we will apply the existing interference
criteria in essentially unchanged form, and supplement them with
similar new criteria to be applied to hub, booster, and response
stations. Furthermore, because two-way systems will involve large
numbers of transmitters with heavy frequency reuse and simultaneous
operation, a calculation of the combined field produced by the main
station transmitter, all cochannel boosters, and the aggregated power
from cochannel response stations within a system will be utilized to
determine compliance with the interference criteria where these
stations partially or completely share spectrum. These criteria shall
be adjusted to account for the particular bandwidths involved in the
calculations. We also emphasize that where an interfered-with receive
antenna meets the antenna characteristics set forth in our MDS and ITFS
rules, the station causing the harmful interference is responsible for
curing it.
13. Interference Prediction Methodology. In order to predict the
interference potential of response stations in cellularized systems, we
will implement a modified version of the three-step process proposed in
the NPRM, which uses statistical analysis and worst-case assumptions in
deriving theoretical estimations of the locations and characteristics
of individual response stations, because these response stations will
be licensed under blanket authorizations which specify only the
locations of the associated hubs to which the response stations
transmit. This methodology is found in Appendix D to the Order, and is
captioned ``Methods for Predicting Interference from Response Station
Transmitters and to Response Station Hubs and for Supplying Data on
Response Station Systems.'' This sequence of system design, development
and authorization necessitates a radical departure from the customary
process whereby interference calculations are made based on specific
information concerning specific stations at specific locations with
specific operating parameters.
14. In step one, the hub station response service area (``RSA'') is
defined and a grid of points is located within this area representative
of the expected actual distribution of response station transmitters
within the area. Regions within the area are defined so that an
adequate population uniformity exists for purposes of predicting
interference from a distribution of response station transmitters.
While the methodology originally proposed in the NPRM would have
determined population uniformity using a complex formula involving
evaluation of the population density within each ZIP Code within the
planned boundaries of a region, in response to comments filed by Spike
Technologies, Inc. (Spike) and others that this procedure would not
produce results representative of the actual distribution of response
stations, the methodology has been corrected so that interference
analyses will be conducted from the grid points which have the greatest
interference potential, taking into account, both for TDMA and CDMA
systems, all potential victim sites both inside and outside the RSA. In
step two, the technical characteristics of response stations which will
be associated with each point in the RSA grid are identified. One or
more classes of response stations are identified within the RSA and its
regions, with each class being a function of several variables, such as
transmitted power (EIRP), antenna height, frequency, bandwidth, and
maximum number of assumed simultaneously operated response stations in
the regional class; these characteristics and others will be specified
in the response hub application. In response to comments of EDX
Engineering, Inc. (EDX) and others that the originally-proposed
methodology ignored terrain data, each grid point now will be assigned
the highest elevation AMSL of all the geographic area surrounding that
grid point, thus making the theoretical stations assigned to each grid
point much more likely to be representative of the actual interference
potential.
15. The final step in calculating response station interference
would require combining the radiated fields of all response stations of
all classes, regions and RSAs within the primary station's protected
service area. In order to simplify this calculation, the statistical
population uniformity within each region will be used as a basis for
grouping response stations of all classes in proximity at the grid
points laid out within each RSA; multiple classes could share the same
grid points. For each class of response stations assigned to a grid
point, a set of worst-case assumptions will be made concerning the
transmitting antenna radiation pattern, transmitter power (EIRP) and
antenna height. Several complex calculations, including procedures for
checking the initial calculations, combining the radiated field for all
of the transmitters for each class of response station at each grid
point from all RSAs will then be used to evaluate compliance with the
interference criteria. Subsequently, licensees are free, upon
notification to the Commission, to continue adding response station
transmitters within their systems until calculations indicate that
permissible interference values would be exceeded.
16. We also have considered other proposed modifications to the
proposals in the NPRM for predicting interference from response
stations and to hubs, which we believe render the methodology
sufficiently comprehensive and conservative without being overly
protective or stifling of growth. For instance, we agree with CTN and
others who argue that the ``minimum receivable signal'' hub protection
standard proposed in the NPRM would have, in some instances,
overprotected the hub and thus potentially precluded construction of
other stations. Instead, we adopt Petitioners' amended proposal to
protect the hub's noise floor, and to take into account the actual
antenna(s) in use at the hub. However, in adopting the methodology as
modified, we decline to adopt several other proposed modifications,
including: EDX's proposed alternate methodology, in which all response
station transmitters within a defined area would be represented by a
single hypothetical aggregate response station located at the hub site,
and which likely would give erroneous interference calculations for
many two-way system configurations; Spike's suggestion that applicants
should be free to choose any methodology they wish for making
interference calculations, which would have promoted uncertainty and
slowed the evaluation of applications; and Spike's recommendation that
hubs be

[[Page 65091]]

redefined to include transmitting capability, which would add
unnecessary complexity to the interference protection rules and which
is further unnecessary in light of the ability of licensees to
collocate hubs with boosters and main stations.
17. We also decline to adopt the guardband proposal for
interference protection advanced by CTN. CTN contends that interference
could be caused to ITFS receive sites by nearby response stations which
are neither cochannel nor adjacent channel to the channels in use at
the ITFS receive sites, as a result of brute force overload (``BFO'')
to broadband downconverters used at these sites. As a solution to the
potential problem of interference from response stations, including
BFO, CTN proposes that a guardband be used as a buffer between
downstream ITFS operations and upstream operations, with downstream MDS
operations occupying the guardband. CTN argues that a guardband would
have several benefits, such as mooting the need for calculating
response station interference into ITFS receive sites, and confining
the risk of BFO, as well as cochannel and adjacent channel
interference, solely to MDS licensees. While we find CTN's guardband
proposal unduly limiting of system design flexibility, and we also at
this time reject as unduly restrictive CTN's proposal of on-air testing
of response stations within a certain proximity of ITFS receive sites
prior to activation of those response stations, we adopt a slightly
modified version of CTN's proposal that no response station may be
installed until a notification is sent to each ITFS licensee with any
registered receive site within a distance of 1960 feet of the location
of the proposed response station. Moreover, because we agree with CTN
that BFO is a possibility in certain limited circumstances, we will
require that licensees of stations causing interference immediately
commence a full cooperative effort with licensees receiving
interference, to solve the problem as quickly as possible at the
expense of the offending licensee. We emphasize that we will order the
immediate deactivation of part or all of a system if that system is
causing any interference--whether cochannel, adjacent channel or BFO--
and the licensee has not cooperated fully and in a timely manner to
eliminate the interference.

C. Modulation Methods

18. In the Digital Declaratory Ruling, the Commission authorized
the use of QAM and VSB modulation. While the Commission declined to
consider the use of other digital modulation methods in the context of
that proceeding, it stated that it would consider future requests for
declaratory rulings where the requesters submit appropriate data to
demonstrate that other modulation techniques could be used in a manner
that would not interfere with MDS and ITFS analog and digital
operations.
19. As in the Digital Declaratory Ruling, and as supported by the
commenters on this issue, we decline to adopt one or more ``standard''
digital technologies. We retain and add provisions for accommodating
the use of different modulation types. In the NPRM, the Commission
solicited comment on whether there is a basis for concluding that use
of particular digital modulation types by MDS and ITFS stations other
than VSB and QAM would not be prone to interference, based on the
current 45 dB/0 dB protection ratios for cochannel and adjacent channel
interference respectively, i.e. that such modulation formats should be
permitted without requiring test data. For example, one modulation type
may be a subset of VSB and QAM and, therefore, is covered under the
industry tests used to support the Digital Declaratory Ruling. In
response, four parties filed a joint request for declaratory ruling
asking that the Commission permit the use of two additional forms of
digital modulation, CDMA and QPSK, and we are persuaded to permit use
of those modulations on a regular basis at all MDS and ITFS stations.
In addition, because we wish to encourage parties to continue to
identify different digital modulation schemes that could be useful in
MDS and ITFS, we emphasize that we remain open to considering future
requests for declaratory rulings in accordance with the Digital
Declaratory Ruling, upon submission of appropriate data. Finally, in
order to facilitate testing and use of different digital modulations
where possible, we will permit licensees and system operators to use
any digital emission in limited circumstances which we set forth where
interference is unlikely or where all parties potentially affected by
interference have consented to such use, and so long as such emissions
meet spectral mask and uniform power spectral density requirements.

III. Application Processing Issues

20. We set forth a scheme governing the filing and processing of
applications for new or modified response station hubs, boosters or
downstream I Channel operations, that will substantially shift review
of such applications from Commission staff and leave much of the
interference environment to be worked out among licensees. As proposed
in the NPRM, we adopt a rolling, one-day filing window system. While
each applicant will be required to demonstrate protection of existing
or previously proposed facilities, applications filed on the same day
will be granted and the filers left to resolve incompatibilities
amongst themselves with little or no intervention by Commission staff.
Because parties will be unable to offer reliable service without
resolving such conflicts, we believe that the incentive to reach a
resolution will be so great that Commission involvement will be
unnecessary to resolve disputes.
21. Specifically, applications first will be placed on public
notice without prior staff review of interference studies. While the
Commission tentatively rejected in the NPRM Petitioners' proposal that
the applications then would be granted automatically on the 61st day
after that notice, unless a petition to deny was filed or the
Commission notified the applicant prior to that date that a grant would
not be made, the majority of commenters on the subject supported some
type of streamlined process, especially when coupled with a complete
guarantee of protection against interference. Upon review of these
comments, we have been persuaded that failure to adopt an expedited
processing system would be seriously detrimental to the provision of
two-way service, despite the increased burden that such a system places
on licensees to track and monitor applications. Thus, we adopt a
modification of the automatic grant proposal, a certification
procedure, whereby an applicant must certify in its application that it
has completed, served upon potentially affected parties, and submitted
to the Commission's copy contractor all required interference studies
(or consent letters) and engineering showings demonstrating no
interference. Before placing an application on public notice,
Commission staff will review it to ensure that all required
certifications are included, and any application that does not contain
the proper certifications will be dismissed. The application will be
granted in reliance on the certifications on the 61st day after public
notice, unless a petition to deny is filed against it or the Commission
finds in a random audit that the applicant certified falsely. A false
certification also could be grounds for revocation of a license. Though
consistent with similar certification procedures that have been adopted
for other communications

