**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | WT Docket No. 03-66          |
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| Amendment of Parts 1, 21, 73, 74 | ) | RM-10586                     |
| and 101 of the Commission's      | * |                              |
| Rules to Facilitate the          | * | WT Docket No. 03-67          |
| Provision of Fixed and Mobile    |   |                              |
| Broadband Access, Educational    | * | MM Docket No. 97-217         |
| and Other Advanced Services in   | * |                              |
| the 2150-2162 and 2500-2690 MHz  | ) | WT Docket No. 02-68          |
| Bands                            | * |                              |
|                                  | * | RM-9718                      |
| Part 1 of the Commission\'s      |   |                              |
| Rules - Further Competitive      | * |                              |
| Bidding Procedures               | * |                              |
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| Amendment of Parts 21 and 74 to  | * |                              |
| Enable Multipoint Distribution   | * |                              |
| Service and the Instructional    |   |                              |
| Television Fixed Service         | * |                              |
| Amendment of Parts 21 and 74 to  | * |                              |
| Engage in Fixed Two-Way          | ) |                              |
| Transmissions                    | * |                              |
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| Amendment of Parts 21 and 74     |   |                              |
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| Licensing in the Multipoint      | * |                              |
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| Instructional Television Fixed   | ) |                              |
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| Gulf of Mexico                   |   |                              |
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+----------------------------------+---+------------------------------+

**NOTICE OF PROPOSED RULE MAKING**

**AND MEMORANDUM OPINION AND ORDER**

**Adopted: March 13, 2003 Released: April 2, 2003**

**Comment Date:** 90 days after publication in the Federal Register

**Reply Comment Date:** 135 days after publication in the Federal
Register

By the Commission: Chairman Powell, Commissioners Abernathy and Copps
issuing separate statements.

Table of Contents

Heading Paragraph \#

I. INTRODUCTION and executive summary 1

II\. Background 6

A. Establishment and Evolution of the Services 6

B. Spectrum Allocation and Current Band Plan for the Services 18

C. Application Processing Freezes and Filing Windows 21

D. Current Uses of the Band 23

E. The Coalition Proposal 30

III\. Discussion 32

A. Broadband Policy Goals and Objectives 32

B. Spectrum Policy Goals and Objectives 36

C. Problems with the Existing MDS/ITFS Rules 44

D. Changes to 2500-2690 MHz Band Plan 47

1\. Background 47

2\. Band Plan Alternatives 49

3\. Response Channels 58

4\. Utilization of Unassigned ITFS Spectrum 60

a\. Geographic Area Licensing of Unassigned ITFS Spectrum 62

\(i\) Geographic Areas for Licenses 66

\(ii\) Bandwidth for Licenses 77

\(iii\) International Border Issues 78

b\. Unlicensed Use of Unassigned ITFS Spectrum 79

5\. Geographic Area Licensing for Current Licensees 83

a\. Geographic Area Licensing for MDS BTA Authorization Holders 83

b\. Geographic Area Licenses for Site-Licensed Incumbents 85

c\. Gulf of Mexico Proceeding 89

6\. Transition to New Band Plan 98

7\. ITFS Eligibility Restrictions 107

8\. Other Eligibility Restrictions 119

E. Technical Issues 130

1\. Signal Strength Limits at Geographic Service Area Boundaries 131

2\. Authorization of Mobile Operation 132

3\. Power and Antenna Height Limits 133

4\. Emission Limits 140

5\. Technology 142

6\. Unlicensed "Underlay" Operation 143

7\. RF Safety 149

8\. North American Datum (NAD) 83 Coordinate Data 150

9\. MDS Response Station Hubs 151

10\. 2150-2162 MHz band 152

11\. Radiation from Stations that are Not Engaged in Communications 154

F. Standardization of Practices and Procedures 159

1\. Consolidation of Procedural Rules in Part 1 159

2\. Consolidation of Service Specific Rules in Part 101 160

3\. Standardization of Major and Minor Filing Requirements 161

4\. Amendments to New and Modification Applications 164

5\. Assignments of Authorization and Transfers of Control 165

6\. Partitioning and Disaggregation 171

7\. License Renewal 173

8\. Special Temporary Authority 178

9\. Ownership Information 181

10\. Regulatory Status 182

11\. Fee Issues 183

12\. Discontinuance, Reduction or Impairment of Service 186

13\. Foreign Ownership Restrictions 189

14\. Performance Requirements 190

15\. Annual Reports 203

G. Application Processing 204

1\. Returns and Dismissals of Incomplete or Defective Applications 212

2\. ULS Forms 215

3\. Transition Periods 220

4\. Suspension of Acceptance and Processing of Applications 226

H. Competitive Bidding Procedures 230

I. An Auction of Currently Unassigned ITFS Spectrum 233

J. Two-Sided Auctions to Restructure Spectrum 241

1\. A Two-Sided Auction to Restructure the ITFS Spectrum 244

2\. A Two-Sided Auction to Restructure the MDS and ITFS Spectrum 246

IV\. Procedural matters 247

A. *Ex Parte* Rules -- Permit-But-Disclose 247

B. Comment Period and Procedures 248

C. Initial Regulatory Flexibility Analysis 253

D. Initial Paperwork Reduction Analysis 254

E. Further Information 256

V. ORDERING CLAUSES 257

APPENDIX A - INITIAL REGULATORY FLEXIBILITY ANALYSIS

APPENDIX B -PROPOSED RULES

APPENDIX C - THE COALITION PLAN

APPENDIX D - LIST OF PLEADINGS

# INTRODUCTION and executive summary

1.  By this *Notice of Proposed Rulemaking and Memorandum Opinion and
    Order (NPRM & MO&O)*, we initiate a comprehensive examination of our
    rules and policies governing the licensing of the Instructional
    Television Fixed Service (ITFS), the Multipoint Distribution Service
    (MDS), and the Multichannel Multipoint Distribution Service (MMDS)
    (collectively, the Services) in the 2500-2690 MHz band.[^1] By this
    action, the Commission seeks to promote competition, innovation and
    investment in wireless broadband services, and to promote
    educational services. Additionally, the Commission also seeks to
    foster the development of innovative service offerings to consumers
    as well as educational, medical and other institutions, simplify the
    licensing process and delete obsolete and unnecessary regulatory
    burdens. We believe that it is appropriate and prudent to take this
    action at this time because the Services and the potential uses for
    the spectrum allotted to them have evolved significantly since the
    inception of the Services. Those uses present a significant
    opportunity to provide alternatives for the provision of broadband
    services to consumers in urban, suburban and rural areas and to
    improve opportunities for distance learning and telemedicine
    services. In addition, this proceeding has been prompted, in part,
    by the request of a group of representatives of licensees in the
    Services---namely, the Wireless Communications Association
    International (WCA), the National ITFS Association (NIA) and the
    Catholic Television Network (CTN) (collectively, the
    Coalition)---that we substantially change the rules governing the
    Services.[^2] Our proposals are intended to foster the provision of
    innovative and traditional service offerings to consumers as well as
    educational, medical and other institutions, to simplify the
    licensing process, and to delete obsolete rules and unnecessary
    regulatory burdens.

2.  The rule changes proposed in this *NPRM* would facilitate the
    provision of high-speed data and voice services accessible to mobile
    as well as fixed users on channels that today are used primarily for
    one-way video operations to fixed locations.[^3] These changes would
    ultimately affect between 142 and 190 MHz of spectrum, depending
    upon which of the alternative sets of rules proposed in this Notice
    are adopted. We emphasize, however, that we do not intend to evict
    any incumbent licensees from the affected band if they have been in
    compliance with our rules and continue to comply with our rules when
    we modify or augment them nor do we intend to undermine the
    educational mission of ITFS licensees. Far from evicting existing
    licensees, we anticipate that the streamlined regulations and
    revised spectrum plan adopted in this proceeding will facilitate the
    provision of advanced wireless communications services by incumbent
    licensees.

3.  The following is a summary of our major proposals and
    determinations. In the *NPRM*, we:

-   Seek comment on whether and how to reconfigure the 2500-2690 MHz
    band;

-   Seek comment on the best means of ensuring the efficient utilization
    of unassigned ITFS spectrum, including geographic area licensing and
    unlicensed operation;

-   Propose to convert site-by-site licenses of MDS and ITFS incumbents
    to geographic service areas;

-   Seek comment on how best to promote increased access to and
    efficient utilization of ITFS spectrum;

-   Propose technical rules to increase licensee flexibility and protect
    incumbent operations in the 2500-2690 MHz band;

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-   Propose technical and service rules for mobile operations;

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-   Propose to simplify and streamline the licensing process for the
    Services;

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```
-   Propose application filing and processing procedures to facilitate
    implementation of the Services into the Universal Licensing System
    (ULS) administered by the Wireless Telecommunications Bureau; and

-   Propose to consolidate all service-specific rules for the Services
    under Parts 27 and 101 but seek comment on alternatives.

4.  In the *MO&O*, we:

-   Temporarily suspend, until the completion of this rulemaking
    proceeding, acceptance of applications for new ITFS licenses and
    applications to amend or modify either ITFS or MDS stations in the
    2500-2690 MHz band, subject to certain exceptions; and

-   Suspend the current construction deadline for MDS and ITFS
    authorization holders until the completion of this rulemaking
    proceeding.

5.  In addition, we incorporate the dockets of two ongoing Commission
    proceedings into this *NPRM & MO&O* because they pertain to the
    Services.[^4] In MM Docket No. 97-217, we address a minor issue
    concerning response stations that are not engaged in communications
    with their associated hubs to restrict their field strengths. In WT
    Docket No. 02-68, we propose to establish a Gulf of Mexico service
    area for the Services and issue licenses on that basis.

# Background

## Establishment and Evolution of the Services

6.  Prior to 1963, the Commission allocated the 2500-2690 MHz band to
    the Fixed Service for shared use by Operational Fixed Service (OFS)
    stations and international control stations.[^5] The traditional
    Fixed Service use of this band was primarily private microwave
    communications uses such as multichannel voice and data
    circuits.[^6]

7.  In 1963, the Commission established ITFS in the band on a shared
    basis with existing Fixed Service stations.[^7] When the Commission
    established ITFS, it indicated that the service was envisioned to be
    used for transmission of instructional material to selected
    receiving locations in accredited public and private schools,
    colleges and universities for the formal education of students.[^8]
    It also permitted ITFS licensees to use the channels for incidental
    purposes. These incidental purposes included the transmission of
    cultural and entertainment material to those receiving locations;
    the transmission of special training material to selected receiving
    locations outside the school system such as hospitals, nursing
    homes, training centers, clinics, rehabilitation centers, commercial
    and industrial establishments; the transmission of special material
    to professional groups or individuals to inform them of new
    developments and techniques in their fields and instruct them in
    their use; and to perform other related services directly concerned
    with formal or informal instruction and training.[^9] In addition,
    when the ITFS facilities were not being used for such incidental
    purposes, the licensee could use them for administrative traffic
    (*e.g.*, transmission of reports, assignments and conferences with
    personnel);[^10] however, individual stations, or complete systems
    could not be licensed solely for handling administrative
    traffic.[^11]

8.  In an effort to promote the development of ITFS during its infancy,
    the Commission in 1963 restricted the authorization of new OFS
    stations for three years except for modifications or expansions of
    existing stations, or for the use of the band by OFS eligible
    entities for television transmission in accord with ITFS technical
    standards.[^12] The Commission placed this restriction on new OFS
    stations because it intended to observe the amount of use of these
    channels by educators and determine what course of action to take to
    encourage the fullest development of the 2500-2690 MHz band at the
    end of the three-year period.[^13] Based in part on those
    observations, in 1971 the Commission designated twenty-eight
    6-megahertz channels in this band and the associated response (R)
    channels[^14] exclusively for ITFS use.[^15]

9.  In 1974, the Commission established MDS as a new common carrier
    service and allotted the 2150-2160 MHz band for such use.[^16] The
    Commission anticipated that the MDS spectrum would be used for the
    common carrier distribution of television programming from a central
    location to numerous points selected by the common carriers\'
    subscribers, sometimes referred to as wireless cable.[^17] The
    Commission allotted two 6 MHz channels (2150-2162 MHz) in fifty of
    the largest metropolitan areas (referred to as MDS Channel Nos. 1
    and 2).[^18] In the rest of the country, only ten megahertz of
    spectrum is allotted to MDS in this band ---namely, Channel No. 1
    (2150-2156 MHz) and Channel No. 2A (2156-2160 MHz).

10. In 1983, in response to the demand for additional spectrum for
    delivery of video entertainment programming to subscribers, the
    Commission reallotted eight of the ITFS channels and associated (R)
    channels (E and F Channels) for MDS.[^19] In reaching this decision,
    the Commission determined that the ITFS spectrum was underutilized
    given that there were a substantial number of unused ITFS channels
    in many areas of the country, with several states having no ITFS
    licensees.[^20] It appeared that, while some growth in the ITFS
    service would occur, this growth was unlikely to exhaust all of the
    ITFS spectrum.[^21] In 1983, the Commission also began allowing ITFS
    licensees to lease excess capacity on their facilities to commercial
    entities.[^22] Following that decision, there was a significant
    increase in the number of applications filed for new ITFS
    facilities.[^23] In 1985, the Commission amended its rules to relax
    the restrictions governing the leasing of excess capacity to
    commercial providers.[^24] For example, the Commission reduced the
    educational obligations of ITFS operators to a minimal level,
    ultimately allowing them to lease all but a small proportion of
    their capacity to commercial operators.[^25] While the ITFS
    community requested that twenty-five percent be required to be used
    for educational purposes or available for recapture for educational
    purposes, the Commission decided to allow ITFS licensees to reserve
    only five percent for educational purposes.[^26] In 1987, the
    Commission allowed MDS operators to elect non-common carrier (and
    non-broadcast) status, leaving them subject to regulation pursuant
    to Part 21 of the Commission's Rules and the general provisions of
    Title III of the Communications Act of 1934, which apply to all
    radio station licensees.[^27] The same year, the Commission
    eliminated the time-of-day restrictions on leasing ITFS spectrum and
    authorized operators to use automatic switching equipment.[^28] In
    this same general timeframe, the Commission continued to relax
    requirements concerning ITFS licensees leasing spectrum for MDS
    operations.[^29]

11. For several years, the International Telecommunication Union (ITU)
    has been fostering the development of advanced wireless systems,
    commonly referred to as International Mobile Telecommunications-2000
    (IMT-2000). It has developed a series of technical recommendations
    and has identified a number of frequency bands that could be used to
    implement IMT-2000 systems. The 2000 World Radiocommunication
    Conference (WRC-2000) identified, among other bands, the 2500-2690
    MHz band for possible terrestrial IMT-2000 use.[^30] WRC-2000 also
    adopted language stating that a country may use any of the bands
    identified for IMT-2000, that IMT-2000 bands may also be used by
    other services that have allocations in those bands, and that
    IMT-2000 services do not have priority over other allocated
    services.[^31] Study and implementation of IMT-2000 is ongoing
    within Working Party 8F (WP 8F) of the ITU-R.

12. WP 8F has developed a revision to Recommendation ITU-R M.\[1036-1\]
    that presents recommended frequency arrangements for IMT-2000 in the
    bands identified by the ITU. It is expected that this revision will
    be considered for adoption by the upcoming meeting of the Radio
    Assembly which meets just prior to WRC-2003. Concerning the
    2500-2690 MHz band, the revision to the recommendation contains only
    scenarios for possible frequency arrangements, as this band is
    currently being considered by some administrations for additional
    IMT-2000 requirements that cannot be met in lower frequency bands.

13. In this regard, on November 15, 2002, the Electronic Communications
    Committee (ECC), of the European Conference of Postal and
    Telecommunications Administrations, adopted Decision 6, wherein it
    designated the 2500-2690 MHz band for IMT-2000 use. The band is to
    be made available to IMT-2000 by 1 January 2008. Through a future
    ECC Decision, slated for the end of 2004, a detailed frequency
    arrangement (band plan) is to be developed. In ITU Region 2, The
    Inter-American Telecommunication Commission (CITEL) Permanent
    Consultative Committee III: Radiocommunications (PCC.III) has also
    been developing, for the Americas, options for IMT-2000 band
    pairings based on the bands identified for IMT-2000 by the ITU.
    Since many CITEL Administrations use the 2500-2690 MHz band for the
    fixed service and have no plans to use it for IMT-2000, the
    2500-2690 MHz band was not included in recently approved
    Recommendation 70, *Frequency Arrangements For IMT-2000 In The Bands
    806 To 960 MHz, 1710 To 2025 MHz And 2110 To 2200 MHz*.

14. In 1991, in an effort to provide more spectrum for multichannel
    video operations, the Commission reallotted three 6-megahertz
    channels in the 2500-2690 MHz band (H channels) from the OFS for
    MDS.[^32] The Commission, however, did reallocate the response
    channels associated with the three H channels, as well as the
    response channels associated with the E3, E4, F3, and F4 MDS
    channels to the OFS.[^33] The net result of these reallocations was
    to provide an allocation of 120 MHz, or 20 6-MHz main station
    channels, to ITFS, and 66 MHz, or 11 main station channels, to MDS
    in the 2500-2690 MHz band. In addition, the MDS service has four
    125-KHz response channels (a total of 0.5 MHz), and ITFS has 20
    response channels (a total of 2.5 MHz).[^34] As noted above, OFS has
    seven response channels (a total of 0.875 MHz). The remaining
    spectrum is either allocated for the MDS Channel 1 (2150-2156 MHz
    associated response channel or is unassigned (2689.875-2690 MHz)).
    Overall, the allocation for MDS amounts to 66.5 MHz and the
    allocation for ITFS amounts to 122.5 MHz.

15. The Commission added the mobile service allocation to this band, to
    provide additional flexibility to make it potentially available for
    advanced wireless services, including IMT-2000 and future
    generations of wireless systems.[^35] The Commission also said that
    because incumbent ITFS and MMDS licensees extensively use the band
    the Commission would not relocate these licensees nor modify their
    licenses. Instead, the Commission would rely on market forces rather
    than making regulatory judgments about the best use of the
    band.[^36] The Commission recognized that under current technology
    and service rules, fixed and mobile sharing of this band did not
    appear feasible, but committed to exploring service rules to permit
    mobile operations in a separate future proceeding.[^37]

16. ITFS licenses are site-based licenses. Prior to 1995, MDS licenses
    were also site-based. In 1995, the Commission adopted rules to
    distribute unused MDS spectrum through competitive bidding.[^38] The
    licensees who acquired their spectrum through competitive bidding
    are required to protect pre-existing site-based licensees.[^39]
    Under current rules, if an incumbent site-based MDS license is
    forfeited, the incumbent's service area shall merge and become part
    of the geographic area licensee's service area.[^40] The BTA
    authorization holder, however, cannot operate within that area until
    it files a long form application to operate a transmitter and the
    Commission grants that application.[^41]

17. Recently, the Commission has provided MDS and ITFS licensees with
    additional technical flexibility. In 1993, the Commission allowed
    ITFS licensees to shift their required educational programming onto
    fewer than their authorized number of channels by channel loading,
    i.e., an ITFS licensee could move all of its ITFS program
    requirements onto one of its four channels so that it could lease
    the remaining three channels on a twenty-four-hour basis to a
    wireless cable operator.[^42] In 1996, the Commission permitted MDS
    and ITFS licensees to employ digital technologies.[^43] In 1998, the
    Commission allowed MDS and ITFS licensees to construct digital
    two-way systems capable of providing high-speed, high capacity
    broadband service, including two-way Internet service via
    cellularized communication systems.[^44] Later, the Commission
    established a mobile, except aeronautical mobile, allocation in the
    2500-2690 MHz band.[^45]

## Spectrum Allocation and Current Band Plan for the Services

18. In the United States, the 2500-2690 MHz band is currently allocated
    to the fixed, mobile except aeronautical mobile, Broadcast Satellite
    Service (BSS), and Fixed Satellite Service (FSS) on a co-primary
    basis for non-Federal Government use. The Commission, however,
    recently proposed to delete the BSS and FSS allocations from the
    band in order to remove regulatory uncertainty from the 2500-2690
    MHz band.[^46]

19. Since January 2001, the Commission has been examining whether the
    2150-2162 MHz band would be appropriate for advanced wireless
    services (AWS).[^47] In 2002, the Commission reallocated the
    2150-2155 MHz segment of this band to support new advanced wireless
    services.[^48] The Commission stated that it would identify
    relocation spectrum for MDS licensees in a later, separate
    proceeding,[^49] and has asked commenters to address the impact of
    reallocating this spectrum, to identify other frequency bands that
    could accommodate MDS services, and to comment on how the Emerging
    Technologies relocation procedures would apply.[^50] Subsequently,
    on January 29, 2003, the Commission tentatively concluded that it
    should reallocate MDS spectrum at 2155-2160/62 MHz for new fixed and
    mobile services, including AWS.[^51]

20. Under the MDS/ITFS band plan for the 2500-2690 MHz band, there are
    thirty-one 6-megahertz channels, of which twenty-four have
    associated, 125-kilohertz (R) channels. Of the thirty-one
    6-megahertz channels in the 2500-2690 MHz band, the Commission has
    allocated twenty channels (A, B, C, D, and G channels) for ITFS and
    eleven channels (E, F, and H channels) for MDS. (This does not
    include the two additional MDS channels at 2150-2162 MHz.). The
    following chart illustrates the current plan.

  ------ --- ------ ------ ---- ------ ---- ---- ---- -- ---- ---- ---- ---- -- ---- ---- ---- ---- -- ---- ---- ---- ---- ---- ------ ---- ---- ---- ---- ---- ---- ---- ------ ---- ---- ---- ---- ---- ---- ---- ---- ------ --- ------ --
         1   2/2A                      A1   B!   A2      B2   A3   B3   A4      B4   C1   D1   C2      D2   C3   D3   C4   D4          E1   F1   E2   F2   E3   F3   E4          F4   G1   H1   G2   H2   G3   H3   G4          R          

  2150              2162        2500                                                                                            2596                                      2644                                           2686       2690   
  ------ --- ------ ------ ---- ------ ---- ---- ---- -- ---- ---- ---- ---- -- ---- ---- ---- ---- -- ---- ---- ---- ---- ---- ------ ---- ---- ---- ---- ---- ---- ---- ------ ---- ---- ---- ---- ---- ---- ---- ---- ------ --- ------ --

## Application Processing Freezes and Filing Windows

21. In 1993, the Commission suspended the ITFS applications process and
    announced plans to adopt a revised process for handling such
    applications.[^52] At the same time, the Commission noted that it
    would continue to accept major change proposals for ITFS
    applications to accommodate settlement agreements among mutually
    exclusive applicants.[^53] In 1995, the Commission provided a
    five-day filing window for the filing of applications for new
    construction permits and for major changes to existing ITFS
    facilities.[^54] In 1996 the Mass Media Bureau announced a sixty-day
    filing window for a limited class of applications, permitting the
    filing of ITFS modification applications and amendments to pending
    ITFS applications proposing to co-locate with an authorized wireless
    cable facility, in order, *inter alia*, to facilitate marketwide
    settlements.[^55]

22. The Balanced Budget Act of 1997 (Budget Act) expanded the
    Commission\'s competitive bidding authority under Section 309(j) of
    the Communications Act by adding provisions governing auctions for
    broadcast and other previously exempt services.[^56] In a subsequent
    order, the Commission concluded that the legislation required that
    competing ITFS applications be subject to auction.[^57] The
    Commission expressed concern that Section 309(j), as adopted, might
    not reflect Congress\' intent with regard to the treatment of
    competing ITFS applications.[^58] Given the instructional nature of
    the service and the reservation of ITFS spectrum for noncommercial
    educational use, the Commission thought it possible that Congress
    did not intend its expansion of our auction authority in the Budget
    Act to include that service. Accordingly, the Commission did not
    proceed immediately with an auction of ITFS applications[^59] but
    sought Congressional guidance with regard to auctioning ITFS by
    proposing that Congress exempt ITFS applications from competitive
    bidding.[^60] To date, however, Congress has given no indication
    that it intends to exempt ITFS applications from competitive
    bidding. The Commission has not yet conducted an ITFS auction.

## Current Uses of the Band

23. Operators are providing four kinds of basic service offerings in the
    2500-2690 MHz band today: (1) downstream analog video; (2)
    downstream digital video; (3) downstream digital data; and
    (4) downstream/ upstream digital data. Licensees have deployed or
    sought to deploy three alternative kinds of system configurations:
    high powered video stations, high power fixed two-way systems and
    low power, cellularized two-way systems.

24. Traditionally high powered video stations consist of a main
    transmitter located at or near the center of a 35-mile-radius
    protected service area (PSA) with the possibility of operating a few
    booster stations in the same PSA. In 1996, the Commission authorized
    some high powered video stations to serve Basic Trading Areas (BTAs)
    consisting of an aggregation of counties.[^61] Homes, businesses,
    and institutions receive signals through outside antennas and
    microwave receivers. This type of system provides fixed, one-way
    video service, either analog or digital. Analog stations support a
    maximum of thirty-three 6-MHz channels on a combination of MDS and
    ITFS channels, which may be licensed to and leased from multiple
    entities; whereas digital stations can support 180 or more channels
    on the same amount of spectrum. The WCA informally has estimated
    that 120-130 MDS/ITFS systems are transmitting video programming to
    subscribing members of the public and that a few additional stations
    deliver video programming exclusively to educational reception sites
    or to cable television systems for retransmission.[^62] Both WCA and
    a number of ITFS licensees have indicated that a majority of the
    licensees operating these high-power stations are actively exploring
    conversion to low-power, cellularized operations.[^63]

25. The high powered fixed two-way systems each consist of one
    high-powered main transmitter, multiple return-path transmitters
    and, in some cases, one or more booster stations. This type of
    system is used primarily in rural areas where population densities
    are much lower than those in urban areas. By September, 2002, our
    Broadband Licensing System showed about eighty-seven operators are
    deploying data-only MDS or ITFS services in the U.S. We believe that
    many of these licensees are offering their services in conjunction
    with other local licensees through integrated systems. Thus, WCA
    representatives have estimated that there are thirty-to-forty
    markets in which data-only services are being marketed, and that all
    but perhaps five to eight of them are using high-power technology.

26. As discussed in further detail below, most MDS operators and a
    substantial proportion of ITFS operators would like to deploy low
    power, cellularized two-way systems, because they are more
    spectrally efficient than high-powered systems, can support
    provision of high-data-rate services to a large number of
    subscribers, can help overcome obstacles to line-of-sight service,
    and can more readily support mobile or portable services.[^64] Our
    MDS/ITFS licensing database system cannot readily show how many of
    these systems are currently deployed, but we believe that
    interference issues have severely limited licensees' ability to
    deploy low power services. WCA estimates that low-power,
    cellularized MDS/ITFS data services are being offered in perhaps
    five-to-eight markets.

27. By the beginning of 2002, the potential number of homes with a
    serviceable line-of-sight to an MDS operator\'s transmission
    facilities was about sixty-two million. Yet, by the third quarter of
    2002, the number of MDS subscribers had declined to approximately
    490,000 from 700,000 a year earlier.[^65] Recently, some entities
    began using this band to provide services other than a multi-channel
    video service (i.e., two-way broadband services). The Coalition
    reports that Sprint, for example, deployed two-way broadband
    services in fourteen cities over the course of a year beginning in
    March 2000, and was signing up about 2,000 customers per month
    before the company halted deployment to resolve technical problems
    that arose with the first generation of two-way technology.[^66]

28. By January 2002, Sprint and WorldCom had each invested more than \$2
    billion acquiring MDS licensees covering about 31 and 30 million
    households, respectively, and each of those companies had spent
    another \$1 billion on system construction.[^67] WorldCom was
    rolling out MDS high-speed Internet access in new markets, many of
    them rural.[^68] The third largest MDS company, Nucentrix Broadband
    Services, Inc., was offering two‑way high‑speed Internet access
    service in Austin and Sherman‑Denison, Texas, and conducting a trial
    of the service in Amarillo, Texas, and at least twenty-four other
    companies offered fixed wireless services in approximately
    thirty-three counties.[^69] In November 2002, Clearwire
    Technologies, Inc., filed comments indicating that it had leased
    ITFS spectrum in more than 20 markets and would launch a wireless
    broadband Internet access service in the first of those markets in
    January, 2003.[^70]

29. We are not aware of any current, comprehensive source of information
    on the nature or extent of ITFS services other than our license
    files. However, in response to the public notice seeking comments on
    the Coalition Proposal,[^71] eight ITFS licensees and related
    organizations provided quantified information on the extent of their
    own services, most of them local. Various local branches of the
    Roman Catholic Church provide ITFS programming to 153,000
    students.[^72] The F Corporation and the George Mason University
    (GMU) Instructional Foundation provide GMU instructional
    programming, C-SPAN, and open meetings of the Commission on analog
    ITFS and MDS channels.[^73] Network for Instructional TV, Inc., and
    its affiliates distribute educational programming and services to
    students and teachers through a network of twenty-three ITFS
    stations and over the Internet.[^74] The Illinois Institute of
    Technology uses seven of its eight ITFS channels to provide master's
    degree programs, certificate programs, and courses in engineering
    and the sciences, business and law.[^75] Stanford University
    transmits hundreds of engineering and science courses each year to
    enrolled university students over five ITFS channels. It also
    provides for-credit course work to enrolled students at business
    sites throughout the Bay Area and non-credit instructional
    programming to several thousand more students.[^76] The Commission's
    database as of November 6, 2000, showed that at least one ITFS
    station operates in most areas of the United States and that only in
    the least populated areas of the country is ITFS spectrum not
    currently occupied.[^77] At that time, the database also showed that
    in 49 of the 50 largest metropolitan areas that all thirty-one
    ITFS/MDS channels are licensed within 100 miles of the cities
    considered.[^78]

## The Coalition Proposal

30. On October 7, 2002, the Coalition submitted a paper entitled "A
    Proposal for Revising the MDS and ITFS Regulatory Regime"
    ("Coalition Proposal") concerning recommendations for changing the
    rules governing the 2500-2690 MHz band.[^79] In general, the
    Coalition argues that the band is not being used to the extent
    possible[^80] and that rule changes are necessary to allow new
    services to develop. The Coalition envisions this band being used to
    provide new wireless two-way broadband services (*e.g.,* provide
    commercial service to portable, nomadic and mobile laptops, Personal
    Digital Assistants (PDAs) and other non-stationary devices) where
    the network architecture is based on a low power cellular concept.
    The Coalition contends that the explosive growth of
    802.11b-compliant "hot spots" demonstrates that there is demand for
    this sort of service and that this band could be used to provide
    ubiquitous service, not just at hot spots. It points out that
    several MDS licensees are currently test marketing this new two-way
    broadband service.[^81] It asserts, however, that a "radical
    reworking of the MDS and ITFS regulatory structure is needed" for
    such new services to develop and flourish in this band.[^82]

31. The Coalition suggests a number of proposals that it believes will
    promote new uses of this band. A detailed summary of the Coalition
    Plan is attached as Appendix C. For example, it proposes
    establishing a new band plan to facilitate advanced low power
    two-way broadband systems while at the same time protecting existing
    high-power systems (*e.g.,* video operations). The core of its
    proposal segregates high-power and low-power systems into separate
    segments of the band to avoid mutual interference. The Coalition
    proposal divides the band into three major segments and three
    smaller segments. The three major segments would consist of the
    Lower Band Segment (LBS) with twelve 5.5-megahertz-wide channels
    extending from 2500-2566 MHz, the Mid Band Segment (MBS) with seven
    6-megahertz wide channels extending from 2572-2614 MHz and the Upper
    Band Segment (UBS) with twelve 5.5-megahertz wide channels extending
    from 2620-2686 MHz.[^83] Low powered operations would use the LBS
    and UBS while high power video operations would operate in the MBS.
    The three minor segments would consist of the I band at 2686-2690
    (narrowband auxiliary channels) and two transition bands or guard
    bands (J and K), one located between the LBS and MBS and one located
    between the MBS and the UBS. The Coalition also proposes (1)
    eliminating unnecessary regulatory burdens imposed by site-by-site
    licensing,[^84] (2) revising the technical rules to make them less
    complex,[^85] (3) establishing a market-by-market mechanism for
    transitioning to the new band plan and (4) eliminating outdated
    regulations. On October 17, 2002, the Commission put the Coalition
    Proposal out on *Public Notice*.[^86]

  --------------- ------------- ------------- ------- ----------------------
  **Coalition                                         
  Band Plan**                                         

                                                      

  Channel         Lower         Upper                 
  Designation     Frequency     Frequency             

  A1              2500.0000     2505.5000             Channels can be used
                                                      for TDD or Upstream
                                                      FDD

  A2              2505.5000     2511.0000     LOW     
                                              POWER   

  A3              2511.0000     2516.5000             

  B1              2516.5000     2522.0000             

  B2              2522.0000     2527.5000             

  B3              2527.5000     2533.0000             

  C1              2533.0000     2538.5000             

  C2              2538.5000     2544.0000             

  C3              2544.0000     2549.5000             

  D1              2549.5000     2555.0000             

  D2              2555.0000     2560.5000             

  D3              2560.5000     2566.0000             

  J               2566.0000     2572.0000             Guard Band

  A4              2572.0000     2578.0000     HIGH    Channels can be used
                                              POWER   for high-power
                                                      operations like
                                                      existing ITFS TV.