[[Page 65092]]

services, this approach is particularly appropriate for MDS and ITFS,
because the interdependence of those two services in most cases relies
on the parties working together. And, as a safeguard, systems causing
interference must cure it immediately or face shut-down, even if the
station applications had been unopposed.
22. A large number of applications are likely to be filed once the
new rules become effective, and many of the applications submitted at
that time may conflict with others filed simultaneously. Therefore, as
proposed in the NPRM, in order to smooth the transition to the rolling
one-day filing window application processing system, we adopt a special
one-week initial filing window, the opening of which will be announced
by public notice, where all applications filed during this window will
be deemed to have been filed as of the same day. Following the
publication of a public notice announcing the tendering for filing of
applications submitted during that window, applicants will have a
period of 60 days to amend their applications to resolve conflicts.
During this 60-day period, no additional applications may be filed,
affording those who filed during the one-week window an opportunity to
resolve any conflicts without fear that, during the pendency of
settlement discussions, third parties will propose facilities that will
have to be protected if the original applicants amend their
applications. After this initial 60 day period, public notice and
application grant procedures akin to those that we adopt for the
rolling one-day filing windows will be implemented. On the 61st day
after the publication of the second public notice, the rolling one-day
filing window will go into effect. We believe that our adoption of the
one-week initial filing window will lessen the burden on all affected
parties, including the Commission's staff, during the first round of
application filing. We also believe that providing parties with an
initial 60-day period during which they can resolve any apparent
conflicts and then amend their applications without prejudice will
serve to expedite service to the public by allowing parties to resolve
their differences without the need to seek Commission review through
the petition to deny process.
23. In the NPRM, the Commission solicited comment on whether to
adopt a system whereby an applicant, once authorization for service has
been granted, may switch from common carrier to non-common carrier
service and back without seeking subsequent authorization. The
Commission also sought comment on whether operators should be required
to give the Commission notice when they are switching back and forth
between common carrier and non-common carrier service, even if prior
approval is not required. What little comment we received on this
subject was supportive of providing the requested flexibility, and we
adopt rules implementing it, subject to a requirement that licensees
provide the Commission with 30-days advance notice of such changes.

IV. Proposals and Issues Primarily Involving ITFS

24. Under Sec. 74.931 of the Commission's Rules, ITFS stations are
operated by educational organizations and are ``intended primarily to
provide a formal educational and cultural development in aural and
visual form,'' to students enrolled for credit in accredited secondary
schools, colleges and universities. Currently, Sec. 74.931(e)(9)
specifies that an ITFS licensee who leases excess channel capacity to a
wireless cable operator must provide a total average of at least 20
hours per channel per week of ITFS programming on its authorized
channels. ITFS licensees in such lease arrangements also retain the
right to recapture ``an average of an additional 20 hours per channel
per week for simultaneous programming on the number of channels for
which it is authorized.'' In addition, an ITFS licensee may shift its
required educational programming onto fewer than its authorized number
of channels via channel loading or channel mapping. The licensee may
further agree to transmission of recapture time on channels not
authorized to it but which are included in the wireless cable system of
which it is a part.

A. ITFS Programming Requirements

25. In the NPRM, the Commission sought comment on several issues
related to the question of whether to change our ITFS programming
requirements in light of the use of digital technology by ITFS
licensees. It asked whether there should be different rules depending
on whether the wireless cable system employs digital or analog
transmissions, or some combination of both. It further asked whether
our existing program content requirements should be retained or whether
they should be modified. Specifically, the Commission sought comment on
whether data transmission and voice transmission should count toward
the fulfillment of minimum programming requirements, and if they were
to count, how they would be measured. The Commission also welcomed
suggestions on whether education-related upstream transmissions should
be applied towards satisfaction of minimum ITFS programming
requirements, and, if so, how they should be measured for that purpose.
The Joint Statement takes positions on many of these issues. To the
extent that it and its supporters represent an agreement by most of the
parties in the wireless cable industry and MDS and ITFS services, we
have accorded it deference in formulating our policies. Nonetheless,
while we find some its approaches sound, we find some if its provisions
unworthy of adoption.
26. Redefinition of Eligible Content. Commenters unanimously
support the proposal that spectrum usage beyond video programming be
eligible to satisfy ITFS educational usage requirements. We agree that
availability of advanced technologies dictates that it is now time to
accord ITFS licensees increased flexibility in determining which
transmissions qualify as satisfying educational usage requirements, so
long as such transmissions are in furtherance of the educational
mission of an accredited public or private school, college or
university, or other eligible institution (such as certain uses by
health care facilities), offering courses to enrolled students. Such
uses may include downstream or upstream video, data and voice
transmissions. In addition, while heretofore not qualifying to satisfy
educational usage requirements, qualifying uses now may include, but
are not limited to, teacher conferencing, remote test administration,
distribution of reports and assignments, research towards and sharing
works of progress in projects for courses, professional training,
continuing education, and other similar uses. Furthermore, in light of
the myriad of possible uses of the spectrum for courses by accredited
schools, we no longer need a separate rule pertaining to where
transmissions are not to on-campus receive sites.
27. We also will subject ITFS signal booster stations to
educational usage requirements, in conjunction with those to which main
ITFS stations are subject, and unless otherwise specified in the Rules,
a ``channel'' henceforth shall refer to any of the 6 MHz frequency
blocks assigned pursuant to Secs. 21.901(b) and 74.902(a) of the
Commission's Rules. We amend Sec. 74.931 and other pertinent rules to
reflect all of these changes. However, while Hispanic Information and
Telecommunications Network contends that qualifying educational service
should not be

[[Page 65093]]

limited to that offered by accredited institutions, we disagree,
because requiring that a qualified licensee be an accredited
institution provides greater certainty of the integrity of the
licensee's educational function. Thus, we will keep intact our
eligibility requirements of Sec. 74.932(a).
28. Analog Programming Requirements. Commenters who address this
subject unanimously believe that the current programming requirements
should be retained for ITFS licensees solely engaged in transmission of
downstream analog programming. We agree, and we will impose no changes
to programming requirements where licensees solely use analog
transmissions. However, for some commenters there is still discord over
what the extent is of the recapture time requirement. In the NPRM, the
Commission rejected Petitioners' proposed changes to Sec. 74.931(e)
that sought to revise the absolute 20 hours per channel per week
recapture time requirement to provide that the ITFS programming
requirements constitute a total of 40 hours per channel per week,
including both actual programming and recapture time. While Petitioners
and some other commenters argue that the Commission's stance in the
NPRM will deter investment, we believe that the Commission's rejection
in the NPRM of Petitioners' proposed changes to our recapture time
requirements was correct. However, in response to concerns expressed by
BellSouth, we clarify that the Rules do not require that 20 hours
always be reserved without accounting for the amount of recapture
already exercised.
29. Digital Educational Usage Requirements. While CTN insists that
educational usage requirements must be modified to reflect increased
capacity arising from use of digital technology, and argues that a
proportionate increase in instructional usage is needed to prevent the
dilution of the instructional nature of ITFS channels, the overwhelming
majority of commenters on these issues favors retaining the current
minimum educational usage requirements in a digital environment. Some
of these commenters, such as BellSouth, argue that ``there is no direct
correlation between technological advancements and the need for ITFS
programming''; others, such as Wireless One of North Carolina, L.L.C.,
observe that many ITFS licensees are finding it difficult even to
satisfy the existing ITFS minimum educational usage requirements;
several others assume the posture reflected in the Joint Statement,
that while the educational usage requirements should not be changed,
25% of an ITFS licensee's capacity should be immediately available to
the ITFS licensee or subject to recapture (with a minimum of 5% of the
licensee's capacity immediately available); and some others, such as
the San Francisco-San Jose Educator/Operator Consortium, contend that
recapture requirements are inefficient and urge that the Commission
abolish them.
30. Because we seek to maximize the flexibility of educators and
wireless cable operators to design systems which best meet their varied
needs, we will adopt ITFS excess capacity leasing rules which best
promote this flexibility while at the same time safeguarding the
primary educational purpose of the ITFS spectrum allocation. After a
careful review of the comments in this proceeding, we decide that these
goals are best harmonized where digital transmissions are used by
retaining the current 20 hours per channel per week educational usage
requirements, adopting the Joint Statement's proposed absolute
reservation of a minimum of 5% of an ITFS station's licensed capacity
for instructional purposes only, and eliminating requirements setting
aside capacity for ready recapture by ITFS licensees. We emphasize that
the 20 hours per channel per week minimum educational usage requirement
is independent from, but concurrent with, the minimum 5% capacity
reservation; further, the reserved capacity can be devoted to
satisfying minimum educational usage requirements. These complementary
standards are in the public interest because they insure the immediate
devotion of ITFS spectrum to formal educational usage, and the
provision by ITFS licensees of at least as much educational usage as
they provide under the current rules, while providing for expansion of
ITFS service offerings and maximization of spectrum available for
leasing to wireless cable operators. Thus, these standards also serve
the same purposes as the recapture provisions that they supplant.
31. Whether a reservation of 5% of the licensee's capacity is
sufficient to meet the minimum educational usage requirements, let
alone provide for future expansion of service, will depend both on the
digital compression ratio employed by the licensee, and on the
particular form of transmissions utilized by the licensee to meet its
usage requirements; in some cases, an ITFS licensee may need to reserve
more than 5% of its capacity in order to satisfy its educational usage
requirements or to provide room for future expansion of services. We
also emphasize that an ITFS licensee may reserve for itself in excess
capacity lease negotiations more than the minimum required reservation
of capacity, and is free not to lease its excess capacity at all if it
does not wish to do so.
32. Measurement of Educational Usage. In recognition of the
difficulty of measuring compliance with the requirements of 20 hours
per channel per week of educational usage and the 5% minimum capacity
reservation, and in light of the varied forms that ITFS spectral usage
can take, we agree with those parties commenting on this issue that at
least for now, the best course is to rely on the good faith efforts of
ITFS licensees to meet these requirements, subject to potential
Commission audits with the licensee bearing the burden of proof of
compliance. We decline to adopt time-of-day requirements for measuring
educational usage, and in light of changed content requirements and
available service options as a result of this proceeding, we grant
relevant portions of pending petitions for reconsideration of a 1994
Commission decision that only programming transmitted for ``real time''
viewing by students counts towards minimum educational usage
requirements.

B. Channel Loading, Shifting and Swapping

33. It is anticipated that system developers will attempt to
utilize contiguous 6 MHz channels for two-way services in order to
minimize the amount of spectrum that would be lost to the spectral mask
whenever a return path is adjacent to a downlink channel. Furthermore,
entire ITFS channel groups may need to be devoted for return paths.
Thus, in the NPRM, the Commission advanced Petitioners' proposal that
we allow ITFS licensees to satisfy their educational usage requirements
on other channels within the wireless cable system (``channel
loading''), and not mandate that licensees meet these requirements
using at least one of their own channels (``channel shifting''). The
Commission also proposed to allow the trading of channels between
licensees (``channel swapping''), and solicited comment on whether ITFS
licensees should be required to retain one or more channels for
downstream transmissions. The general concepts of channel loading,
shifting and swapping are endorsed by the Joint Statement and supported
by almost all of the commenting parties. With the exception of our
channel loading rules and intra-ITFS channel swaps between licensees
using analog transmissions only, the concepts which we permanently
adopt in the Order apply only to licensees using digital

[[Page 65094]]

transmissions, leasing excess capacity to an operator which uses
digital transmissions, or swapping channels with a licensee which uses
digital transmissions.
34. Channel Loading. The parties commenting on our channel loading
rules unanimously support their retention, and we shall do so. In
response to comments of Petitioners and of BellSouth, we also modify
these rules to eliminate the requirement that each ITFS licensee
engaged in channel mapping or channel loading preserve the ability to
transmit all of its ready recapture time simultaneously on the number
of channels for which it is licensed.
35. Channel Shifting. The overwhelming majority of commenters on
this proposal wholeheartedly support it. While the Joint Statement
supports the proposal so long as the usage is shifted onto channels
licensed to other ITFS entities, we are amending our Rules to permit
maximum flexibility in voluntary channel shifting for an ITFS licensee
which itself uses, or leases excess capacity to a wireless cable
operator which uses, digital transmissions. Such flexibility
encompasses the right of an eligible ITFS licensee to shift its
required educational usage onto any other channel(s) within the same
wireless cable system, regardless of whether licensed to an MDS or ITFS
entity. We hope that the flexibility we accord to ITFS licensees to
lease their channel capacity, along with the maintenance of minimum
ITFS educational usage requirements, also encourages educators to apply
for new ITFS stations and leads to more educational usage.
36. Downstream Channel Reservation. Of the few comments that we
received on this issue, the majority favors a mandatory preservation of
one downstream channel. We are adopting the Joint Statement's proposal,
as modified by comments of Alliance for Higher Education, et al.
(Higher Education Alliance): that each ITFS licensee leasing channels
to be used for return paths shall be required to maintain at least 25%
of its capacity to be used for downstream transmissions both during the
term of the lease and following termination of its leasing arrangement;
and that this preservation need not be over the licensee's own licensed
channels. In order to provide additional safeguards of the ITFS
spectrum allocation, we stipulate further that in the event the leasing
arrangement ends, the wireless cable operator must return to the ITFS
licensee unfettered use of as many 6 MHz channels as are authorized to
the licensee; only 25% of these channels, however, must be devoted to
downstream transmissions.
37. Channel Swapping. The comments that we received unanimously are
in favor of the concept, and most commenters on these issues indicate
full support both for swaps between ITFS channels, as well as between
ITFS and MDS channels. The rules that we adopt allow nearly maximum
flexibility in the types of swaps that may take place. We decline to
adopt proposals limiting the location of response channels, such as a
proposal which the Commission tentatively rejected in the NPRM as
unduly restrictive, which sought to convert MDS channels 1, 2 and 2A to
upstream use only, leaving the rest of the MDS and ITFS spectrum solely
for downstream use. Moreover, because channel swapping is voluntary and
its terms negotiable, we see no need to adopt the proposal of Schwartz,
Woods & Miller (SWM) to require that the wireless cable operator cover
all of the costs of channel swaps. We implement simple procedures for
channel swap applications: Each licensee seeking to swap channels shall
file a pro forma assignment application with the Commission, attaching
an exhibit which clearly specifies that the application is filed
pursuant to a channel swap agreement.
38. Effects on ITFS License Renewal. Several commenters urge that
it is important that we clarify that channel shifting, in particular,
will not constitute a basis for, or be a factor in, a license renewal
proceeding; the Joint Statement also contains a provision to this
effect. This concern arises over possible effects of an ITFS licensee
not providing any educational usage over its own licensed channels,
even if it satisfies its educational usage requirements on other
channels in the same wireless cable system. Because we recognize that
two-way system design may be based largely on the implementation of
channel shifting, and that wireless cable operators and their ITFS
lessors may be deterred from utilizing these efficiencies without
assurances that doing so will not have an adverse effect at the time
the ITFS licensee seeks renewal, we amend Sec. 74.931 to reflect that
the fact that an ITFS licensee utilizes channel shifting, channel
loading or channel mapping will not itself be considered adversely to
the licensee in seeking a license renewal.

C. Autonomy of ITFS Licensees and Agency Role

39. When the Commission solicited comments in preparation for the
NPRM, several of the ITFS parties who commented at that time expressed
concern that the proposed two-way scheme presents threats to the
independence of ITFS licensees and their future ability to use spectrum
capacity for instructional purposes. Some of those concerned commenters
focused on the effect that the proposed rules may have on the
engineering autonomy of ITFS licensees. Concerned commenters also
identified issues relating to possible encroachment upon the financial
autonomy of ITFS licensees by implementation of the proposed two-way
framework. While the Commission, in the NPRM, sought comment on the
effects that cellularization would have on the engineering and
financial autonomy of ITFS licensees, it also acknowledged that any
proposed solutions inherently would implicate the fundamental question
of what degree of oversight the Commission should maintain in
regulating the wireless cable industry and ITFS. The Commission
solicited views on this fundamental question, and on one of its
principal offshoots, the question of what impact the proposed two-way
rules should have on the Commission's requirements regarding excess
capacity lease agreements.
40. The comments that we received in response to the NPRM evince
many of the same concerns expressed by some of the ITFS commenting
parties in earlier rounds of comment, and likewise are met with
opposing comments conveying responses comparable to those previously
conveyed. Some of our decisions in the Order, such as generally
prohibiting involuntary modifications to ITFS stations in a two-way
environment, should help address some of the concerns of ITFS licensees
regarding their autonomy and ability to continue providing service
should they no longer be in a relationship with a wireless cable
operator. However, while we will continue to require certain provisions
in excess capacity leases between ITFS licensees and wireless cable
operators, and likewise will continue to prohibit certain provisions,
we believe generally that ITFS licensees can--and should--in their
negotiations with wireless cable operators arrange for lease terms that
best protect their own individual interests and needs.
41. As a starting point, we reemphasize the Commission's
declaration in the NPRM that cellularization by ITFS licensees is

[[Page 65095]]