  B4              2578.0000     2584.0000             

  C4              2584.0000     2590.0000             

  D4              2590.0000     2596.0000             

  E4              2596.0000     2602.0000             

  F4              2602.0000     2608.0000             

  G4              2608.0000     2614.0000             

  K               2614.0000     2620.0000             Guard Band

  E1              2620.0000     2625.5000     LOW     Channels can be used
                                              POWER   for TDD or Downstream
                                                      FDD

  E2              2625.5000     2631.0000             

  E3              2631.0000     2636.5000             

  F1              2636.5000     2642.0000             

  F2              2642.0000     2647.5000             

  F3              2647.5000     2653.0000             

  H1              2653.0000     2658.5000             

  H2              2658.5000     2664.0000             

  H3              2664.0000     2669.5000             

  G1              2669.5000     2675.0000             

  G2              2675.0000     2680.5000             

  G3              2680.5000     2686.0000             

  I               2686.0000     2690.0000             
  --------------- ------------- ------------- ------- ----------------------

# Discussion

## Broadband Policy Goals and Objectives

32. This proceeding provides us with another opportunity to help meet
    our statutory duty to \"encourage the deployment on a reasonable and
    timely basis of advanced telecommunications capability to all
    Americans (including, in particular, elementary and secondary
    schools and classrooms). . .\"[^87] This proceeding also provides us
    with the opportunity to further our goal to "establish regulatory
    policies that promote competition, innovation, and investment in
    broadband services and facilities while monitoring progress toward
    the deployment of broadband services in the United States and
    abroad."[^88] Broadband technologies, which encompass all evolving
    high-speed digital technologies that provide consumers integrated
    access to voice, high-speed data, video-on-demand, and interactive
    delivery services, are a fundamental component of the communications
    revolution.[^89] Fully evolved broadband will virtually eliminate
    geographic distance as an obstacle to acquiring information and
    dramatically reduce the time it takes to access information.[^90] We
    intend for this proceeding to accomplish the following objectives:

33. *Promote availability of broadband to all Americans, including
    broadband technologies for educators.* In recent years, the MDS
    industry has invested several billion dollars to develop broadband
    fixed wireless data systems in this band, including high-speed
    access to the Internet for residential customers, small and medium
    businesses, and educational institutions.[^91] Such systems offer a
    significant opportunity to provide competition to cable and (Digital
    Subscriber Line) DSL services in the provision of broadband services
    in urban and rural areas. In this proceeding we are seeking comment
    on how best to configure the 2500-2690 MHz band to enable the
    development of broadband service in the 2500-2690 MHz band.
    Broadband technologies hold some promise not only for residential
    and business communities, but also for American students. The
    American classrooms are increasingly wired, but access to broadband
    technologies is still far from ubiquitous. With access to broadband
    technologies our students and teachers will have more powerful tools
    with which to learn. ITFS can and should play a role in making
    broadband more common in our students' educational experience.

34. *Clarify and stabilize the regulatory treatment of similar
    spectrum-based services.* Broadband services should exist in an
    environment that eliminates regulations that deter investment and
    innovation and recognizes rules that promote competition and
    minimize harmful interference.[^92] We note that broadband providers
    are delivering or planning to deliver broadband service over any
    combination of licensed spectrum, such as 700 MHz, cellular,
    broadband PCS, Part 101 millimeter wave, MDS/ITFS, and unlicensed
    spectrum, such as 902-928 MHz, 2.4 GHz, and 5 GHz.[^93] As stated
    above, we seek to stabilize the regulatory regime of the 2500-2690
    MHz band by seeking comment on whether consolidating the Services in
    Part 101 of the Commission's Rules to provide regulatory parity for
    similar wireless services will advance the public interest in more
    ubiquitous availability of broadband, particularly for educational,
    telemedicine, and medical purposes.

35. *Facilitate development of possible alternative broadband
    residential facilities-based providers.* In the *Declaratory
    Ruling*, the Commission noted that "\[t\]hroughout the brief history
    of the residential broadband business, cable modem service has been
    the most widely subscribed to technology, with industry analysts
    estimating that approximately 68% of residential broadband
    subscribers today use cable modem service . . . 29% of residential
    broadband subscribers use DSL service, and about 3% of subscribers
    use various radio-based technologies."[^94] As we noted above,
    wireless broadband service in the 2500-2690 MHz band may offer
    consumers another broadband alternative, which may lead to reduced
    prices and more competition in the delivery of high-speed internet
    access.[^95] We believe that the changes that we are proposing to
    make in this proceeding, streamlining the application process,
    implementing geographic area licensing, modifying technical rules,
    and proposing rules to allow mobile operation in the 2500-2690 MHz
    band will enable the flexible use of the spectrum. These changes
    will allow for the operation of market forces, which in turn, may
    stimulate the development of wireless broadband services; thus
    giving consumers more choice in broadband providers.

## Spectrum Policy Goals and Objectives

36. Pursuant to the Communications Act, a benchmark of national
    communications policy is to encourage the provision of new
    technologies and services to the public.[^96] Based on the evolution
    of the Services and recent trends in consumer demand, this
    proceeding provides us with an opportunity to further our spectrum
    management goal to "encourage the highest and best use of spectrum
    domestically and internationally in order to encourage the growth
    and rapid deployment of innovative and efficient communications
    technologies and services."[^97] The promise of emerging
    technologies could mean ubiquitous, mobile broadband
    connections.[^98] We believe that it is necessary for us to take
    certain actions, as described in further detail below, to foster the
    continued development and deployment of the Services by encouraging
    licensees in the 2500-2690 MHz band to migrate to more
    technologically and economically efficient uses of the spectrum. We
    believe that providing these licensees with additional flexibility
    of use would serve the public interest and allow licensees to
    provide new and innovative services, consistent with the
    requirements of Section 303(y) of the Communications Act.[^99]
    Moreover, we believe that our proposals address the strong desire
    for a revamping of the services as expressed by representatives of
    the MDS and ITFS communities. In this connection, we intend for this
    proceeding to accomplish the following spectrum management
    objectives:

37. *Meet Increasing Demand for Spectrum-Based Services.* In recent
    years, we have seen strong demand for mobile telephone and mobile
    data services. In 2001, the mobile telephony sector generated more
    than \$65 billion in revenues, increased subscribership from 109.5
    million to 128.5 million, and produced a nationwide penetration rate
    of roughly forty-five percent.[^100] Estimates of the number of
    mobile Internet users at the end of 2001 ranged from approximately
    eight to ten million, up from 2 to 2.5 million at the end of
    2000.[^101] In recent years, the MDS industry has invested several
    billion dollars to develop broadband fixed wireless data systems in
    this band, including high-speed access to the Internet for
    residential customers, small and medium businesses, and educational
    institutions.[^102] Such systems offer a significant opportunity to
    provide competition to cable and Digital Subscriber Line (DSL)
    services in the provision of broadband services in urban and rural
    areas.

38. We are also cognizant that spectrum-based services can improve the
    ability of educators to serve America's students. The Commission is
    committed to exploring ways in which these bands can be used to
    advance the public interest in broadband services for all Americans,
    and therefore reaffirms our goal of ensuring that educational and
    medical institutions continue to have access to spectrum. In this
    proceeding, we hope to grant educators additional rights to make it
    easier for them to use our national spectrum resource.

39. *Afford Greater Flexibility to Licensees.* When we allow increased
    flexibility in the use of radio spectrum, we allow market forces and
    educational needs to move spectrum to its highest valued use.[^103]
    In doing so, however, we must carefully calibrate the extent of
    flexibility that is compatible with avoiding harmful interference.
    Thus, we endeavor to allow the maximum extent of flexibility
    possible that would not impair the rights of others to offer valued
    services in the band.

40. *Promote Increased Access to Spectrum.* Our rules do not allow
    profit-making entities to hold ITFS licenses, but they do allow
    commercial MDS operators to finance, build, operate, and obtain
    leased use of ITFS transmission facilities -- and provide the vast
    majority of the programming carried over them.[^104] We undertake
    this proceeding to determine whether there are rules that impede the
    full development of the 2500-2690 MHz band.

41. *Create regulatory policies that treat similar services similarly.*
    In these Services where ITFS and MDS licensees are subject to
    different regulations, although they offer similar services, we
    believe that regulatory parity will promote more efficient use of
    the spectrum allocated for each service. Consequently, we propose to
    consolidate the ITFS rules in Parts 73 and 74 and the MDS rules in
    Part 21 into Parts 27 or 101 to foster consistency among similar
    wireless services.

42. *Facilitate grouping similar spectrum uses*. One of the challenges
    presented in managing spectrum is to promote incentives for spectrum
    licensees to be "good neighbors," *i.e.*, not cause harmful
    interference to adjacent systems. The Commission may accomplish this
    objective by creating an incentive for spectrum-based systems or
    devices to migrate to compatible bands based on marketplace forces.
    We note that the current configuration of the 2500-2690 MHz band in
    which high-power ITFS channels are interleaved with MDS channels,
    may inhibit the development of low power cellularized broadband uses
    of the MDS channels. Thus, in this proceeding we are seeking comment
    on reconfiguring the 2500-2690 MHz band to separate low power uses
    from high power uses and thereby promote the most efficient use of
    the 2500-2690 MHz band.

43. *Conduct effective and timely licensing activities that encourage
    efficient use of the spectrum.* To ensure that licensing of the
    2500-2690 MHz band occurs in a rapid, routine, and ordinary manner,
    we propose to greatly streamline the application process for the
    Services, including migrating licensees to the ULS. Also, we are
    proposing other licensing approaches, such as licensing by
    geographic area, that will give licensees increased flexibility
    while greatly reducing the administrative burdens on both licensees
    and the Commission.

## Problems with the Existing MDS/ITFS Rules

44. The Coalition has identified some of the problems with the existing
    MDS and ITFS rules. The Coalition Plan focuses primarily on
    engineering issues -- accommodating the needs of two incompatible
    types of users that presently share a single band: one-way,
    relatively high-powered stations and operators that seek to maximize
    spectral efficiency by deploying low-powered cellular systems. The
    Coalition also identifies certain areas where the Commission could
    act to reduce administrative burdens on licensees and make the
    MDS/ITFS licensing process more efficient. In addition, the
    Coalition proposes ways to eliminate unnecessary paperwork
    requirements that would otherwise impose a near-impossible burden on
    low-power operators.

45. Both the Coalition's perception of the problems and its proposed
    solutions are broadly consistent with the conclusions reached in a
    major report our staff completed in 2001, the *3G Final
    Report*.[^105] The most important conclusion reached in the *3G
    Final Report* is that traditional MDS/ITFS stations and third
    generation cellular systems are not compatible with each other when
    they are operating on the same frequencies. Their service area
    borders must be separated by distances exceeding 100 miles to ensure
    that MDS/ITFS transmitters will not cause harmful interference to
    Third Generation (3G) receivers.[^106] Moreover, the report
    concludes that existing MDS/ITFS systems preclude operation of 3G
    systems in forty-nine of the fifty largest cities in the U.S.,
    because all thirty-one of the MDS and ITFS channels in the 2500-2690
    MHz band are licensed within 100 miles of those forty-nine
    cities.[^107] The authors of the *3G Final Report* recognize that it
    would be infeasible to move the incumbent licensees to a different
    band. Instead, they recommend segmenting the band into separate
    high- and low-power segments and requiring both incumbents and new
    applicants to conform with the new technical rules.[^108] While the
    *3G* *Final Report* focuses on one particular type of new
    technology, its conclusions may apply with respect to any
    low-powered two-way service that seeks to achieve spectral
    efficiencies through a cellular-style configuration.

46. As discussed below, we believe that the Coalition's proposals are a
    major step forward as we examine this band. However, we believe that
    significant progress will also require a discussion of ownership and
    eligibility issues, transition timetables, and, perhaps, a more
    thorough resolution of engineering issues as well. Specifically, we
    seek comment on the possibility of expanding the ITFS eligibility
    criteria to include commercial entities, and we address the
    possibility of merging MDS and ITFS into a single Broadband
    Communications Service. We also seek comment on establishing
    specific deadlines for completion of the transition process, and we
    inquire whether we should establish a timetable for conversion of
    the entire 2500-2690 MHz band to low-power operations compatible
    with two-way, broadband cellular services. We do not propose to
    reclaim licenses from any incumbent operators that have complied
    with our existing rules and continue to comply with our rules when
    we change them or adopt new ones.

## ![](media/image1.wmf){width="2.9in" height="5.998611111111111in"}Changes to 2500-2690 MHz Band Plan

### Background

47. ITFS and all but two of the MDS channels are located in the 2500 --
    2690 MHz band. As shown in the chart below, ITFS currently has
    twenty 6-MHz channels, while MDS has eleven 6-MHz channels in the
    2500 -- 2690 MHz band. The channels are usually licensed in groups
    of four, but the channels in each group are not contiguous. The
    chart below depicts the arrangement. This band plan was designed
    primarily to promote wireless cable and educational television
    services. When ITFS was created, ITFS reception equipment could not
    receive adjacent channels without interference.[^109] Thus, the
    Commission interleaved the A block channels with the B block
    channels, the C block channels with the D block channels, the E
    block channels with the F block channels and the G block channels
    with the H block channels.

48. This channelization framework was appropriate for first generation
    technology when the Commission created ITFS and MDS, but is not
    optimal for digital two-way services. The Coalition notes that the
    existing band plan -- which provides licensees with multiple
    interleaved 6 MHz channels rather than contiguous spectrum -- was
    established in the early 1960s when television technology precluded
    the use of adjacent channels, and has remained essentially unchanged
    since that time.[^110] The Coalition asserts that the rationale for
    the interleaved band plan is long gone, because MDS and ITFS systems
    have been demonstrating the ability to use adjacent channels for the
    past 20 years.[^111] An interleaved channelization scheme is
    especially awkward when one licensee seeks to operate at low power
    while another, contiguous licensee continues operating at
    high-power, because low-power services are especially susceptible to
    interference from high-power transmissions on adjacent channels. The
    Coalition contends that the current interleaved band plan, coupled
    with the current adjacent channel interference protection rules,
    effectively precludes any licensee from providing broadband service
    unless consent is received from the licensee of the interleaved
    channel group (i.e. the licensee of the A Group cannot deploy
    two-way services without consent from the licensee of the B Group,
    and vice versa).[^112] This hampers the ability of individual MDS
    and ITFS licensees to deploy broadband services by giving adjacent
    channel licensees veto power over any such offering.[^113] Another
    consideration is that, especially when using spread-spectrum
    techniques to avoid interference, service providers can operate more
    efficiently when they have access to large blocks of contiguous
    spectrum. At the very least, therefore, any plan that we adopt
    should address the need to avoid incompatible power levels on
    adjacent channels, and ideally, it would provide a means by which
    licensees could consolidate their channels into contiguous blocks.

### Band Plan Alternatives

49. There are two basic ways to resolve the incompatibility between
    high-power one-way services and low-power cellular services:
    separate them into separate band segments or require an
    across-the-board reduction in signal strengths at system boundaries.
    Either approach would facilitate the provision of low-power cellular
    services, which could include, but need not be limited to, provision
    of two-way voice or high-speed data services to mobile users.[^114]
    We discuss each approach in turn.

50. The Coalition proposes to split the 2500-2690 MHz into three
    segments, with the middle segment being reserved for high-powered
    MDS and ITFS stations and the two segments above and below it
    reserved for low power operations. The Coalition proposes that every
    MDS and ITFS licensee be assigned a geographic service area.
    Existing circular protected service areas would be converted to
    geographic service areas with signal strength limits applied at
    their boundaries.

    Coalition Band Plan

  ------- ---------- ------- -------- ------- ------- ------ --------------- ------ -------
  Lower              J Band  Middle                   KK     Upper Band             II Band
  Band                       Band                     Band   (UBS)                  
  (LBS)                      (MBS)                                                  

  22500              22566   22572            22614          2620            2686   22690
  ------- ---------- ------- -------- ------- ------- ------ --------------- ------ -------

51. The Coalition proposes that the LBS be designated as the mobile
    station transmit band and that the UBS be designated as the base
    station transmit band. Such a designation would protect the passive
    band at 2690-2700 MHz band. We seek comment on this
    alternative.[^115]

52. The *3G Final Report* discusses two other types of band segmentation
    plans.[^116] Under the first type of band plan, there would be
    alternating bands for low power services and high power services,
    respectively, with guard bands in between the two 45 megahertz
    frequency blocks for low power services. The chart below is a
    pictorial representation of such a band plan:

  ------------ ------- ------------ ------- ------------ ------- ------------
  Low Power    Guard   High Power   Guard   Low Power    Guard   High Power
  Operations   Band    Operations   Band    Operations   Band    Operations

  ------------ ------- ------------ ------- ------------ ------- ------------

A benefit of this option is that it would allow both types of operations
to provide frequency separation between paired channel blocks for both
3G and ITFS/MDS operations for frequency division duplex (FDD)
technology. Just as important, the ability to implement time division
duplex (TDD) systems is not precluded by this segmentation plan. An
operator may implement TDD technology on any spectrum block for which it
is licensed.

53. Another option would be to separate the band into one block for low
    power operations and one block for high power operations, separated
    by a guard band. Such a band plan would look like this:

  ----------------------------- ----------- ------------------------------
  Low Power Operations          Guard Band  High Power Operations

  ----------------------------- ----------- ------------------------------

Such a band plan would provide a large block of contiguous spectrum for
both types of operations. As noted in the *3G Final Report*, such a band
plan would be particularly well suited to TDD technology.[^117]

54. We seek comment on various band plans or other plans that would
    separate the band into high power and low power operations.
    Commenters should address such issues as (1) the appropriate
    channelization plan, (2) the justification for and appropriate size
    of any guard bands, and what types operations could be permitted in
    such bands, (3) whether tighter out-of-band emission limitations
    could serve as an alternative to guard bands; (4) whether, and under
    what circumstances, licensees may disaggregate or aggregate
    channels, (5) any special rules to apply in a particular band
    segment or channel, (6) whether every market requires a uniform band
    plan, or whether different band plans would be appropriate for
    different markets, and (7) whether any plan is inconsistent with the
    educational mission of ITFS or fails to recognize the unusual
    challenges faced by nonprofit educational institutions. With regard
    to the latter concern, we note that our *Spectrum Policy Report*
    raises the possibility of allowing licensees in uncongested rural
    areas to operate at higher power levels, provided they do not
    thereby generate unacceptable interference in urban areas.[^118]

55. The other basic approach would be to avoid any segmentation of the
    band by applying an across-the-board limit on signal strengths
    sufficient to accommodate low power cellularized operations on all
    channels throughout the 2500-2690 MHz band. The Coalition Plan, or
    any other band segmentation plan, would require extensive, mandatory
    re-shuffling of channel assignments to avoid leaving high power
    channels adjacent to low power channels, to avoid adjacent channel
    interference.[^119] By contrast, applying an across-the-board
    limitation on signal strengths could make de-interleaving a less
    urgent necessity and, perhaps, make it possible for acquisitions,
    channel trades, and other voluntary market processes to effectuate
    any needed consolidation of channels. We seek comment on the extent
    to which such a rule would reduce the need to apply mandatory
    channel reassignments or whether it would interfere with future uses
    of this spectrum by educators.

56. If we were to adopt an across-the-board reduction in signal
    strengths, we anticipate that we would adopt a transition period
    during which existing high power operations could continue to
    operate. At the end of the transition period, absent an agreement
    with affected licensees, we would require high power licensees to
    comply with new interference protection criteria. Alternative
    mechanisms for encouraging or requiring transitions to a new band
    plan are discussed in section III(D)(5), below. To the extent that
    parties file comments on these issues, we ask them to discuss the
    differing considerations that might apply depending upon whether we
    adopt a high-power/low-power band segmentation plan or an
    across-the-board reduction in power levels that would not require
    segmentation of the band.

57. From a broader perspective, we note that Coalition members appear to
    believe that the predominant future use of this band will be low
    power mobile services. On that basis, we seek comment on whether it
    will be necessary to reserve a portion of this band in the long term
    to accommodate high power services. We particularly seek comment
    from licensees who are currently engaging in high power operations
    as to their plans for the spectrum. We seek comment on the technical
    feasibility and cost involved in complying with technical rules that
    may require licensees to lower substantially their signal strength
    outside their protected service areas. Based upon all of those
    considerations, we inquire whether a uniform reduction in power
    levels throughout the 2500-2690 MHz band would be warranted. We
    inquire to what extent such a plan would disrupt existing
    high-powered operations, and to what extent it would produce
    offsetting advantages by making more channels available for
    low-power operations.

### Response Channels

58. In 1991, we allocated the seven 125 kHz response channels (part of
    the R channels under the Coalition band plan) associated with MDS
    channels E3, E4, F3, F4, H1, H2, and H3 to the POFS.[^120] The
    Coalition proposes to return these channels for MDS use.[^121] We
    believe the proposal has merit because, as the Coalition notes,
    there are no OFS licensees currently on these channels, probably
    because they are too narrow to be usable by themselves. We ask for
    comment on this proposal. We also seek comment on how to assign this
    spectrum, if reallocated. For example, should we automatically give
    the channels to the geographic area licensee of the corresponding
    6-megahertz main channel? The Coalition favors this approach.
    Another option would be to license the channels on a geographic area
    basis and allow any eligible entity to apply for these channels. If
    we received mutually exclusive applications, we would hold an
    auction.[^122]

59. The Coalition recommends that operation on the response (R) channels
    be secondary to operation on the LBS, MBS, and UBS channels. In
    other words, they would have us provide that operation on the
    response channels must not cause harmful interference to operations
    on the LBS, MBS, and UBS channels and the R channel licensee must
    accept any interference caused by an LBS, MBS, or UBS licensee
    operating in accordance with our Rules. The MMDS Licensee Coalition
    opposes this recommendation and states that response channels should
    receive equal status.[^123] We seek comment on this issue.

### Utilization of Unassigned ITFS Spectrum

60. Under our rules, MDS and ITFS licensees and applicants must apply to
    license each transmitter site in the area they wish to serve
    (*i.e.,* site-based licensing).[^124] In addition, we license MDS
    BTA channels on a geographic area basis.[^125] The Coalition argues
    that elimination of site-by-site licensing and adoption of a
    geographic area-licensing concept for low-power operations will
    promote deployment of advanced low-power systems because a
    site-by-site licensing system is cumbersome and the transaction
    costs are too high to permit competitive businesses to flourish
    using next generation technology.[^126] The Coalition contends,
    however, that a site-by-site licensing approach will continue to be
    necessary for high-powered, one-way operations, though they state
    that such operations could benefit from a streamlined site-by-site
    licensing approach.[^127]

61. In general, there are two types of flexible, market-oriented
    approaches to spectrum allocation -- the "exclusive use" model, and
    the "commons" model.[^128] Under the "exclusive use" model, "a
    licensee has exclusive and transferable rights to the use of
    specified spectrum within a defined geographic area, with flexible
    use rights that are governed primarily by technical rules to protect
    spectrum users against interference."[^129] Under the commons model,
    spectrum is available to all users that comply with established
    technical "etiquettes" or standards that set power limits and other
    criteria for potential operation of unlicensed devices to mitigate
    potential interference.[^130] These models suggest two types of
    approaches for allowing use of the unassigned ITFS spectrum --
    geographic area licensing and unlicensed operation pursuant to Part
    15 of the Commission's Rules on a primary basis. We seek comment on
    whether one or the other of these models is the best means of
    ensuring the maximum and efficient use of the ITFS spectrum.

#### Geographic Area Licensing of Unassigned ITFS Spectrum

62. One means of seeking to increase the intensity and efficiency of use
    of the ITFS spectrum would be to license the unassigned ITFS
    spectrum using geographic area licensing. In other bands where we
    contemplated allowing the development of mobile or other wide-area
    services, we concluded that licensing based on pre-defined service
    areas (*e.g.,* geographic area licensing) poses significant
    advantages over site-based licensing because of the greater
    operational flexibility it gives licensees and the greater ease of
    administration for consumers, licensees, and regulators.[^131] For
    example, geographic area licensing reduces administrative burdens
    and operating costs by allowing licensees to modify, move, and add
    to their facilities within specified geographic areas without prior
    Commission approval.[^132] Our experience has been that wide-area
    licensing (as opposed to site-by-site licensing) affords licensees
    substantial flexibility to respond to market demand and may result
    in significant improvements in spectrum utilization.[^133] In
    particular, geographic area licensing allows licensees to coordinate
    usage across an entire geographic area to maximize the use of
    spectrum in areas of highest demand. Geographic area licenses also
    provide licensees the flexibility to adjust spectrum usage depending
    upon market demands. Such adjustments may be significantly more
    difficult under a site-by-site licensing regime where prior
    Commission approval is needed before a licensee can address growth
    or changes in demand.

63. The facts that both ITFS and MDS channels in the same communications
    system and that many MDS licensees already have geographic area
    licenses may provide an additional reason for providing ITFS
    operators with geographic area licenses as well. We seek comment on
    whether both the public and the Commission would benefit from a
    consistent licensing approach across the entire band. We note that
    this licensing approach is consistent with the operational
    flexibility we have afforded other entities that use spectrum to
    provide services such as 24 GHz, 39 GHz, PCS, 700 MHz commercial
    band and SMR licensees.[^134]

64. We also seek comment on the possible disadvantages of licensing
    unassigned ITFS spectrum on a geographic area basis. Would
    geographic area licensing make it more difficult for educational
    institutions and nonprofit educational organizations to obtain
    access to spectrum? Would licensing ITFS spectrum on a geographic
    area basis result in the underutilization of spectrum because ITFS
    users are interested in operating in small, discrete areas?

65. If we decide to license unassigned ITFS spectrum via a geographic
    area overlay license, we must address three issues: what geographic
    areas to use for licenses, how much bandwidth should be associated
    with each license, and how to address interference issues near
    international borders. We address each of these issues below.

##### Geographic Areas for Licenses

66. Assuming that we use a GSA approach to license this band, we must
    determine the appropriate size(s) of service areas on which licenses
    should be based. Traditionally, in establishing a service the
    Commission attempts to adopt optimal spectrum block size(s) and
    optimal GSAs, while at the same time allowing parties to aggregate
    initial licenses and then adjust their licenses through secondary
    market mechanisms such as partitioning and disaggregation, if such
    fine-tuning is necessary.

67. Ideally, the size(s) of the initial GSAs would match the business
    plans of the initial licensees. Our approach to determining optimum
    size(s) attempts to accommodate the likely range of applicant
    desires by balancing efficiency with the policy goal of
    disseminating licenses among a wide variety of applicants.[^135] We
    also wish to foster service to rural areas[^136] and tribal lands,
    and to promote investment in and rapid deployment of new
    technologies and services.[^137] Large license areas may be
    preferred by incumbent providers to facilitate build-out of existing
    large-area systems. Large license areas also provide carriers with
    greater flexibility in the build-out of their services, since they
    are less constrained by geographical license limits and entail
    coordination with fewer adjacent service providers. In this regard,
    we seek comment on whether any problems associated with the
    operations of other service providers may be better addressed by
    licensing this spectrum in larger areas where there may be less of a
    need for complicated protection agreements. On the other hand, small
    license areas may favor smaller entities with regional business
    plans and no interest in providing large-area service. Rural and
    smaller carriers may prefer licensing based on small geographic
    areas.[^138]

68. We note that our simultaneous multiple round and combinatorial (or
    "package") auction designs generally may offer bidders the
    opportunity to aggregate smaller regional licenses to cover larger
    geographic areas, to aggregate smaller spectrum blocks, and to pair
    unpaired spectrum.[^139] Such aggregation at auction of smaller
    spectrum blocks and licenses may provide bidders with greater
    flexibility to implement their business plans, as compared with the
    traditional approach of defining optimal size. Thus, in discussing
    the issues of spectrum block size, geographic area, and pairing of
    spectrum, commenters are requested to take into consideration the
    various available auction designs. For example, if a commenter
    advocates a nationwide geographic area license, the commenter may
    also wish to comment on whether the auction of smaller licenses
    would allow bidders to aggregate licenses to create a nationwide
    footprint. Commenters should also discuss whether a particular band
    plan serves the Commission's spectrum management goals, including
    flexible and efficient spectrum use.[^140] We are also aware that
    some licensees may need smaller service areas, since the most
    desirable or efficient scale of service area may vary according to
    the business plan of the potential licensee, in light of the variety
    of potential services that we envision will use these bands,
    including emerging technologies or next-generation applications.
    Thus, in discussing these issues, commenters should also take into
    consideration the possibility that we would permit post-auction
    partitioning of licenses for bidders whose business plans require
    different size geographic areas than we ultimately adopt.

69. In the past the Commission has licensed spectrum using a wide
    variety of GSAs, including nationwide licensing, regional licensing,
    local licensing, or some combination of these approaches:

+----------+-------------------------------+---------------------------+
| Number   | Description of areas          | Examples                  |
| of       |                               |                           |
| Licenses |                               |                           |
+----------+-------------------------------+---------------------------+
| 1        | Nationwide                    | Narrowband PCS[^141], 1.6 |
|          |                               | GHz band[^142]            |
+----------+-------------------------------+---------------------------+
| 5        | Narrowband PCS Regional       | Narrowband PCS[^143]      |
+----------+-------------------------------+---------------------------+
| 6        | Economic Area Groupings (EAG) | 220 MHz,[^144] Blocks     |
|          |                               | A/B/D/E,                  |
|          |                               |                           |
|          |                               | Lower 700 MHz[^145]       |
+----------+-------------------------------+---------------------------+
| 12       | Regional Economic Area        | Wireless Communication    |
|          | Groupings (REAG)              | Service (WCS)[^146]       |
+----------+-------------------------------+---------------------------+
| 51       | (see note below)              | A & B-Block PCS[^147]     |
+----------+-------------------------------+---------------------------+
| 51 or 52 | Major Economic Areas (MEA)    | WCS,[^148] 929/931 MHz    |
|          |                               | Paging[^149]              |
+----------+-------------------------------+---------------------------+
| 175      | Economic Areas (EA)           | 220 MHz,[^150] 800 MHz    |
|          |                               | SMR,[^151] Paging,[^152]  |
|          |                               | Multiple Address          |
|          |                               | Systems[^153]             |
+----------+-------------------------------+---------------------------+
| 493      | (see note below)              | C/D/E/F-Block PCS[^154]   |
+----------+-------------------------------+---------------------------+
| 734      | 306 Metropolitan Statistical  | Cellular,[^155] Block C,  |
|          | Areas (MSA) plus 428 Rural    | Lower 700 MHz[^156]       |
|          | Service Areas (RSA)           |                           |
+----------+-------------------------------+---------------------------+

70. We seek comment on these and other possible approaches as applied to
    the 2500-2690 MHz band. As indicated in the chart above, options
    include:

71. *Licensing these bands on a nationwide basis*. Nationwide licensing
    provides the maximum advantages of large-area licenses, and it may
    disadvantage applicants interested in limited service areas. We seek
    comment on the extent to which nationwide licenses maximize the
    opportunity to provide the widest array of services and business
    plans. We also seek comment on whether nationwide licensing provides
    the necessary incentives for fostering the growth of existing
    technologies while encouraging the development of new applications.
    In addition, we seek comment on whether the adoption of nationwide
    licensing provides potential savings to the time and cost of
    developing applications and manufacturing equipment to operate in
    the spectrum at issue in this proceeding. We seek comment as to
    whether nationwide licensing would affect educational, telemedicine
    or medical institutions located in particular geographic areas.

72. *Licensing this spectrum, or a subset of this spectrum, using local
    area licenses*. Under this approach, the Commission could license
    this spectrum, or some part of this spectrum, using BTAs or
    aggregations of counties that approximate BTAs. The most compelling
    argument for that approach is that we used BTAs when auctioning
    unused MDS spectrum in 1996. A similar approach when auctioning
    unused ITFS spectrum would be consistent and would arguably make it
    easier for licensees to aggregate spectrum derived from MDS with
    spectrum derived from ITFS. We seek comment on whether local area
    licenses are preferable to nationwide or regional licenses, and if
    so which local area licensing scheme is preferable. We also seek
    comment on how local area licenses would affect educational,
    telemedicine or medical institutions seeking ITFS service.

73. *Licensing these bands using large, regional licenses*. We could
    license these bands using areas comparable to the six large,
    regional Economic Area Groupings (EAGs), the twelve slightly smaller
    Regional Economic Areas (REAs), or the fifty-two Major Economic
    Areas (MEAs). To ensure consistency with our previous MDS auction,
    it may be best to choose boundaries aligned with BTA boundaries,
    i.e., to fashion large regional GSAs comprised of multiple BTAs.
    While we are aware of interest in BTA-sized licenses, we seek
    comment on whether there is any demand for regional licenses. We
    seek comment on what specific large regional licensing areas would
    be appropriate if we choose to follow that approach. We also seek
    comment on whether the opportunity to aggregate regional licenses
    would be sufficient for those seeking to build a nationwide
    footprint. We also seek comment on how the use of large regional
    licenses would affect educational, telemedicine or medical
    institutions seeking ITFS service.

74. Licensing a portion of this spectrum using a nationwide or regional
    approach, and the remaining portion using smaller geographic areas.
    Commenters supporting this approach should indicate which spectrum
    in these bands should be licensed on a nationwide or regional basis
    and which spectrum should be licensed using small geographic areas.
    In addition, if commenters support licensing based on service areas
    other than those discussed above, they should discuss why other
    designations are more appropriate. We seek comment on how such an
    approach would affect educational, telemedicine or medical
    institutions seeking ITFS service.

75. We point out here that Rand McNally is the copyright owner of the
    Basic Trading Area and Major Trading Area Listings, which list the
    counties embodied in each BTA, as contained in Rand McNally's
    *Commercial Atlas & Marketing Guide*.[^157] Both the WCA and the
    Commission have agreements with Rand McNally to use Rand McNally's
    copyright MTA/BTA listings and maps.[^158] These agreements
    authorize the conditional use of Rand McNally's copyright material
    by Commission MDS licensees and requires interested persons using
    this material to include a legend on reproductions indicating Rand
    McNally's ownership, and provides for payment of a one time license
    fee to Rand McNally.[^159] Under the terms of the WCA license
    agreement, license fees are to be paid within ten business days
    after the date that MDS BTA authorization(s) are issued by the
    Commission.

76. These agreements do not explicitly address ITFS channels that the
    Commission does not license as a result of the *MDS Auction
    R&O*.[^160] Thus, if we select Rand McNally's BTAs as the service
    definition for ITFS geographic area licenses, a question arises as
    to whether an ITFS licensee would have to obtain a copyright license
    (either through a blanket license agreement or some other agreement)
    from Rand McNally.[^161] We are concerned that an ITFS geographic
    area licensee might not be able to rely on the grant of a BTA-based
    authorization from the Commission as a defense against any claim of
    copyright infringement brought by Rand McNally against such grantee.
    Accordingly, we seek comment on whether BTAs are appropriate for
    ITFS.

##### Bandwidth for Licenses

77. We also seek comment on the appropriate size of the spectrum block
    or blocks to assign to ITFS geographic area licensees. The
    individual channels for MDS and ITFS spectrum in the 2500-2690 MHz
    band are six megahertz wide. One option would be to issue a single
    geographic area license for all unencumbered ITFS spectrum in a
    given market, region, or nationwide. In the case of MDS, the
    Commission awarded a single BTA license covering all unencumbered
    MDS channels.[^162] A second option would be to issue separate
    licenses for each individual channel. A third option would be to
    divide the band into 24 MHz blocks, based upon the fact that many
    licensees are licensed for blocks of four six MHz channels. In
    reaching our determination, our intent is to maximize licensee
    flexibility, provide ITFS geographic area licensees with the
    spectrum they need to offer technologically advanced and innovative
    services, and ensure the most efficient utilization of the spectrum.