permissive only, and not mandatory. In addition, we have decided to
grant all ITFS licensees protected service area (psa) protection, in
response to concerns over coercion such as those expressed by the
Foundation, that otherwise there would be a disparity in interference
protection between ITFS licensees that offer high-speed Internet
service pursuant to a lease with a wireless cable operator, and ITFS
licensees that provide exactly the same service on their own. We also
reaffirm the ability of stand-alone ITFS licensees to provide
communications services that are not specifically educational over
their frequencies, so long as they meet the educational usage
requirements set forth in our Rules.
42. Engineering Autonomy. We agree with the commenters who
recognize that our requirement that each ITFS licensee retain 25% of
its capacity for downstream transmissions will present significant
assistance to ITFS licensees in continuing to provide downstream
educational services. Nevertheless, we believe generally that post-
relationship configuration issues should be arranged by the ITFS
licensee in the course of negotiating the terms of its excess capacity
lease with the wireless cable operator. We further conclude that,
particularly in light of the primary educational function of ITFS
licensees, where an ITFS licensee is not the source of transmissions
over its licensed bandwidth, we will not regard the ITFS licensee as
having legal control over the content of such transmissions. At most,
an ITFS licensee's legal control over content transmitted over its
authorized bandwidth is a contractual matter between the leasing
parties.
43. Financial Autonomy. In the NPRM, the Commission sought comment
on the concerns of several commenters at that stage of the proceeding
that ITFS licensees will be unable to sever their relationship with the
wireless cable operator and acquire the equipment to either continue
cellular operations or return to non-two-way transmissions. While some
commenters such as CTN, the Foundation, and SWM propose various
regulatory solutions to these concerns, we agree with the commenters
who argue that the ITFS licensee should address these concerns itself
in its lease negotiations. Thus, we decline to adopt proposals to
require that two-way wireless cable operators establish a performance
bond or escrow account, with sufficient funds to ensure the
uninterrupted operation of participating ITFS stations for a given
period; or to have transmission systems transfer automatically to the
ownership and control of the ITFS licensee upon termination of the
lease, or upon commencement of a lease term. However, consistent with
current policy, we will require that each excess capacity lease contain
a provision assuring the ITFS licensee's right to purchase the actual
equipment, or equipment comparable to that, used by the ITFS licensee
during the lease for educational purposes. This means, for example,
that if the ITFS licensee was providing educational services during the
lease period utilizing digital transmissions, the wireless cable
operator is not obligated to retain analog transmission equipment for
ITFS licensees seeking to return to traditional downstream analog
transmissions. In addition, as requested by CTN, this required lease
provision applies to dedicated or common equipment used for educational
purposes. Nonetheless, as further indicated by CTN, negotiations
between the parties to the lease still will be required to spell out
the appropriate specific equipment that must be made available.
44. Commission Role. In the NPRM, the Commission described how in
the past, it has adopted rules and procedures to accommodate and
protect what has been viewed as the special needs of educational
institutions and organizations, believing that educational institutions
should be treated differently from commercial entities in many
situations due to limited financial and staff resources. One of these
protections has been required review by the staff of ITFS excess
capacity lease agreements, for overly restrictive provisions affecting
the licensee's rights and obligations and for compliance with the
Commission's leasing policies. The Commission requested comment on
whether parties should continue to be required to file written
agreements governing the ITFS licensee's lease of excess capacity on
its channels.
45. The comments that we received on this issue generally are split
between those who believe that many ITFS licensees are well-funded, and
those who believe that many still have very limited resources. Because
we believe that many examples supporting both viewpoints exist, we find
it still appropriate for us to maintain some degree of oversight
regarding the relations between the wireless cable industry and ITFS,
albeit a limited role which allows for maximum possible flexibility of
the parties in establishing excess capacity lease provisions, while at
the same time ensuring educational use of ITFS and a licensee's ability
to continue uninterrupted in that use should its relationship with the
wireless cable operator terminate. In this regard, we will heed the
prescriptions of the numerous commenters who request that we continue
to review excess capacity leases for provisions overly restrictive of
ITFS licensees and in order to police established safeguards, and
require amendment of noncompliant leases. However, consistent with many
of our decisions in the Order regarding the substance of such leases,
we intend this review to be on a lesser scale than previously, and to
be more deferential to the burdens and benefits which constitute the
agreement between the parties to the leases, and to allowing
flexibility in implementation of two-way services.
46. In the NPRM, the Commission tentatively rejected, but
nonetheless sought comment on, a proposal, advanced by the Foundation,
that the Commission require that two-way digital applications and
interference consents be reviewed by legal and engineering counsel that
do not represent commercial interests, and that these independent
advisors certify that in their professional opinion the submission will
not harm future instructional service. The Commission noted that past
attempts to require all leasing parties to hire separate counsel have
been declined by the Commission, having found this safeguard
unnecessary and relying instead on the staff's review and monitoring of
leases. After reviewing the comments on this issue, we continue to see
no reason to change our position on this issue, and we decline to adopt
the Foundation's proposal.
47. Grandfathering of Excess Capacity Lease Provisions. The Joint
Statement recommends that excess capacity lease agreements that provide
for digital usage and were entered into prior to release of the Order
be ``grandfathered for their duration.'' We seek to ensure a transition
as smooth as possible to two-way operations, and we are persuaded by
commenters such as Higher Education Alliance who describe how
effectively requiring amendment of numerous existing leases could prove
unduly burdensome to ITFS licensees and wireless cable operators who
did not anticipate such changes. However, since the March 31, 1997
release of our Public Notice announcing the filing of the petition for
rulemaking which initiated this proceeding, no party can be heard to
argue that it did not have notice that ITFS/MDS two-operations were
anticipated in the not-too-distant future. Thus, any excess capacity
lease entered into, renewed, or extended after March 31, 1997 is
expected to be brought into compliance immediately

[[Page 65096]]

with all of the rule changes and policies that are adopted here, as is
each new such lease, renewal, or term extension from here onward.
Finally, we emphasize that we will not adjudicate whether the
provisions of any specific lease contemplated digital operations as a
general matter. In the absence of resolution between the parties to the
lease, we believe this issue to be a matter of contract law properly
heard before a state tribunal. In framing our policies towards
grandfathering of certain excess capacity leases, we have considered,
and rejected, SWM's proposal that in order to protect the rights of
incumbent ITFS licenses, the Commission require that leases approved or
submitted under the previous rules ``be amended to make clear that the
wireless cable lessee and the ITFS licensee have together considered
the rule changes adopted and made any appropriate changes to lease
terms, prior to the commencement of commercial operations on the
frequencies using cellularization, sectorization or differing
channelization plans.''
48. Length of Leases. The Joint Statement urges that the Commission
allow excess capacity leases of up to 15 years duration, provided that
any lease extending beyond the term of a licensee's authorization
provides for termination of the lease in the event the Commission
denies the subject station's application for renewal. Virtually all of
the commenters who address this proposal support it, and we are
adopting it. In doing so, we decline to adopt the Foundation's
suggestion of maintaining the 10 year lease limit for downstream-only
digital and analog systems, while allowing a 15 year limit for two-way
systems.
49. Other Lease Requirements. Petitioners urge that the Commission
reverse two policies which, Petitioners assert, were not formed in
rulemaking proceedings: (1) Barring lease provisions that require an
ITFS licensee to assign its remaining obligations under an excess
capacity lease if it chooses to assign its underlying license; and (2)
Rejecting lease provisions which require that an ITFS licensee, seeking
to cease operating its facility during the excess capacity lease term,
provide the wireless cable operator a reasonable opportunity to secure
an eligible ITFS assignee before the license is returned to the
Commission for cancellation. We believe that it is appropriate to
continue our ban of provisions that would require an ITFS licensee to
assign its remaining obligations under an excess capacity lease.
However, henceforth we will allow provisions that would permit a
wireless cable operator to find a qualified ITFS assignee to assume the
license prior to its cancellation, and we set forth guidelines to
govern what constitutes acceptable such provisions.
50. The Joint Statement contains provisions which call for all
excess capacity leases to state that the ITFS licensee ``shall have the
right to use any Internet services offered over the system at no
greater than the lowest prevailing commercial rate and shall have
reasonable access, at rates to be negotiated between the parties, to
other services offered over the system (such as addressability and two-
way capability).'' Because we believe that these are best private
contractual matters between the parties, we decline to implement these
provisions of the Joint Statement.

D. ITFS Call Sign Transmission

51. In the NPRM, the Commission presented Petitioners' arguments
that the burdens of continued enforcement of the ITFS call sign
transmission requirement in a two-way environment will far outweigh the
benefits. The Commission sought comment on the proposed elimination of
Sec. 74.982, and solicited alternative solutions for maintaining the
accountability of ITFS licensees. The few commenters which addressed
this proposal unanimously favored eliminating the call sign
transmission requirement where digital transmissions are utilized. In a
two-way environment, alleviation of interference problems primarily
will be left to the wireless cable operator, because of all the
coordination it must do to make a two-way system function properly. In
recognition of this and the greater efficiency of digital
transmissions, we believe that the burdens embedded in Sec. 74.982,
such as costs, outweigh the benefits of applying the rule to any ITFS
station using any digital transmissions. Thus, any ITFS station using
digital modulation, whether or not in a lease agreement with a wireless
cable operator and whether or not in a two-way system, will be exempt
from the requirements of Sec. 74.982. However, because these costs
would not be prohibitive to ITFS stations using only analog
transmissions, and because the benefits of interference identification
can still be realized economically where transmissions are in analog,
we will retain Sec. 74.982 and apply it to ITFS stations which transmit
only in analog.

V. Final Regulatory Flexibility Analysis (FRFA)

52. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C.
Sec. 603, an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the NPRM in this proceeding. The Commission sought
written public comment on the proposals in the NPRM, including on the
IRFA. The Commission's Final Regulatory Flexibility Analysis (FRFA) in
this Order conforms to the RFA, as amended by the Contract With America
Advancement Act of 1996.1
---------------------------------------------------------------------------

\1\ Public Law 104-121, 110 Stat. 847 (1996) (CWAAA); see
generally 5 U.S.C. Secs. 601 et seq. Title II of the CWAAA is the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
---------------------------------------------------------------------------

A. Need for and Objectives of Action

53. In the Order, we amend parts 1, 21 and 74 of our Rules to
enable MDS and ITFS licensees to provide two-way communication
services. These services will be enhanced through the use of two-way
audio, video and data communications from ``response'' stations, the
use of booster stations with program origination capability in a
cellular configuration designed to create spectrum flexibility through
frequency reuse, and the use of variable bandwidth (``subchanneling''
and ``superchanneling'') to create additional flexibility. We believe
the final rule amendments will facilitate two-way transmission and
other improvements to the MDS and ITFS services.

B. Significant Issues Raised by the Public in Response to the Initial
Analysis

54. No comments were received specifically in response to the IRFA
contained in the NPRM. However, some commenters did raise arguments
concerning the effect that certain of our proposals may have on small
entities.
55. As to whether we should increase educational usage requirements
when ITFS licensees employ digital transmissions, Region IV argued that
greater educational usage requirements would particularly burden small
ITFS entities, by indirectly imposing financial and administrative
burdens before these licensees are in a posture to assume such
responsibilities.
56. With respect to whether we should adopt a rolling one-day
filing window for the submission of two-way MDS and ITFS applications,
the Alliance of MDS Licensees argued that such a system would place an
unbearable burden on the limited resources of incumbents, resulting in
large operators having an advantage over small operators.

C. Description and Number of Small Entities Involved

57. The RFA generally defines ``small entity'' as having the same
meaning as the terms ``small business,'' ``small organization,'' and
``small business

[[Page 65097]]

concern.'' 5 U.S.C. Sec. 601(6). In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.2 A small business concern is
one which: (1) is independently owned and operated; (2) is not dominant
in its field of operation; and (3) satisfies any additional criteria
established by the SBA. Small Business Act, 15 U.S.C. Sec. 632.
---------------------------------------------------------------------------

\2\ 5 U.S.C. Sec. 601(3) (incorporating by reference the
definition of ``small business concern'' in 15 U.S.C. Sec. 632).
Pursuant to 5 U.S.C. Sec. 601(3), the statutory definition of small
business applies unless an agency after consultation with the Office
of Advocacy of the Small Business Administration and after an
opportunity for public comment, establishes one or more definitions
of such term which are appropriate to the activities of the agency
and publishes definitions in the Federal Register.
---------------------------------------------------------------------------

58. MDS: The Commission has defined ``small entity'' for the
auction of MDS as an entity that, together with its affiliates, has
average gross annual revenues that are not more than $40 million for
the preceding three calendar years. 47 CFR 21.961(b)(1). This
definition of a small entity in the context of MDS auctions has been
approved by the SBA. See 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, MM Docket No. 94-31 and PP Docket No. 93-253,
Report and Order, 10 FCC Rcd 9589 (1995), 60 FR 36524, Jul. 17, 1995.
The Commission completed its MDS auction in March 1996 for
authorizations in 493 basic trading areas (BTAs). Of 67 winning
bidders, 61 qualified as small entities.3
---------------------------------------------------------------------------

\3\ One of these small entities, O'ahu Wireless Cable, Inc., was
subsequently acquired by GTE Media Ventures, Inc., which did not
qualify as a small entity for purposes of the MDS auction.
---------------------------------------------------------------------------

59. MDS is also heavily encumbered with licensees of stations
authorized prior to the auction. The SBA has developed a definition of
small entities for pay television services, which includes all such
companies generating $11 million or less in annual receipts. 13 CFR
121.201. This definition includes multipoint distribution systems, and
thus applies to MDS licensees and wireless cable operators which did
not participate in the MDS auction. Information available to us
indicates that there are 832 of these licensees and operators that do
not generate revenue in excess of $11 million annually. Therefore, for
purposes of this FRFA, we find that there are approximately 892 small
MDS providers as defined by the SBA and the Commission's auction rules,
and some of these providers may take advantage of our amended rules to
provide two-way MDS.
60. ITFS: There are presently 2032 ITFS licensees. All but 100 of
these licenses are held by educational institutions (these 100 fall in
the MDS category, above). Educational institutions may be included in
the definition of a small entity. See 5 U.S.C. Secs. 601 (3)-(5). ITFS
is a non-pay, non-commercial broadcast service that, depending on SBA
categorization, has, as small entities, entities generating either
$10.5 million or less, or $11.0 million or less, in annual receipts.
See 13 CFR 121.210 (SIC 4833, 4841, and 4899). However, we do not
collect, nor are we aware of other collections of, annual revenue data
for ITFS licensees. Thus, we find that up to 1932 of these educational
institutions are small entities that may take advantage of our amended
rules to provide two-way ITFS.

D. Summary of Projected Reporting, Recordkeeping and Other Compliance
Requirements

61. The Order adopts the following proposals that include
reporting, recordkeeping, and compliance requirements:
62. We required MDS and ITFS licensees employing two-way technology
to attach labels to every subscriber transceiver in a conspicuous
fashion. In addition, MDS and ITFS licensees employing two-way
technology will be required to include a full explanation of the labels
that appear on their transceivers, as well as reference to the
applicable Commission guidelines, in the instruction manuals and other
information accompanying their subscriber transceivers.
63. We required a hub station licensee to formally notify an ITFS
licensee when a response station is being located in the vicinity of
any of the ITFS licensee's receive sites. Specifically, we created a
notification zone with a radius of 1960 feet around each registered
ITFS receive site and we required that, at least 20 days prior to the
activation of any response station within such a zone, the hub station
licensee notify, by certified mail, the appropriate ITFS licensee.
64. In addition to required information contained on new FCC Form
331, we required applicants to submit additional data in specified
formats and on diskettes accompanying the application forms.
65. While we do not ordinarily require applicants for minor changes
to ITFS facilities to prepare interference showings or serve them on
potentially affected parties, we required the preparation and service
of interference analyses by ITFS licensees who seek to use their
associated I channels for downstream transmissions.
66. We will accept applications for MDS and ITFS response stations
hubs or boosters via a rolling, one-day filing window. Each applicant
will have to provide interference protection to all facilities existing
or proposed prior to the filing of its application, but its application
will take precedence over all subsequently filed applications.
Applicants will be required to file their applications with all of
their interference analyses, in both hard copy and on disk.
67. Applicants for two-way facilities will be required to certify
that they have met all requirements regarding interference protection
to existing and prior proposed facilities. The applicant will also be
required to certify that it has served all potentially affected parties
with copies of its application, and with its engineering analysis
supporting its interference compliance claim.

E. Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered

68. The following steps were taken in the Order to minimize the
significant economic impact on small entities:
69. The rule changes adopted in the Order to allow two-way
operations for MDS and ITFS will simplify our licensing system and
provide greater flexibility in the use of the allotted spectrum to
licensees. It is expected that such changes will further eliminate
market entry barriers for small entities.
70. By allowing for subchannelization, small entity licensees will
be able to respond to the demands of the market and create an unlimited
number of channels to carry their current and future communications
needs. Allowing superchannelization will permit small entity licensees
to combine their spectrum with other small entity licensees and create
larger systems to meet their particular operations and to operate at
greater speeds.
71. To permit small entity ITFS licensees with limited resources
adequate time to evaluate a two-way applicant's proposed service plan,
we adopted a certification procedure whereby applicants are required to
certify that they have met all requirements regarding interference
protection to existing and prior proposed facilities. The applicant
will also be required to certify that it has served all potentially
affected parties

[[Page 65098]]

with copies of its application and with its engineering analysis
supporting its interference compliance claim.
72. In an effort to minimize the impact of our new rules on
educational ITFS licensees, many of whom are small entities, we
determined that restricting ITFS eligible use to the downstream video/
audio paradigm would preclude flexibility in service offerings for an
ITFS licensee which leases excess channel capacity. We provided
educational entities with additional flexibility to define what ITFS
usage they regard as educational, in an effort to permit such entities
to further their educational mission. We did not expand our minimum
educational usage requirement for digital ITFS transmissions, and we
added a requirement that 5 percent of an ITFS station's capacity be set
aside for instructional purposes only.
73. The following significant alternatives were considered in the
Order:
74. We declined to adopt CTN's suggestion that greater suppression
of spurious emissions is needed on the order of -60 dB for response
stations operating at +48 dBm, up to -75 dB for response stations
operating at +63 dBm. We found that modifications made to the spectral
mask for response stations would completely eliminate the requirements
that were proposed for such emissions.
75. We did not adopt NextLevel's suggestion that a maximum
suppression limit be placed on digital emitters, which would
effectively remove the out-of-band attenuation requirements for power
levels below a certain minimum. We found that such a relaxation of out-
of-band limits, in the context of a cellularized CDMA system, could
result in an adverse impact on the interference environment because,
unlike other services, hundreds or thousands of low power emitters may
be transmitting simultaneously and the combined effects of their out-
of-band emissions could be significant.
76. In the Order, we adopted a Methodology for calculating the
interference potential of response stations. We rejected CTN's request
to protect hub receivers only to a distance of 35 miles and make them
secondary beyond that distance. We concluded that such a step would
render hubs extremely susceptible to interference and seriously degrade
the communications capabilities and reliabilities within the hub's RSA.
We did not adopt EDX Engineering's alternative to Petitioners' response
station interference Methodology because, for many two-way system
configurations, EDX's interference calculations will inevitably give
erroneous results, a shortcoming that was conceded by EDX itself. We
also did not permit applicants to choose any methodology they wish for
making interference calculations, as we found that this would
drastically slow the evaluation of applications and almost certainly
result in many Petitions to Deny, as licensees and applicants struggled
to understand the differing and potentially incompatible assumptions
and calculations incorporated into the various methodologies.
77. We also declined to adopt Spike's recommendation that hub
stations be redefined to include transmitting capability. We found that
this was not necessary because booster and primary stations may be co-
located with hub stations to provide transmission capability, and
permitting hubs to also transmit would simply add redundancy and
unnecessary complexity to the interference protection requirements of
the rules.
78. We denied CTN's request that guardbands be established
separating upstream (response station) transmissions from downstream
ITFS transmissions. We determined that CTN's first proposal, involving
the creation of 24 MHz-wide guardbands, could result in partially or
completely eliminating many MHz of potentially useful upstream spectrum
on the speculative assumption that such action was necessary to protect
ITFS receive sites from interference. We also declined to adopt CTN's
subsequent proposals, involving 6 MHz guardbands, believing that it was
not the case that the proposed response station interference
Methodology is ``unduly complex'' and will be ineffective in
determining interference when the potential victim ITFS receive site is
within a hub station's RSA.
79. We did not adopt CTN's request for mandatory response station
testing, as we found that it would impose an unnecessary burden on two-
way licensees.
80. We denied CTN's request to reallocate all of the 125 kHz
channels to ITFS and to use them solely for response transmissions. We
found that reallocation and the complications associated with that is
not necessary, and that allowing the I channels to be used for point-
to-multipoint transmissions promotes greater options for two-way system
design and more efficient use of the spectrum. For the same reasons, we
declined to adopt CTN's suggestion that we render low power boosters
secondary, and we also declined to adopt Maryland's request that we
mandate that any non-ITFS use of I channels licensed to an ITFS entity
be secondary to ITFS use.
81. We rejected the automatic grant proposal made by the
Petitioners for granting without review any unopposed two-way license
application after a 60-day comment period. We also did not adopt the
proposal specified in the NPRM to set up a system whereby the staff
would fully review the filed applications and issue a grant or denial.
Instead, we adopted a certification procedure whereby applicants
certify that they have met the requirements regarding interference
protection to existing and prior proposed facilities and have served
copies of their applications on all affected parties. We determined
that this approach was needed to facilitate two-way service to the
public, and that without it, two-way service by MDS operators and/or
ITFS licensees may not become a reality. The certification requirement
would also protect the interests of ITFS licensees, many of whom do not
have the time or resources to evaluate a two-way applicant's proposed
service plan.
82. In the Order, we determined that parties will have 60 days from
the date of the public notice to file petitions to deny against two-way
applications. We decided that, due to the complex nature of the
engineering to be filed, a 60 day petition to deny period is more
reasonable that the usual 30 day period.
83. We did not adopt HITN's suggestion that we eliminate our rule
that limits eligible ITFS educational service providers to accredited
institutions. We found that the primary purpose of ITFS is, and always
has been, to meet the needs of students enrolled in courses of formal
instruction. Furthermore, we found that accredited schools have been
the intended users of ITFS since the origin of the service.
84. We decided to subject ITFS high power booster stations to
educational usage requirements, separate from those to which main ITFS
stations are subject. We determined, however, not to subject ITFS
response stations or response station hubs to educational usage
requirements, because the ITFS licensee has no control over which
upstream transmissions would qualify to satisfy the requirements.
85. We declined to adopt time-of-day requirements for measuring
educational usage, in order to provide ITFS licensees with the maximum
flexibility to determine which uses of their spectrum enhance their
formal educational mission.