##### International Border Issues

78. In the Canadian and Mexican border areas, availability of this band
    may be restricted by a border agreement or treaty. [^163] As a
    result, certain segments of the band may not be available in border
    areas or licensees may need to comply with limitations on power,
    antenna height and use which may make geographic area licenses in
    these areas less attractive. In other services where we have
    implemented geographic area licensing, we did not distinguish
    between border areas and non-border areas.[^164] We propose to
    license all geographic areas on a uniform basis without regard to
    whether all or part of the geographic area is in a border area.
    Geographic area licensees could use any authorized ITFS channels
    subject to the relevant rules and international agreements governing
    this band. We will review existing agreements to see if it would be
    useful to initiate discussions with Canada and Mexico concerning
    renegotiating current agreements in the future to provide greater
    flexibility than what is allowed by the existing agreements. We
    believe that applicants are in the best position to assess the
    effects of any limitations on the use of ITFS channels.

#### Unlicensed Use of Unassigned ITFS Spectrum

79. Another possible means of ensuring utilization of the unassigned
    ITFS spectrum would be to allow unlicensed operation in the
    unassigned ITFS spectrum on a primary basis.[^165] Unlicensed
    transmitters may be operated under the provisions of Part 15 of the
    Commission's Rules.[^166] Part 15 transmitters generally operate on
    frequencies shared with authorized services and at relatively low
    power. Operation of a Part 15 transmitter is subject to the
    conditions that the device not cause interference to authorized
    services, and that the device must accept any interference
    received.[^167] Part 15 transmitters may not operate in certain
    restricted bands, including 2655-2690 MHz.[^168]

80. The use of unlicensed spectrum has grown substantially in the past
    several years. The innovation allowed by the unlicensed approach has
    led to an explosion in 802.11(b) wireless local area networks, for
    example, which has benefited consumers. The Spectrum Policy Task
    Force recognized that "the Commission's dedication of some lower
    band spectrum to unlicensed uses, e.g. 2.4 GHz, is yielding
    significant technological and economic benefits in the form of
    low-power short-distance communications and emerging mesh network
    technologies that should be further encouraged."[^169]

81. The characteristics of the ITFS spectrum may, depending on the
    choices we make in this proceeding, make it an attractive choice for
    unlicensed use. The presence of intense unlicensed operations at 2.4
    GHz may mean that equipment efficiencies could be realized for
    operators that engage in operations in both bands. The intense
    utilization of unlicensed technologies, such as wireless LANs, by
    educational, telemedicine or medical institutions today may mean
    that ITFS and unlicensed technologies can provide educations with a
    useful hybrid spectrum-based teaching tool.

82. We therefore seek comment on the advantages and disadvantages of
    allowing unlicensed technologies to operate in current white space
    in the ITFS spectrum, and where ITFS licenses are returned to the
    Commission, on a primary basis. Would allowing unlicensed use of the
    ITFS spectrum on a primary basis provide educators with a useful new
    tool? Is it possible to allow unlicensed operation without
    undermining current ITFS operations (including educational,
    telemedicine or medical uses)? If so, what rules and technical
    requirements would be necessary to ensure sufficient interference
    protection to existing, licensed ITFS facilities? Should any antenna
    requirements be imposed? What would be the appropriate power and/or
    field strength limits for unlicensed transmitters operating on such
    a basis? Could GPS or other location techniques be incorporated into
    an unlicensed device so it could determine its precise location and
    identify licensed users in its vicinity by accessing a database?
    Would such an approach be reliable, and could it be combined with
    other methods to prevent interference to licensed services? If we
    ultimately revise the band plan for the 2500-2690 MHz band,
    particularly in a fashion segmenting low power and high power
    operations, is unlicensed use preferable in one portion but not the
    other?

### Geographic Area Licensing for Current Licensees

#### Geographic Area Licensing for MDS BTA Authorization Holders

83. Under the current rules, qualified auction winners were granted
    licenses for BTAs. A BTA authorization holder may provide service
    within its BTA, excluding the PSA of incumbent stations and
    previously proposed MDS and ITFS facilities.[^170] A BTA
    authorization holder, however, must also apply for an individual
    station license for each transmitter within its BTA.[^171] In other
    services utilizing geographic area licensing, however, a geographic
    area licensee may generally construct a new transmitter within its
    licensed area and on a channel covered by its geographic area
    license so long as (1) the construction complies with the
    Commission's interference and other rules, (2) an environmental
    assessment is not required, (3) international coordination is not
    required, or (4) the proposed transmitter would not affect a
    radiofrequency quiet zone.[^172] We believe that this approach
    results in efficient service to the public and fewer unnecessary
    regulatory burdens upon licensees and the Commission. For the
    reasons noted above, we believe that MDS BTA authorization holders
    should not be required to obtain individual station licenses for
    transmitters. We also see no basis for treating MDS BTA
    authorization holders differently than ITFS geographic area
    licensees.[^173] Accordingly, we tentatively conclude that MDS BTA
    authorization holders should be allowed to place transmitters
    anywhere within their service area without prior authorization so
    long as the operation complies with the applicable service rules and
    that do not affect radiofrequency quiet zones or require
    environmental review or international coordination. We seek comment
    on this tentative conclusion.

84. We also propose to modify the procedures that apply when an
    incumbent license within a BTA is forfeited. Under current rules, if
    an incumbent site-based MDS license is forfeited, the incumbent's
    service area shall merge and become part of the surrounding BTA
    service area.[^174] The BTA authorization holder, however, cannot
    operate within that area until it files a long form application to
    operate a transmitter and the Commission grants that
    application.[^175] In other wireless services, frequencies
    associated with cancelled or forfeited incumbent authorizations
    automatically revert to the geographic license holder.[^176] We
    believe that requiring geographic area licensees to obtain a
    separate authorization prior to operating within the area of a
    cancelled or forfeited incumbent license is an unnecessary
    regulatory burden and causes delays in service. Consistent with the
    approach we have taken in other wireless services, we tentatively
    conclude to modify the rules to provide that in the case where an
    incumbent license cancels or is forfeited, the right to operate
    would automatically revert to the licensee that holds the BTA
    license.[^177]

#### Geographic Area Licenses for Site-Licensed Incumbents

85. In tandem with our proposal to use geographic areas to license ITFS
    spectrum, we must assess the potential impact of this proposal on
    incumbent ITFS licensees that have site-based licenses. Previously,
    when implementing geographic area licensing for spectrum that had
    incumbents, the Commission traditionally has used an "overlay"
    licensing approach where the Commission grandfathered (protected)
    existing constructed and operating stations[^178] or provided for
    specified relocation periods. While an overlay approach has worked
    well in the past, the Coalition contends that there are inherent
    difficulties with an approach that allows incumbents to remain in
    place indefinitely because high-power video and low-power cellular
    systems will share this band.[^179] The Coalition believes these
    difficulties could hinder the implementation of new advanced
    services in this band because most geographic area licensees and
    incumbents would probably use the band to provide a low-power
    two-way service,[^180] while some incumbent licensees are using the
    band to provide high-power video operations (educational or
    commercial wireless cable).

86. Since we are proposing to protect incumbent operations on current
    ITFS channels, we must define the protected areas. The Coalition
    proposes to give each existing site-based MDS and ITFS licensees a
    GSA, based on the current rules.[^181] In this regard, we note that
    applicants for new stations on ITFS channels must provide protection
    to incumbents based on PSAs.[^182] We note that MDS incumbents that
    obtained their licenses prior to our 1996 MDS BTA auction have
    35-mile PSAs around their main stations.[^183] Except with respect
    to situations where MDS and ITFS PSAs overlap, we have not received
    many significant expressions of concern over electrical interference
    resulting from this approach. Therefore, we propose to provide each
    incumbent on a current ITFS channel and each MDS incumbent with a
    PSA based on a circle with a 35-mile radius around its main station,
    subject to the exceptions discussed below. We ask for comments on
    this proposal and, in addition, we inquire whether we should change
    the name of such areas from PSAs to GSAs. A benefit of making this
    change would be to allow incumbents to change the location of their
    transmitters without prior Commission approval.

87. In discussing the issue of protected areas for incumbents, the
    Coalition points out that the rules defining protected areas have
    changed over the years. As a result, the PSAs assigned to co-channel
    incumbent MDS and ITFS licensees can overlap.[^184] The Coalition
    argues that since none of the licensees with service areas that
    overlap can satisfy the interference protection criteria in the
    overlap area, no one can operate in these areas.[^185] According to
    the Coalition, the MDS/ITFS industry has informally developed a
    method for handling this problem. The Coalition notes that the
    general method for dividing the overlap area is to draw a
    straight-line (chord) beginning and ending at the two points where
    the protected service areas intersect.[^186] This approach has the
    effect of drawing a boundary along the line connecting the ends of
    the football-shaped overlap area, with the licensees on either side
    agreeing to limit the interference they generate outside their
    boundaries. The Coalition proposes that we codify this approach.

88. The boundary-splitting proposal described above could leave some
    reception sites marooned on the "wrong" side of the line relative to
    ITFS stations from which they have been receiving service. Based on
    that concern, and on the fact that some registered reception sites
    fall outside a 35-mile radius, the Coalition proposes that we
    grandfather certain ITFS reception sites located outside the
    PSA.[^187] Under the Coalition's proposal, ITFS licensees would be
    required to provide technical information to co-channel and adjacent
    channel licensees concerning the reception sites within twenty-one
    days of a request.[^188] Generally, however, we do not protect sites
    outside the established protected areas in other services where we
    have implemented geographic area licensing.[^189] Requiring
    licensees to provide such additional technical information is
    contrary to our goal of reducing regulatory burdens. We are also
    concerned that providing continued protection to out-of-area
    reception sites could confuse the definition of GSAs for
    site-licensed incumbents, whether or not we choose to allow
    continued high-power operations in part of the band. We invite
    comment on the costs versus benefits of continuing to protect
    reception sites that fall outside the 35-mile service areas of
    incumbents, or beyond boundaries established mathematically by
    splitting areas of overlap. Commenters supporting the Coalition's
    position on this issue should provide information on how many
    receive-only sites are located outside the PSAs of stations from
    which they have been receiving service. We seek comment on
    alternative ways of addressing this problem.

#### Gulf of Mexico Proceeding

89. *Background.* In the *MDS Report and Order*, the Commission adopted
    a licensing plan under which it assigned, through a simultaneous
    multiple round bidding process, one MDS authorization for each of
    the 487 BTAs and six additional geographic areas.[^190] A BTA
    authorization holder may construct facilities to provide service
    over any usable MDS channels within the BTA.[^191] A MDS channel is
    usable if the proposed station design is in compliance with the
    Commission's interference standards.[^192]

90. The signals of a BTA authorization holder cannot interfere with any
    other BTA authorization holder's signals.[^193] In addition, BTA
    authorization holders cannot interfere with the PSAs of incumbent
    MDS operators and ITFS licensees within their BTAs.[^194] However,
    the BTA authorization holder may negotiate interference rights with
    BTA authorization holders and incumbents.[^195]

91. On May 21, 1996, the Gulf Coast MDS Service Company (Gulf Coast)
    filed a Petition for Rulemaking requesting that the Commission amend
    its rules to permit licensing of MDS and ITFS spectrum in the Gulf
    of Mexico.[^196] Specifically, Gulf Coast sought to have the
    Commission treat the Gulf of Mexico as one service area and to hold
    an auction to license service in the area. On November 23, 1998,
    PetroCom License Corporation (PetroCom), successor in interest to
    Gulf Coast, amended the petition.[^197] PetroCom requested that the
    Commission authorize two licenses in the Gulf of Mexico and adopt
    eligibility restrictions to avoid excessive concentration of
    licenses.[^198] Additionally, PetroCom asked the Commission to
    establish a service area in the Gulf similar to the service areas
    established in the *MDS Report and Order*.[^199] On August 11, 1999,
    the Commission sought comment on PetroCom's Amended Petition.[^200]
    On May 3, 2002, the Commission issued the *Gulf Notice* seeking
    comments on PetroCom's amended petition.[^201]

92. In the *Gulf of Mexico MDS NPRM*, the Commission proposed to
    establish a GSA in the Gulf of Mexico ("Gulf Service Area").[^202]
    The Commission proposed to adopt the same rules, with certain
    limitations, as those service areas established in the *MDS Report
    and Order*. The Commission solicited comment on the technical and
    economic effects of implementing the proposals.[^203]

93. *Discussion.* Generally, commenters support creation of a Gulf
    Service Area. However, they express concern over the timing of the
    adoption of rules for the service area.[^204] The commenters seek to
    delay the licensing of MDS in the Gulf of Mexico until after the
    Commission establishes mobile service rules,[^205] as well as until
    we address the Coalition's proposals.[^206] We note that we are
    proposing mobile service rules in this proceeding.[^207] We believe
    that by addressing the use of MDS in the Gulf simultaneously with
    the consideration of other MDS flexibility issues that we decrease
    any attendant delay in the provision of service in the Gulf of
    Mexico. Accordingly, we disagree with the commenters that we should
    defer consideration of all of the issues involving the Gulf of
    Mexico until after adoption of mobile service rules. Resolving the
    primary issue of whether to establish a Gulf Service Area is a
    preliminary step that does not have to wait for the adoption of
    final rules in this proceeding. As no commenter opposed the
    establishment of a Gulf Service Area, we adopt the proposal to
    create a Gulf service area. The parties who asked the Commission to
    establish a Gulf Service Area state that establishing such a service
    area would allow specialized businesses that operate in the Gulf of
    Mexico to obtain advanced communications services that are currently
    unavailable to them and that would allow these businesses to operate
    more efficiently.[^208] The Commission has also noted in other
    services that creating a service area for the Gulf of Mexico region
    will help meet the growing communications needs of businesses
    operating in the Gulf.[^209]

94. We note that we have incorporated, as WCA asks, the Gulf of Mexico
    proceeding into this comprehensive review of the entire band.[^210]
    Although the Commission proposed to create a Gulf Service Area for
    MDS operations, the Commission proposed to exclude all ITFS channels
    from licensing in a Gulf Service area.[^211] The Commission
    indicated that ITFS licensees have not expressed an interest in
    obtaining licenses in the Gulf of Mexico, the area most likely has
    little need for educational service, and the requested commercial
    use does not require the full bandwidth available in the 2500-2690
    MHz band.[^212] No commenter specifically addressed the Commission's
    proposal to exclude ITFS channels.[^213] In order to ensure that we
    have a full and complete record, we seek further comment on whether
    we should reallocate ITFS channels in the Gulf Service Area for
    other uses. We specifically seek comment on whether we should
    consider unlicensed uses.

95. Unlike BTAs established by Rand McNally, the Gulf Service Area does
    not have a significant population center and is based primarily on
    the geographic confines of the Gulf and on the commonality of
    commercial interests of the potential users of any service
    provided.[^214] Thus, the Commission proposed to use the same
    boundary definitions for this Gulf Service Area as adopted in the
    *WCS R&O*.[^215] As a result, the Commission proposed that
    land-based license regions abutting the Gulf of Mexico will extend
    to the limit of the territorial waters of the United States in the
    Gulf of Mexico, which is the maritime zone that extends
    approximately twelve nautical miles from the United States
    coastline.[^216] Beyond that line of demarcation, the Commission
    created a Gulf Service Area, which extended from that line outward
    to the geographic limits consistent with international
    agreements.[^217]

96. Although WCA supports the Commission's proposal to establish the
    demarcation line of the Gulf Service Area at twelve nautical miles
    from the coastline,[^218] PetroCom maintains that the better
    approach is to employ the boundaries used for cellular service in
    the Gulf.[^219] In the *Gulf Cellular Order*, the Commission
    established the Gulf Service Area boundary as the land-water line.
    PetroCom argues that because current MDS and ITFS licensees are
    providing fixed services that they do not require protection beyond
    the shore.[^220] Additionally, PetroCom asserts that allowing land
    based MDS/ITFS operations to extend into the Gulf of Mexico will
    create interference issues for Gulf operations and discourage Gulf
    licensees from fully developing their systems.[^221] Moreover,
    PetroCom asserts that this definition of the inner boundary of the
    Gulf Service Area is consistent with our Rules, which base BTA
    boundaries on market areas defined by Rand McNally, which follow
    county lines.[^222] We seek comment on where to establish the
    demarcation line for the Gulf Service Area.

97. For the most part, commenters to this proceeding did not address the
    Commission's proposals with regard to licensing MDS in the Gulf of
    Mexico. Instead, commenters focused their remarks on requesting a
    delay in the consideration of the issues presented in the *Gulf of
    Mexico MDS NPRM* until after the Commission considered the
    Coalition's proposal to transform the service. Accordingly, we do
    not believe the record has developed satisfactorily to resolve
    issues concerning the amount of spectrum to license in the Gulf
    Service Area, competitive bidding, partitioning and disaggregation,
    interference protection requirements, construction period, and
    license term. We invite commenters to address these issues in the
    broader context of this comprehensive proceeding. However, where
    differences exist with regard to the treatment of Gulf licenses,
    commenters should explain those differences and expound upon the
    rationale for the different treatment.

### Transition to New Band Plan

98. An important issue relating to the adoption of any new band plan is
    the mechanism to use to transition existing licensees to a new band
    plan. There are four alternative kinds of transition mechanisms that
    are relevant in this context:[^223] expanded rights overlay licenses
    combined with mandatory relocation of incumbents; expanded rights
    overlay licenses with grandfathering of incumbents; expanded rights
    overlay licenses combined with voluntary band-clearing restructuring
    incentives for incumbents; and expanded rights granted to incumbent
    licensees under existing licenses.[^224] The Coalition's proposal
    most nearly resembles the second of those four approaches, though it
    reflects elements of the fourth approach as well.

99. The Coalition proposes that we rely on a combination of regulatory
    and market forces to effect the transition to its proposed band
    plan. The Coalition recommends a market-by-market transition process
    to the new band plan that allows MDS and ITFS licensees to continue
    to operate pursuant to the current rules until an MDS or ITFS
    licensee or lessee (called a "proponent") triggers the transition
    process.[^225] In general, the Coalition would require the Proponent
    to fund any conversion costs incurred by ITFS operators but would
    require MDS operators to pay their own conversion costs.[^226] In
    addition, any party offering a commercial service using MDS or ITFS
    channels would be required to reimburse the Proponent for its *pro
    rata* share of the cost of transitioning the facilities that it uses
    and the cost of transitioning facilities associated with any
    overlapping transition impact area.[^227] A Proponent would be
    permitted, at its sole discretion and at any time, to trigger the
    transition process with respect to any MDS or ITFS licensee that has
    a GSA located in whole or in part within 150 miles of any portion of
    its GSA.[^228] At any time during the transition planning period,
    the Proponent would be permitted, in its sole discretion, to decide
    not to proceed with the transition process in whole or in part.
    [^229] The Coalition plan would require the Commission to enact
    detailed rules concerning the mechanisms of the transition process
    and set forth nine safe harbors describing proposals that licensees
    subject to transition would have to accept from proponents.[^230]
    The Coalition does not recommend that we set any fixed deadlines.

100. We seek comment on whether we should impose a date certain for
     completing the transition process if we adopt a process resembling
     that proposed by the Coalition. The Coalition recognizes that the
     absence of specific deadlines in its proposal could leave hold-out
     licensees in a position to obstruct the re-channelization process,
     but urges that we adopt a very detailed list of criteria defining
     what sorts of proposals ITFS licensees must accept if Proponents
     offered to implement them or pay for their implementation.[^231]
     This proposal resembles the process we have applied for clearing
     incumbents from the upper 200 channels in the 800 MHz band to make
     way for Specialized Mobile Radio operators licensed to Economic
     Areas.[^232] However, the Coalition proposes a far more detailed
     set of criteria for mandatory negotiations between MDS and ITFS
     operators, and does not provide for reimbursement of MDS operators
     undergoing involuntary conversion to lower signal strengths.

101. As an alternative, we ask whether we should impose a date or dates
     certain by which all licensees must comply with our new
     interference rules. In that regard, an *ad hoc* group of MMDS
     licensees has expressed concern that the detailed transition rules
     that the Coalition proposes as an alternative to specific deadlines
     would be cumbersome. These licensees view the plan as requiring
     complex reimbursement schemes, 150-mile daisy chains and other
     complications resulting from the voluntary market-by-market
     approach.[^233] They assert that the net result of adopting the
     Coalition Plan would be to delay the transition rather than to
     expedite it because the parties would be embroiled in constant
     bickering over the terms of transition and who should be
     responsible for what costs.[^234]

102. Another alternative would allow incumbents to bargain freely for
     the best inducements they can obtain from Proponents to convert
     their operations prior to a deadline for conformance with the new
     band plan, while requiring incumbents to fund their own conversions
     if they do not accept a Proponent's offer to fund the conversion
     ahead of time. Under such an approach, the incumbent's bargaining
     leverage would be greater the further in the future we established
     the conversion deadline, and it would gradually diminish as the
     deadline approached. We believe that we have the legal authority to
     apply such deadlines pursuant to Section 316(a) of the
     Communications Act, as amended, which permits us to modify a
     license or construction permit if such action is in the public
     interest.[^235] Section 316(a) requires that we notify the affected
     stations of the proposed action, the public interest reasons for
     the action, and afford at least thirty days to respond. This
     procedure is now set forth in Section 1.87 of our Rules.[^236]
     Licenses may be modified through rule making,[^237] as we did when
     establishing the cellular telephone service.[^238] We seek comment
     on alternative means by which we might lawfully and efficiently
     implement a schedule for modifying existing MDS and ITFS stations,
     such as the adoption of a single deadline by rulemaking rather than
     through station-by-station processes.

103. A second possible approach would be to adopt a three-phase
     transition process: a voluntary negotiation period, during which
     incumbents could bargain freely for the best inducements they could
     obtain from Proponents, followed by a mandatory negotiation and
     conversion phase, during which Proponents could compel incumbents
     to reduce their signal strengths by offering to fund their
     conversions, based on specific criteria to be defined in our rules.
     In the final stage, Proponents would be entitled to compel
     incumbents to take whatever steps are necessary to reduce their
     signal strengths at the incumbents' own expense. Such an approach
     would resemble the band-clearing procedures that we adopted for
     terrestrial fixed microwave services in the bands that we
     reallocated to PCS,[^239] except that MDS and ITFS incumbents would
     ultimately be required only to reduce their signal strengths at
     their GSA boundaries, not cease operations altogether or relocate.

104. A third alternative would be to refrain from providing for a
     voluntary negotiation period and proceed immediately to a mandatory
     negotiation and conversion phase, later to be followed by a sunset
     date after which incumbents would be required to assume their own
     conversion costs. The Commission used this procedure to clear
     terrestrial fixed microwave services from 18.58-19.3 GHz band when
     the Commission reallocated it to FSS.[^240] We seek comments on the
     benefits and disadvantages of a voluntary negotiation period, and
     inquire what mandatory conversion requirements should apply if we
     decide not to adopt a voluntary negotiation period. We seek comment
     on all of these approaches, on other possible alternatives, on the
     appropriate date or dates for any deadlines that we might apply
     under any of the transition proposals and on the criteria that we
     should apply during any mandatory negotiation and conversion phase,
     should we choose to adopt one.

105. An altogether different option would be to rely on an auction to
     restructure the bands.[^241] Such an approach might mitigate the
     need for a complicated set of transition rules because bidders
     might be able to obtain efficient packages of encumbered and
     unencumbered spectrum for new uses without engaging in costly and
     time-consuming bilateral and multi-lateral negotiations.[^242] The
     efficacy of such an approach, of course, would depend upon how many
     incumbents chose to make their licenses available for competitive
     bidding. Transition rules might be necessary as a fall-back even if
     we conduct such an auction, to transition incumbent licensees that
     choose not to participate or receive no bids that induce them to
     sell.

106. We seek comment on all issues relating to the transition of
     existing licensees to a new band plan, including, but not limited
     to, the Coalition Proposal. Commenters addressing this issue should
     discuss in detail their preferred mechanisms for adopting any
     transition.[^243]

### ITFS Eligibility Restrictions

107. ITFS main channels account for 120 MHz of the 2500-2690 MHz band.
     Initially, the Commission intended ITFS stations to provide formal
     educational and cultural development in aural and visual form to
     students enrolled in accredited public and private schools,
     colleges and universities.[^244] Generally, our Rules limit
     eligibility for ITFS to: (1) accredited educational
     institutions, (2) governmental organizations engaged in the formal
     education of enrolled students, and (3) nonprofit organizations
     whose purposes are organizational and include providing educational
     and educational television materials to accredited institutions and
     governmental organizations.[^245] In 1971, the Commission did not
     see a valid reason to change the ITFS eligibility rules.[^246] In
     1985, after recognizing that ITFS signals were reaching the homes
     of MDS subscribers, the Commission revised the main purpose of
     ITFS. The Commission determined that the transmission of
     instructional material for accredited educational institutions was
     an "*essential use*" of ITFS stations, *i.e.*, at least some of
     their capacity had to be used for the transmission of
     course-oriented formal instructional material.[^247] In 1991, the
     Commission voiced its support of the role of ITFS in providing
     improved educational opportunities for all.[^248] Consequently, the
     Commission remained committed to not jeopardizing the current or
     future ability of ITFS to fulfill its primary intended purpose of
     providing educational material for instructional use.[^249] In
     fact, the Commission expressed its intention to enforce strictly
     the existing eligibility rules.[^250]

108. In many respects, our regulatory policies toward MDS and, to a
     lesser extent, our treatment of ITFS over the years have
     represented pioneering movements toward flexible use. We initially
     limited MDS licensees to common carrier operations and adopted
     technical rules that limited the service to point-to-multipoint
     distribution from a single point, but we allowed MDS subscribers to
     transmit any of a broad range of content types: private television,
     high speed computer data, facsimile, control information, or other
     communications capable of radio transmission.[^251] In 1983, the
     *First Leasing Decision* authorized ITFS operators to begin leasing
     unused channel capacity to commercial entities. Thus, as WCA notes
     in comments that it filed in our Spectrum Policy Task Force
     proceeding, "The secondary markets concept (under which licensees
     could lease the spectrum usage rights to third parties) has been a
     staple of the Commission's MDS/ITFS rules for twenty years."[^252]

109. One byproduct of our flexible use policy toward ITFS has been a
     reduction in the proportion of ITFS channel capacity used for
     educational purposes. As the MDS industry struggled to achieve
     commercial viability and ITFS operators sought to generate enough
     revenue to survive, we gradually relaxed the restrictions on
     channel leasing. One step at a time, over a fifteen year period, we
     reduced the educational obligations of ITFS operators to a minimal
     level, ultimately allowing them to lease all but a small fraction
     of their capacity to commercial operators:

-   In 1985 the Commission determined that ITFS licensees would be
    required to transmit at least 20 hours of instructional programming
    per week on each of their channels between 8 AM and 10 PM. It also
    required ITFS operators to preserve their right to recapture at
    least an additional 20 hours per week, including at least three
    hours per day on weekdays between 8 AM and 10 PM.[^253] The
    Commission further determined, however, that it would permit
    commercial channel lessees to build, own, and operate the
    transmitters involved, provided that ITFS licensees met the
    above-stated programming requirements.[^254]

-   By 1991, ITFS operators were increasingly reliant upon MDS operators
    as a source of revenue and operational support, but MDS operators
    were finding it difficult to compete against cable television and
    DBS while simultaneously supporting ITFS. The inability to lease
    ITFS channels on a 24-hour-per-day basis was impairing the ability
    of MDS operators to make effective commercial use of ITFS capacity,
    which depressed the prices that MDS operators were willing and able
    to pay for ITFS capacity. Thus, ITFS operators willingly acquiesced
    when the Commission eliminated the time-of-day restrictions on its
    minimum ITFS transmission requirements and authorized operators to
    use automatic channel-switching equipment to create the appearance,
    to end users, of channels that were 100 percent dedicated to
    commercial programming.[^255] We referred to this process as
    "channel mapping."

-   Three years later, the Commission acknowledged that channel-mapping
    was a costly endeavor and allowed ITFS licensees to load all of the
    educational programming required for a four-channel system onto one
    ITFS channel, leaving the other three channels available for
    full-time leasing to commercial operators.[^256] In addition, the
    Commission determined that ITFS operators need not keep an
    additional 20 hours per channel available for recapture on their own
    ITFS channels if, in lieu thereof, the ITFS operator negotiated an
    option to obtain access to an equal number of hours on another
    licensee's ITFS or MDS channel within the same market-wide
    system.[^257]

-   In 1995, the Commission further relaxed its requirements by deciding
    that ITFS operators could fulfill their instructional obligations
    even if no more than one of their reception sites served an
    accredited educational institution.[^258] In 1996, we authorized
    ITFS operators to expand their effective channel capacity through
    the use of digital transmission systems, making it possible to
    deliver more than a hundred channels over the available bandwidth.
    In doing so, we declined to require a concomitant increase in the
    hours of educational programming provided by ITFS operators.[^259]

-   In 1998, the Commission again declined to increase the hours of
    educational programming offered on ITFS stations and further relaxed
    its requirements in four ways. First, we eliminated the requirement
    that ITFS operators fulfill their minimum educational usage
    obligations by transmitting such content on their own stations,
    allowing them the option of transmitting it on other licensees' ITFS
    or MDS stations.[^260] Second, we determined that digital ITFS
    stations would in most cases be required to use or reserve no more
    than 5 percent of their transmission capacity for educational
    programming.[^261] Third, we gave ITFS licensees increased
    flexibility in determining which transmissions would qualify as
    satisfying the service's educational usage requirements, to include
    but not be limited to teacher conferencing, remote test
    administration, distribution of reports and assignments, research
    toward and sharing work of progress in projects for courses,
    professional training, continuing education, and other similar
    uses.[^262] Finally, we declined to impose any educational usage
    requirements upon digital ITFS response stations or response station
    hubs, based on the understanding that ITFS operators would not be
    able to control the content of upstream transmissions from end
    users.[^263]

    Thus, from 1983 through 1998 we progressively reduced the
    performance required of ITFS operators while expanding the
    opportunities for ITFS operators to generate income by leasing out
    their channels, and we substantially increased MDS operators' access
    to ITFS spectrum.

110. As noted above, in 1987, we provided MDS licensees the additional
     option of electing to provide service and be regulated on a
     non-common carrier (and non-broadcast) basis.[^264] In 1998, we
     revised our rules to allow both MDS and ITFS licensees to construct
     digital two-way systems capable of providing high-speed,
     high-capacity broadband service, including two-way Internet service
     via cellularized communication systems.[^265] In 2001, we applied a
     mobile allocation in the 2500-2690 MHz band.[^266] Despite those
     several decisions removing various restrictions from MDS and ITFS,
     however, we have continued to limit the classes of applicants that
     are eligible to obtain ITFS licenses.

111. In recent years, we have pursued a general policy of eliminating
     use restrictions in radio licenses except in circumstances where
     there are clear and compelling reasons for retaining them. The
     basis for this policy was articulated in the *Spectrum Policy
     Statement* in 2000: if market forces are allowed to operate without
     being restricted by government, they will tend to push the use of
     radio licenses to their highest valued applications.[^267] Since
     then, we have applied that policy to broaden eligibility in the
     Cable Television Relay Service;[^268] to establish eligibility for
     a broad variety of users in the 648-746 MHz band (reclaimed from
     broadcasters using TV channels 52-59);[^269] to establish service
     rules for the 747-762 MHz and 777-792 MHz bands (reclaimed from
     broadcasters using TV channels 60-69);[^270] to explore the
     possibility of introducing third generation cellular services in
     frequency bands previously reserved for traditional forms of
     cellular, broadband PCS, and SMR, as well as in the 1710-1755 MHz,
     1755-1850 MHz, 2110-2150 MHz, 2160-2165 MHz and 2500-2690 MHz
     bands;[^271] and to encourage the development of secondary markets
     in radio licenses.[^272] Before adopting the *Spectrum Policy
     Statement,* the Commission applied a flexible use policy when
     establishing WCS. In that service, the Commission imposed no
     eligibility restrictions other than the foreign ownership
     restrictions set forth in Section 310 of the Communications
     Act.[^273] All of those decisions have occurred since we last
     reaffirmed our ITFS eligibility policies in 1991.

112. While our general policy toward use restrictions has evolved since
     1991, significant events specific to ITFS have occurred that
     warrant our revisiting whether an eligibility restriction continues
     to be necessary. Those events include the increased use of ITFS
     spectrum in MDS systems, and the development of alternative means
     of providing educational content to students. Based on those
     developments, we believe that it serves the public interest to
     consider providing both current MDS and ITFS licensees with
     additional flexibility.

113. Although our rules state that the primary use of ITFS is for
     educational and cultural development, they allow an ITFS licensee
     to lease up to ninety-five percent of its channel capacity for
     non-educational programming.[^274] This increased use of ITFS
     spectrum in connection with MDS systems through leasing
     arrangements enabled educational institutions to fund the
     construction of stations and to develop educational programming. By
     comparison, our rules require direct broadcast satellite (DBS)
     licensees to reserve four percent of their channel capacity for use
     by qualified programmers for noncommercial programming of an
     educational or informational nature.[^275] Thus, while ITFS retains
     both its historic nomenclature and a codified statement of purpose
     identifying the transmission of educational programming as its
     primary purpose, the required amount of educational programming
     carried on such stations in actuality may barely exceed the minimum
     proportion required for DBS. We seek comments from other licensees
     and lessees to determine whether that degree of consolidation is
     typical of the industry as a whole.

114. We note currently, for example, that the public may obtain
     educational programming by using the Internet to receive college
     courses as well as obtaining the services of for-profit
     corporations that provide educational programming. Education is
     becoming more popular over the Internet because the Internet's
     ability to deliver media-rich content is improving rapidly. In
     2002, approximately 2.2 million college students took courses over
     the Internet compared with 710,000 college students in 1998 -- a
     210% increase.[^276] These students chose from over 6,000 online
     courses delivered by eighty-four percent of four-year colleges and
     universities.[^277] These courses were accessible worldwide on the
     Internet to a rapidly expanding pool of users with sufficient
     connections. Already, more than twenty-eight percent of U.S. online
     households have broadband connections to the Internet; by one
     estimate, the number of broadband users experienced a nine percent
     average monthly growth rate between February 2000 and June
     2002.[^278] On the other hand, some educational institutions,
     especially those in rural areas and those with less economic
     resources, do not utilize broadband. We seek comment on what ITFS
     enables educators to achieve that the Internet could not. What role
     does educational broadcasting in other bands play? Finally, we seek
     comment from educators on whether commercial programming is able to
     fulfill some of these needs. We seek comment on whether continuing
     to restrict the eligibility for ITFS spectrum is in the public
     interest or whether maintaining educational responsibilities
     remains in the public interest.