[[Page 65099]]

86. In the Order, we retained two different but complementary
requirements of ITFS spectral usage: a minimum of 20 hours per channel
per week for educational usage, and a minimum reservation of 5% of a
licensee's capacity that it may not lease. We determined that both
would be difficult to measure in light of the varied forms that such
usage can take. We decided that the best course would be to rely on the
good faith efforts of ITFS licensees to meet these requirements, and we
did not institute any new, formal proof of compliance reporting
submissions in this area.

F. Report to Congress

87. The Commission will send a copy of the Order, including this
FRFA, in a report to be sent to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996. See 5 USC
Sec. 801(a)(1)(A). In addition, the Commission will send a copy of the
Order, including the FRFA, to the Chief Counsel for Advocacy of the
Small Business Administration. A copy of the Order and FRFA (or
summaries thereof) will also be published in the Federal Register. See
5 USC Sec. 604(b).

VI. Procedural Matters

88. Accordingly, it is ordered that, pursuant to the authority
contained in Sections 4(i) and (j), 301, 303(f), 303(g), 303(h),
303(j), 303(r), and 308(b) of the Communications Act of 1934, as
amended, 47 USC Secs. 154(i), 154(j), 301, 303(f), 303(g), 303(h),
303(j), 303(r), and 308(b), this Order is adopted, and parts 1, 21, and
74 of the Commission's Rules, 47 CFR 1, 21, and 74, are amended as set
forth below.
89. It is further ordered that the Petition of Wireless Cable Ass'n
Int'l for Reconsideration and Clarification, MM Docket No. 93-106
(filed August 12, 1994), and Petition of Alliance for Higher Education,
et al., MM Docket No. 93-106 (filed August 5, 1994), are granted to the
extent described in the Order at note 230.
90. The action contained in the Order has been analyzed with
respect to the Paperwork Reduction Act of 1995 and found to impose new
or modified reporting and recordkeeping requirements or burdens on the
public. Implementation of these new or modified reporting and
recordkeeping requirements will be subject to approval by the Office of
Management and Budget as prescribed by the Act. The new or modified
paperwork requirements contained in this Order (which are subject to
approval by the Office of Management and Budget) will go into effect
upon OMB approval.

List of Subjects

47 CFR Part 1

Environmental impact statements.

47 CFR Part 21

Communications common carriers, Communications equipment, Reporting
and recordkeeping requirements, Television.

47 CFR Part 74

Communications equipment, Education, Reporting and recordkeeping
requirements, Television.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

Parts 1, 21 and 74 of Title 47 of the Code of Federal Regulations
are amended as follows:

PART 1--PRACTICE AND PROCEDURE

1. The authority for part 1 continues to read as follows:

Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j),
155, 225, and 303(r).

2. In Sec. 1.1307, paragraph (b)(1), Table 1, right column is
amended by adding the entry regarding MDS licensees directly following
the existing reference to Multipoint Distribution Service building-
mounted antennas, and by adding the entry regarding ITFS licensees
directly following the existing reference to part 74, subpart I
stations, to read as follows:

Sec. 1.1307 Actions that may have a significant environmental effect,
for which Environmental Assessments (EAs) must be prepared.

* * * * *
(b) * * *
(1) * * *

Table 1.--Transmitters, Facilities and Operations Subject To Routine
Environmental Evaluation
------------------------------------------------------------------------
Service (title 47 CFR rule
part) Evaluation required if--
------------------------------------------------------------------------

* * * * * * *
Multipoint Distribution * * *
Service (subpart K of part
21).
MDS licensees are required to attach a
label to subscriber transceiver or
transverter antennas that:
(1) provides adequate notice regarding
potential radiofrequency safety
hazards, e.g., information regarding
the safe minimum separation distance
required between users and
transceiver antennas; and
(2) references the applicable FCC-
adopted limits for radiofrequency
exposure specified in Sec. 1.1310.

* * * * * * *
Experimental, auxiliary, and * * *
special broadcast and other
program distributional
services (part 74).
ITFS licensees are required to attach a
label to subscriber transceiver or
transverter antennas that:
(1) provides adequate notice regarding
potential radiofrequency safety
hazards, e.g., information regarding
the safe minimum separation distance
required between users and
transceiver antennas; and
(2) references the applicable FCC-
adopted limits for radiofrequency
exposure specified in Sec. 1.1310.

* * * * * * *
------------------------------------------------------------------------

[[Page 65100]]

PART 21--DOMESTIC PUBLIC FIXED RADIO SERVICES

3. The authority for part 21 continues to read as follows:

Authority: Secs. 1, 2, 4, 201-205, 208, 215, 218, 303, 307, 313,
403, 404, 410, 602, 48 Stat. as amended, 1064, 1066, 1070-1073,
1076, 1077, 1080, 1082, 1083, 1087, 1094, 1098, 1102; 47 U.S.C. 151,
154, 201-205, 208, 215, 218, 303, 307, 313, 314, 403, 404, 602; 47
U.S.C. 552, 554.

4. In Sec. 21.2, the following definitions are added in
alphabetical order, to read as follows:

Sec. 21.2 Definitions.

* * * * *
Booster service area. A geographic area to be designated by an
applicant for a booster station, within which the booster station shall
be entitled to protection against interference as set forth in this
part. The booster service area must be specified by the applicant so as
to not overlap the booster service area of any other booster authorized
to or proposed by the applicant. However, a booster station may provide
service to receive sites outside of its booster service area, at the
licensee's risk of interference.
* * * * *
Channel. Unless otherwise specified, a channel under this part
shall refer to a 6 MHz frequency block assigned pursuant to
Secs. 21.901(b) or 74.902(a) of this chapter.
* * * * *
Response station hub. A fixed facility licensed to an MDS licensee,
and operated by an MDS licensee or the lessee of an MDS facility, for
the reception of information transmitted by one or more MDS response
stations that utilize digital modulation with uniform power spectral
density. A response station hub licensed under this part may share
facilities with other MDS response station hubs, ITFS response station
hubs authorized pursuant to Sec. 74.939 of this chapter, MDS signal
booster stations, ITFS signal booster stations, MDS stations, and/or
ITFS stations.
Response station hub license. A blanket license authorizing the
operation of a single response station hub at a specific location and
the operation of a specified number of associated digital response
stations of one or more classes at unspecified locations within one or
more regions of the response service area.
Sectorization. The use of an antenna system at an MDS station,
booster station and/or response station hub that is capable of
simultaneously transmitting multiple signals over the same frequencies
to different portions of the service area and/or simultaneously
receiving multiple signals over the same frequencies from different
portions of the service area.
* * * * *
4a. In Sec. 21.2, the following definitions, in alphabetical order,
are revised to read as follows:
Multichannel Multipoint Distribution Service (MMDS). Those
Multipoint Distribution Service Channels that use the frequency band
2596 MHz to 2644 MHz and associated 125 kHz channels.
Multipoint Distribution Service (MDS). A domestic public radio
service rendered on microwave frequencies from one or more fixed
stations transmitting to multiple receiving facilities located at fixed
points. MDS also may encompass transmissions from response stations to
response station hubs or associated fixed stations.
Multipoint Distribution Service response station. A fixed station
operated by an MDS licensee, the lessee of MDS channel capacity or a
subscriber of either to communicate with a response station hub or
associated MDS station. A response station under this part may share
facilities with other MDS response stations and/or one or more
Instructional Television Fixed Service (ITFS) response stations
authorized pursuant to Sec. 74.939 of this chapter or Sec. 74.940 of
this chapter.
* * * * *
Signal Booster Station. An MDS station licensed for use in
accordance with Sec. 21.913 that operates on one or more MDS channels.
Signal booster stations are intended to augment service as part of a
distributed transmission system where signal booster stations
retransmit the signals of one or more MDS stations and/or originate
transmissions on MDS channels. A signal booster station licensed under
this part may share facilities with other MDS signal booster stations,
ITFS signal booster stations authorized pursuant to Sec. 74.985 of this
chapter, MDS response station hubs and/or ITFS response station hubs.
* * * * *
5. In Sec. 21.11, paragraphs (f) and (g) are redesignated as
paragraphs (e) and (f), respectively, and the section heading,
paragraphs (a) and (d), and newly redesignated paragraph (e) are
revised, to read as follows:

Sec. 21.11 Miscellaneous forms.

(a) Licensee qualifications. FCC Form 430 (``Licensee Qualification
Report'') must be filed annually, no later than March 31 for the end of
the preceding calendar year, unless the licensee operates solely on a
common carrier basis and service was not offered at any time during the
preceding year. Each annual filing must include all changes of
information required by FCC Form 430 that occurred during the preceding
year. In those cases in which there has been no change in any of the
required information, the applicant or licensee, in lieu of submitting
a new form, may so notify the Commission by letter.
* * * * *
(d) Assignment of license. FCC Form 702 (``Application for Consent
to Assignment of Radio Station Construction Authorization or License
(for Stations in Services Other than Broadcast)'') must be submitted to
assign voluntarily (as by, for example, contract or other agreement) or
involuntarily (as by, for example, death, bankruptcy, or legal
disability) the station license or conditional license. In the case of
involuntary assignment, the application must be filed within 30 days of
the event causing the assignment. FCC Form 702 also must be used for
nonsubstantial (pro forma) assignments. In addition, FCC Form 430 must
be submitted by the proposed assignee unless such assignee has a
current and substantially accurate report on file with the Commission.
Whenever a group of station licenses or conditional licenses in the
same radio service is to be assigned to a single assignee, a single
``blanket'' application may be filed to cover the entire group, if the
application identifies each station by call sign and station location
and if two copies are provided for each station affected. The
assignment must be completed within 45 days from the date of
authorization. Upon consummation of an approved assignment, the
Commission must be notified by letter of the date of consummation
within 10 days of its occurrence.
(e) Transfer of control of corporation holding a conditional
license or license. FCC Form 704 (``Application for Consent to Transfer
of Control'') must be submitted in order to voluntarily or
involuntarily transfer control (de jure or de facto) of a corporation
holding any conditional licenses or licenses. In the case of
involuntary transfer of control, the application must be filed within
30 days of the event causing the transfer of control. FCC Form 704 also
must be used for nonsubstantial (pro forma) transfers of control. In
addition, FCC Form 430 must be submitted by the proposed transferee
unless such transferee has a current and substantially accurate report
on file with the Commission. Whenever control of a corporation holding
a group of station licenses or conditional licenses in the

[[Page 65101]]

same radio service is to be transferred to a single transferee, a
single ``blanket'' application may be filed to cover the entire
transfer, if the application identifies each station by call sign and
station location and if two copies are provided for each station
affected. The transfer must be completed within 45 days from the date
of authorization. Upon consummation of an approved transfer, the
Commission must be notified by letter of the date of consummation
within 10 days of its occurrence.
* * * * *
6. In Sec. 21.27, paragraph (d) is added, to read as follows:

Sec. 21.27 Public notice period.

* * * * *
(d) Notwithstanding any other provisions of this part, effective as
of September 17, 1998, there shall be one one-week window, at such time
as the Commission shall announce by public notice, for the filing of
applications for high-power signal booster station, response station
hub and I channels point-to-multipoint transmissions licenses, during
which all applications shall be deemed to have been filed as of the
same day for purposes of Secs. 21.909, 21.913 and 74.939(l) of this
chapter. Following the publication of a public notice announcing the
tendering for filing of applications submitted during that window,
applicants shall have a period of sixty (60) days to amend their
applications, provided such amendments do not result in any increase in
interference to any previously proposed or authorized station, or to
facilities proposed during the window, absent consent of the applicant
for or conditional licensee or licensee of the station that would
receive such interference. At the conclusion of that sixty (60) day
period, the Commission shall publish a public notice announcing the
acceptance for filing of all applications submitted during the initial
window, as amended during the sixty (60) day period. All petitions to
deny such applications must be filed within sixty (60) days of such
second public notice. On the sixty-first (61st) day after the
publication of such second public notice, applications for new or
modified response station hub, booster station and I channels point-to-
multipoint transmissions licenses may be filed and will be processed in
accordance with the provisions of Secs. 21.909, 21.913 and 74.939(l) of
this chapter. Notwithstanding Sec. 21.31, each application submitted
during the initial window shall be granted on the sixty-first (61st)
day after the Commission shall have given such public notice of its
acceptance for filing, unless prior to such date either a party in
interest timely files a formal petition to deny or for other relief
pursuant to Sec. 21.30(a), or the Commission notifies the applicant
that its application will not be granted. Where an application is
granted pursuant to the provisions of this paragraph, the conditional
licensee or licensee shall maintain a copy of the application at the
transmitter site or response station hub until such time as the
Commission issues a license.
7. In Sec. 21.30, paragraph (a)(4) is revised to read as follows:

Sec. 21.30 Opposition to applications.

(a) * * *
(4) Except as provided in Sec. 21.902(i)(6) regarding Instructional
Television Fixed Service licensees and conditional licensees, in
Sec. 21.909 regarding MDS response station hubs and in Sec. 21.913
regarding MDS booster stations, be filed within thirty (30) days after
the date of public notice announcing the acceptance for filing of any
such application or major amendment thereto, or identifying the
tentative selectee of a random selection proceeding in the Multichannel
Multipoint Distribution Service or for Multipoint Distribution Service
H-channel stations (unless the Commission otherwise extends the filing
deadline); and
* * * * *
8. In Sec. 21.31, paragraph (e)(6)(iv) is revised to read as
follows:

Sec. 21.31 Mutually exclusive applications.

* * * * *
(e) * * *
(6) * * *
(iv) The change of status by an MDS applicant from common carrier
to non-common carrier, from non-common carrier to common carrier, or
from common carrier or non-common carrier to flexibility to alternate
between common carrier and non-common carrier service.
9. In Sec. 21.42, paragraph (b)(3) is revised, and paragraph (c)(8)
is added, to read as follows:

Sec. 21.42 Certain modifications not requiring prior authorization.

* * * * *
(b) * * *
(3) The Commission is notified of changes made to facilities by the
submission of a completed FCC Form 304 within thirty (30) days after
the changes are made.
* * * * *
(c) * * *
(8) A change to a sectorized antenna system comprising an array of
directional antennas, provided that such system does not change
polarization or result in an increase in radiated power by more than
one dB in any direction; provided, however, that notice of such change
is provided to the Commission on FCC Form 331 within ten (10) days of
installation.
* * * * *
10. In Sec. 21.101, paragraph (a), footnote 2 is revised to read as
follows:

Sec. 21.101 Frequency tolerance.

(a) * * *

________________

\2\ Beginning November 1, 1991, equipment authorized to be
operated in the frequency bands 2150-2162 MHz, 2596-2644 MHz, 2650-
2656 MHz, 2662-2668 MHz, and 2674-2680 MHz for use in the Multipoint
Distribution Service shall maintain a frequency tolerance within
1 kHz of the assigned frequency. MDS booster stations
authorized pursuant to Sec. 21.913(b) shall maintain a frequency
tolerance within 1 kHz of the assigned frequencies. MDS
booster stations authorized pursuant to Sec. 21.913(e) and MDS
response stations authorized pursuant to Sec. 21.909 shall employ
transmitters with sufficient frequency stability to ensure that the
emission stays within the authorized bandwidth.
* * * * *
11. In Sec. 21.118, paragraph (c) is revised to read as follows:

Sec. 21.118 Transmitter construction and installation.

* * * * *
(c) Each transmitter employed in these services shall be equipped
with an appropriately labeled pilot lamp or meter which will provide
continuous visual indication at the transmitter when its control
circuits have been placed in a condition to activate the transmitter.
Such requirement will not be applicable to MDS response stations or MDS
booster stations authorized pursuant to Sec. 21.913(e). In addition,
facilities shall be provided at each transmitter to permit the
transmitter to be turned on and off independently of any remote control
circuits associated therewith.
* * * * *
12. Section 21.201 is revised to read as follows:

Sec. 21.201 Posting of station license.

Each licensee shall post at the station, the booster station
authorized pursuant to Sec. 21.913(b) or the MDS response station hub
the name, address and telephone number of the custodian of the station
license or other instrument of authorization if such license or
instrument of authorization, or a clearly legible photocopy thereof, is
not maintained at the station, booster

[[Page 65102]]

station or response station hub. Each operator of an MDS booster
station authorized pursuant to Sec. 21.913(e) shall post at the booster
station the name, address and telephone number of the custodian of the
notification filed pursuant to Sec. 21.913(e) if such notification is
not maintained at the station.
13. Section 21.304 is revised to read as follows:

Sec. 21.304 Tariffs, reports, and other material required to be
submitted to the Commission.

Sections 1.771 through 1.815 of this chapter contain summaries of
certain materials and reports, including schedule of charges and
accounting and financial reports, which, when applicable, must be filed
with the Commission. These requirements likewise shall apply to
licensees which alternate between rendering service on a common carrier
and non-common carrier basis.
14. Section 21.900 is revised to read as follows:

Sec. 21.900 Eligibility.

(a) Authorizations for stations in this service will be granted to
existing and proposed communications common carriers and non-common
carriers. An application will be granted only in cases where it can be
shown that:
(1) The applicant is legally, financially, technically, and
otherwise qualified to render the proposed service; and
(2) There are frequencies available to enable the applicant to
render a satisfactory service; and
(3) The public interest, convenience and necessity would be served
by a grant thereof.
(b) The applicant shall state whether service will be provided on a
common carrier basis, a non-common carrier basis, or alternating
between a common carrier and non-common carrier basis. In addition, an
applicant proposing to provide any common carrier service whatsoever
shall state whether there is any affiliation or relationship to any
intended or likely subscriber or program originator.
15. In Sec. 21.901, paragraphs (a), (b), and (d) and note 1 are
revised, and new paragraph (g) is added, to read as follows:

Sec. 21.901 Frequencies.

(a) Frequencies in the bands 2150-2162 MHz, 2596-2644 MHz, 2650-
2656 MHz, 2662-2668 MHz, 2674-2680 MHz and 2686-2690 MHz are available
for assignment to fixed stations in this service. Frequencies in the
band 2150-2160 MHz are shared with nonbroadcast omnidirectional radio
systems licensed under other parts of the Commission's Rules, and
frequencies in the band 2160-2162 MHz are shared with directional radio
systems authorized in other common carrier services. Frequencies in the
2596-2644 MHz band are shared with Instructional Television Fixed
Service stations licensed under part 74 of the Commission's Rules.
Channels I5, I13, I6 and I14, listed in Sec. 74.939(j) of this chapter,
are assigned to fixed stations in the 2596-2620 band, and are shared
with Instructional Television Fixed Service Stations licensed under
part 74 of the Commission's Rules to operate in this band;
grandfathered channels I21, I29, I22 and I30, listed in Sec. 74.939(j)
of this chapter, are licensed under part 21 or part 74 of the
Commission's Rules, as applicable.
(b) Applicants may be assigned a channel(s) according to one of the
following frequency plans:
(1) At 2150-2156 MHz (designated as Channel 1), or
(2) At 2156-2162 MHz (designated as Channel 2), or
(3) At 2156-2160 MHz (designated as Channel 2A), or
(4) At 2596-2602 MHz, 2608-2614 MHz, 2620-2626 MHz, and 2632-2638
MHz (designated as Channels E1, E2, E3 and E4, respectively, with the
four channels to be designated the E-group channels), and Channels I5
and I13 listed in Sec. 74.939(j) of this chapter,\1\ or
(5) At 2602-2608 MHz, 2614-2620 MHz, 2626-2632 MHz and 2638-2644
MHz (designated as Channels F1, F2, F3 and F4, respectively, with the
four channels to be designated the F-group channels), and Channels I6
and I14, listed in Sec. 74.939(j) of this chapter,\1\ or
(6) At 2650-2656 MHz, 2662-2668 MHz and 2674-2680 MHz (designated
as Channels H1, H2 and H3, respectively, with the three channels to be
designated the H-group channels).\1\
* * * * *
(d) An MDS licensee or conditional licensee may apply to exchange
evenly one or more of its assigned channels with another MDS licensee
or conditional licensee in the same system, or with an ITFS licensee or
conditional licensee in the same system where one or both parties
utilizes digital transmissions or leases capacity to an operator which
utilizes digital transmissions. The licensees or conditional licensees
seeking to exchange channels shall file in tandem with the Commission
separate pro forma assignment of license applications, each attaching
an exhibit which clearly specifies that the application is filed
pursuant to a channel exchange agreement. The exchanged channel(s)
shall be regulated according to the requirements applicable to the
assignee.
* * * * *
(g) Frequencies in the bands 2150-2162 MHz, 2596-2644 MHz, 2650-
2656 MHz, 2662-2668 MHz and 2674-2680 MHz are available for point-to-
multipoint use and/or for communications between MDS response stations
and response station hubs when authorized in accordance with the
provisions of Sec. 21.909, provided that such frequencies may be
employed for MDS response stations only when transmitting using digital
modulation.