115. Although we perceive that significant developments have occurred
     since the last examination of the ITFS eligibility restriction,
     retention of the restriction could be detrimental to the growth of
     services on the ITFS channels. The complexity of the contractual
     relationships that our rules require in the ITFS service may
     discourage investment and impair the ability of service providers
     to modify their operations in response to changing technology and
     market conditions. For example, an MMDS operator who wants to
     change from providing one-way, high-powered television transmission
     operations from a single tower to providing two-way Internet access
     from multiple low-powered base stations, it must gain the consent
     of the ITFS operators in the market, even though the MMDS operator
     may already have a leasing agreement with the ITFS licensee.
     Innovation could proceed more smoothly if commercial operators were
     able to aggregate spectrum in the 2500-2690 MHz band and purchase
     ITFS stations, which would allow them to exercise direct ownership
     control.

116. In light of these developments, we seek comment on various options
     relating to the ITFS service. We emphasize that we do not
     contemplate reclaiming licenses from any incumbent licensees, so
     long as they comply with any revised technical, service or other
     rules that we adopt for this band. We realize that if the FCC
     provides existing ITFS and MDS licensees with greater flexibility,
     those licensees may capture the increased value given that they
     could not have paid for that value when they obtained their
     original license. Accordingly, we seek comment on whether allowing
     these licensees to capture such value is in the public interest on
     balance with having this spectrum underutilized? If not, what other
     approach would parties recommend the FCC implement to ensure
     efficient use of the MMDS and ITFS spectrum? We request comment on
     combining the MMDS and ITFS services into a new Broadband Radio
     Service with requirements similar to those that apply now to MMDS,
     *i.e.*, open eligibility and no educational programming
     requirement. Additionally, we seek comment on maintaining ITFS as a
     separate service requiring educational programming but modifying
     the eligibility requirements to allow for-profit companies to be
     eligible licensees. Furthermore, we invite comment on whether or
     not we should eliminate or otherwise change our existing ITFS
     instructional content origination rules. We note, for example, that
     one such change could be to apply to ITFS channels public interest
     obligations comparable to those that apply to DBS under Section
     100.5 of our rules.[^279] We also ask commenters to suggest
     alternative changes to ITFS that will result in robust services to
     the public.[^280] We also seek comment on whether data services can
     meet the ITFS programming requirement. While we note that these
     educational requirements were developed in a video context, we
     recognize that data service, i.e., high speed internet data
     connections may be useful to educational institutions. Moreover, we
     seek comment on what kind of requirements should be required of
     ITFS licensees providing data services. We believe that there is a
     public interest benefit in promoting data services in this context
     particularly given that they do not consume as much spectrum as
     video and may be more useful than a minimal amount of video
     programming. Commenters may also believe that educational
     requirements for ITFS remains important, and that the Commission
     should find ways of promoting more use of the spectrum for
     educational purposes. We also seek comment on requiring a higher
     percentage of educational use for new ITFS licensees, such as
     twenty-five percent which was advocated by the ITFS community in
     the past. Finally we seek comment on other ways the Commission can
     strengthen the public interest in spectrum‑based services for
     educational institutions?

117. To the extent that commercial or noncommercial MDS or ITFS
     operators may prefer to continue leasing channel capacity from
     others, we do not propose to prevent licensees from entering into
     new lease arrangements. ITFS licensees, to the same extent as MDS
     licensees, may assign their underlying license rights to commercial
     lessees or to others. In general, we prefer to let the markets
     determine the outcome of such arrangements without imposing limits,
     unless specific reasons justify a contrary policy. As a result, we
     seek comment on whether there are any circumstances under which we
     should restrict or require leasing in order to ensure that access
     to spectrum is not unduly limited.

118. We propose to relieve ITFS operators of the burden of filing copies
     of every channel lease agreement with the Commission. While the
     Commission never codified these requirements, they were enunciated
     from time to time in various orders.[^281] We propose to eliminate
     such requirements, with the proviso that licensees retain copies of
     channel lease agreements in their files and make them available to
     the Commission upon request. We seek comment on these proposals and
     the utility of retaining the ITFS eligibility restriction.

### Other Eligibility Restrictions

119. Eligibility issues relevant to this proceeding are addressed in
     Sections 309(j), 257, and 613(a) of the Telecommunications Act
     of 1996. When granting the Commission authority in Section 309(j)
     of the Act to auction wireless spectrum, Congress acknowledged our
     authority to "\[specify\] eligibility and other characteristics of
     such licenses."[^282] However, Congress specifically directed the
     Commission to exercise that authority so as to "promot\[e\] . . .
     economic opportunity and competition."[^283] Congress also
     emphasized this pro-competitive policy in Section 257, where it
     articulated a "national policy" in favor of "vigorous economic
     competition" and the elimination of barriers to market entry by a
     new generation of telecommunications providers.[^284] Section
     613(a) also prohibits a cable operator from holding an MMDS license
     in any portion of the franchise area served by that cable
     operator's system.[^285] The intent was to encourage entry of
     alternative providers of multichannel video service into markets
     dominated by incumbent cable systems in order to spur
     competition.[^286] The cross-ownership restriction addressed
     Congress' concern that common ownership of different means of video
     distribution may reduce competition and limit the diversity of
     voices available to the public.[^287] However, Section 613(a) does
     authorize the Commission to waive the cross-ownership prohibition
     in order to ensure that all significant portions of the franchise
     area are able to obtain video programming.[^288] In addition, the
     cross-ownership restriction shall not apply if the cable franchise
     operates in a geographic area that is subject to "effective
     competition." [^289]

120. When the Cable Act was enacted in 1992, MDS operators were limited
     to offering television programming to paid subscribers and Congress
     was concerned with MDS providers' ability to compete with cable.
     Six years later, the Commission fundamentally changed the nature of
     the MDS service when it permitted MDS licensees to construct
     systems capable of providing high-speed, high-capacity broadband
     service. In light of the legislative history of Section 613 and the
     change to the MDS service, we seek comment on how this statutory
     restriction would apply to non-video services, such as broadband
     service or mobile phone service. In this regard, we note that the
     Act does not define "multichannel multipoint distribution service"
     but does define "multichannel video programming distributor" (MVPD)
     as "a person such as, but not limited to, a cable operator, a
     multichannel multipoint distribution service, a direct broadcast
     satellite service, or a television receive-only satellite program
     distributor, who makes available for purchase by subscribers or
     customers, multiple channels of video programming."[^290]

121. Under our precedent, eligibility restrictions should be imposed
     only when (1) there is a significant likelihood of substantial
     competitive harm in specific markets, and, (2) only when
     eligibility restrictions are an effective way to address such
     harm.[^291] When assessing the need to restrict the opportunity of
     any class of service provider to obtain spectrum for the provision
     of communications services, our overall goal has been to determine
     whether the restriction is necessary to ensure that consumers will
     receive communications services in a spectrum-efficient manner and
     at reasonable prices.[^292] Consequently, we believe we should rely
     on competitive market forces to guide license assignment absent a
     compelling showing that regulatory intervention to exclude
     potential participants is necessary. In order to determine the
     competitiveness of a market, there must be an examination of market
     concentration in addition to other relevant market facts and
     circumstances. Also important in determining the competitiveness of
     a given market are the economic incentives for entry into a market,
     the existence of potential competitors, and the existence of
     barriers to entry.[^293] According to the Department of Justice
     Merger Guidelines, a market is competitive if, in response to a
     price increase or quality decrease by the incumbents, "...entry
     would be timely, likely, and sufficient in its magnitude,
     character, and scope to deter or counteract the competitive effects
     of concern."[^294]

122. Based on our preliminary analysis, we do not believe it likely in
     most cases that cable operators and/or DBS providers would have the
     incentive to acquire MDS/ITFS licenses in order to foreclose entry
     by a wireless MVPD provider. New MDS licensees are very unlikely to
     be entrants into the MVPD market for reasons discussed earlier in
     the *NPRM & MO&O*. This conclusion is based upon the fact that the
     current MDS video providers have been unable to penetrate the vast
     majority of markets within the United States. Overall, the service
     has proven to be unsuccessful and at the moment is not a viable
     alternative to cable and DBS. We request comment on whether opening
     up eligibility to cable providers would have a significant effect
     on concentration in video markets.

123. Although we anticipate that this spectrum will be largely used as a
     mobile voice and data service, the most relevant issue may be
     whether or not open eligibility for cable operators would have a
     negative impact on the broadband internet market. Industry analysts
     estimated that in the Fall of 2001 approximately 68% of residential
     broadband subscribers used cable modem service, 29% used Digital
     Subscriber Line (DSL) service, and about 3% used various
     radio-based technologies.[^295] Industry analysts also estimated
     that in the second quarter of 2002, approximately 66% of the total
     cable and DSL subscribers were cable subscribers and about 34% were
     DSL subscribers.[^296] Our own data indicate that 57% of high speed
     lines (connection to an end-user that is faster than 200 kbps in at
     least one direction) in service are cable lines, 31% are Asymmetric
     Digital Subscriber Line (ADSL) lines, and 11% are operated by other
     fringe competitors (other wireline, fiber, satellite, or
     fixed).[^297] In addition, 36% of high-speed lines are provided by
     a Regional Bell Operating Company (RBOC) or other Incumbent Local
     Exchange Carrier (ILEC), 56% of high-speed lines are provided by
     cable (non-ILEC), and 7% are provided by other non-ILEC.[^298] If
     we assume that a typical market consists of the incumbent service
     provider, one cable provider, and one other non-ILEC, and assume
     that the above numbers can be used to represent a typical market,
     the Herfindahl-Hirschman Index (HHI) is approximately 4500.[^299]
     If we don't allow for an additional non-ILEC and again assuming
     that the national numbers of ILEC/RBOC and cable non-ILEC can be
     used to calculate market shares representative of a typical local
     broadband market, the HHI ranges between approximately 5000
     and 5400. The above figures indicate that the typical broadband
     internet market is very highly concentrated. We request comment on
     this analysis and any evidence to the contrary. Commenters also
     should identify and discuss any regional differences and/or
     differences between urban and rural areas that impact such
     analysis.

124. We note that broadband market shares for residential and small
     business markets are quite different from those of medium and large
     size business markets. As of June 30, 2002, national high-speed
     residential and small business lines consisted of 65% cable lines,
     31% ADSL lines, and 3% other.[^300] Business (medium and large
     size) lines consisted of 1% cable lines, 32% ADSL lines, 43% other
     wireline, 23% fiber, and 1% satellite or fixed wireless.[^301] In
     addition, 31% of residential and small business high-speed lines
     are provided by a RBOC or other ILEC, 65% are provided by cable
     (non-ILEC), and 4% are provided by other non-ILEC on a national
     basis. Seventy-two percent of business (medium and large size)
     high-speed lines are provided by a RBOC or other ILEC, and 28% are
     provided by non-ILECs. We note that cable seems to play a very
     insignificant role in the business market. If we assume that a
     typical residential (and small business) market consists of the
     ILEC provider, one cable provider, and one other non-ILEC, and
     assume that the national figures can be used to represent a typical
     local market, the HHI is approximately 5200. If we don't allow for
     an additional non-ILEC and again assuming that the national numbers
     of ILEC/RBOC and cable non-ILEC can be used to calculate market
     shares representative of a typical local broadband market, the HHI
     ranges between approximately 5500 and 5800. We note that the
     residential numbers indicate that the markets are more concentrated
     than the total numbers indicate. If we assume that a typical
     business (medium and large size) market consists of the incumbent
     service provider and one other non-ILEC, the HHI is
     approximately 6000. Markets in which the non-ILEC plays a very
     insignificant role are essentially monopolies and the HHI can
     approach 10,000. As the national market share for the non-ILEC
     (excluding cable) for the business market is quite a bit higher
     than for the residential market, we request comment as to whether
     there is likely to be more than one non-cable, non-ILEC provider in
     a typical broadband business market.

125. Although the typical broadband internet market is highly
     concentrated, in some circumstances there could be substantial
     benefits to allowing the incumbent cable or DSL operator to have
     more access to the MDS/ITFS spectrum. For example, in situations
     where expensive plant upgrades are not feasible, DSL service
     providers may be able to use spectrum to offer broadband internet
     service to customers who live in rural areas or beyond distance
     limitations from the central office. In addition, rural cable
     operators may be able to offer broadband internet service by using
     the spectrum to expand channel capacity (note that there are areas
     of the country that do not have access to DSL or cable modem
     service.[^302] We note that Section 613(a) allows the Commission to
     waive the cable/MMDS cross-ownership restriction to ensure that all
     significant portions of a franchise area are able to obtain video
     programming. If eligibility restrictions were to be implemented,
     competition in the broadband internet markets could be enhanced
     through the use of such a waiver.

126. Given the above analysis we request comment on whether allowing
     incumbent cable operators and/or DSL providers to be eligible to
     obtain MDS/ITFS licenses could have a negative impact in some
     broadband internet markets. If the incumbent cable and DSL
     operators believe that purchasing unlicensed spectrum at auction
     would have the effect of precluding current as well as future
     entry, they may purchase spectrum in an attempt to protect their
     market power. We request comment on this analysis and specific
     evidence, including the relevant market shares, for any local
     broadband internet market that may be negatively affected by
     allowing open eligibility to incumbent cable operators and/or DSL
     providers. We also request comment on the impact of an eligibility
     restriction on rural and underserved areas and whether eligibility
     waivers would be effective in allowing growth in these areas. When
     providing market share information, we request that commenters
     define the relevant geographic and product markets from which the
     market share information is derived. In addition, we request
     comment on the likelihood of future entry of wireless broadband
     internet service providers, assuming that they are not able to
     purchase the unlicensed ITFS spectrum. That is, are there
     substantial barriers to entry posed by the limited availability of
     spectrum?

127. As discussed earlier in the NPRM & MO&O, the proposed band
     restructuring will make mobile service a viable option in the
     MDS/ITFS band. Therefore, the effect of open eligibility on the
     mobile voice and data markets also needs to be considered. The
     Commission decided last year to "sunset" the CMRS spectrum
     aggregation limit, or "spectrum cap,"[^303] effective January 1,
     2003.[^304] The Commission found that the cap, by setting an *a
     priori* limit on spectrum aggregation without looking at the
     particular circumstances of specific proposed transactions, was
     unnecessarily inflexible and could be preventing beneficial
     arrangements that promote efficiency without undermining
     competition. However, the Commission also stated that the
     Commission would continue to pursue the objectives of
     "discourag\[ing\] anticompetitive behavior while at the same time
     maintaining incentives for innovation and efficiency,"[^305] but
     would do so by performing case-by-case reviews of proposed CMRS
     spectrum transactions rather than by applying a prophylactic
     rule.[^306] And, as is most relevant here, the Commission found
     that "to the extent that the initial distribution of spectrum
     through auction is an issue in the future, that is also amenable to
     case-by-case review, in the sense that \[the Commission\] can shape
     the initial distribution through the service rules adopted with
     respect to specific auctions."[^307]

128. Given the current state of competition in the CMRS industry, we
     believe that such restrictions are not necessary for the 2500-2690
     MHz band. To the contrary, does opening this band to as wide a
     range of applicants as possible encourage entrepreneurial efforts
     to develop new technologies and services, while helping to ensure
     efficient use of this spectrum? Is this approach consistent with
     our statutory mandates? We seek comment on these questions.

129. In sum, we seek comment on whether eligibility restrictions over
     and above those required by statute are necessary in the 2500-2690
     MHz band. We seek comment on whether opening these bands to as wide
     a range of applicants as possible would encourage entrepreneurial
     efforts to develop new technologies and services, while helping to
     ensure efficient use of this spectrum. To the extent any potential
     and substantial harms to competition are raised, we seek comment on
     whether the most effective means for addressing such allegations
     would be through a case-by-case review, taking into account all of
     the fact and circumstances.

## Technical Issues

130. In the preceding section, we addressed band plan reconfigurations,
     geographic area licensing and eligibility issues. In this section,
     we address technical proposals to enhance the service. We ask for
     comments on these issues as well as suggestions concerning other
     technical rule changes that may be of benefit to the Services.

### Signal Strength Limits at Geographic Service Area Boundaries

131. We seek comment on the signal strength limits to apply at
     geographic area boundaries. Last year, for example, we reallocated
     forty-eight megahertz in the lower 700 MHz band (broadcast
     television channels 52-59) to fixed and mobile services while
     allowing continued provision of broadcast services in the band on a
     secondary basis, and limited the permissible signal strength at
     service area boundaries to 40 dBμV/m, the same signal strength
     limit that we had adopted earlier for the upper 700 MHz band and
     the 800-MHz EA-based and 900-MHz MTA-based SMR services.[^308] By
     comparison, our rules apply a somewhat higher 47 dBμV/m limit at
     the geographic service area boundaries for broadband PCS,[^309] for
     Part 27 services in the 2305-2320 and 2345-2360 MHz bands, and for
     Part 27 services in the 1390-1395 and 1432-1435 MHz bands.[^310] In
     all of those cases, the allowed signal strengths are compatible
     with the provision of low-powered cellular services in adjacent
     service areas. We are tentatively inclined to follow the same
     general standard in this proceeding but seek comments on any unique
     characteristics of the 2500-2690 MHz band that might warrant a
     different approach.

### Authorization of Mobile Operation

132. Although we have applied a mobile allocation to the 2500-2690 MHz
     band, until now we have required MDS and ITFS licensees to obtain
     separate authorizations before commencing mobile service. We
     propose to authorize MDS and ITFS licensees to engage in mobile
     operation by blanket-licensing such operation under those
     licensees' geographic service area authorizations. We seek comment
     on the advisability of such blanket licenses and any requirements
     they should contain, including but not limited to those discussed
     above and below.

### Power and Antenna Height Limits

133. *Response Stations.* Under our current rules, we limit response
     stations to a transmitter output power of 2 watts.[^311] This is
     the same requirement that we have for broadband PCS mobile/portable
     operation in the 1.9 GHz band.[^312] However, the Coalition notes
     that we adopted the 2-watt limit in the *Two-Way Order* without any
     explanation and urges that we delete this power limit.[^313] It
     says that the limit unduly restricts the flexibility of equipment
     designers to make the most efficient use of the 2.1 and 2.5 GHz
     bands. The Coalition emphasizes, however, that it is not advocating
     any change in the restrictions on power contained in Parts 1 and 2
     that are designed to assure the protection of human health and
     safety; in fact, it recommends that we clarify that those limits
     apply to MDS and ITFS by adding those services to the list of
     services specifically shown as being subject to the rules.[^314]

134. While the 2-watt limit on PCS response stations seemed like a
     reasonable model to follow when we adopted a similar rule for MDS
     and ITFS, the record of the PCS proceeding indicates that the
     2-watt limit was originally designed to reduce the likelihood of
     interference with fixed microwave stations in the PCS bands.[^315]
     We seek comment on the extent to which similar concerns should
     apply for MDS and ITFS, bearing in mind the differences between the
     incumbent licensees in the MDS/ITFS bands -- and their
     circumstances -- as compared with the incumbent licensees in the
     PCS band. While compliance with our safety rules may by itself
     necessitate compliance with a 2-watt limit for devices that are
     normally held close to the user's body, those rules allow higher
     power levels in circumstances where the response station's
     transmission antenna is designed to be used at least twenty
     centimeters away from the body of the user or any nearby
     persons.[^316]

135. Finally, we seek comment on whether we should establish a maximum
     antenna height for response stations in view of our proposal to
     blanket-license such stations. While mobile or portable stations
     would typically be close enough to the ground that they would be
     shielded by nearby structures, the rules that we contemplate
     adopting for these services would also permit the deployment of
     response stations at fixed locations, where they could be attached
     to antennas at high elevations. Such transmitters would have a
     greater potential for generating unwanted electrical interference.
     We seek comment on whether or not the signal strength limits that
     we propose to apply at geographic service area boundaries would
     obviate the need for antenna height limits.

136. *Base/Main Stations.* We note that there is no specific power limit
     specified for low power base stations nor are there base station
     transmitting antenna height limits for operating in this band. In
     view of our proposals above to limit power at other licensees'
     border areas, we ask for comment on whether there would be any
     benefit to establishing base station power and antenna height
     limits.

137. In particular, we seek comment upon a Coalition proposal to create
     incentives, but not an absolute requirement, for licensees to limit
     the height of low power base stations near their GSA borders.[^317]
     The Coalition expresses concern that a 47 dBμV/m signal strength
     limit at GSA boundaries might not provide sufficient protection
     against interference to base station receivers. The scenario that
     causes them the most concern would arise when the interfering
     licensee is using a channel for downstream communications from its
     base stations, and the interfered-with licensee in a contiguous GSA
     is using the same channel for upstream communications to its base
     stations. Under these circumstances, the Coalition would have us
     apply a safe-harbor requirement that both licensees limit their
     antenna heights to D^2^/17, where D is the distance in kilometers
     between the base station causing the interference and the point
     where a line connecting the transmitting base station with the
     neighboring receiving base station intersects the boundary between
     their respective GSAs. Antenna height for this purpose would be
     defined as the height in meters of the antenna's centerline above
     the average elevation along the line between the two base
     stations.[^318] If a transmitting licensee's antenna is not within
     the safe-harbor height limit and the receiving licensee's antenna
     is within the safe harbor, the transmitting operator would be
     required to take such measures as are necessary to limit the level
     of the undesired signal at the receiving base station to -107 dBm
     or less.[^319]

138. By comparison with the Coalition's recommendations, our Broadband
     PCS rules do not impose any direct limit on antenna heights, but
     they apply a graduated reduction in permissible e.i.r.p. output for
     base station antennas that are more than 300 meters in
     height.[^320] On first impression, the Coalition's proposal appears
     to lack certainty, insofar as the requirements imposed upon a
     licensee would be dependent upon actions taken by a neighboring
     licensee. However, a licensee could ensure its compliance with the
     recommended safe harbor, regardless of any future actions taken by
     the neighboring licensee, by drawing a line intersecting the
     nearest point on the GSA boundary and assuming that the other
     licensee might someday site a base station somewhere on that line.
     The recommended formula could then be applied to determine the
     maximum safe-harbor height for any given distance from the
     boundary. The safe harbor distance formula proposed by the
     Coalition does not adversely affect the typical 2-5 mile antenna
     service distance and 150\' to 300\' height above average terrain
     (HAAT) of base stations in low- power cellular networks. Although
     it seems to have a minimal effect on typical base station design,
     it is unclear how the coalition arrived at the formula itself. Is
     the formula really necessary? Is the formula "technology agnostic"?

139. In addition, given our licensing approach discussed herein, we seek
     comment on whether there is a need to reduce the maximum power
     permitted for high-powered video operations.[^321] Finally, we
     request comment on the Coalition's proposal to eliminate the
     limitation pertaining to the use of digital modulations with
     non-uniform spectral densities, i.e., the uneven or random
     distribution of energy throughout the specified spectrum .[^322]

### Emission Limits 

140. The purpose of emission limits, also known as emission masks, is to
     provide protection against adjacent channel interference (*e.g.,*
     restrict transmitter emissions on a range of frequencies removed
     from the licensee's assigned frequency or frequency band). The
     current rules governing emission limits for MDS and ITFS are set
     forth in Section 21.905 and 74.936, respectively. The current rules
     are based, however, on high power video operation and vary slightly
     between the services. As discussed herein, MDS licenses have
     indicated an interest to use this band for low power two-way
     operations. Further, we are proposing rules for mobile operation in
     this band. Consequently, we believe that modification of the rules
     governing out-of-band emissions may be necessary.

141. The Coalition recommends that we require equipment on the LBS and
     UBS channels (both base stations and stations at a customer's
     premise) to attenuate the power below the transmitter power (P) by
     at least 43 + 10 log~10~(P) dB on any frequency outside a
     licensee's authorized spectrum.[^323] This recommendation is the
     same as the general emission mask the Commission adopted for
     operations in both the upper and lower 700 MHz band.[^324] For the
     R channels the Coalition suggests requiring an attenuation of at
     least 80 + 10 log~10~(P) dB. The Coalition also asserts that
     additional attenuation may be required in special circumstances.
     For example, the Coalition states that the rules be changed to
     require a licensee to take steps to attenuate out-of-band emissions
     by at least 67 + 10 log~10~(P) dB upon written request from an
     adjacent channel licensee.[^325] Requiring a licensee to reduce its
     out-of-band emissions at the request of an adjacent channel
     licensee, however, is not something we have done in the past. The
     Coalition also outlines a more restrictive mask for protecting
     operations on the MBS channels[^326] and for licensees of MBS
     channels to protect operations on LBS and UBS channels.[^327] Our
     initial observation here is that adopting all the Coalition's
     recommendations would be inconsistent with our attempt herein to
     simplify the rules governing this band (*e.g.,* minimize harmful
     interference without establishing overly burdensome requirements).
     Nevertheless, we seek comment on whether we should adopt the
     Coalition's recommendations concerning out-of-band emissions or
     different criteria and details on measurement procedures to
     determine compliance.[^328] Further, we seek comment on the
     appropriate emission mask for mobile operations. In that regard, we
     note that we recently adopted out of band emission requirements to
     ancillary terrestrial component (ATC) mobile units in the 2000-2020
     MHz band in order to protect adjacent channel PCS operations.[^329]
     Since Mobile Satellite Service (MSS) and ATC units will be
     operating in the band immediately below 2500 MHz, we seek comment
     on whether similar limits should apply. We also seek comment on
     whether any special rules are needed to protect the Earth
     Exploration Satellite (passive), Radio Astronomy, and Space
     Research allocations in the 2690-2700 MHz band.[^330] Finally, we
     request comment on whether we should specify a frequency tolerance
     or require equipment to maintain its operations fully within the
     emission mask at all times.

### Technology

142. The Coalition states that we should not restrict operation in this
     band to a particular technology or technologies and our rules
     should remain technology-neutral to the maximum extent
     possible.[^331] However, it does mention second-generation
     equipment employing two different technologies -- FDD and TDD. The
     Coalition notes that FDD technology requires a separation between
     the highest frequency used in one direction and the lowest
     frequency used in the other direction.[^332] To allow for FDD
     technology, the Coalition proposes that when this technology is
     employed by a licensee, the LBS be restricted to subscriber-to-base
     (upstream) communications and the UBS be restricted to
     base-to-subscriber (downstream communications).[^333] According to
     the Coalition, this framework will simplify adjacent channel
     coordination and provide the vendor community with a degree of
     certainty as to the band usage that will translate into lower
     equipment costs and smaller equipment. We seek comment on whether
     we should specify upstream and downstream channels in the rules
     should licensees use FDD or a similar technology. We also ask for
     comment on whether we should establish formal channel pairings to
     standardize the separation between channels used in upstream and
     downstream equipment.[^334] In addition, we ask for comment on what
     role software defined radio technology can play here in resolving
     potential problems. Finally, we ask for comment on whether the
     Commission should adopt standards for mobile operation to promote
     interoperability and roaming.

### Unlicensed "Underlay" Operation

143. As noted previously, one of the underlying goals of this proceeding
     is to promote increased access to spectrum. In this regard, we note
     that Intel and Microsoft advocate that we create or at least
     preserve the opportunity to create unlicensed "underlay" rights for
     very low-powered devices on these channels.[^335] Recently, we
     issued a *Notice of Inquiry* concerning making additional spectrum
     available for use by unlicensed devices in the television bands and
     in the 3650-3700 MHz band.[^336] In the *Unlicensed NOI*, we noted
     that there have been significant advances in technology that that
     may make it feasible to design new types of unlicensed equipment
     that would not cause interference to existing services.[^337] For
     example, equipment could be designed that could monitor spectrum
     before transmitting to avoid interference, or equipment could be
     designed that could use the Global Positioning System to know where
     it is located and determine whether there are licensed operators in
     the area.[^338] We also noted that allowing unlicensed operation
     with minimal technical requirements could potentially permit the
     development of new and innovative types of devices, such as new
     wireless data networks.[^339]

144. The proximity of the 2500-2690 MHz band to successful unlicensed
     technologies in the 2.4 GHz band, and our goal of increasing the
     intensiveness and efficiency of use of the 2500-2655 MHz band,
     suggests that it may be appropriate to consider enhancing
     unlicensed use in the that band on a secondary, non-interference
     basis.[^340] While we recognize that unlicensed operations under
     our Part 15 rules are subject to the condition that the transmitter
     does not cause interference to authorized services, we nonetheless
     are mindful in this context that additional measures may be
     necessary to ensure that unlicensed operations do not cause
     interference to existing, licensed operations. In that regard, we
     note that WCA believes that Microsoft's and Intel's proposal is
     premature. WCA contends that the necessary technology for mass
     producing affordable devices capable of measuring and reliably
     adapting to the presence of background noise or "interference
     temperature" has not been demonstrated.[^341]

145. As we observed in the *Unlicensed NOI,* allowing unlicensed devices
     to operate on spectrum that is not being utilized in a particular
     area would be a more efficient use of spectrum.[^342] We seek
     comment on possible revisions to our rules to enhance unlicensed
     operations in the 2500-2690 MHz band. Are equipment economies
     possible between the 2.4 GHz band and the 2.5 GHz band for
     unlicensed operators? What Part 15 rules would need to be changed
     in order to allow enhanced unlicensed operation? Could we permit
     power levels greater than 1 watt for such operations without
     causing harmful interference to authorized MDS and ITFS users? If
     so, we seek comment on the maximum permissible power level. Would
     any restrictions on antenna gain or directivity be necessary? What
     other requirements would be necessary to protect existing MDS and
     ITFS users? Is unlicensed use appropriate for any of the band plans
     we mentioned earlier?[^343] If we create high-power and low-power
     sections of the band, should we permit unlicensed use in one
     section of the band but not the other?

146. We seek comment on the extent to which underlay rights would have
     practical utility if they were made available on a
     less-than-nationwide basis. Is it feasible to manufacture
     affordable transceivers that are capable of using underlay rights
     where and only where such access is offered, if some but not all
     licensees on a given channel allow underlay access? If not, what
     kinds of institutional frameworks could facilitate national
     aggregation and sale of underlay rights? If a licensee or a group
     of licensees were willing to sell such rights, what kinds of
     entities would be likely purchasers? To make such transactions
     feasible, would it be necessary for the Commission to issue
     separate licenses for underlay rights, or would it suffice for the
     primary licensees to commit themselves contractually to refrain
     from seeking enforcement of interference protection from underlay
     users? If companies like Intel or Microsoft were willing to
     consider paying licensees to allow underlay operation on their
     channels, would the vendors seek to restrict underlay operation to
     their own customers, or would it suffice, from their perspective,
     if licensees were to allow underlay operation by anyone on their
     channels?

147. In addition, we note that Part 15 transmitters may not operate in
     certain restricted bands, including 2655-2690 MHz.[^344] Are there
     any circumstances under which unlicensed operation could be allowed
     in the 2655-2690 MHz band without adversely affecting passive
     sensing operations in the 2655-2700 MHz band?

148. We also seek comment on what rules might provide incentives for
     licensees to offer access to devices operating above Part 15 power
     limits either through secondary markets or an "easment" basis.
     Although our first choice is that licensees make available these
     rights via commercial transactions, we recognize that in many cases
     transaction costs may be too high to enable efficient transactions,
     and that in some cases licensees may refrain from entering into
     such transactions to preclude potential competitors. We seek
     comment on whether high transaction costs or anti-competitive
     motivations will hinder such transactions.

### RF Safety

149. The Coalition states that to implement its proposed approach, we
     should amend our RF emissions rules. More specifically, the
     Coalition contends that we should amend Sections 1.1307(b)(2),
     2.1091(c) and 2.1093(c)[^345] to include MDS and ITFS
     services.[^346] The Commission considers RF safety procedures to be
     essential in protecting human beings from excessive exposure to RF
     energy.[^347] Accordingly, we seek comment on whether and how we
     should amend the RF safety rules.

### North American Datum (NAD) 83 Coordinate Data

150. The Coalition notes that our rules require the submission of
     different coordinate data for licensing actions. Applicants submit
     coordinate data in NAD83 for applications filed on FCC Form 331 but
     in NAD27 for all other MDS/ITFS forms. The Coalition asks that we
     require applicants to use NAD83 coordinate data and update or
     convert the current database.[^348] As stated above, we propose to
     process applications using the ULS. We require NAD83 coordinate
     data for applications filed under ULS. Accordingly, we propose to
     require all licensees to file coordinate data using NAD83 and
     propose to convert existing data to NAD83. We seek comment on these
     proposals.[^349]

### MDS Response Station Hubs

151. Our existing rules treat hubs like main stations for application
     processing purposes. For instance, whereas 47 C.F.R. Section 1.1104
     contains a special section on the application fee for signal
     booster applications and for signal booster certification of
     completion of construction applications (\$70.00 in each instance),
     the rules do not differentiate between requirements for main
     station applications and certifications and response station hub
     applications and certifications. At present, the fee for a response
     station hub on a Form 331 is \$210.00, and the fee for the Form
     304A is \$610.00.[^350] Section 21.909 states that an MDS response
     station hub application must be filed on a Form 331. Licensees of
     MDS response station hubs must also file a certification of
     completion of construction application.[^351] Response station
     hubs, signal booster stations and R channels are considered
     stand-alone stations, and thus have unique facility ID numbers
     separate from the associated main stations.[^352] However, at this
     time, only signal booster stations are designated for special
     treatment in the application fee schedule. We do not believe that
     certifications of completion of construction of two-way hubs will
     be necessary under the GSA licensing approach that we propose, and
     therefore propose to eliminate such filing requirements.

### 2150-2162 MHz band

152. In the *Third Report and Order*, the Commission addressed
     relocation issues for the MDS channels in the 2150-2162 band. We
     stated that MDS incumbents would be entitled to comparable
     facilities and/or adequate replacement spectrum. The Commission
     noted that "our relocation policies do not dictate that systems be
     relocated to the same amount of spectrum as they currently use,
     only that comparable facilities be provided."[^353] We further
     concluded that "\[g\]iven advances in technology, *e.g.,* changing
     from analog to digital modulation and the flexibility provided by
     our existing relocation procedures to make incumbents' whole, we
     believe that current MDS operations could be accommodated using
     substantially less spectrum than that of the existing 2150-2160/62
     MHz allocation." We then sought comment on how much spectrum was
     necessary for MDS relocation. The Commission further noted "under
     our relocation policies only stations with primary status are
     entitled to relocation."[^354]

153. In light of the fact that we do not yet know where MDS licensees
     operating on Channels 1 and 2 (or 2A) will be relocated, we will
     not propose changes to service rules for those channels at this
     time. Depending on the relocated spectrum that MDS licensees
     receive, additional technical rules may be necessary to accommodate
     the technical characteristics of that spectrum. Once relocation
     spectrum for these MDS licensees has been identified, we will issue
     a further notice of proposed rulemaking in this proceeding seeking
     comment on service rules for relocated licensees.

### Radiation from Stations that are Not Engaged in Communications

154. On September 25, 1998, the Commission amended its rules to allow
     MDS and ITFS licensees to provide a wide range of high-speed,
     two-way services to a variety of users.[^355] On July 29, 1999, the
     Commission made some additional rule modifications to facilitate
     the provision of these services.[^356] On December 22, 1999,
     IPWireless, Inc. (IPWireless) requested reconsideration of the
     Commission's out-of-band emission limitations.[^357] On February
     10, 2000, the group of over 100 wireless communications system
     operators, Commission licensees, equipment manufacturers and
     consultants who were parties to the Petition for Rulemaking that
     commenced the *Two-Way Proceeding* (collectively, Petitioners) did
     not oppose IPWireless' petition, but sought clarification of
     Sections 21.909(m) and 74.939(o) of our Rules.[^358] The
     Petitioners indicated that there was some uncertainty within the
     industry as to the meaning of the language, \"Radiation of an
     unmodulated carrier and other unnecessary transmissions are
     forbidden.\"[^359]

155. The Petitioners requested clarification that this language requires
     a response station\'s transmitter to be biased off so that no RF
     Gaussian noise is emitted when the station is not engaged in
     communications.[^360] The Petitioners argued that this
     interpretation assures the protection of the noise floor of
     adjacent channel and adjacent market licensees against unnecessary
     emissions from transceivers.[^361] On May 11, 2000, the Petitioners
     and IPWireless notified the Commission that it had reached a
     compromise concerning the appropriate level of emissions that a
     response station may generate when not directly engaged in
     communications with a response hub.[^362]

156. The Petitioners and IPWireless requested amendment of Sections
     21.909(m) and 74.939(o) of our Rules to provide that when a
     response station is not in communications with its associated hub,
     it must restrict its field strength.[^363] First, they proposed to
     set the permissible level of RF Gaussian noise at 10
     microvolts/meter per 1 MHz bandwidth at a distance of 3 meters for
     response stations utilizing antennas with 6 dB or less gain over
     isotropic. Second, they proposed to set the permissible level of RF
     Gaussian noise at 10 microvolts/meter x 10exp\[(antenna gain - 6
     dB) / 20\] per 1 MHz bandwidth at a distance of 3 meters for
     stations utilizing antennas with more than 6 dB gain over
     isotropic.[^364]

157. We note that the Commission agreed to clarify this issue and sought
     comment[^365] on specific issues relating to this matter.[^366] In
     this *NPRM & MO&O*, we are seeking comments on comprehensive
     changes to the interference rules that would apply in these
     services. In light of that fact, we seek further comment on whether
     the rules changes suggested by the Petitioners are still necessary
     or appropriate. We note that other services do not have a similar
     requirement. We ask commenters who support imposition of such a
     requirement to explain the need for such a requirement in light of
     other changes we are proposing to our technical rules.

158. In a related matter, we also seek comment on requiring that
     subscriber handsets not transmit unless a base station pilot is
     present. Such a rule could be necessary in order to avoid
     interference to existing operations.

## Standardization of Practices and Procedures

### Consolidation of Procedural Rules in Part 1

159. With the adoption of the *ULS R&O*, the Commission consolidated the
     majority of its wireless services procedural rules into Part
     1.[^367] By consolidating the procedural rules in Part 1, the
     Commission improved the consistency of its rules across wireless
     services and provided a single point of reference for applicants,
     licensees, and the members of the public seeking information
     regarding our licensing procedures.[^368] Additionally, the
     consolidation reduced confusion among applicants and licensees,
     accelerated the application process, and improved the speed with
     which wireless carriers were able to provide service to the
     public.[^369] We believe that consolidating the MDS and ITFS
     procedural rules into one rule part will decrease confusion
     concerning the application of our MDS and ITFS rules. Because we
     believe that consolidation will benefit applicants, licensees and
     members of the public, we propose to consolidate the MDS and ITFS
     procedural rules into Part 1. We invite comment on this proposal.

### Consolidation of Service Specific Rules in Part 101

160. Currently, three rules parts - Parts 21, 73 and 74 -- contain our
     MDS and ITFS service specific rules. Part 21 contains our MDS rules
     while Parts 73 and 74 contain our ITFS rules. Although MDS and ITFS
     licensees use their licenses to provide similar services, our rules
     treat these licensees differently. We believe that regulatory
     parity will lead to efficiency in this band and spur the
     development of new and improved services for the public.
     Additionally, we believe that consolidating the MDS and ITFS
     service specific rules into one rule part will reduce confusion and
     provide a single reference point for these similar services.
     Because we believe that consolidation will benefit applicants,
     licensees and members of the public, we propose to consolidate the
     MDS and ITFS service specific rules into Part 101. We also seek
     comment on alternative means of consolidating the rules relating to
     these services, such as incorporating the rules into Parts 21 or 27
     of our Rules.

### Standardization of Major and Minor Filing Requirements

161. The license modification rules for MDS and ITFS are spread across
     seven rules. MDS licensees submit FCC Forms 304 or 331 to modify
     their licenses pursuant to Sections 21.40 and 21.41 of our
     Rules.[^370] For a "major modification" to an MDS station, the
     Commission will not grant the modification unless it finds that the
     modification is in the public interest and in compliance with
     Communications Act.[^371] A major modification to an MDS license
     would also include an amendment that would require submission of an
     environmental assessment, would result in a substantial and
     material alteration of the proposed service, specifies a
     substantial change in beneficial ownership or control, or is deemed
     substantial by the Commission pursuant to section 309 of the
     Communication Act.[^372]

162. Our existing rules require an ITFS licensee to file a formal
     application on FCC Form 330 for any of the following kinds of
     changes or modifications to its transmission system: adding a new
     channel; changing channels; changing polarization; increasing the
     EIRP in any direction by more than 1.5 dB; increasing the
     transmitting height by twenty-five feet or more; or relocating a
     facility's transmitter site by ten miles or more.[^373] Our rules
     further provide that applications for "major changes" to existing
     ITFS facilities that are mutually exclusive with other such
     applications or with applications for new stations are subject to
     competitive bidding.[^374] ITFS minor modification applications may
     continue to be filed at any time and are not be subject to
     competitive bidding.[^375] Our rules also permit certain parties,
     subject to Commission approval, to modify involuntarily the
     facilities of an existing ITFS licensee in certain
     situations.[^376]

163. We have adopted one set of modification rules for the services that
     we license using the ULS.[^377] This consolidation of modification
     rules has led to efficient processing of modification applications
     in ULS. We treat all major modifications as new applications in
     ULS.[^378] Licensees may make minor modifications as a matter of
     right without prior Commission approval (other than pro forma
     assignments and transfers) within thirty days of implementing such
     changes.[^379] Where other rule parts permit licensees to make
     permissive changes to technical parameters without notifying the
     Commission (e.g., adding, modifying, or deleting internal sites),
     no notification is required.[^380] Although there are similarities
     between our current MDS and ITFS license modification rules, we
     believe that there are substantial benefits to employing the
     simplified approach we use in ULS to the MDS and ITFS licenses. We
     believe that using our Part 1 ULS modification rules will reduce
     confusion with regards to the appropriate rules to use, increase
     the speed with which the Commission staff processes applications
     and will eliminate redundancy in our rules. Accordingly, we propose
     to use our Part 1 modification rules to determine major and minor
     modifications for MDS and ITFS licenses. We seek comment on this
     proposal.

### Amendments to New and Modification Applications

164. The MDS community apparently did not raise any objections to the
     procedural rules regarding the filing of amendments in the Services
     in response to the Coalitions proposals. However, our consolidated
     approach to amendments for wireless applications[^381] differs in
     some respects with our approach to amendments for MDS/ITFS
     applications.[^382] We must reconcile these differences. For
     instance, we must address the treatment of major amendments, and
     amendments regarding ownership and auction services. MDS operators
     have recommended that we revise our MDS/ITFS rules to use the same
     definitions for major and minor amendments as for major and minor
     modifications.[^383] We invite comment on whether to adopt the
     consolidated wireless procedures for amendments to applications.
     Furthermore, ITFS applicants may amend applications to cure defects
     noted in deficiency letters to the applicant. MDS BTA applicants
     may amend a long-form application up to the date the application
     has appeared on public notice as accepted for filing or by written
     petition demonstrating good cause if the application is already on
     public notice.

### Assignments of Authorization and Transfers of Control

165. MDS licensees use FCC Form 305 to apply for voluntary assignments;
     involuntary assignments; and pro forma assignments and FCC Form 306
     to apply for voluntary transfers of control, involuntary
     assignments, and pro forma transfers of control.[^384] These
     licensees use FCC Form 304A to request a partial assignment.[^385]
     However, the assignor should apply for deletion of the assigned
     facilities, indicating concurrence in an assignee\'s request.[^386]
     The parties must consummate these transactions within forty-five
     days from the date of approval.[^387] If the parties fail to
     consummate a partial assignment, the parties must submit FCC Form
     304A to return the assignor\'s license to its original
     condition.[^388] Before the Commission will consent to these
     transactions, the assignor/transferor must complete construction of
     the facility and file a certificate of completion of
     construction.[^389]

166. The assignor/transferor must file the certificate of construction
     within one year from the initial license grant date, the
     consummation date of the transaction; or median date of the
     applicable commencement dates if the transaction involves a system
     of two or more stations. The Commission also requires an
     assignee/transferee to file FCC Form 430 License Qualification
     Report with the appropriate application form (Form 305 or Form 306)
     unless the assignee or transferee already has a current and
     substantially accurate report on file with the Commission. Finally,
     the parties of both transactions must notify the Commission of the
     date of consummation, by letter, within ten days of the date of
     consummation.

167. ITFS licensees use one form, FCC Form 330, to request an assignment
     of license or a transfer of control.[^390] With both types of
     transactions, ITFS licensees must file their applications at least
     forty-five days before the contemplated effective date of the
     transaction.[^391] However, in the case of an involuntary
     transaction, notification must be made to the Commission, in
     writing, promptly after the death or legal disability of a
     licensee.[^392] Additionally, the Commission requires the filing of
     an application for involuntary transaction within thirty days of
     such occurrence.[^393]

168. When the Commission developed FCC Form 603 to process assignment of
     license and transfer of control applications in ULS, the Commission
     recognized there would be significant benefits to eliminating
     inconsistencies between similar services. Specifically, the
     Commission found that replacing service specific forms with
     consolidated forms would provide the public with a consistent set
     of procedures and filing requirements and would increase the speed
     and accuracy of the assignment and transfer process.[^394] Although
     there are some differences in the information requirements for
     transfers and assignments, there is a sufficient degree of overlap
     in the information that both types of applicants supply that both
     MDS and ITFS applicants can use the FCC Form 603 for transfers and
     assignments. Furthermore, we designed the FCC Form 603 so that the
     applicant only has to answer the questions pertinent to the type of
     transaction involved.[^395] We propose to revise our MDS and ITFS
     transaction requirements to conform to and merge with the ULS
     requirements in Section 1.948 of our rules.

169. Specifically, we propose to eliminate the prior consent requirement
     for non-substantial, pro forma assignments in MDS, and extend the
     consummation notice period to 180 days for both services. We
     believe these changes will lessen the administrative burden on
     applicants, licensees, and Commission staff,. With regard to
     involuntary assignments, we propose to integrate the MDS rules into
     our ULS consolidated rules. We invite comment on this integration.

170. Further, we propose to revise our channel exchange procedures[^396]
     to conform to our assignment of license procedures. Currently, our
     rules require both the filing of a major modification application
     to change a frequency assignment[^397] and each licensee seeking to
     exchange channels to file in tandem with the Commission separate
     *pro forma* assignment applications.[^398] Furthermore, our
     engineers must generate and enter a minor modification application
     into BLS for each channel the parties seek to exchange. We find
     that this channel exchange procedure is unduly burdensome upon
     licensees and the Commission's resources. The MDS/ITFS community
     has also asked that we make changes in this area.[^399] We propose
     instead to require the licensees involved to treat channel
     exchanges like any other set of license transfers, i.e., to file
     two or more applications showing the transferor and transferee for
     each channel or set of channels being transferred.

### Partitioning and Disaggregation

171. In other services where we have implemented geographic area
     licensing[^400] we have allowed licensees to partition their
     service areas and to disaggregate their spectrum.[^401] MDS BTA
     licensees may partition their spectrum.[^402] We seek comment on
     whether allowing such flexibility here to all licensees will
     promote efficient spectrum use, rule consistency and facilitate
     market entry by parties who may lack the financial resources for
     participation in ITFS auctions such as small businesses,
     educational, telemedicine or medical institutions. The Coalition
     also supports allowing disaggregation and partitioning to the
     maximum extent possible.[^403] Should we allow geographic area
     licensees of current ITFS channels to partition and disaggregate.
     Under this proposal, licensees could file for partial assignment of
     a licensee, and licensees could apply to partition their licensed
     geographic service areas or disaggregate their licensed spectrum at
     any time following grant of their geographic area licensee. The
     area to be partitioned would be defined by the partitioner and
     partitionee. The partitionee or 68isaggregate would be authorized
     to hold its license for the remainder of the partitioner's or
     disaggregator's license term, and would be eligible for renewal
     expentancy on the same basis as other licensees. There would be no
     restriction on the amount of spectrum disaggregated and we would
     permit combined partitioning and disaggregation. Licensees that
     partition and disaggregate would be subject to provisions against
     unjust enrichment. We also propose to eliminate any separate
     provisions relating to "channel swapping" and rely upon the ability
     of licensees to partition and disaggregate their spectrum.[^404]

172. We also seek comment on factors other than geography or frequency
     that licensees might reasonably use when disaggregating their
     licenses. For example, the *Spectrum Policy Report* discusses the
     possibility that licensees might also be willing to sell off parts
     of their license rights on the basis of time slots and power
     levels.[^405] That report suggests that frequency-agile
     transceivers are already capable of sensing if a given channel is
     in use at a particular moment in time, by switching channels,
     reducing power, or remaining silent until a channel becomes
     available. Should we afford licensees in this band the right to
     sell spare capacity on that basis to others, on a preemptible
     basis?

### License Renewal 

173. Except for special temporary authorizations (STAs), MDS licensees
     must file FCC Form 405, in duplicate, to renew their
     licenses.[^406] They must file the form between thirty and sixty
     days before the expiration date of the license to be renewed.[^407]
     A licensee shall automatically forfeit its license in whole or in
     part without further notice to the licensee upon the expiration of
     the license period specified therein, unless prior thereto an
     application for renewal has been filed with the Commission.[^408]
     An MDS licensee may seek reinstatement of its licenses by filing a
     petition within 30 days of the license's expiration explaining the
     failure to timely file the required notification or application and
     setting out with specificity the procedures that the petititioner
     has established to ensure that such filings will be submitted on
     time in the future..[^409] Generally, a license period is ten
     years. The terms of MDS station licenses granted on the basis of
     underlying BTA service area authorizations obtained by competitive
     bidding extend until the end of the ten-year BTA
     authorization.[^410]

174. ITFS licensees must file an FCC Form 330-R to renew a
     license.[^411] Unless otherwise directed by the FCC, ITFS licensees
     must file their renewal applications no later than the first day of
     the fourth full month prior to the expiration date of the license
     to be renewed.[^412] Licensees in auctionable services file FCC
     Form 601 no later than the expiration date of the authorization for
     which renewal is sought, and no sooner than ninety days prior to
     expiration. The Commission will reinstate expired ITFS licensees if
     the former licensee files a timely petition with adequate
     justification.[^413]

175. The Commission designed ULS to provide wireless licensees with a
     pre-expiration notification approximately ninety days before their
     licenses expire and thereby avoid situations in which licensees
     allow their licenses to expire inadvertently and subsequently seek
     reinstatement.[^414] The Commission provides pre-expiration letters
     of reminder to all wireless radio services licensees by regular
     mail. Specifically, the Commission sends letters of reminder to all
     wireless radio service licensees, both site-specific and geographic
     area licensees, ninety days before the expiration of their
     licenses. Although a license expires automatically on the date
     specified on the individual license, ULS does not show a license
     expiration as final until approximately thirty days after the
     renewal deadline. We note that while we generally provide renewal
     notices to licensees, the pre-expiration notice is not a
     prerequisite to cancellation should a licensee fail to renew its
     license. After the license expiration, the previous licensee may
     file a new application for use of those frequencies subject to any
     service specific rules. Once that thirty-day period has elapsed, or
     the prior holder of the license files a new application for that
     spectrum, the license then becomes available for the Commission to
     reassign by competitive bidding or other means according to the
     rules of the particular service.[^415]

176. In 1999, the Commission adopted a new policy regarding treatment of
     late-filed renewal applications in the Wireless Radio
     Services.[^416] Renewal applications that are filed up to thirty
     days after the expiration date of the license are granted *nunc pro
     tunc* if the application is otherwise sufficient under our
     Rules.[^417] However, the licensee may be subject to an enforcement
     action for untimely filing and unauthorized operation during the
     time between the expiration of the license and the untimely renewal
     filing.[^418] Applicants who file renewal applications more than
     thirty days after the license expiration date may also request
     renewal of the license *nunc pro tunc*, but such requests are not
     routinely granted, and are subject to stricter review, and may be
     accompanied by enforcement action, including more significant fines
     or forfeitures.[^419] In determining whether to grant a late-filed
     renewal application, we take into consideration all of the facts
     and circumstances, including the length of the delay in filing, the
     reasons for the failure to timely file, the potential consequences
     to the public if the license should terminate, and the performance
     record of the licensee.[^420]

177. We believe that elimination of the reinstatement period will
     benefit all licensees and entities interested in acquiring
     abandoned spectrum.[^421] Under our ULS procedures, failure to file
     for renewal of the license before the end of the license term
     results in automatic cancellation of the license.[^422] We believe
     that we should eliminate reinstatement of expired licenses because
     licensees will receive notification that their licenses are about
     to expire and, therefore, should be responsible for submitting
     timely renewal applications. Additionally, interactive electronic
     filing will make it easier for all licensees to timely file renewal
     applications. Moreover, we believe elimination of the reinstatement
     procedures will facilitate our ability to efficiently, and quickly
     perform our licensing responsibilities by reducing the amount of
     late-filed renewal applications and eliminating the processing of
     reinstatement applications. Accordingly, we propose to eliminate
     reinstatement procedures and adopt the late-filed renewal policy
     for wireless radio services for MDS and ITFS. We seek comment on
     this proposal. Additionally, we seek comment on whether we should
     impose any special requirements or limitations on the renewal of
     ITFS licenses. For example, we seek comment on the possibility of
     imposing special performance requirements on ITFS licensees in
     order to ensure efficient utilization of the spectrum. We seek
     comment on these proposals.

### Special Temporary Authority

178. In MDS, in circumstances requiring immediate or temporary use of
     facilities, entities may request special temporary authority to
     install and/or operate new or modified equipment.[^423] Requests
     may be submitted as informal applications, at least ten days prior
     to the date of the proposed construction or operation (however, in
     practice an FCC Form 304 is attached to the informal
     request).[^424] We may grant STAs without regard to the thirty-day
     public notice requirement in certain instances. First, we may grant
     an STA when the STA period is not to exceed thirty days and the
     filing of an application to change the STA into a permanent
     situation is not contemplated. Second, we may grant an STA when the
     STA period is not to exceed sixty days, pending the filing of an
     application to change the special situation into a regular
     operation. Third, we may grant an STA to permit interim operation
     to facilitate completion of authorized construction or to provide
     substantially the same service as previously authorized. Fourth, we
     may grant an STA when there are extraordinary circumstances
     requiring operation in the public interest. We may grant STAs and
     extensions of STAs up to 180 days pursuant to Section 309(f) of the
     Communications Act where extraordinary circumstances so require,
     but the licensee has a heavy burden to show it warrants such
     action. Finally, in times of national emergency or war, we may
     grant special temporary licenses (in place of construction permits,
     station licenses, modifications or renewals) for the period of the
     emergency.[^425]

179. We may grant ITFS STAs in extraordinary circumstances requiring
     emergency operation to serve the public interest.[^426] As in MDS,
     only an informal application is required. However, ITFS STA
     applicants must submit the request at least ten days before the
     date of the proposed operation. We may grant ITFS STAs for a period
     not to exceed 180 days with a limited number of extensions also
     granted for up to 180 days. However, we may grant an STA
     necessitated for technical reasons for an initial period of ninety
     days only.

180. Under our consolidated ULS approach, applicants must file STA
     requests electronically on an FCC Form 601 within ten days before
     the date of the proposed operation (although we may grant requests
     received less than ten days for compelling reasons).[^427] As in
     MDS/ITFS, grant of STAs are without public notice. Wireless
     Services have the same requirements as MDS/ITFS for thirty, sixty,
     and 180-day STA requests. In addition, since MDS STA requests are
     informal applications, but in practice have an FCC Form 304
     attached, adoption of the Form 601 for MDS/ITFS STA requests as
     currently used in WTB makes good sense. Since STAs are an emergency
     measure, mandatory electronic filing as now required in WTB, would
     also provide MDS/ITFS licensees with faster, more responsive
     service. For the foregoing reasons, we propose to include MDS and
     ITFS STA requests under the same ULS regulatory regime as the
     Wireless Services. We request comment on this proposal.

### Ownership Information

181. MDS and ITFS licensees file FCC Form 430 to submit ownership
     information to the Commission. The Communications Act mandates the
     ownership information requested in Form 430.[^428] The submission
     of ownership information enables the Commission to review whether
     applicants and licensees comply with our real-party-in-interest
     rules, eligibility for treatment as a small business at auction and
     foreign ownership restrictions.[^429] Wireless licensees use Form
     602 to file ownership information electronically in ULS.[^430] FCC
     Form 602 and FCC Form 430 request the same ownership
     information.[^431] On June 14, 2002, the Wireless Bureau stopped
     accepting electronically filed Forms 430 temporarily.[^432]
     Therefore, in the short term, MDS and ITFS licensees may continue
     to file the Form 430 manually. The Form 430 requires the licensee
     to list its MDS and/or ITFS licenses or conditional licenses. We
     seek comment on whether this requirement is necessary in light of
     the proposed transition to ULS.[^433] Additionally, we propose to
     require MDS and ITFS licensees to file Form 602 instead of Form 430
     to submit ownership information. We request comment on this
     proposal.

### Regulatory Status

182. Consistent with our goal to maximize flexibility to the extent
     possible, we tentatively conclude that MDS and ITFS applicants may
     request more than one regulatory status for authorization in a
     single license. Thus, under this approach, an MDS or ITFS license
     may authorize a combination of common carrier and non-common
     carrier services in a single license and licensees in this band may
     render any kind of communications service (*e.g.,* fixed, mobile,
     point-to-multi-point) consistent with that regulatory status and
     the existing rules. This approach is consistent with the approach
     we have used for other services licensed on a geographic area
     basis.[^434] Applicants would not be required to describe the
     services they seek to provide but would be required to designate
     the regulatory status of services they intend to provide using the
     Form 601.[^435] We seek comment on what procedures to adopt for
     licensees to change their regulatory status (*i.e.,* notify the
     Commission within a certain timeframe or seek prior approval).

### Fee Issues

183. Currently, MDS applicants and licensees are subject to application
     fees under Section 8 of the Act, which directs the Commission to
     assess and collect charges for applications and other filings by
     regulated entities.[^436] These fees were initially set by statute
     and are subject to adjustment by the Commission [^437] MDS
     licensees are also subject to regulatory fees under Section 9 of
     the Act.[^438] We collect these fees to recover the regulatory
     costs associated with our enforcement, policy and rulemaking, user
     information, and international activities.[^439] Currently, we do
     not assess ITFS applicants and licensees with either application
     fees or regulatory fees. The Commission exempted ITFS from
     application fees because the original statutory schedule of charges
     did not provide for fees for ITFS applicants and because ITFS
     stations were "traditionally used by public service
     organizations."[^440]

184. In light of the possible changes to the ITFS service that we are
     proposing in this proceeding, we seek comment on whether ITFS
     licensees and applicants (or former licensees of the service, if we
     decide to reclassify ITFS as a new service) should become subject
     to application fees and regulatory fees, to the extent that such
     licensees or applicants do not fall within an express statutory
     exemption.[^441] In light of our contemplated changes to the rules,
     the fact that MDS and ITFS licensees often provide service as part
     of the same system, and the fact that ITFS licensees can lease up
     to ninety-five percent of their capacity to other entities (usually
     MDS licensees), we seek comment on whether there currently is any
     valid basis for treating MDS and ITFS applicants and licensees
     differently for fee purposes. We note that under our proposal,
     those ITFS licensees that are governmental entities would continue
     to be exempt under the statute from application fees.[^442] We also
     note that most existing ITFS licensees would likely remain exempt
     from regulatory fees because they would be covered under the
     statutory exemptions for governmental entities and nonprofit
     entities.[^443] To the extent we change the eligibility criteria
     for ITFS, however, we propose to require new licensees that are not
     statutorily exempt to pay regulatory fees. We seek comment on this
     proposal.

185. We also seek comment on changing the regulatory fees applicable to
     MDS licensees. Congress has authorized the Commission to add,
     delete, or reclassify services in the regulatory fee schedule to
     reflect additions, deletions, or changes in the nature of its
     services as a consequence of Commission

rulemaking proceedings or changes in law.[^444] The instant proceeding
proposes major changes to the MDS service, including allowing mobile
operation and expediting the use of MDS to provide advanced broadband
services. In light of these potential changes, we seek comment on
adjusting the regulatory fees for MDS. Currently, we assess MDS stations
a regulatory fee of \$450 per station.[^445] We note that converting MDS
stations to geographic area licensing would reduce the number of MDS
licenses. Furthermore, to the extent MDS stations begin offering mobile
services, it may be appropriate to begin assessing these licensees on a
per unit basis, as we do for other mobile services.[^446] Accordingly,
we seek comment on the appropriate changes to the regulatory fee
structure and amount for MDS licensees. To the extent we conclude that
ITFS licensees should pay regulatory fees, we tentatively conclude that
the regulatory fees for MDS and ITFS licensees should be the same. We
seek comment on this tentative conclusion.

### Discontinuance, Reduction or Impairment of Service

186. The Commission implemented its license forfeiture rules to ensure
     station operation and alleviate concerns about spectrum
     warehousing.[^447] When considering forfeitures, cancellation and
     discontinuance of service, an MDS licensee has five separate rule
     sections to review an ITFS licensee has three separate rule
     sections to review[^448] Because a system can have both ITFS and
     MDS channels, we believe that consolidating these rules will be
     advantageous to both the industry and the Commission staff. We
     tentatively conclude that consolidating these rules will reduce the
     confusion of the industry as to the appropriate rules and increase
     the efficiency of the Commission staff in processing these actions.
     We propose to move, revise, and consolidate these rules in Parts 1
     and 101 of our rules.

187. We note that MDS licensees may alternate between providing service
     as a common carrier or a non-common carrier.[^449] However, before
     alternating, the licensee must notify the Commission of the change
     at least thirty days before the change.[^450] Additionally, common
     carriers who seek to alternate or who otherwise intend to reduce or
     impair service must notify all affected customers of the planned
     discontinuance, reduction, or impairment on or before providing
     notice to the Commission.[^451] These provisions concerning
     licensees alternating between common carrier and non-common carrier
     status are not in our Part 101 rules. We invite comment on whether
     we should retain these rules and consolidate them in Part 101.

188. Through these actions, we are proposing above, we are endeavoring
     to ensure station operation and to alleviate concerns about the
     warehousing of spectrum in MDS/ITFS. The MDS/ITFS community,
     however, has asked us to liberalize the rules on forfeiture of
     license and discontinuance of service due to the transition of the
     spectrum to new uses. For instance, the industry has called for a
     liberalizing of the rules regarding the retention and periodic use
     of facilities to provide for simpler preservation of downstream
     authorization for stations operating upstream and to provide for
     preservation of licenses for channels being used as guard
     bands.[^452] Therefore, we invite comment on the proposals
     described in this section*.* We invite alternate proposals that
     would allow for flexible use of the spectrum while preserving our
     policy of ensuring station operation and alleviating concerns about
     the warehousing of spectrum.

### Foreign Ownership Restrictions

189. Sections 310(a) and 310(b) of the Communications Act, as modified
     by the Telecommunications Act of 1996, impose foreign ownership and
     citizenship requirements that restrict the issuance of licenses to
     certain applicants.[^453] An applicant requesting authorization
     only for non-common carrier services would be subject to Section
     310(a), but not to the additional prohibitions of section 310(b).
     An applicant requesting authorization for common carrier services
     would be subject to both Sections 310(a) and 310(b). We do not
     believe that common carriers and non-common carriers filing an
     application to operate in this band should be subject to varied
     reporting obligations. Rather, as a matter of fostering regulatory
     parity and transparency, we believe that all applicants should be
     required to file changes in foreign ownership information to the
     extent required by Part 101 of our Rules.[^454] By establishing
     parity in reporting obligations, however, we do not propose a
     single, substantive standard for compliance. For example, we do not
     and would not deny a license to an applicant requesting
     authorization exclusively to provide services not enumerated in
     Section 310(b), solely because its foreign ownership would
     disqualify it from receiving a license if the applicant had applied
     for a license to provide the services enumerated in Section 310(b).
     We request comment on this proposal.

### Performance Requirements

190. Incumbents in the 2500-2690 MHz band consist of MDS BTA
     Authorization holders and site-based ITFS and MDS licensees. In
     addition, as noted above, we are seeking comment on, among other
     things, whether geographic licensing for unassigned ITFS spectrum
     would be appropriate. In this section, we discuss the various
     performance requirements applicable to the categories noted above
     and seek comment on whether we should retain those requirements or
     whether we should make changes. We also seek comment on the
     construction benchmarks we should adopt to encourage licensees to
     deliver service to rural areas. We note that the Communications Act
     requires us to adopt policies to deter spectrum warehousing,
     promote the rapid development and deployment of new technologies
     and services, and promote service to rural areas.[^455]

191. *MDS BTA Authorization Holders*. Currently, MDS BTA authorization
     holders have a five-year build-out period, which begins on the date
     of the grant of the MDS BTA authorization and ends on the fifth
     anniversary of the authorization grant.[^456] This build-out period
     is not extended by the grant of subsequent authorizations.[^457]
     Timely certifications of completion of construction for each MDS
     station within a MDS BTA or partitioned service area must be filed
     on completion of the construction of a station.[^458] Within five
     years of a grant of a MDS BTA-authorization, the authorization
     holder must construct MDS stations to provide signals pursuant to
     Section 21.907 of the Commission's Rules[^459] that are capable of
     reaching at least two-thirds of the population of the applicable
     service area, excluding the populations within protected service
     areas of incumbent MDS stations[^460] and the authorization holder
     must file sixty days prior to the end of the five-year build-out
     period that it has met this requirement.[^461] If the Commission
     finds that the authorization holder has met this requirement, the
     Commission will issue a declaration so stating.[^462] If the
     Commission finds that the BTA authorization holder did not meet
     this requirement, the Commission will partition from the BTA any
     unserved area and will reauthorize service to the unserved area
     pursuant to the MDS competitive bidding procedures[^463] and the
     BTA authorization holder originally authorized to provide service
     will be ineligible to participate in the auction of the unserved
     areas.[^464] We seek comment on whether we should retain these
     requirements as they are, or whether they should be changed or
     clarified in some way. If they should be changed, commenters should
     recommend specifically those requirements that should be changed,
     those that should be clarified, and those that should remain
     unchanged. In the alternative, we seek comment on whether we should
     adopt a different approach altogether, such as a substantial
     service approach. We note that for services that require ubiquitous
     coverage, the Commission has required that at the time of license
     renewal each geographic area authorization holder demonstrate that
     it has made "substantial service" available within its authorized
     service area.[^465] The Commission has observed that the
     substantial service standard affords maximum flexibility for
     authorization holders to offer a range of services and fosters
     competition.[^466] If we were to adopt a substantial service
     approach, should we also adopt safe harbors? We ask commenters who
     believe that we should adopt safe harbors to recommend specific
     safe harbors. Accordingly, if the Commission adopts a substantial
     service performance standard, we propose that any licensee who
     fails to meet the standard with respect to a license will forfeit
     the license or be ineligible to renew the license pursuant to
     sections 1.946(c) and 1.955(a)(2) of our rules.[^467] Additionally,
     we propose to eliminate extension of time requests for MDS BTA
     Authorization holders who must satisfy a substantial service
     performance standard. We seek comment on this proposal.

192. *Site-based licensees*. As noted above, we are proposing to provide
     each incumbent on a current ITFS channel and each MDS incumbent
     with a PSA based on a circle with a 35-mile radius around its main
     station. Currently, the rules provide MDS incumbent stations with a
     maximum construction period of twelve months from the date of the
     license grant.[^468] We note that the Commission extended the
     construction period from eight months to twelve months to provide
     MDS permittees with sufficient time to meet the construction
     requirements without requesting extensions of time.[^469] ITFS
     licensees have eighteen months from the date of the issuance of the
     original construction permit to construct their facilities.[^470]
     We seek comment on whether we should retain these requirements or
     whether they should be changed. Do licensees need more time to
     construct? If licensees need more time to construct, how much is
     appropriate? Should MDS and ITFS site-based licensees be given the
     same time to construct? Or are there reasons to treat MDS and ITFS
     site-based licensees differently?