________________

\1\ No 125 kHz channels are provided for Channels E3, E4, F3,
F4, H1, H2 and H3, except for those grandfathered for Channels E3,
E4, F3 and F4. The 125 kHz channels associated with Channels E3, E4,
F3, F4, H1, H2 and H3 are allocated to the Private Operational Fixed
Point-to-Point Microwave Service, pursuant to Sec. 101.147(g) of
this chapter.

16. In Sec. 21.902, the section heading, paragraphs (b)(3), (b)(4)
(b)(5)(i), (f)(1) and (f)(2) are revised, and new paragraphs (b)(7) and
(l) are added, to read as follows:

Sec. 21.902 Interference.

* * * * *
(b) * * *
(3) Engineer the system to provide at least 45 dB of cochannel
interference protection within the 56.33 km (35 mile) protected service
area of any authorized or previously-proposed ITFS or incumbent MDS
station, and at each previously-registered ITFS receive site (both
stations utilizing 6 MHz bandwidths).
(4) Engineer the station to provide at least 0 dB of adjacent
channel interference protection within the 56.33 km (35 mile) protected
service area of any authorized or previously-proposed ITFS or incumbent
MDS station, and at each previously-registered ITFS receive site (both
stations utilizing 6 MHz bandwidths).
(5) (i) Engineer the station to limit the calculated free space
power flux density to -73 dBW/m \2\ (or the appropriate value for
bandwidth other than 6 MHz) at the boundary of a 56.33 km (35 mile)
protected service area, where there is an unobstructed signal path from
the transmitting antenna to the boundary; or alternatively, obtain the
written consent of the entity authorized for the adjoining area to
exceed the -73 dBW/m \2\ limiting signal strength at the common
boundary.
* * * * *

[[Page 65103]]

(7) Notwithstanding the above, main, booster and response stations
shall use the following formulas, as applicable, for determining
compliance with: (1) Radiated field contour limits where bandwidths
other than 6 MHz are employed at stations utilizing digital modulation
with uniform power spectral density; and (2) Cochannel and adjacent
channel D/U ratios where the bandwidths in use at the interfering and
protected stations are unequal and both stations are utilizing digital
modulation with uniform power spectral density or one station is
utilizing such modulation and the other station is utilizing either 6
MHz NTSC analog modulation or 125 kHz analog modulation (I channels
only).
(i) Contour limit: -73 dBW + 10 log (X/6), where X is the bandwidth
in MHz of the digital channel.
(ii) Cochannel D/U: 45 dB + 10 log (X1/X2), where X1 is the
bandwidth in MHz of the protected channel and X2 is the bandwidth in
MHz of the interfering channel.
(iii) Adjacent channel D/U: 0 dB + 10 log (X1/X2), where X1 is the
bandwidth in MHz of the protected channel and X2 is the bandwidth in
MHz of the interfering channel.
* * * * *
(f) * * *
(1) Cochannel interference is defined as the ratio of the desired
signal to the undesired signal present in the desired channel, at the
output of a reference receiving antenna oriented to receive the maximum
desired signal. Harmful interference will be considered present when a
free space calculation for an unobstructed signal path determines that
this ratio is less than 45 dB (both stations utilizing 6 MHz
bandwidths).
(2) Adjacent channel interference is defined as the ratio of the
desired signal to undesired signal present in an adjacent channel, at
the output of a reference receiving antenna oriented to receive the
maximum desired signal level.
(i) Harmful interference will be considered present when a free
space calculation for an unobstructed signal path determines that this
ratio is less than 0 dB (both stations utilizing 6 MHz bandwidths).
(ii) In the alternative, harmful interference will be considered
present for an ITFS station constructed before May 26, 1983, when a
free space calculation determines that this ratio is less than 10 dB
(both stations utilizing 6 MHz bandwidths), unless:
(A) The individual receive site under consideration has been
subsequently upgraded with up-to-date reception equipment, in which
case the ratio shall be less than 0 dB. Absent information presented to
the contrary, however, the Commission will assume that reception
equipment installation occurred simultaneously with original station
equipment; or
(B) The license for an MDS station is conditioned on the proffer to
the affected ITFS station licensee of equipment capable of providing a
ratio of 0 dB or more at no expense to the ITFS station licensee, and
also conditioned, if necessary, on the proffer of installation of such
equipment; and there has been no showing by the affected ITFS station
licensee demonstrating good cause and that the proposed equipment will
not provide a ratio of 0 dB or more, or that installation of such
equipment, at no expense to the ITFS station licensee, is not possible
or has not been proffered.
* * * * *
(l) Specific rules relating to response station hubs, booster
stations, and 125 kHz channels are set forth in Secs. 21.909, 21.913,
21.940, 74.939 of this chapter, 74.940 of this chapter and 74.985 of
this chapter. To the extent those specific rules are inconsistent with
any rules set forth above, those specific rules shall control.
17. In Sec. 21.903, paragraphs (a) and (b)(1) are revised, and new
paragraph (d) is added, to read as follows:

Sec. 21.903 Purpose and permissible service.

(a) Multipoint Distribution Service channels are available for
transmissions from MDS stations and associated MDS signal booster
stations to receive locations, and from MDS response stations to
response station hubs. When service is provided on a common carrier
basis, subscriber supplied information is transmitted to points
designated by the subscriber. When service is provided on a non-common
carrier basis, transmissions may include information originated by
persons other than the licensee, licensee-manipulated information
supplied by other persons, or information originated by the licensee.
Point-to-point radio return links from a subscriber's location to a MDS
operator's facilities may also be authorized in the 18,580 through
18,820 MHz and 18,920 through 19,160 MHz bands. Rules governing such
operation are contained in subpart I of part 101 of this chapter, the
Point-to-Point Microwave Radio Service.
(b) * * *
(1) Unless service is rendered on a non-common carrier basis, the
common carrier controls the operation of all receiving facilities
(e.g., including any equipment necessary to convert the signal to a
standard television channel, but excluding the television receiver);
and
* * * * *
(d) An MDS licensee also may apply for authorization by the
Commission to alternate, without further authorization required,
between rendering service on a common carrier and non-common carrier
basis, provided that the licensee notify the Commission of any service
status changes at least 30 days in advance of such changes.
18. Section 21.904 is revised to read as follows:

Sec. 21.904 Transmitter power.

(a) The maximum EIRP of an MDS main or booster station shall not
exceed 33 dBW (or, when digital modulation with uniform power spectral
density and subchannels or superchannels, or 125 kHz channels, are
used, the appropriately adjusted value based upon the ratio of 6 MHz to
the subchannel or superchannel, or 125 kHz, bandwidth), except as
provided in paragraph (b) of this section.
(b) If a main or booster station sectorizes or otherwise uses one
or more transmitting antennas with a non-omnidirectional horizontal
plane radiation pattern, the maximum EIRP over a 6 MHz channel in dBW
in a given direction shall be determined by the following formula:

EIRP = 33 dBW + 10 log (360/beamwidth) [where 10 log (360/beamwidth)
6 dB]. Beamwidth is the total horizontal plane beamwidth of
the individual transmitting antenna for the station or any sector
measured at the half-power points. The first term of the equation
above, 33 dBW, must be adjusted appropriately based upon the ratio of 6
MHz to the subchannel or superchannel, or 125 kHz, bandwidth.
(c) An increase in station transmitter power, above currently
authorized or previously-proposed values, to the maximum values
provided in paragraphs (a) and (b) of this section, may be authorized,
if the requested power increase would not cause harmful interference to
any authorized or previously-proposed, cochannel or adjacent channel
station entitled to interference protection under the Commission's
rules, or if an applicant demonstrates that:
(1) A station that must be protected from interference could
eliminate that interference by increasing its power; and
(2) The interfered-with station may increase its own power
consistent with

[[Page 65104]]

the rules and without causing interference to any MDS booster station
or response station hub which operates as part of the same coordinated
system as the interfered-with station; and
(3) The applicant requesting authorization of a power increase
agrees to pay all expenses associated with the increase in power by the
interfered-with station.
19. In Sec. 21.905, paragraph (b) is revised, and new paragraph (d)
is added, to read as follows:

Sec. 21.905 Emissions and bandwidth.

* * * * *
(b) Quadrature amplitude modulation, digital vestigial sideband
modulation, quadrature phase shift key modulation and code division
multiple access emissions may be employed, subject to compliance with
the policies set forth in the Declaratory Ruling and Order, 11 FCC Rcd
18839 (1996). Different types of emissions may be authorized if the
applicant describes fully the modulation and bandwidth desired and
demonstrates that operation of the station will not cause impermissible
interference. The licensee may subchannelize its authorized bandwidth,
provided that digital modulation is employed and the aggregate power
does not exceed the authorized power for the channel, and may utilize
all or a portion of its authorized

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A98-31334. Public record. Not legal advice.