193. *Geographic area licensing*. As noted above, we seek comment on
     whether we should license unassigned ITFS spectrum via a geographic
     area overlay license. If we were to adopt such an approach, we seek
     comment on whether we should adopt the same performance standard
     for geographic licensees of unassigned ITFS spectrum as we do for
     MDS BTA Authorization holders. Are there any reasons that they
     should be treated differently? In other words, if we decide to
     retain the current performance requirements for MDS BTA
     authorization holders, discussed above, should we apply those same
     requirements to geographic licensees of unassigned ITFS spectrum?
     Or, if we were to adopt a substantial service standard for MDS BTA
     Authorization holders, should we adopt that same standard for
     geographic licensees of unassigned ITFS spectrum? If not,
     commenters should specify a different approach for geographic area
     licensee of unassigned ITFS spectrum. Commenters should also state
     the reason that licensees of unassigned ITFS spectrum should be
     treated differently than MDS BTA Authorization holders. We note
     that commenters to the recent *Extension Memorandum Opinion and
     Order* proceeding consistently advocated the replacement of the
     current build-out requirement with a substantial service
     benchmark.[^471] Accordingly, if the Commission adopts a
     substantial service performance standard, we propose that any
     licensee who fails to meet the standard with respect to a license
     will forfeit the license or be ineligible to renew the license
     pursuant to sections 1.946(c) and 1.955(a)(2) of our rules.[^472]
     Additionally, we propose to eliminate extension of time requests
     for geographic area licensees who must satisfy a substantial
     service performance standard. We seek comment on this proposal.

194. *Coalition Proposal*. Although the Coalition did not recommend an
     overlay approach for licensing unassigned ITFS spectrum, the
     Coalition did recommend that a transition to a pure geographic
     licensing system for the Services presents the need and opportunity
     to adopt revised performance requirements for licensees.[^473]
     Instead of continuing to use site-based licensing procedures, the
     Coalition advocates using a substantial service requirement at the
     time of renewal, coupled with safe harbors designed to provide
     licensees with a measure of certainty and an appropriate period for
     service activation following adoption of the new rules, for those
     licensees with early forthcoming license expirations.[^474]

195. The Coalition argues that using a case-by-case standard to evaluate
     MDS and ITFS construction is appropriate. Unlike most other
     services, they assert that MDS/ITFS system operators will provide
     service using channels combined from a variety of sources -- their
     own BTA authorized stations, incumbent MDS stations they own, and
     leased capacity of MDS and ITFS stations licensed to others.[^475]
     Thus, focusing solely on the population served via stations
     authorized pursuant to a particular license hardly tells the story
     as to whether the licensee is providing adequate service to the
     public.[^476] In fact, they say, the Commission should recognize
     that in some cases a licensee may not use particular spectrum
     covered by one license, or certain channels authorized by a
     license, that is part of a larger operating system at the time of
     renewal. Instead, the licensee may use the spectrum in the system
     as a guard band -- not used in the classic sense, but they argue a
     critical component of the system design.[^477]

196. Alternatively, they say, the licensed spectrum may not be
     built-out, but instead the system operator may hold the spectrum
     for future use as the demands of the operating system expand.[^478]
     Still licensees may construct other systems for use by particular
     constituents rather than the general population covered by a
     GSA.[^479] The Coalition maintains that it is also essential that
     system operators just launching systems hold spectrum in reserve to
     address increases in demand and that there is no valid reason to
     penalize MDS and ITFS licensees for providing that spectrum.
     Particularly with respect to licenses that come up for renewal in
     the early years of MDS/ITFS broadband deployment, they assert that
     a channel-by-channel evaluation will not provide an accurate
     assessment of service development.[^480] For those reasons, they
     conclude, the flexibility inherent in the case-by-case application
     of the substantial service standard provides the Commission with a
     means of examining the entire picture.[^481]

197. The Coalition recommends that we clarify that a substantial service
     evaluation will include not only the service areas of incumbent
     stations that are directly owned by the entity, which holds the BTA
     authorization, but also the service areas of incumbent stations
     owned by any entity controlled by the same ultimate parent company
     as is the BTA authorization holder.[^482] We seek comment on the
     Coalitions recommendations.

198. *Rural areas*. We seek comment on whether and how we may use
     construction benchmarks to encourage licensees to deliver wireless
     services to rural populations. To what extent are our current
     construction benchmarks effective in ensuring that spectrum-based
     services are provided to rural areas? In what instances, and under
     what circumstances, should the Commission adopt a population-based,
     geography-based, or substantial service construction benchmark? For
     example, in licensing service areas that are predominantly rural,
     should the Commission adopt geography-based construction
     benchmarks? Are there other types of construction benchmarks that
     would promote service to rural regions better? For instance, should
     we adopt a separate construction benchmark applicable only to
     service areas that constitute rural areas? Alternatively, should we
     revise our current construction benchmarks to permit service
     providers to serve either smaller portions of the population or
     service area if they meet a second construction benchmark
     applicable to the rural portions of a licensee's market? If so,
     commenters should explain what construction benchmarks we should
     adopt for the rural portions of the service area and how to
     determine whether an area is rural? If, as suggested above, we were
     to require licensees to disaggregate or partition unused spectrum
     or unserved portions of geographic service areas, should we adopt
     additional construction benchmarks to implement this requirement?
     If so, what penalties should the Commission impose on licensees for
     failure to timely meet such additional construction benchmarks? The
     Commission has generally accepted certifications of CMRS carriers
     that they have met their construction benchmarks.[^483] To what
     extent are our self-certification procedures an adequate means of
     ensuring compliance with our construction benchmark requirements?

199. *Extension/Suspension of current performance requirements for MDS
     BTA Authorization holders*. The Coalition requests that we
     immediately suspend the MDS BTA build-out deadline in Section
     21.930, as extended by the *MDS Build-Out Extension Order*, while
     our build-out policy for this service remains subject to pending
     rulemaking proceedings.[^484] We note that on August 16, 1996, the
     Commission granted 334 of the 493 BTA authorizations.[^485] As a
     result, the five-year build-out period for these authorizations
     ended on August 16, 2001. However, before the end of the build-out
     period, the former Mass Media Bureau extended the construction
     deadline for BTA authorizations to August 16, 2003 or the existing
     build-out date, whichever is later.[^486] The former Mass Media
     Bureau found that a maximum of two years would be a sufficient
     amount of time to allow the MDS industry to build-out its
     facilities and provide new and innovative two-way services to the
     public.[^487] The former Mass Media Bureau found that a longer
     extension period would unreasonably delay MDS entry in both rural
     and urban markets.[^488] At that time, the former Mass Media Bureau
     indicated that the Commission would address issues concerning the
     clarification, modification, or abolishment of the MDS BTA
     requirement in an upcoming rulemaking.[^489]

200. In light of the breadth of the proposals set forth in this *NPRM &
     MO&O*, and our re-evaluation of performance standards for the 2500
     -2690 MHz band, we believe that suspending the current August 16,
     2003 construction deadline for BTA authorization holders is in the
     public interest. While we are normally reluctant to suspend a
     build-out requirement, a suspension of this construction deadline
     will allow the Commission to evaluate the performance requirements
     and service rules for this band. This approach is consistent with
     prior Commission actions suspending a deadline while relevant
     policy is subject to the pending rulemaking proceedings.[^490]
     Accordingly, we will suspend the BTA construction deadline pending
     the release of a *Report and Order* in this proceeding. We seek
     comment, however, on how much additional time we should give MDS
     BTA Authorization holders. Should we toll the time from the release
     of the *NPRM* until the August 16, 2003 deadline, which is
     approximately five months and give them an additional five months
     from the release date of the *Report and Order* in this proceeding?
     Should we give them eight months from the release of the *Report
     and Order* in this proceeding? Should we give them an additional
     two years from the release date of the *Report and Order* in this
     proceeding?

201. *Extension/Suspension of current performance requirements for
     site-based licensees.* Moreover, we also believe that it is in the
     public interest to suspend the construction deadline for ITFS and
     MDS site-based licensees and permittees that have unexpired
     licenses or permits that have not expired as of the release date of
     the *NPRM & MO&O* and that have made a timely filed extension
     request*.* We seek comment, however, on whether we should review
     those timely filed extension requests to construct under our
     current rules and suspend the construction deadline only for those
     that comply with the current rules, or whether we should
     automatically suspend the construction deadline for all timely
     filed requests for extension of time to construct. If we should
     automatically grant such requests, how much time should licensees
     or permittees receive to construct? We seek comment on whether this
     suspension should also cover licensees and permittees whose
     requests for extension of time have been denied, but who have
     timely petitions for reconsideration or applications for review
     pending. We also request comment on the proper treatment of
     objections or other pleadings that have been filed against requests
     for extension of time. We emphasize that the suspension of this
     construction deadline for site-based licensees does not affect the
     requirement for such licensees to timely file a renewal
     application.[^491] We stress that all site-based licensees are
     required to timely file renewal applications or face cancellation
     of their licenses regardless of the pendency of this proceeding.

202. In light of the changes we are proposing, we seek comment on
     whether we should continue our current policy with regard to
     extension requests to construct facilities. If we should continue
     our current policy, should we make any changes? If so, we seek
     comment on the specific changes that we should make.

### Annual Reports

203. Our existing rules require MDS operators to file annual reports
     even if they are in full compliance with all of our rules.[^492] We
     propose to eliminate this requirement because these reports do not
     appear to serve any purpose.

## Application Processing

204. Currently, our MDS and ITFS application processing is cumbersome,
     time-consuming, and resource intensive. As noted above, we propose
     to replace the requirement to separately license individual
     transmitters with a geographic area licensing scheme in which most
     operations would be authorized under the geographic area license.
     We believe this change will substantially reduce the burdens on
     licensees, expedite the initiation of service, and provide greater
     flexibility. Nonetheless, we note that there will continue to be
     limited instances in which transmitters will have to be licensed
     individually. We therefore believe it is appropriate to review and
     streamline our application procedures.

205. With respect to the processing of ITFS applications, our rules
     require the opening of a filing window before we will accept
     applications.[^493] Then we must announce a one-week filing period
     for applications for major changes, high-power signal booster
     station, response station hub and R channels point-to-multipoint
     transmissions licenses. At the conclusion of the one-week filing
     period, we announce the tendering for filing of applications
     submitted during the filing window and provide a sixty-day filing
     window for applicants to amend their applications.[^494] At the end
     of the sixty-day filing window, we announce the acceptance for
     filing of all applications submitted during the initial window, as
     amended by the applicants.[^495] Opposing parties receive sixty
     days from the release of the public notice announcing the
     acceptance for filing of the applications to file a petition to
     deny against an application.[^496] On the sixty-first day, we grant
     the unopposed applications unless we notified the applicant that we
     were not granting the application. We are concerned that this
     process may result in delays to the public and hinders the
     efficient processing of ITFS applications. We seek comment on
     whether this concern is valid. Additionally, if this concern is
     valid, we seek comment on measures we may implement to stream-line
     this process.

206. Although our MDS application processing procedures are different
     from the ITFS procedures, we seek comment on whether we should
     consolidate the MDS and ITFS application procedures. Generally,
     upon receipt of an MDS application, we give the application a file
     number.[^497] After preliminary review, we place those applications
     that appeared complete on public notice as accepted for
     filing.[^498] However, with regard to MDS two-way application
     filings, we currently use a rolling one-day filing window.[^499] We
     announced the "tendering for filing" of applications submitted
     during the filing window.[^500] After a sixty-day period, we
     released a second public notice announcing those applications that
     we accepted for filing.[^501] Although the MDS application filing
     procedures appear quicker, we are concerned that these procedures
     can be stream-lined as well. Accordingly, we seek comment on
     whether we should stream-line the MDS application procedures. If
     so, we seek comment on methods to stream-line these procedures and
     where possible to consolidate the procedures.

207. Previously, applicants could file and view their applications
     on-line using the Broadband Licensing System (BLS).[^502] The BLS
     contained the licensing data for MDS and ITFS.[^503] The public
     could access the BLS via the Internet.[^504] This on-line access
     enables users to search and display MDS and ITFS application and
     station information including Internet display of granted station
     authorizations.[^505] Users could also view filed applications in
     the electronic format.[^506]

208. On October 11, 2002, the Wireless Bureau suspended the electronic
     filing capabilities of the BLS in order to improve the integrity of
     data in the BLS, prepare for converting the ITFS and MDS services
     to the ULS, and facilitate future enhancements to electronic
     filing.[^507] Although the BLS had some on-line capabilities, we
     believe that conversion of the data from BLS to ULS will improve
     the efficiency of filing applications, as well as searching for
     data on these services.

209. In this vein, we note that we require the majority of the wireless
     applicants to file their applications electronically using ULS. The
     ULS has eliminated the need for wireless carriers to file
     duplicative applications and has increased the accuracy and
     reliability of licensing information for wireless services.
     Additionally, ULS has increased the speed and the efficiency of the
     application process because wireless licensees and applicants can
     file all licensing-related applications and other filings
     electronically. Since the implementation of ULS, the public may
     access all publicly available wireless licensing information
     on-line.[^508] Because ULS is interactive, ULS prompts the
     applicant to input the required information for the type of action
     that the applicant seeks. As a result, applicants must submit all
     the appropriate information before they may file their applications
     electronically in ULS.[^509] Notably, ULS will automatically
     "pre-fill" licensee information already in the system and will
     display only the portions of the form and schedules that require
     completion for the applicant's or licensee's indicated
     purpose.[^510]

210. The Commission also created redundant systems and back up
     procedures to safeguard against loss of data or system access
     should a system failure occur.[^511] We believe that transitioning
     MDS and ITFS to ULS will have the same benefits for MDS and ITFS
     carriers, the public and the Commission. Accordingly, we seek
     comment on the changes needed to transition MDS and ITFS to ULS.

211. In light of the interactively nature of ULS to assist an applicant
     through the application process, we propose to streamline the
     licensing process.[^512] Generally, upon filing of an application
     in ULS, we place the application on public notice as accepted for
     filing.[^513] The extra step of allowing applicants to amend their
     applications to make corrections is not necessary with ULS. We seek
     comment on this proposal. In addition to the concerns noted above
     with regard to streamlining the ITFS and MDS application processes,
     we tentatively conclude that the interactive nature of ULS will
     enhance the on-line capabilities of MDS and ITFS users.
     Accordingly, we propose to integrate the Services into ULS. We seek
     comment on this proposal.

### Returns and Dismissals of Incomplete or Defective Applications

212. As noted above,[^514] in some instances ITFS and MDS applicants
     submitted applications that were incomplete or required the
     submission of additional information before they could be placed on
     public notice as accepted for filing. We propose to extend our
     uniform rule for dismissal or return of defective applications in
     the Wireless Services to ITFS and MDS applications.

213. In the *ULS Report and Order*, the Commission adopted a uniform
     application dismissal and return rule in all the Wireless
     Services.[^515] Pursuant to the uniform rule, the Commission
     indicated that it has the discretion to return applications for
     correction on minor filing errors, but it also has the authority to
     dismiss any incomplete or defective application without
     prejudice.[^516] However, the Commission explained that it would
     automatically dismiss any application that is defective because the
     applicant failed to sign the application, failed to pay the
     required filing fee, or filed outside of the applicable filing
     window.[^517] The Commission concluded that, in contrast to minor
     filing errors, such defects were "fatal to the consideration of the
     application."[^518] Accordingly, the Commission found that,
     regardless of the manner in which applicants submitted their
     applications, ULS would automatically dismiss "applications that
     were unsigned, untimely, or not fee-compliant."[^519]

214. The Wireless Bureau announced specific procedures for complying
     with the Commission's uniform policy.[^520] The Wireless Bureau
     explained that, "\[g\]enerally, timely filed renewal applications
     and construction notifications that are otherwise defective will be
     returned to the applicants for correction, rather than dismissed by
     the Bureau."[^521] However, the Bureau clarified "that renewal
     applications and construction notifications that fail to comply
     with the applicable fee and signature requirements will be
     dismissed by the Bureau as defective, rather than returned to the
     applicants for correction, even if timely filed."[^522] We propose
     to adopt this application dismissal and return policy for MDS and
     ITFS to ensure efficient processing and equal treatment of all
     applications. We invite comment on this proposal.

### ULS Forms

215. The Commission consolidated the ULS application forms for wireless
     services to replace approximately forty-one application
     forms.[^523] The consolidation streamlined the processing of
     applications and reduced the filing burden for wireless applicants
     and licensees.[^524] We use four forms in ULS -- Form 601
     (Long-Form or FCC Application for Wireless Telecommunications
     Bureau Radio Service Authorization), Form 602 (FCC Ownership
     Disclosure Information for the Wireless Telecommunications Bureau),
     Form 603 (FCC Wireless Telecommunications Bureau Application for
     Assignment of Authorization or Transfer of Control) and Form 605
     (Quick-Form Applications for Authorization in the Ship, Aircraft,
     Amateur, Restricted and Commercial Operator, and General Mobile
     Radio Services.[^525] Currently, our rules require MDS and ITFS
     applicants to use eleven forms to request licensing actions.[^526]
     We tentatively conclude that we will use the ULS forms to license
     the Services. Accordingly, we seek comment on the changes to the
     forms that will be needed to accommodate these Services. In the
     paragraphs that follow, we delineate the purposes of the specific
     ULS forms and the forms that they will replace.

216. *FCC Form 601*. Under our proposal, this form will replace FCC
     Forms 304, 304A, 330, 330A, 330R, 331, 405, 701 and most informal
     application filings. The FCC Form 601 and associated schedules will
     be used to apply for initial authorizations, modifications (major
     and minor) to existing authorizations, amendments to pending
     applications, renewals of station authorizations, developmental
     authorizations, special temporary authorities (STAs),
     certifications of construction, requests for extension of time,
     cancellations, and administrative updates. The required schedules
     are:

-   New/Modification/Amendment (Regular Authorizations, Developmental
    Authority and

Special Temporary Authority) -- FCC Form 601 Main Form with required
technical

schedule.

-   Renewals/Cancellation/Administrative Updates -- FCC Form 601 Main
    Form and

Schedule A (if requesting multiple call signs).[^527]

-   Certifications of Construction -- FCC Form 601 Main Form and
    Schedule K.

-   Extension of Time to Construct -- FCC Form 601 and Schedule L.

217. *FCC Form 602.* This form will replace the FCC Form 430 for the
     submission of initial and updated ownership information for those
     wireless radio services that require the submission of such
     information.[^528]

218. *FCC Form 603.* This form will replace FCC Forms 305, 306 and 330.
     Applicants use the FCC Form 603 and associated schedules to apply
     for consent to assignment of existing authorizations (including
     channel swaps), to apply for Commission consent to the transfer of
     control of entities holding authorizations, to notify the
     Commission of the consummation of assignments or transfers, and to
     request extensions of time for consummation of assignments or
     transfers. Additionally, applicants use the form to apply for
     partial assignments of authorization, including partitioning and
     disaggregation. The required schedules are:

-   Assignment/Transfer of Control -- FCC Form 603 Main Form and
    Schedule A for

auctionable services.[^529]

-   Partitioning & Disaggregation -- FCC Form 603 Main Form and Schedule
    B or

Schedule D as required.

-   Consummation Notifications -- FCC Form 603 and Schedule D.

-   Extension of Time for Consummation -- FCC Form 603 and Schedule E.

219. We believe that eliminating the current MDS and ITFS forms and
     implementing the ULS forms for MDS and ITFS will streamline the
     processing of applications and reduce the filing burden for MDS and
     ITFS applicants and licensees. We note that by using the ULS Forms,
     we will eliminate a number of obsolete MDS and ITFS forms from our
     rules.[^530] Accordingly, we propose to use the ULS forms for MDS
     and ITFS, thereby eliminating the current MDS and ITFS forms. We
     seek comment on this proposal.

### Transition Periods

220. In light of the significant changes proposed to the ITFS and MDS
     forms and rules, we believe applicants and licensees should receive
     a transition period to familiarize themselves with ULS and begin
     using ULS forms. Accordingly, we propose to allow continued use of
     the current ITFS and MDS forms for a transition period of six
     months after the effective date of the release of a *Report and
     Order* in this proceeding. This period will provide ITFS and MDS
     applicants and licensees with sufficient time to familiarize
     themselves with ULS and to plan an orderly transition from using
     existing forms to using the ULS forms. At the conclusion of this
     period, we tentatively conclude that the we will accept ULS forms
     only for these Services. This period is consistent with the
     transition period the Commission used with the initial
     implementation of ULS.[^531]

221. In the *ULS R&O*, the Commission provided a transition period for
     applicants and licensees to use ULS voluntarily before implementing
     mandatory electronic filing using the ULS forms.[^532] Generally,
     the Commission determined that permitting a six-month transition
     period after application processing in ULS begins for a service
     before requiring mandatory electronic filing was appropriate.[^533]
     We believe the six-month transition period has worked reasonably
     well for the other services that have transitioned to ULS.[^534]
     Accordingly, we tentatively conclude that we will permit a
     six-month transition period after application processing in ULS
     begins before requiring mandatory electronic filing by MDS and ITFS
     applicants and licensees in ULS is appropriate. We invite comment
     on this tentative conclusion. As in the past, the Wireless Bureau
     will release a public notice announcing the relevant commencement
     date for the processing of the Services applications in ULS.[^535]

222. We anticipate that ITFS and MDS operators will find the application
     and renewal process with the ULS to be easier and less error-prone
     than with the existing system. Before implementing the electronic
     ULS, the Commission established a task force to receive public
     input on the design of the system and to coordinate efforts.
     Consistent with the WTB's approach in implementing other services
     into ULS, Commission staff will conduct interactive demonstrations
     for licensees and their representatives on the proper use of the
     system for filing license applications and conducting database
     research. Such demonstrations will be announced by public notice
     and will include topics such as: (1) finding information in ULS for
     license and application searches; (2) filing and researching
     license transfers and assignments; and (3) general application
     filing procedures.

223. We also note that the WTB has ongoing initiatives designed to
     familiarize Commission licensees with the ULS and give notice of
     upcoming changes thereto. For instance, the WTB periodically
     updates its "ULS Newsletter" on the WTB web site to provide the
     public with current information on ULS and related topics of
     interest.[^536] The WTB maintains an electronic mail list of
     interested parties, which are provided with updated ULS information
     free of charge. The WTB also maintains a toll-free phone line[^537]
     to assist with licensing questions during the ULS transition and
     has established a technical support hotline (and e-mail
     address)[^538] to assist the public with computer-related issues,
     including set-up and configuration.

224. To ensure that existing and potential licensees will be comfortable
     with the integration of MDS and ITFS into the ULS, we intend to
     pursue a variety of outreach efforts similar to those we have
     followed in the past when bringing new classes of licenses into the
     ULS. The WTB has operated booths at many industry trade shows,
     providing hands-on training regarding use of the Commission's ULS
     and auction bidding software over the Internet. The Commission's
     outreach program also includes a web page and telephone hot lines.
     Members of the Commission and its staff have spoken at numerous
     industry, trade association, public interest organization, and
     telecommunications user group conferences on opportunities in
     wireless services licensed by the Commission, and will continue to
     do so.[^539] We also solicit comment on additional means by which
     we can afford MDS and ITFS licensees opportunities to become
     educated about and familiar with ULS and the new application
     procedures we adopt in this proceeding.

225. We note that the MDS/ITFS community requests clarification that it
     may use the FCC Form 331 for all modification applications for
     existing stations, whether main stations, boosters, or response
     station hubs, and that it should use the FCC Forms 304 and 330 only
     for applications for new stations.[^540] Although the MDS community
     seeks a clarification that it may use FCC Form 331 to modify
     existing stations, whether main stations, booster stations or
     response stations, we believe that MDS applicants should use FCC
     Form 601, upon adoption of final rules, to ensure a smooth
     transition to ULS. We seek comment on this concern.

### Suspension of Acceptance and Processing of Applications

226. In light of our actions described above, and effective as of the
     date of the release of this *NPRM & MO&O*, we will suspend
     acceptance of applications for ITFS channels for new licenses,
     amendments or modifications for any kind of station temporarily,
     except as provided below. The suspension is effective until further
     notice and applies to applications received on or after the date of
     release of this *NPRM & MO&O*. Any such applications received after
     the deadline will be returned as unacceptable for filing. We take
     this action to permit the orderly and effective resolution of
     issues in this proceeding. Absent this action, applications for new
     licenses, amendments, and modifications might limit the
     effectiveness of the decisions made and the standards developed in
     this proceeding. We note this action is consistent with the
     approach we have taken in other existing services where we have
     proposed to adopt geographic area licensing.[^541] We therefore
     find that this temporary measure is in the public interest.

227. Notwithstanding this temporary suspension, we will continue to
     process applications for ITFS channels that involve minor
     modifications, assignment of license or transfer of control.[^542]
     This exception should permit modifications that can improve the
     efficiency of incumbent operations on these channels without
     affecting the effective and orderly resolution of the issues in
     this proceeding. Again, we will continue to accept applications for
     minor modifications, license assignments and transfers of control
     under existing procedures.

228. With respect to pending ITFS applications that were filed prior to
     the release date of this *Notice of Proposed Rulemaking*, and which
     are pending, we will process such applications provided that they
     are not mutually exclusive with other applications as of the
     deadline stated above. We believe that this approach gives the
     appropriate consideration to those applicants who filed
     applications prior to our proposed changes and whose applications
     are not subject to competing applications. We note that we used
     this approach in other services where we have proposed a transition
     to geographic area licensing.[^543] If applicants have filed
     settlement agreements prior to the release date of the *Notice of
     Proposed Rulemaking*, and such settlement agreements comply with
     our rules, we will act on the settlement agreements. If we approve
     such a settlement agreement, we will allow the processing and grant
     of the remaining non-mutually exclusive applications. We will not
     accept settlement agreements relating to mutually exclusive ITFS
     applications that are filed after the release date of this *Notice
     of Proposed Rulemaking*. With respect to applications for ITFS
     stations filed prior to the adoption of this *Notice of Proposed
     Rulemaking* that do not meet the above criteria, we tentatively
     conclude that we will dismiss such applications without prejudice
     upon adoption of a *Report and Order* in this proceeding. Any
     commenters proposing that we retain such applications should
     address how such applications should be processed, particularly in
     the event of any auction for spectrum covered by the
     application.[^544] This action would be consistent with our
     treatment of pending applications in other services that we have
     converted to geographic area licensing.[^545] While we are
     proposing to convert ITFS to geographic area licensing, the pending
     applications were filed in response to a site-based licensing
     scheme. We seek comment on this tentative conclusion.

229. These decisions are procedural in nature and therefore not subject
     to the notice and comment and effective date requirements of the
     Administrative Procedure Act.[^546] Moreover, there is good cause
     for proceeding in this manner: to do otherwise would be impractical
     and contrary to the public interest because compliance would
     undercut the purpose of these interim measures.[^547] It is
     well-established that the Commission may initiate a freeze without
     prior notice and hearing when the purpose is the "creation of
     conditions under which formal rulemaking proceedings can be held in
     an effective, efficient, and meaningful manner."[^548] In this
     particular instance, we are undertaking a comprehensive review of
     the services to provide licensees maximum operational flexibility
     with minimal regulatory restrictions. Because we seek comment on
     virtually every area related to the services, we believe that it is
     appropriate to suspend the acceptance and processing of
     applications.

## Competitive Bidding Procedures 

230. *Competitive Bidding Authority.* As discussed earlier in this *NPRM
     & MO&O*, the Commission determined in prior proceedings that the
     statutory mandate to use competitive bidding to resolve mutually
     exclusive applications for licenses applies to MDS[^549] and
     ITFS[^550] applications under current service rules. As the
     Commission recognized, Congress has mandated expressly that "if
     'mutually exclusive applications are accepted for *any* initial
     license or construction permit, then, *except as provided in
     paragraph (2)* \[of 47 U.S.C. §309(j)\], the Commission *shall*
     grant the license or permit to a qualified applicant through a
     system of competitive bidding\[.\]'"[^551] The Commission
     originally concluded that neither MDS nor ITFS come within any of
     paragraph 2's exceptions for "public safety radio services;" for
     initial digital television licenses given to existing broadcast
     licenses to replace analog televisions licenses; and for
     "noncommercial educational broadcast" and "public broadcast"
     stations, as those terms are defined in 47 U.S.C. §397(6).[^552]
     The changes proposed in this *NPRM & MO&O* will not bring MDS or
     ITFS licenses within any of these exceptions, which Congress has
     not changed or expanded. Accordingly, we must use competitive
     bidding to resolve mutually exclusive applications for licenses in
     these bands.

231. *Participation in Auctions for Licenses to Use ITFS Spectrum in
     Currently Unassigned Areas.* What parties may participate in an
     auction for licenses to use ITFS spectrum in currently unassigned
     areas is a distinct question from what parties should be eligible
     to hold ITFS spectrum licenses.[^553] Citing prior Commission
     proceedings, the Coalition proposes that participation in such an
     auction should be limited solely to parties with pending
     applications for licenses associated with unassigned ITFS
     spectrum.[^554] Previously, the Commission observed that "it would
     not serve the public interest to accept additional competing ITFS
     applications despite our authority to do so under Section
     309(j)(1)," and therefore the only "eligible bidders in any auction
     of the pending ITFS applications" ought to be "those with
     applications already on file."[^555] However, this prior
     observation applied solely with respect to "any auction of the
     *pending ITFS applications*\[.\]" Pursuant to this *NPRM & MO&O*,
     and consistent with the Coalition proposal, we now are considering
     an auction of new licenses for using ITFS spectrum in geographic
     areas that will encompass currently unassigned areas. As noted
     previously, geographic area licensing will give licensees greater
     operational flexibility to modify, move, and add to their
     facilities, which may improve spectrum utilization.[^556] In
     addition, this greater operational flexibility may result in new
     and competing proposals for utilizing the public spectrum resource
     from parties not previously involved in pending site-based
     licensing applications. Applicants intending very different uses of
     these more flexible licenses can express the respective values a
     particular license has for their intended use in easy to compare
     competitive bids. This enables the Commission rapidly to assign
     licenses to parties that will put them to their highest value use.
     However, an auction must be open to all parties qualified to use
     the license in order to assign the license to the party that most
     highly values it.[^557] We seek comment on whether the Commission
     should adopt the Coalition's plan or open participation to any
     party eligible to hold a geographic license. We note that, in
     either case, if the Commission determines that only educational
     institutions may hold ITFS licenses, then only those institutions
     may participate in any auction of ITFS licenses. We further seek
     comment on any special challenges associated with governmental
     educational institutions or non-governmental non-profit educational
     institutions participating in auctions. Commenters proposing that
     auction participation be restricted to fewer than all parties
     eligible to be licensees should address how any such restrictions
     are consistent with the statutory policy objectives of the
     Commission's competitive bidding authority.[^558]

232. *Potential Auctions.* As discussed further below, we seek comment
     on three alternative potential auctions: an auction of new licenses
     to use ITFS spectrum in currently unassigned areas; a two-sided
     auction to restructure the ITFS spectrum with new licenses; and a
     two-sided auction to restructure the MDS and ITFS spectrum with new
     licenses. The term "two-sided auction" generally refers to auctions
     with multiple sellers and buyers. It is used here to refer to a
     Commission auction of licenses that makes available rights to
     previously unassigned spectrum, held by the Commission, and rights
     to spectrum previously licensed. In such a "two-sided auction,"
     incumbent licensees may bid on licenses that include licenses
     associated with spectrum previously licensed to them. As discussed
     further below, a restructuring auction would attempt to further the
     public interest in efficient and intensive use of the spectrum by
     bringing together all parties that may have an interest in rights
     in the ITFS and MDS spectrum, including incumbent licensees and
     prospective new licensees. Each of the potential auctions would
     include licenses to use ITFS spectrum in currently unassigned areas
     and, accordingly, procedures proposed for the auction of such
     licenses will apply to any of the three potential auctions, with
     modifications noted below for two-sided auctions in the latter two
     cases.

## An Auction of Currently Unassigned ITFS Spectrum

233. *Auction Procedures*. We request comment on a number of issues
     relating to competitive bidding procedures that could be used to
     assign licenses by auction for ITFS spectrum in areas not covered
     by any incumbent licenses. If we decide on any auction approach, we
     propose to conduct any auction of licenses to use spectrum in the
     2500-2690 MHz band in conformity with the general competitive
     bidding rules set forth in Part 1, Subpart Q, of the Commission's
     rules, and substantially consistent with the bidding procedures
     that have been employed in previous auctions.[^559] Specifically,
     we propose to employ the Part 1 rules governing, among other
     things, competitive bidding design, designated entities,
     application and payment procedures, collusion issues, and unjust
     enrichment.[^560] Under this proposal, such rules would be subject
     to any modifications that the Commission may adopt in our Part 1
     proceeding.[^561] In addition, consistent with current practice,
     matters such as the appropriate competitive bidding design for the
     auction of ITFS licenses, as well as minimum opening bids and
     reserve prices, would be determined by the Wireless
     Telecommunications Bureau pursuant to its delegated
     authority.[^562] We seek comment on whether any of our Part 1 rules
     or other auction procedures would be inappropriate or should be
     modified for an auction of ITFS licenses.

234. *Designated Entities.* In authorizing the Commission to use
     competitive bidding, Congress mandated that the Commission "ensure
     that small businesses, rural telephone companies, and businesses
     owned by members of minority groups and women are given the
     opportunity to participate in the provision of spectrum-based
     services."[^563] In addition, section 309(j)(3)(B) of the Act
     provides that in establishing eligibility criteria and bidding
     methodologies, the Commission shall promote "economic opportunity
     and competition . . . by avoiding excessive concentration of
     licenses and by disseminating licenses among a wide variety of
     applicants, including small businesses, rural telephone companies,
     and businesses owned by members of minority groups and
     women."[^564]

235. The Commission's existing designated entity provisions apply based
     on an entity's qualification as a small business.[^565] We note
     that minority- and women-owned businesses and rural telephone
     companies that qualify as small businesses may take advantage of
     the special provisions we have adopted for small businesses.[^566]
     We seek comment on whether our small business provisions are
     sufficient to promote participation by business owned by minorities
     and women, as well as rural telephone companies.[^567] To the
     extent that commenters propose additional provisions to ensure
     participation by minority- or women-owned businesses, or rural
     telephone companies, they should address how such provisions should
     be crafted to meet the relevant constitutional standards.

236. We seek comment on the appropriate definition(s) of small business
     that should be used to determine eligibility for bidding credits in
     auctions involving ITFS spectrum. In the *Competitive Bidding
     Second Memorandum Opinion and Order*, the Commission stated that it
     would define eligibility requirements for small businesses on a
     service-specific basis, taking into account the capital
     requirements and other characteristics of each particular service
     in establishing the appropriate threshold.[^568] The *Part 1 Third
     Report and Order*, while it standardizes many auction rules,
     provides that the Commission will continue a service-by-service
     approach to defining small businesses.[^569] Generally, when
     establishing service-specific small business size standards, we
     look to the capital required to provide likely service using the
     spectrum. We do not know the precise type of service that new
     licensees may attempt to provide in this band. The Coalition has
     suggested that the ITFS and MDS bands may be used to provide
     ubiquitous broadband services using next generation low power,
     cellular systems on fixed, portable and/or mobile bases.[^570] We
     invite comment on whether likely services in this band will have
     capital requirements similar to current MDS services; or similar to
     mobile services, such as Personal Communications Services; or
     similar to fixed services, such as services in the 24 GHz and 39
     GHz bands.

237. Further, we invite comment on whether distinctive characteristics
     of licensees in the ITFS band require distinct rules for assessing
     the relative size of potential participants in an ITFS auction. In
     this regard, current ITFS eligibility rules would limit
     participation in an auction of ITFS licenses for which there are
     mutually exclusive applications to accredited educational
     institutions, governmental organizations engaged in the formal
     education of enrolled students, and nonprofit educational
     organizations providing educational and instructional television
     materials to such accredited institutions or governmental
     organizations.[^571] How do our designated entity provisions
     comport with the unique challenges and status of educational
     institutions? Should we establish special provisions for non-profit
     educational institutions that may want to have access to ITFS
     spectrum but do not have the financial capability to compete in an
     auction for spectrum licenses? Commenters that propose special
     provisions for non-profit educational institutions should address
     the statutory basis for such proposals. Our standard schedule of
     small business bidding credits provides for bidding credits based
     on a calculation of bidders' average annual gross revenues for the
     three years preceding the auction.[^572] We seek comment on whether
     the non-commercial character of current ITFS licensees requires any
     special procedures for determining the average annual gross
     revenues of such entities. For example, are our standard gross
     revenue attribution rules an appropriate method of evaluating the
     relative resources of universities and government entities? We also
     invite comment on whether some other criterion besides average
     annual gross revenues should be used for identifying small entities
     among eligible ITFS applicants.

238. Similarly, if current or revised licensee eligibility rules
     significantly limit parties eligible to participate in an ITFS
     auction, would distinguishing among eligible entities to grant
     bidding credits to small entities serve the statutory purpose of
     bidding credits?[^573] We tentatively conclude that if the
     eligibility of parties to hold ITFS licensees is determined by
     their educational purpose, providing bidding credits based on the
     relative size of participants may not serve statutory purposes. We
     seek comment on this tentative conclusion.

239. In the event that participation in an ITFS auction is not
     significantly limited by eligibility restrictions, should our
     standard schedule of bidding credits should be applied to this
     service? In the *Part 1 Third Report and Order*, we adopted a
     standard schedule of bidding credits for certain small business
     definitions, the levels of which were developed based on our
     auction experience.[^574] The standard schedule appears at Section
     1.2110(f)(2) of the Commission's rules.[^575] Are these levels of
     bidding credits appropriate for ITFS? Will they provide adequate
     opportunities for small businesses of varying sizes and for
     educational institutions, especially governmental and non-profit
     institutions, to participate in spectrum auctions that are open to
     a wide variety of participants.[^576] For this proceeding, we
     propose to apply this standard schedule and define an entity with
     average annual gross revenues not exceeding \$40 million for the
     preceding three years as a "small business;" an entity with average
     gross revenues not exceeding \$15 million for the same period as a
     "very small business;" and an entity with average gross revenues
     not exceeding \$3 million for the same period as an
     "entrepreneur."[^577] We propose to provide qualifying "small
     businesses" with a bidding credit of 15%, qualifying "very small
     businesses" with a bidding credit of 25%; and qualifying
     "entrepreneurs" with a bidding credit of 35%, consistent with
     Section 1.2110(f)(2).[^578] We seek comment on this proposal.

240. Given the close relationship between MDS and ITFS, we invite
     comment on the effect of having three small business sizes, and
     bidding credits, in ITFS while having only one small business size
     (average annual gross revenues for the preceding three years not
     exceeding \$40 million) and one credit (15%) in MDS.[^579]
     Commenters proposing alternative business size standards should
     give careful consideration to the likely capital requirements for
     developing services in this spectrum. In this regard, we note that
     new ITFS licensees may be presented with issues and costs involved
     in transitioning incumbents and developing markets, technologies,
     and services. Commenters also should consider whether the band plan
     and characteristics of the ITFS band suggest adoption of other
     small business size definitions and/or bidding credits in this
     instance.

## Two-Sided Auctions to Restructure Spectrum

241. The Commission could conduct a two-sided auction to restructure
     spectrum to bring together all parties interested in rights to ITFS
     spectrum, and MDS spectrum as well, including incumbent licensees
     and prospective new licensees.[^580] Making available in a single
     auction new licenses to use ITFS spectrum in currently unassigned
     areas along with spectrum made available by incumbent ITFS
     licensees, and potentially incumbent MDS licensees as well, would
     enable interested parties to restructure the band rapidly by
     helping them learn the cost of combining and obtaining encumbered
     and unencumbered spectrum for new uses, without engaging in costly
     and time consuming bilateral and multi-lateral negotiations.[^581]
     Thus, a restructuring auction could facilitate the voluntary
     clearing of spectrum by incumbent licensees and allow the
     Commission to issue new licenses, that more efficiently aggregate
     spectrum rights and/or spectrum blocks with rights and blocks
     associated with existing licenses.

242. Conducting a two-sided restructuring auction may raise novel issues
     related to competitive bidding. To the extent a restructuring
     auction offers new initial licenses to all interested parties, we
     conclude that we can conduct such an auction consistent with our
     mandate and authority under Section 309(j).[^582] To the extent
     that our auction process provides private parties with a secondary
     market for existing licenses that enhances the final license
     assignment in a simultaneous auction of new licenses, we believe
     that we can design such an auction consistent with our mandate and
     authority under Sections 1, 4(i) and 303® of the Communications
     Act.[^583] We further seek comment on the feasibility and
     effectiveness of a two-sided "restructuring" auction conducted by
     the FCC, both as described briefly below and as any commenters may
     propose.[^584] We invite discussion of whether alternative
     mechanisms, such as privately conducted secondary market auctions,
     can or should be employed in conjunction with any FCC restructuring
     auction.[^585] Commenters should identify the components of any
     proposals that they believe are essential to an effective
     restructuring auction, the Commission's authority to conduct an
     auction such as they propose, and also discuss the probable effect
     of modifying any significant components. Commenters should consider
     whether a private party could effectively conduct a two-sided
     auction involving existing licenses or otherwise facilitate
     restructuring the band and the likely efficiency of such a private
     secondary market auction compared to one conducted by the FCC that
     also includes unassigned ITFS spectrum. Could a private auction be
     conducted in coordination with a government auction? Are there any
     regulatory barriers to a privately conducted auction?

243. A restructuring auction may enable a transition to a more efficient
     and intensive use of the ITFS and MDS spectrum by enabling parties
     to aggregate spectrum blocks that serve their specific needs. The
     Commission could conduct a restructuring auction in conjunction
     with or as an alternative to the transition mechanisms previously
     discussed. Accordingly, we seek comment on whether a non-auction
     transition mechanism to a new band plan (such as that proposed by
     the Coalition) is essential to achieving more efficient and
     intensive use of this spectrum or whether a restructuring auction
     alone could achieve our objectives. If a two-sided restructuring
     auction is sufficient, should any aspect of the band plan be
     reconsidered? For example, if a restructuring auction is conducted
     to transition to a new band plan, would it be appropriate to modify
     the amount of spectrum associated with each license? Are six
     megahertz channels the most efficient size to auction, if an
     auction makes available large amounts of spectrum and permits the
     bidders to create customized spectrum blocks? If a two-sided
     restructuring auction is used in conjunction with one of transition
     mechanisms discussed above, we seek comment on whether the
     restructuring auction should take place before, or after, the
     non-auction transition.

### A Two-Sided Auction to Restructure the ITFS Spectrum

244. We seek comment on whether to conduct a two-sided auction to
     restructure the ITFS band that includes ITFS spectrum in areas
     covered by existing licenses, provided that incumbent licensees are
     willing to return their licenses and receive payments, along with
     ITFS spectrum in areas not currently licensed. The effectiveness of
     a restructuring auction will depend in part on incumbent ITFS
     licensees' willingness to participate. The Commission might
     facilitate participation by allowing incumbent licensees to receive
     value from wining bidders for their incumbent licenses. Such a
     mechanism should determine the amount incumbent licensees would
     receive from winning bidders to clear the spectrum. For winning
     bids for use of spectrum associated with one incumbent license, the
     incumbent licensee could receive the full amount of the winning bid
     directly from the buyer in return for the incumbent's transfer of
     its license to the buyer (subject, of course, to Commission
     approval under Section 310(d) of the Communications Act). The
     licensee would be free to use this payment as it sees fit, *e.g.*,
     to purchase less expensive spectrum and pay the costs of
     relocating, or to purchase new equipment, or to finance projects
     unconnected with ITFS. During the auction, incumbents dissatisfied
     with the amount they would receive based on current high bids for
     their license could place a higher bid. If, at the end of the
     auction, the incumbent licensee is the high bidder, the incumbent
     would "pay" themselves the amount of their final bid and retain
     their license at no net cost. In the unlikely event that no one bid
     on their license or a winning bidder defaults on its bid, the
     incumbent licensee would retain its license. These protections
     would enable incumbent licensees to participate in the two-sided
     auction without committing to giving up the spectrum. Incumbent
     licensees could obtain valuable information about market prices
     during the course of the auction which could result in a more
     efficient use of the licensee's resources and the public spectrum
     resource.

245. The effectiveness of a two-sided restructuring auction depends in
     part on clearly defining the spectrum rights associated with a
     license. If the winner of a license for ITFS spectrum in currently
     unassigned areas (geographic licensee) also wins an existing ITFS
     license encompassed by the geographic license, the incumbent
     license would be subsumed within the geographic license. It is also
     important to clearly identify the parties that may have rights with
     respect to spectrum associated with existing licenses. Multiple
     parties, including licensees and their lessees, may assert claims
     to ITFS spectrum associated with existing licenses. Potential
     claims by lessees may inhibit incumbent licensees from offering
     existing licenses in an auction. Even if they want to do so,
     licensees and lessees may be unable to resolve potential claims due
     to pre-auction uncertainty regarding the value of the license and
     the lease; the cost of replacement spectrum; and/or the cost of new
     or retuned equipment. Any disputed claims among such parties could
     reduce bidders' certainty that they will receive all the rights
     associated with the licenses. If such uncertainty deters
     participation in a restructuring auction, the restructuring auction
     may be less effective at assigning the new licenses to parties that
     value them most highly. Consequently, the restructuring auction
     must take potential claims into account, regardless of the ultimate
     validity of such claims. We seek comment on the extent and nature
     of probable claims and their effect, if any, on the interest of
     potential bidders in a restructuring auction. Are there rules that
     could be applied to all parties, subject to separately negotiated
     agreements, that would resolve uncertainty surrounding potential
     claims and facilitate the sale of existing licenses?

### A Two-Sided Auction to Restructure the MDS and ITFS Spectrum

246. If a two-sided restructuring auction is feasible, we also could
     consider restructuring both the MDS and ITFS spectrum in one
     auction. Including MDS spectrum in such a two-sided restructuring
     auction would further enhance the opportunities for parties to
     learn the cost of combining and obtaining encumbered and
     unencumbered spectrum for new uses, all without engaging in costly
     and time consuming bilateral and multi-lateral negotiations. It
     also might reduce the need for complex transitional rules to
     migrate to a new band plan. We seek comment on the desirability and
     feasibility of including MDS spectrum in any restructuring auction.
     Commenters should address the extent to which incumbent MDS
     licensees are more or less likely than existing ITFS licensees to
     be willing and able to exchange their licenses and participate in a
     restructuring auction.

# Procedural matters

## *Ex Parte* Rules -- Permit-But-Disclose

247. This is a permit-but-disclose notice and comment rulemaking
     proceeding. *Ex parte* presentations are permitted, except during
     the Sunshine Agenda period, provided they are disclosed pursuant to
     the Commission's rules.[^586]

## Comment Period and Procedures

248. Pursuant to applicable procedures set forth in sections 1.415 and
     1.419 of the Commission**'**s rules,[^587] interested parties may
     file comments on this Notice on or before **\[90 days from
     publication in the Federal Register\]**, and reply comments on or
     before **\[135 days from publication in the Federal Register\]**.
     Comments and reply comments should be filed in WT Docket No. 03-66,
     and may be filed using the Commission's Electronic Comment Filing
     System (ECFS) or by filing paper copies.[^588] All relevant and
     timely comments will be considered by the Commission before final
     action is taken in this proceeding.

249. Comments filed through the ECFS can be sent as an electronic file
     via the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>. In
     completing the transmittal screen, commenters should include their
     full name, Postal Service mailing address, and the applicable
     docket number. Parties may also submit an electronic comment by
     e-mail via the Internet. To obtain filing instructions for e-mail
     comments, commenters should send an e-mail to ecfs@fcc.gov, and
     should include the following words in the body of the message: "get
     form \<your e-mail address\>." A sample form and directions will be
     sent in reply.

250. Parties who choose to file by paper must file an original and four
     copies of each filing. If parties want each Commissioner to receive
     a personal copy of their comments, they must file an original plus
     nine copies. All filings must be sent to the Commission's
     Secretary, Marlene H. Dortch, Office of the Secretary, Federal
     Communications Commission, 445 12^th^ Street, S.W., Room TW-A325,
     Washington, D.C. 20554. Furthermore, parties are requested to
     provide courtesy copies for the following Commission staff: (1)
     Nancy Zaczek, Charles Oliver and Stephen Zak, Public Safety and
     Private Wireless Division, Wireless Telecommunications Bureau,
     Federal Communications Commission, 445 12^th^ Street, S.W., Room.
     3-C124, Washington, D.C. 20554; and (2) Gary Michaels and Andrea
     Kelly, Auctions and Industry Analysis Division, Wireless
     Telecommunications Bureau, Federal Communications Commission, 445
     12^th^ Street, S.W., Room. 4-A760, Washington, D.C. 20554. One copy
     of each filing (together with a diskette copy, as indicated below)
     should also be sent to the Commission's copy contractor, Qualex
     International, 445 12^th^ Street, SW, Room CY-B402, Washington, DC,
     20554, 202-863-2893.

251. Parties who choose to file by paper should also submit their
     comments on diskette. These diskettes should be attached to the
     original paper filing submitted to the Office of the Secretary.
     Such a submission should be on a 3.5 inch diskette formatted in an
     IBM compatible format using Microsoft ^TM^ Word 97 for Windows or
     compatible software. The diskette should be accompanied by a cover
     letter and should be submitted in "read only" mode. The diskette
     should be clearly labeled with the commenter's name, proceeding,
     type of pleading (comment or reply comment), date of submission,
     and the name of the electronic file on the diskette. The label
     should also include the following phrase "Disk Copy -- Not an
     Original." Each diskette should contain only one party's pleadings,
     preferably in a single electronic file. In addition, commenters
     should send diskette copies to the Commission's copy contractor,
     Qualex International, 445 12^th^ Street, SW, Room CY-B402,
     Washington, DC, 20554, 202-863-2893.

252. The public may view the documents filed in this proceeding during
     regular business hours in the FCC Reference Information Center,
     Federal Communications Commission, 445 12^th^ Street, S.W., Room
     CY-A257, Washington, D. C. 20554, and on the Commission's Internet
     Home Page: \<http://www.fcc.gov\>. Copies of comments and reply
     comments are also available through the Commission**'**s
     duplicating contractor: Qualex International, 445 12^th^ Street,
     SW, Room CY-B402, Washington, DC, 20554, 202-863-2893. Accessible
     formats (computer diskettes, large print, audio recording and
     Braille) are available to persons with disabilities by contacting
     Brian Millin, of the Consumer & Governmental Affairs Bureau,
     at (202) 418-7426, TTY (202) 418-7365, or at bmillin@fcc.gov.

## Initial Regulatory Flexibility Analysis

253. As required by the Regulatory Flexibility Act of 1980 (RFA),[^589]
     the Commission has prepared an Initial Regulatory Flexibility
     Analysis (IRFA) of the possible significant economic impact on
     small entities of the policies and rules proposed in the Notice.
     The analysis is found in Appendix A. We request written public
     comment on the analysis. Comments must be filed in accordance with
     the same deadlines as comments filed in response to the *NPRM &
     MO&O*, and must have a separate and distinct heading designating
     them as responses to the IRFA. The Commission**'**s Consumer and
     Governmental Affairs Bureau, Reference Information Center, will
     send a copy of this *NPRM & MO&O*, including the IRFA, to the Chief
     Counsel for Advocacy of the Small Business Administration.

## Paperwork Reduction Analysis

254. This item proposes no new information collections.

## Further Information

255. For further information concerning this rulemaking proceeding,
     contact Nancy Zaczek or Charles Oliver at (202) 418-0680, Public
     Safety and Private Wireless Division, Wireless Telecommunications
     Bureau, Federal Communications Commission, 445 12^th^ Street, S.W.,
     Room. 4-C367, Washington, D.C. 20554; or via the Internet to
     *nzaczek@fcc.gov* or *coliver@fcc.gov*.

# ORDERING CLAUSES 

256. Accordingly, IT IS ORDERED, pursuant to sections 1, 2, 4(i), 7, 10,
     201, 214, 301, 302, 303, 307, 308, 309, 310, 319, 324, 332, 333 and
     706 of the Communications Act of 1934, 47 U.S.C. §§ 151, 152,
     154(i), 157, 160, 201, 214, 301, 302, 303, 307, 308, 309, 310, 319,
     324, 332, 333, and 706, that this *Notice of Proposed Rulemaking
     and Memorandum Opinion and Order* is hereby ADOPTED.

257. IT IS FURTHER ORDERED that the five-year build-out requirements in
     section 21.930 of our rules, 47 C.F.R. § 21.930, IS SUSPENDED until
     further notice.

258. IT IS FURTHER ORDERED the build-out requirements for site-based
     ITFS and MDS licensees and permittees that have not expired as of
     the release date of this *Memorandum Opinion and Order* ARE
     SUSPENDED until further notice.

259. IT IS FURTHER ORDERED that applications for new MDS or ITFS
     licenses, major modifications of MDS stations, or major changes to
     ITFS stations other than applications for license assignments or
     transfers of control WILL NOT BE ACCEPTED until further notice.

260. With regard to mutually exclusive ITFS applications, IT IS FURTHER
     ORDERED that applications for acceptance of settlement agreements
     filed after the release date of this *Notice of Proposed Rulemaking
     and Memorandum Opinion and Order* WILL NOT BE ACCEPTED.

261. IT IS FURTHER ORDERED that NOTICE IS HEREBY GIVEN of the proposed
     regulatory changes described in this *NPRM & MO&O*, and that
     comment is sought on these proposals.

262. IT IS FURTHER ORDERED that the Commission's Consumer and
     Governmental Affairs Bureau, Reference Information Center, SHALL
     SEND a copy of this *NPRM & MO&O*, including the Initial Regulatory
     Flexibility Analysis, to the Chief Counsel for Advocacy of the
     Small Business Administration.

> Federal Communications Commission
>
> Marlene H. Dortch

Secretary

# APPENDIX A {#appendix-a .unnumbered}

# INITIAL REGULATORY FLEXIBILITY ANALYSIS {#initial-regulatory-flexibility-analysis-1 .unnumbered}

*(For Notice of Proposed Rulemaking)*

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    (RFA),[^590] the Commission has prepared this present Initial
    Regulatory Flexibility Analysis (IRFA) of the possible significant
    economic impact on a substantial number of small entities by the
    policies and rules proposed in this *Notice of Proposed Rule Making
    and Memorandum Opinion and Order (NPRM & MO&O)*. Written public
    comments are requested on this IRFA. Comments must be identified as
    responses to the IRFA and must be filed by the deadlines specified
    in the *NPRM & MO&O* for comments. The Commission will send a copy
    of this *NPRM & MO&O*, including this IRFA, to the Chief Counsel for
    Advocacy of the Small Business Administration (SBA).[^591] In
    addition, the *NPRM & MO&O* and IRFA (or summaries thereof) will be
    published in the Federal Register.[^592]

    **Need for, and Objectives of, the Proposed Rules**

2.  In this *NPRM* we propose a number of changes and ask for comments
    concerning the rules governing the 2500-2690 MHz band, for the
    Multipoint Distribution Service (MDS), the Multichannel Multipoint
    Distribution Service (MMDS), and the Instructional Television Fixed
    Service (ITFS). Our proposals include:

-   Proposing technical rules to increase licensee flexibility;

-   Seeking comment on revising the band plan;

-   Proposing service rules for mobile operation;

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-   Proposing to encourage entrepreneurial efforts to develop new
    technologies and services by opening ITFS spectrum to a wide range
    of applicants;

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-   Proposing to simplify and streamline the licensing process;

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-   Proposing application filing and processing to facilitate electronic
    filing in ULS;

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-   Proposing to consolidate these services under Part 101;

-   Tentatively concluding that MDS and ITFS licensees should receive a
    six-month transition period after application processing in ULS
    begins before requiring mandatory electronic filing in ULS;

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-   Suspending the acceptance and processing of applications in this
    band, with certain exceptions, until the completion of this
    rulemaking proceeding;

-   Suspending the current August 16, 2003 construction deadline for BTA
    authorization holders; and

-   Proposing to assign ITFS licenses through competitive bidding.

3.  We believe our proposals will encourage the enhancement of existing
    services using this band and the development of new innovative
    services to the public such as providing wireless broadband
    services, including high-speed Internet access and mobile services.
    We also believe that our proposals will allow licensees to adapt
    quickly to changing market conditions and the marketplace, rather
    than the government, to determine how this band will best be used.

**Legal Basis**

4.  The proposed action is authorized under Sections 1, 2, 4(i), 7, 10,
    201, 214, 301, 302, 303, 307, 308, 309, 310, 319, 324, 332, 333 and
    706 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151,
    152, 154(i), 157, 160, 201, 214, 301, 302, 303, 307, 308, 309, 310,
    319, 324, 332, 333, and 706.

**Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply**

5.  The RFA directs agencies to provide a description of and, where
    feasible, an estimate of the number of small entities that may be
    affected by the proposed rules.[^593] The RFA generally defines the
    term "small entity" as having the same meaning as the terms, "small
    business," "small organization," and "small governmental
    jurisdiction."[^594] In addition, the term "small business" has the
    same meaning as the term "small business concern" under the Small
    Business Act.[^595] 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.[^596] A small organization is generally "any
    not-for-profit enterprise which is independently owned and operated
    and is not dominant in its field."[^597] Nationwide, as of 1992,
    there were approximately 275,801 small organizations.[^598] The
    definition of "small governmental jurisdiction" is one with a
    population of fewer than 50,000.[^599] There are 85,006 governmental
    jurisdictions in the nation.[^600] This number includes such
    entities as states, counties, cities, utility districts and school
    districts. There are no figures available on how many of these
    entities have populations of fewer than 50,000. However, this number
    includes 38,978 counties, cities and towns, and of those, 37,556, or
    96 percent, have populations of fewer than 50,000.[^601] The Census
    Bureau estimates that this ratio is approximately accurate for all
    government entities. Thus, of the 85,006 governmental entities, we
    estimate that 96 percent, or about 81,600, are small entities that
    may be affected by our rules.

6.  Nationwide, there are 4.44 million small business firms, according
    to SBA reporting data.[^602] In this section, we further describe
    and estimate the number of small entity licensees and regulatees
    that may be affected by rules adopted pursuant to this NPRM. The
    most reliable source of information regarding the total numbers of
    certain common carrier and related providers nationwide, as well as
    the number of commercial wireless entities, appears to be the data
    that the Commission publishes in its *Trends in Telephone Service*
    report.[^603] The SBA has developed small business size standards
    for wireline and wireless small businesses within the three
    commercial census categories of Wired Telecommunications
    Carriers,[^604] Paging,[^605] and Cellular and Other Wireless
    Telecommunications. [^606] Under these categories, a business is
    small if it has 1,500 or fewer employees. Below, using the above
    size standards and others, we discuss the total estimated numbers of
    small businesses that might be affected by our actions.

7.  *Multipoint Distribution Service, Multichannel Multipoint
    Distribution Service, and ITFS.* Multichannel Multipoint
    Distribution Service (MMDS) systems, often referred to as "wireless
    cable," transmit video programming to subscribers using the
    microwave frequencies of the Multipoint Distribution Service (MDS)
    and Instructional Television Fixed Service (ITFS).[^607] In
    connection with the 1996 MDS auction, the Commission established a
    small business size standard as an entity that had annual average
    gross revenues of less than \$40 million in the previous three
    calendar years.[^608] The MDS auctions resulted in 67 successful
    bidders obtaining licensing opportunities for 493 Basic Trading
    Areas (BTAs). Of the 67 auction winners, 61 met the definition of a
    small business. MDS also includes licensees of stations authorized
    prior to the auction. In addition, the SBA has developed a small
    business size standard for Cable and Other Program Distribution,
    which includes all such companies generating \$12.5 million or less
    in annual receipts.[^609] According to Census Bureau data for 1997,
    there were a total of 1,311 firms in this category, total, that had
    operated for the entire year.[^610] Of this total, 1,180 firms had
    annual receipts of under \$10 million and an additional 52 firms had
    receipts of \$10 million or more but less than \$25 million.
    Consequently, we estimate that the majority of providers in this
    service category are small businesses that may be affected by the
    rules and policies adopted herein. This SBA small business size
    standard also appears applicable to ITFS. There are presently 2,032
    ITFS licensees. All but 100 of these licenses are held by
    educational institutions. Educational institutions are included in
    this analysis as small entities.[^611] Thus, we tentatively conclude
    that at least 1,932 licensees are small businesses.

8.  In connection with the 1996 MDS auction, the Commission defined
    "small business" 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.[^612] The Commission
    established this small business definition in the context of this
    particular service and with the approval of SBA.[^613] The MDS
    auction resulted in 67 successful bidders obtaining licensing
    opportunities for 493 Basic Trading Areas (BTAs).[^614] Of the 67
    auction winners, 61 met the definition of a small business. At this
    time, we estimate that of the 61 small business MDS auction winners,
    48 remain small business licensees. In addition to the 48 small
    businesses that hold BTA authorizations, there are approximately 392
    incumbent MDS licensees that are considered small entities.[^615]
    After adding the number of small business auction licensees to the
    number of incumbent licensees not already counted, we find that
    there are currently approximately 440 MDS licensees that are defined
    as small businesses under either the SBA or the Commission's rules.
    Some of those 440 small business licensees may be affected by the
    proposals in this *NPRM & MO&O*.

9.  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 that includes all such
    companies generating \$11 million or less in annual receipts.[^616]
    This definition includes multipoint distribution systems, and thus
    applies to MDS licensees and wireless cable operators that 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 IRFA, we find 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.

10. 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.[^617] ITFS is a
    non-profit non-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.[^618] 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 additional flexibility to ITFS.

**Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements.**

11. As noted previously,[^619] applicants for MDS or ITFS licenses would
    be required to apply through the Universal Licensing System using
    FCC Form 601,[^620] and other appropriate forms.[^621] Licensees
    will also be required to apply for an individual station license by
    filing FCC Form 601 for those individual stations that (1) require
    submission of an Environmental Assessment of the facilities under
    Section 1.1307 of our Rules;[^622] (2) require international
    coordination of the application;[^623] or (3) require coordination
    with the Frequency Assignment Subcommittee (FAS) of the
    Interdepartment Radio Advisory Committee (IRAC). While these
    requirements are new with respect to potential licensees in the ITFS
    and MDS bands, the Commission has applied these requirements to
    licensees in other bands. Moreover, the Commission is also proposing
    to eliminate many burdensome filing requirements that have
    previously been applied to MDS and ITFS.

[^624]**Steps Taken to Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered.**

12. The RFA requires an agency to describe any significant alternatives
    that it has considered in reaching its proposed approach, which may
    include the following four alternatives: "(1) the establishment of
    differing compliance or reporting requirements or timetables that
    take into account the resources available to small entities; (2) the
    clarification, consolidation, or simplification of compliance or
    reporting requirements under the rule for such small entities; (3)
    the use of performance, rather than design standards; and (4) an
    exemption from coverage of the rule, or any part thereof, for small
    entities."[^625]

13. In this *NPRM & MO&O*, we seek comment on a number of proposals and
    alternatives regarding the use of the 2500-2690 MHz band. This *NPRM
    & MO&O* seeks to adopt rules that will reduce regulatory burdens,
    promote innovative services and encourage flexible use of this
    spectrum. It opens up economic opportunities to a variety of
    spectrum users, including small businesses. We consider various
    proposals and alternatives partly because we seek to minimize, to
    the extent possible, the economic impact on small businesses.

14. We have reduced the burdens wherever possible. To minimize any
    further negative impact, however, we propose certain exclusive
    incentives for small entities that will redound to their benefit. We
    propose the use of bidding credits for small entities that
    participate in auctions of licenses that are conducted pursuant to
    the rules proposed in this *NPRM & MO&O*. We propose to define a
    "small business" as an entity with average annual gross revenues for
    the preceding three years not exceeding \$40 million, a "very small
    business" as an entity with average gross revenues for the preceding
    three years not exceeding \$15 million, and an "entrepreneur" as an
    entity with average annual gross revenues for the preceding three
    years not exceeding \$3 million.[^626] We propose that entities
    qualifying as small businesses will receive a 15% bidding credit,
    that entities qualifying as very small businesses will receive a 25%
    bidding credit, and that entities qualifying as entrepreneurs will
    receive a 35% bidding credit. Qualifying small businesses, very
    small businesses, and entrepreneurs can reduce their winning bids by
    the amount of their bidding credits. We believe that these bidding
    credits will help small entities compete in our auctions and acquire
    licenses. We seek comment on our proposed small business definitions
    and bidding credits, including information on factors that may
    affect the capital requirements of the type of services a licensee
    may seek to provide.

15. The regulatory burdens contained in the *NPRM & MO&O,* such as
    filing applications on appropriate forms, are necessary in order to
    ensure that the public receives the benefits of innovative new
    services, or enhanced existing services, in a prompt and efficient
    manner. We will continue to examine alternatives in the future with
    the objectives of eliminating unnecessary regulations and minimizing
    any significant economic impact on small entities. We seek comment
    on significant alternatives commenters believe we should adopt.

**Federal Rules that May Duplicate, Overlap, or Conflict with the
Proposed Rule**

16. None.

# APPENDIX B {#appendix-b .unnumbered}

# PROPOSED RULES {#proposed-rules .unnumbered}

1.  For the reasons discussed in the preamble, the Federal
    Communications Commission proposes to amend 47 CFR Parts 1, 21, 73,
    74, and 101 as follows:

2.  Part 1 of Title 47 of the Code of Federal Regulations is proposed to
    be amended as follows:

**PART 1 -- PRACTICE AND PROCEDURE**

**\
** 1. The authority citation for Part 1 continues to read:

 Authority: 47 U.S.C. 151, 154(i), 154(j), 155, 225, 303®, 309 and
325(e).

2\. Section 1.933(c) is amended to add subparagraphs (8) and (9) as
follows:

\* \* \* \* \*

\(8\) Multipoint Distribution Service.

\(9\) Instructional Television Fixed Service.

3\. Section 1.1102 is amended by amending paragraph 20 to read as
follows:

20. Multipoint  Distribution Service (including Multi-channel MDS) 

a. New Station 601 & 159 220.00 CJM      
Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358155, 

Pittsburgh, PA 15251-5155. 

b. Major Modification of  

  License 601 &159 220.00CJM  Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358994, 

Pittsburgh, PA 15251-5155. 

c. Certification of  Completion of 

  Construction 601 & 159 80.00 CJM     
Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358155, 

Pittsburgh, PA 15251-5155. 

d. License Renewal  601 & 159 220.00 CJM 
  Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358155, 

Pittsburgh, PA 15251-5155. 

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

  e. Assignment or Transfer: 

  

(b) First Station on Application  603 & 159

> 80.00 CCM       Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358155, 

Pittsburgh, PA 15251-5155. 

  (ii) Each Additional 

  Station \...\...\...\...\....  603 & 159  50.00  CAM 
Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358155, 

Pittsburgh, PA 15251-5155. 

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

f. Extension of 

  Construction 

  Authorization \...\...\.... 601 & 159  185.00  CHM   
 Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358155, 

Pittsburgh, PA 15251-5155. 

g. Special Temporary 

  Authority or Request 

  for Waiver of Prior 

  Construction 

  Authorization \...\...\.... Corres & 159 
100.00  CEM     Federal Communications Commission,

Wireless Bureau Applications,

P.O. Box 358155, 

Pittsburgh, PA 15251-5155. 

  -----------------------------------------------------------------------

  -----------------------------------------------------------------------

(b) \* \* \* \*

Under the authority 47 U.S.C. § 154, amend 47 C.F.R. chapter I by
removing Part 21.

3.  Part 74 of Title 47 of the Code of Federal Regulations is proposed
    to be amended as follows:

    **PART 74 -- EXPERIMENTAL RADIO, AUXILIARY, SPECIAL BROADCASTING AND
    OTHER PROGRAM DISTRIBUTIONAL SERVICES**

    1\. The authority citation for Part 74 continues to read as follows:

    AUTHORITY: 47 U.S.C. 154, 303, 307, 336(f), 336(h) and 554.

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(b) Section 74.1 is revised to read as follows:

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b\) Rules in Part 74 which apply exclusively to a particular service are
contained in that service subpart, as follows: Experimental Broadcast
Stations, Subpart A; Remote Pickup Broadcast Stations, Subpart D; Aural
Broadcast STL and Intercity Relay Stations, Subpart E; TV Auxiliary
Broadcast Stations, Subpart F; Low Power TV, TV Translator and TV
Booster Stations,

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Subpart G; Low Power Auxiliary Stations, Subpart H; FM Broadcast
Translator Stations and FM Broadcast Booster Stations, Subpart L.

3\. Subpart I is reserved.

4.  Part 101 of Title 47 of the Code of Federal Regulations is proposed
    to be amended as follows:

    1\. The authority citation for Part 101 continues to read as
    follows:

**AUTHORITY: 47 U.S.C. 154 and 303, unless otherwise noted.**

2\. Section 101.3 is amended to add the following definitions:

\* \* \* \*

*Instructional Television Fixed Service.* A fixed or mobile service
intended primarily for video, data, or voice transmissions of
instructional, cultural, and other types of educational material to one
or more receiving locations.

(b) \* \* \*

*Multipoint Distribution Service.* A domestic public radio service
rendered on microwave frequencies from one or more stations transmitting
to multiple receiving facilities.

(b) Section 101.101 of the Commission's Rules is amended to read as
    follows:

                                          Radio service 

 Frequency band       Common       Private     
Broadcast       Other      Notes 

      (MHz)           carrier        radio      
auxiliary      (Parts 15, 22, 24

                       (Part  101)      (Part 101)      
(Part 74)      25, 74, 78, and 100) 

\* \* \* \*

2450-2500 LTTS OFS TV BAS ISM F/M/TF

2500-2650 ITFS MDS ITFS MDS

2650-2690  ITFS MDS OFS MDS/ITFS 

(b) \* \* \* 

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-- 

BAS: Broadcast Auxiliary Service--(Part 74) 

CARS: Cable Television Relay Service --(Part 78) 

CC: Common Carrier Fixed Point-to-Point Microwave Service--(Part 101, Subparts 

  C & I) 

DBS: Direct Broadcast Satellite--(Part 100) 

DEMS: Digital Electronic Message Service--(Part 101, Subpart G) 

ISM: Industrial, Scientific & Medical--(Part 18) 

ITFS: Instructional Television Fixed Service--(Part 101, Subpart P) 

LTTS: Local Television Transmission Service--(Part 101, Subpart J) 

MAS: Multiple Address System--(Part 101) 

MDS: Multipoint Distribution Service--(Part 101, Subpart Q) 

OFS: Private Operational Fixed Point-to-Point Microwave Service--(Part 101, 

  Subparts C & H) 

PCS: Personal Communications Service--(Part 24) 

PET: Emerging Technologies (per ET Dkt. No. 92-9, not yet assigned) 

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  PRS: Paging and Radiotelephone Service--(Part 22, Subpart E) 

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SAT: Fixed Satellite Service--(Part 25) 

4\. Part 101 is amended to add a new Subpart P, as follows:

**Subpart P: Instructional Television Fixed Service**

101.1401 Purpose and Permissible Service:

(a)(1) Instructional television fixed stations are intended primarily
through video, data, or voice transmissions to further the educational
mission of accredited public and private schools, colleges and
universities providing a formal educational and cultural development to
enrolled students. Authorized instructional television fixed station
channels must be used to further the educational mission of accredited
schools offering formal educational courses to enrolled students.

\(2\) In furtherance of the educational mission of accredited schools,
instructional television fixed station channels may be used for:

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(b) In-service training and instruction in special skills and safety
    programs, extension of professional training, informing persons and
    groups engaged in professional and technical activities of current
    developments in their particular fields, and other similar
    endeavors.

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\(ii\) Transmission of material directly related to the administrative
activities of the licensee, such as the holding of conferences with
personnel, distribution of reports and assignments, exchange of data and
statistics, and other similar uses.

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\(iii\) Response channels transmitting information associated with
formal educational courses offered to enrolled students, including uses
described in paragraphs (a)(2)(i) and (ii) of this section, from ITFS
response stations to response station hubs

\(b\) Stations may be licensed in this service as originating or relay
stations to interconnect instructional television fixed stations in
adjacent areas, to deliver instructional and cultural material to, and
obtain such material from, commercial and noncommercial educational
television broadcast stations for use on the instructional television
fixed system, and to deliver instructional and cultural material to, and
obtain such material from, nearby terminals or connection points of
closed circuit educational television systems employing wired
distribution systems or radio facilities authorized under other parts of
this Chapter, or to deliver instructional and cultural material to any
CATV system serving a receiving site or sites which would be eligible
for direct reception of ITFS signals under the provisions of paragraph
(a) of this section.

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> \(3\) When an ITFS licensee makes capacity available on a common
> carrier basis, it will be subject to common carrier regulation.

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\(1\) A licensee operating as a common carrier is required to comply
with all policies and rules applicable to that service. Responsibility
for making the initial determination of whether a particular activity is
common carriage rests with the ITFS licensee.

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\(2\) An ITFS licensee also may alternate, without further authorization
required, between rendering service on a common carrier and non-common
carrier basis, provided that the licensee notifies the Commission of any
service status changes at least 30 days in advance of such changes. The
notification shall state whether there is any affiliation or
relationship to any intended or likely subscriber or program originator.

101.1402 BTA license authorization.

\(a\) Winning bidders must file an application (FCC Form 601) for an
initial authorization in each market and frequency block.

\(b\) Blanket licenses are granted for each market and frequency block.
Blanket licenses cover all mobile and response stations. Blanket
licenses also cover all fixed stations anywhere within the authorized
service area, except as follows:

\(1\) A fixed station (other than a response station) would be required
to be individually licensed if:

\(i\) International agreements require coordination;

\(ii\) Submission of an Environmental Assessment is required under §
1.1307 of this chapter;

\(iii\) The station would affect the radio quiet zones under § 1.924 of
this chapter.

\(2\) Any antenna structure that requires notification to the Federal
Aviation Administration (FAA) must be registered with the Commission
prior to construction under § 17.4 of this chapter.

101.1403 Service areas.

Most ITFS service areas are Basic Trading Areas (BTAs). BTAs are based
on the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd
Edition, at pages 38-39. The following are additional ITFS service areas
in places where Rand McNally has not defined BTAs: American Samoa; Guam;
Northern Mariana Islands; Mayaguez/Aguadilla-Ponce, Puerto Rico; San
Juan, Puerto Rico; and the United States Virgin Islands. The
Mayaguez/Aguadilla-Ponce, PR, service area consists of the following
municipios: Adjuntas, Aguada, Aguadilla, Anasco, Arroyo, Cabo Rojo,
Coamo, Guanica, Guayama, Guayanilla, Hormigueros, Isabela, Jayuya, Juana
Diaz, Lajas, Las Marias, Maricao, Maunabo, Mayaguez, Moca, Patillas,
Penuelas, Ponce, Quebradillas, Rincón, Sabana Grande, Salinas, San
German, Santa Isabel, Villalba and Yauco. The San Juan service area
consists of all other municipios in Puerto Rico.

101.1404 Conversion of incumbent ITFS stations to geographic area
licensing.

\(a\) Any ITFS station licensed by the Commission prior to \[date to be
decided\] as well as assignments and transfers approved by the
Commission and consummated as of \[date to be decided\] shall be
considered incumbent and grandfathered (may continue to operate under
their licensed parameters).

\(b\) As of \[date to be decided\], all incumbent ITFS licenses shall be
converted to a blanket license. Pursuant to that geographic area
license, such incumbent licensees may modify their systems provided the
signal level \[specific level to be decided\] does not increase outside
their pre-existing protected service area. The blanket license covers
all fixed stations anywhere within the authorized service area, except
as follows:

\(1\) A fixed station (other than a response station) would be required
to be individually licensed if:

\(i\) International agreements require coordination;

\(ii\) Submission of an Environmental Assessment is required under §
1.1307 of this chapter;

\(iii\) The station would affect the radio quiet zones under § 1.924 of
this chapter.

\(2\) Any antenna structure that requires notification to the Federal
Aviation Administration (FAA) must be registered with the Commission
prior to construction under § 17.4 of this chapter.

Incumbent operators and geographic area licensees may negotiate
alternative criteria.

\(c\) The frequencies associated with incumbent authorizations that have
been cancelled automatically or otherwise been recovered by the
Commission will automatically revert to the applicable BTA licensee.

101.1405 Performance Requirements

\(a\) Incumbent site-based licensees are subject to the construction
requirements set forth in § 101.63.

(b)) All ITFS BTA licensees must demonstrate substantial service at the
time of license renewal. A licensee's substantial service showing should
include, but not be limited to, the following information for each
channel for which it holds a license, in each BTA or portion of a BTA
covered by their license, in order to qualify for renewal of that
license. The information provided will be judged by the Commission to
determine whether the licensee is providing service which rises to the
level of "substantial."

\(1\) A description of the ITFS licensee's current service in terms of
geographic coverage;

\(2\) Copies of all orders or other adjudications that the licensee has
violated the Communications Act or the Commission's Rules or policies;

( 3) A description of the ITFS band licensee's current service in terms
of population served, as well as any additional service provided during
the license term;

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\(4\) A description of the ITFS licensee's investments in its system(s)
(type of facilities constructed and their operational status is
required);

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\(b\) Any ITFS licensees adjudged not to be providing substantial
service will not have their licenses renewed.

101.1406 Partitioning and Disaggregation

a\) Eligibility.

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\(1\) Parties seeking approval for partitioning and disaggregation shall
request from the Commission an authorization for partial assignment of
license. Geographic area licensees may participate in aggregation,
disaggregation, and partitioning within the bands licensed on a
geographic area basis

.

\(2\) Eligible ITFS licensees may apply to the Commission to partition
their licensed geographic service areas to eligible entities and are
free to determine the portion of their service areas to be partitioned.
Eligible ITFS licensees may aggregate or disaggregate their licensed
spectrum at any time following the grant of a license.

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\(b\) Technical standards--

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(b) There is no limitation on the amount of spectrum that an ITFS
    licensee may aggregate.

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\(2\) Spectrum may be disaggregated in any amount. A licensee need not
retain a minimum amount of spectrum.

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\(3\) In the case of partitioning, applicants and licensees must file
FCC Form 603 pursuant to § 1.948 of this chapter and list the
partitioned service area on a schedule to the application. The
geographic coordinates must be specified in degrees, minutes, and
seconds to the nearest second of latitude and longitude, and must be
based upon the 1983 North American Datum (NAD83).

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\(4\) Combined partitioning and disaggregation. The Commission will
consider requests from geographic area licensees for partial assignment
of licenses that propose combinations of partitioning and
disaggregation.

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\(c\) Construction requirements.

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\(1\) Disaggregation. Partial assignors and assignees for license
disaggregation have two options to meet construction requirements. Under
the first option, the disaggregator and Disaggregate would certify that
they each will share responsibility for meeting the applicable
construction requirements set forth in § 101.1406 for the geographic
service area. If parties choose this option and either party fails to
demonstrate substantial service, both licenses would be subject to
forfeiture at renewal. The second option allows the parties to agree
that either the disaggregator or 111isaggregate would be responsible for
meeting the requirements in § 101.1405 for the geographic service area.
If parties choose this option, and the party responsible for meeting the
construction requirement fails to do so, only the license of the
non-performing party would be subject to forfeiture at renewal.

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\(2\) Partitioning. Partial assignors and assignees for license
partitioning have two options to meet construction requirements. Under
the first option, the partitionor and partitionee would each certify
that they will independently provide substantial service for their
respective partitioned areas. If either licensee fails to meet its
requirement in § 101.1405, only the non-performing licensee's renewal
application would be subject to dismissal. Under the second option, the
partitionor certifies that it has met or will meet the requirement in §
101.1405 for the entire market. If the partitionor fails to meet the
requirement in § 101.1405, however, only its license would be subject to
forfeiture at renewal.

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\(3\) All applications requesting partial assignments of license for
partitioning or disaggregation must certify in the appropriate portion
of the application which construction option is selected.

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\(4\) Responsible parties must submit supporting documents as required
by § 101.1405.

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\(d\) License term. The license term for a partitioned license area and
for disaggregated spectrum shall be the remainder of the original
licensee's license term.

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(b) Remote Control Operation.

Licensed ITFS stations may be operated by remote control without further
authority.

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101.1408 Unattended Operation

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Unattended operation of licensed ITFS stations is permitted without
further authority. An unattended relay station may be employed to
receive and retransmit signals of another station provided that the
transmitter is equipped with circuits which permit it to radiate only
when the signal intended to be retransmitted is present at the receiver
input terminals.

101.1409 License Term

\(a\) Incumbent ITFS licenses shall be issued for a period of 10 years
beginning with the date of grant.

\(b\) A BTA authorization shall be issued for a period of ten years from
the date the Commission declared bidding closed in the ITFS auction.

(b) Part 101 is amended to add a new Subpart Q, as follows:

**Subpart Q: Multipoint Distribution Service:**

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101.1501 Purpose and Permissible Service:

Multipoint Distribution Service stations may provide any fixed or mobile
services for which its frequency bands are allocated, subject to the
technical and other rules contained in this part and subpart.

101.1502 BTA license authorization.

\(a\) Winning bidders must file an application (FCC Form 601) for an
initial authorization in each market and frequency block.

\(b\) Blanket licenses are granted for each market and frequency block.
Blanket licenses cover all mobile and response stations. Blanket
licenses also cover all fixed stations anywhere within the authorized
service area, except as follows:

\(1\) A fixed station (other than a response station) would be required
to be individually licensed if:

\(i\) International agreements require coordination;

\(ii\) Submission of an Environmental Assessment is required under §
1.1307 of this chapter;

\(iii\) The station would affect the radio quiet zones under § 1.924 of
this chapter.

\(2\) Any antenna structure that requires notification to the Federal
Aviation Administration (FAA) must be registered with the Commission
prior to construction under § 17.4 of this chapter.

101.1503 Service areas.

MDS service areas are Basic Trading Areas (BTAs). BTAs are based on the
Rand McNally *1992 Commercial Atlas & Marketing Guide*, 123^rd^ Edition,
at pages 38-39, with the following additions licensed separately as
BTA-like areas: American Samoa; Guam; Northern Mariana Islands;
Mayaguez/Aguadilla-Ponce, Puerto Rico; San Juan, Puerto Rico; and the
United States Virgin Islands. The 113isaggre/Aguadilla-Ponce BTA-like
service area consists of the following municipios: Adjuntas, Aguada,
Aguadilla, Anasco, Arroyo, Cabo Rojo, Coamo, Guanica, Guayama,
Guayanilla, Hormigueros, Isabela, Jayuya, Juana Diaz, Lajas, Las Marias,
113isaggre, Maricao, Maunabo, Moca, Patillas, Penuelas, Ponce,
Quebradillas, 113isagg, Sabana Grande, Salinas, San German, Santa
Isabel, Villalba and Yauco. The San Juan BTA-like service area consists
of all other municipios in Puerto Rico.

101.1504 Conversion of incumbent MDS stations to geographic area
licensing.

\(a\) Any MDS station licensed by the Commission prior to \[date to be
decided\] as well as assignments and transfers approved by the
Commission and consummated as of \[date to be decided\] shall be
considered incumbent and grandfathered (may continue to operate under
their licensed parameters).

\(b\) As of \[date to be decided\], all incumbent MDS licenses shall be
converted to a blanket license. Pursuant to that geographic area
license, such incumbent licensees may modify their systems provided the
signal level \[specific level to be decided\] does not increase outside
their pre-existing protected service area. The blanket license covers
all fixed stations anywhere within the authorized service area, except
as follows:

\(1\) A fixed station (other than a response station) would be required
to be individually licensed if:

\(i\) International agreements require coordination;

\(ii\) Submission of an Environmental Assessment is required under §
1.1307 of this chapter;

\(iii\) The station would affect the radio quiet zones under § 1.924 of
this chapter.

\(2\) Any antenna structure that requires notification to the Federal
Aviation Administration (FAA) must be registered with the Commission
prior to construction under § 17.4 of this chapter.

® The frequencies associated with incumbent authorizations that have
been cancelled automatically or otherwise been recovered by the
Commission will automatically revert to the applicable BTA licensee.

101.1505 Performance Requirements

\(a\) Incumbent site-based licensees are subject to the construction
requirements set forth in § 101.63.

(b)) All MDS BTA licensees must demonstrate substantial service at the
time of license renewal. A licensee's substantial service showing should
include, but not be limited to, the following information for each
channel for which it holds a license, in each BTA or portion of a BTA
covered by their license, in order to qualify for renewal of that
license. The information provided will be judged by the Commission to
determine whether the licensee is providing service which rises to the
level of "substantial."

\(1\) A description of the MDS licensee's current service in terms of
geographic coverage;

\(2\) Copies of all orders or other adjudications that the licensee has
violated the Communications Act or the Commission's Rules or policies;

( 3) A description of the MDS licensee's current service in terms of
population served, as well as any additional service provided during the
license term;

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\(4\) A description of the MDS licensee's investments in its system(s)
(type of facilities constructed and their operational status is
required);

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\(b\) Any MDS licensees adjudged not to be providing substantial service
will not have their licenses renewed.

101.1506 Partitioning and Disaggregation

a\) Eligibility.

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\(1\) Parties seeking approval for partitioning and disaggregation shall
request from the Commission an authorization for partial assignment of
license. Geographic area licensees may participate in aggregation,
disaggregation, and partitioning within the bands licensed on a
geographic area basis

.

\(2\) Eligible MDS licensees may apply to the Commission to partition
their licensed geographic service areas to eligible entities and are
free to determine the portion of their service areas to be partitioned.
Eligible MDS licensees may aggregate or disaggregate their licensed
spectrum at any time following the grant of a license.

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\(b\) Technical standards--

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(b) There is no limitation on the amount of spectrum that an MDS
    licensee may aggregate.

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\(2\) Spectrum may be disaggregated in any amount. A licensee need not
retain a minimum amount of spectrum.

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\(3\) In the case of partitioning, applicants and licensees must file
FCC Form 603 pursuant to § 1.948 of this chapter and list the
partitioned service area on a schedule to the application. The
geographic coordinates must be specified in degrees, minutes, and
seconds to the nearest second of latitude and longitude, and must be
based upon the 1983 North American Datum (NAD83).

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\(4\) Combined partitioning and disaggregation. The Commission will
consider requests from geographic area licensees for partial assignment
of licenses that propose combinations of partitioning and
disaggregation.

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® Construction requirements.

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\(1\) Disaggregation. Partial assignors and assignees for license
disaggregation have two options to meet construction requirements. Under
the first option, the disaggregator and 114isaggregate would certify
that they each will share responsibility for meeting the applicable
construction requirements set forth in § 101.1505 for the geographic
service area. If parties choose this option and either party fails to
demonstrate substantial service, both licenses would be subject to
forfeiture at renewal. The second option allows the parties to agree
that either the disaggregator or 114isaggregate would be responsible for
meeting the requirements in § 101.1505 for the geographic service area.
If parties choose this option, and the party responsible for meeting the
construction requirement fails to do so, only the license of the
non-performing party would be subject to forfeiture at renewal.

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\(2\) Partitioning. Partial assignors and assignees for license
partitioning have two options to meet construction requirements. Under
the first option, the partitionor and partitionee would each certify
that they will independently provide substantial service for their
respective partitioned areas. If either licensee fails to meet its
requirement in § 101.1505, only the non-performing licensee's renewal
application would be subject to dismissal. Under the second option, the
partitionor certifies that it has met or will meet the requirement in §
101.1505 for the entire market. If the partitionor fails to meet the
requirement in § 101.1505, however, only its license would be subject to
forfeiture at renewal.

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\(3\) All applications requesting partial assignments of license for
partitioning or disaggregation must certify in the appropriate portion
of the application which construction option is selected.

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\(4\) Responsible parties must submit supporting documents as required
by § 101.1405.

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\(d\) License term. The license term for a partitioned license area and
for disaggregated spectrum shall be the remainder of the original
licensee's license term.

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(b) Remote Control Operation.

MDS stations may be operated by remote control without further
authority.

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101.1508 Unattended Operation

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Unattended operation of licensed MDS stations is permitted without
further authority. An unattended relay station may be employed to
receive and retransmit signals of another station provided that the
transmitter is equipped with circuits which permit it to radiate only
when the signal intended to be retransmitted is present at the receiver
input terminals.

101.1509 License Term

\(a\) Incumbent MDS licenses shall be issued for a period of 10 years
beginning with the date of grant.

\(b\) A BTA authorization shall be issued for a period of ten years from
the date the Commission declared bidding closed in the MDS auction.

# Appendix C {#appendix-c .unnumbered}

# The Coalition Plan {#the-coalition-plan .unnumbered}

1.  The Coalition proposes to split the 2500-2690 MHz band into three
    segments, with the middle segment being reserved for high-powered
    MDS and ITFS stations and the two segments above and below it
    reserved for low-powered operations. Transition to the new band plan
    would proceed on a market-by-market basis at the instigation of
    parties ("Proponents") offering to pay the conversion costs of all
    affected ITFS operators. No deadlines would apply unless and until a
    Proponent offered to fund a market's transition. Instead, the
    Coalition provides a detailed description of nine safe proposals; if
    a Proponent offers any of the nine compensation schemes, the
    incumbent would be required to accept it. The Coalition proposes
    that every MDS and ITFS licensee be assigned a geographic service
    area. Existing circular protected service areas would be converted
    to geographic service areas with signal strength limits applied at
    their boundaries.

### Coalition Band Plan {#coalition-band-plan .unnumbered}

17. ITFS and all but two of the MDS channels are located in the 2500 --
    2690 MHz band. The Coalition has requested the adoption of a new
    plan for this band, which consists of multiple interleaved 6-MHz
    channels. According to the Coalition, the intermixing of the two
    types of system designs (high-power/high site and low-power cellular
    systems) causes interference problems because the two system designs
    are fundamentally incompatible.[^627] To eliminate this interference
    problem, the Coalition proposes that we establish a new band plan
    that isolates high-power, high-site systems from two-way cellular
    systems by separating the two different uses into different segments
    within the band.[^628] The Coalition notes that the plan allows
    entities to obtain contiguous spectrum and best provides for two
    promising technologies -- Frequency Division Duplex (FDD) and Time
    Division Duplex (TDD) technologies.

18. The Coalition proposes to divide the band into three major band
    segments consisting of the Lower Band Segment (LBS), the Middle Band
    Segment (MBS) and the Upper Band Segment (UBS) and three minor
    segments consisting of the I, J and K bands. The LBS would have
    twelve 5.5-megahertz wide channels extending from 2500 -- 2566 MHz,
    the MBS would have seven 6-megahertz wide channels extending from
    2572 -- 2614 MHz[^629] and the UBS would have twelve 5.5-megahertz
    wide channels extending from 2620 -- 2686 MHz. The Coalition
    proposes to permit low-power operations in the LBS and UBS segments
    while permitting high-power video operations in the MBS.[^630]
    However, low-power systems could use the MBS segment if the demand
    were to arise.[^631] In addition, to protect MBS high-power
    operations, the Coalition proposes special restrictions on the
    operation of channels closest to the MBS. The Coalition seeks to
    provide each licensee with the same quantity of spectrum it has now
    but to distribute it differently.[^632] The Coalition states that a
    licensee that presently has four interleaved 6 MHz channels and four
    interleaved 125 kHz channels will have 16.5 MHz of contiguous
    spectrum in either the LBS or UBS, 6 MHz of spectrum in the MBS, 500
    kHz of contiguous spectrum in the I Band and 1.5 MHz of contiguous
    spectrum in a transition band[^633] after the transition."[^634] We
    invite comments on all aspects of the proposed Coalition band plan
    and transition process.

    The I band under the Coalition proposal would have thirty-two 125
    KHz-wide channels extending from 2686-2690 (response channels). The
    J band would have four 1.5 MHz-wide channels extending from
    2566-2572 MHz. The J band is located between the LBS and the MBS.
    The K band would have four 1.5 MHz-wide channels extending from
    2614-2620 MHz. Both the J and K bands will serve as transition
    bands. The K band is located between the MBS and the UBS.[^635] In
    addition to reducing interference, the Coalition argues that a fixed
    band for high-powered operations (*i.e.,* the MBS) "translates
    directly into less complex, less expensive cellular system
    equipment, particularly customer equipment and promotes
    roaming."[^636]

    **Coalition Band Plan Chart**

  ------ ------- ---------- ------ ------ ------ -------- ------- ------ ------ ------ -------------- ------ ------ ------ ---
         Lower                     J Band        Middle                  K Band        Upper Band            I Band        
         Band                                    Band                                  (UBS)                               
         (LBS)                                   (MBS)                                                                     

  2500                      2566          2572                    2614          2620                  2686          2690   
  ------ ------- ---------- ------ ------ ------ -------- ------- ------ ------ ------ -------------- ------ ------ ------ ---

19. The Coalition recommends a market-by-market transition process to
    the new band plan that allows MDS and ITFS licensees to continue to
    operate pursuant to the current rules until an MDS or ITFS licensee
    triggers the transition process. They say that each of the
    market-by-market transition processes they propose will have four
    fundamental phases: (i) identifying the MDS and ITFS licensees that
    will have to participate in a given transition; (ii) planning the
    transition; (iii) physically shifting educational ITFS programming
    tracks to spectrum in the MBS and outfitting eligible ITFS receive
    sites with improved downconverters designed to limit the reception
    of signals from outside the high-power band; and (iv) terminating
    existing operations in transitioned markets that do not comport with
    the new rules.

#### Identifying the Parties to the Transition Process {#identifying-the-parties-to-the-transition-process .unnumbered}

20. As part of the basis it proposes for determining which licensees
    will participate in its proposed market-by-market transition
    process, the Coalition introduces a concept that they refer to as a
    "transition impact area" ("TIA").[^637] They recommend that the TIA
    for a station be defined as its geographic service area plus, in the
    case of ITFS licensees, the specific location of any ITFS reception
    site certified as eligible to receive a new downconverter under the
    transition rules. However, they urge that there be one exception to
    the general approach for establishing the boundaries of GSAs and
    TIAs. They say that the GSAs of BTA authorization holders may be
    extremely large and a BTA authorization holder may not intend to
    launch services throughout its entire BTA/GSA at once. As a result,
    they explain, the size of the GSA/TIA of a BTA authorization holder
    calculated under the general rule may extend far beyond the area in
    which the BTA authorization holder's intended operations will
    actually have any impact. To address that kind of situation, the
    Coalition makes the following suggestions:

-   If the BTA authorization holder is the Proponent, it should be
    permitted to reduce voluntarily the size of its GSA/TIA solely for
    purposes of any given transition process. For administrative
    convenience, and to reflect the fact that deployments are likely to
    occur based on the GSAs of incumbent MDS and ITFS licensees, the
    reduced GSA/TIA should be required to mirror the boundaries of any
    GSA of any incumbent MDS or ITFS licensee that is wholly within the
    BTA and should be established by having the BTA authorization holder
    certify to the Commission that it will not provide service outside
    of that particular GSA. Upon such certification, the Coalition would
    have the GSA/TIA deemed to be reduced in size for purposes of the
    particular transition; neighboring licensees with GSA/TIAs that do
    not overlap the resulting smaller TIA could be excused from the
    transition process. In the event a BTA authorization holder provides
    such a certification but subsequently decides to expand its service
    area, the Coalition would have us require the BTA authorization
    holder to invoke the transition process anew as to any licensees
    that were excused from the process as a result of the initial
    reduction in the GSA/TIA.[^638]

-   The Coalition says that a BTA authorization holder that is not the
    Proponent should only be a required participant and should only be
    considered for purposes of determining the other licensees that must
    participate in a transition process when the BTA authorization
    holder holds a license or conditional license for one or more
    facilities within the BTA. If it does not, then the BTA
    authorization holder should not be a participant in the transition
    process and its GSA/TIA should be ignored for purposes of
    determining which other licensees are required parties to the
    process.[^639]

-   If a BTA authorization holder that is not the Proponent does hold a
    license or conditional license for one or more facilities within the
    BTA, says the Coalition, our rules should deem it to have separate
    TIAs defined as 35-mile-radius circles centered at each of its
    transmitting stations and/or response station hubs.[^640]

21. As the Coalition envisions the process, a Proponent would institute
    a transition for a particular market in which the following nearby
    licensees (even those that are not cochannel or first adjacent
    channel) would be required participants:

-   Every licensee that has not previously been transitioned and that
    has a TIA that overlaps the GSA in which the contemplated base
    station will be located; and

-   every non-transitioned licensee with a TIA to which any of the
    contemplated facility's transmission antennas will have an
    unobstructed transmission path calculated assuming receive antenna
    heights of 9.1 meters above ground level and employing a smooth
    earth with 4/3 earth curvature propagation model; and

-   every non-transitioned licensee with a GSA that overlaps the GSA of
    a license being transitioned pursuant to the first two conditions
    listed above.

Moreover, says the Coalition, no operations of a new or modified base
station should be permitted in the low-power channels (even if the
underlying license has transitioned) unless the same three categories of
nearby licensees are transitioned by the licensee to the new band
plan.[^641]

22. In addition to the above-listed mandatory parties to the transition
    process, the Coalition argues that a Proponent should be permitted,
    at its sole discretion and at any time, to trigger the transition
    process with respect to any MDS or ITFS licensee that has a GSA
    located in whole or part within 150 miles of any portion of its GSA.
    Beyond that, they recommend that any transition should also include
    any license with a GSA overlapping a GSA being transitioned.
    Granting this right to Proponents, they contend, would serve a
    variety of needs, the most important of which is the need to address
    the possibility that if left in place outside the high-power band,
    high-power, high-site operations would interfere with the ability of
    cochannel cell sites that are placed above the ground clutter to
    receive low-power signals from consumer equipment.[^642]

23. The Coalition urges that any licensee identified for transition
    under these policies should be required to participate in the
    transition process. However, they emphasize that we should not adopt
    a requirement that those who participate in the transition process
    must necessarily be transitioned to the new bandplan upon
    completion. First of all, they argue that any multichannel video
    programming distributor that was using more than seven MDS/ITFS
    channels for the transmission of digitally compressed video
    programming to subscribers, and any other MDS or ITFS station that
    is collocated with it, should be allowed to opt out of the
    transition process.[^643] For other stations, the Coalition says
    that many of the recoverable costs involved will be unknown to the
    Proponent at the time it issues a transition notice and that one of
    the purposes of the transition planning period should be to provide
    the Proponent an opportunity to identify all of the recoverable
    costs it will be responsible for should the transition occur. The
    Coalition says we should allow the Proponent at any time during the
    transition planning period to decide not to proceed with the
    transition due to transition cost considerations, and that the
    Proponent should be allowed to make that decision in its sole
    discretion. They further argue that the Proponent should be allowed
    to terminate the process in whole or in part with respect to any
    licensee that it voluntarily brought into the process and any other
    licensee that is required to be a participant solely because of a
    GSA overlap with the licensee voluntarily brought in by the
    Proponent.[^644]

24. The Coalition notes that a Proponent will not be able to determine
    the TIAs of ITFS stations based on Commission records because the
    Commission does not maintain ITFS reception site records of the sort
    necessary to determine eligibility for replacement downconvertes.
    They say that a Proponent will only be able to determine fully the
    TIA of an ITFS licensee by securing the necessary information from
    individual ITFS licensees. Therefore, they say, prior to the
    commencement of any transition process any potential Proponent
    should be permitted to serve upon any ITFS licensee at its address
    of record in the Commission's licensing database a pre-transition
    data request to elicit this information. They say we should require
    that such requests include the Proponent's full name, postal mailing
    address, contact person, email address, phone and fax number, and
    that the recipient of the request provide the potential Proponent
    with a listing that identifies the location (by street address and,
    if known, geographic coordinates) of every constructed ITFS
    reception site that, as of the date of receipt of the request, would
    be entitled to a replacement downconverter upon transition. In
    addition, they say, the listing should indicate whether the
    downconverter is mounted on a structure attached to the building or
    on a free-standing structure, and the approximate height above
    ground level of the downconverter. They say that, if known, the
    response should also specify the adjacent channel D/U ratio that can
    be tolerated by any receiver(s) at the reception site. Finally, they
    say we should require that the response identify the number of ITFS
    video programming or data transmission tracks the ITFS licensee is
    entitled to receive in the high-power band and whether the ITFS
    licensee will accept fewer tracks in the high-power band. They say
    that the response should be considered a representation not only to
    the potential Proponent, but also to the Commission, and should be
    sent by certified mail with return receipt requested, courier,
    overnight delivery, or other service that provides evidence of
    receipt. They say we should require that the recipient provide the
    requested information to the potential Proponent by any delivery
    service that provides evidence of receipt no later than 21 calendar
    days after delivery of the request.[^645]

25. The Coalition goes on to recommend that, in the absence of a timely
    response, we should require the potential Proponent to make at least
    two attempts to contact both the licensee by telephone during normal
    business hours to ensure receipt of the request. They further
    recommend that, if the potential Proponent makes contact with the
    licensee and the licensee requests additional time to respond, we
    should allow the licensee an additional fifteen calendar days to
    respond. In the absence of a response, they say, the potential
    Proponent should be permitted to proceed with the transition without
    having to provide for the migration of any of the licensee's
    programming tracks to the high-power band, without replacing any of
    the licensee's downconverters, and with the unrebuttable presumption
    that the ITFS licensee's TIA is coterminous with its GSA unless the
    licensee subsequently provides the requested information to the
    Proponent before the end of the transition planning period and the
    Proponent is able to use that information as part of the transition
    process without prejudice to other parties and without significant
    additional expense to the Proponent.[^646]

#### Planning the Transition {#planning-the-transition .unnumbered}

26. The Coalition advocates that we impose a basic procedural structure
    to the transition planning process. It proposes that no later than
    30 days before conclusion of the transition planning period, we
    should require the Proponent to provide participants with a written
    plan for implementing the transition (the "Transition Plan"). They
    say we should require that the Transition Plan be sent by certified
    mail with return receipt requested, courier, overnight delivery, or
    other service that provides evidence of receipt. They maintain that
    the Transition Plan should identify the call signs of the stations
    that will transition to the new bandplan, the specific channels that
    each will receive following the transition, the reception sites at
    which replacement downconverters will be installed, the video
    programming and data transmission tracks that will be migrated to
    the new high-power band, the technical configuration of the
    high-power facilities, and the approximate time line for
    effectuating the transition and ceasing operations pursuant to the
    current band plan. They say that the Transition Plan should also
    provide for the establishment of an escrow or other appropriate
    mechanism for ensuring completion of the transition in accordance
    with the Transition Plan.[^647]

27. The Coalition says that each of the other participants should be
    permitted to submit a written counterproposal that would have to be
    received by the Proponent no later than ten business days before the
    conclusion of the Transition Planning Period. If the Proponent
    receives a counterproposal, under the Coalition's plan the Proponent
    would have three options:

-   First, the Proponent would be permitted to accept the
    counterproposal and proceed accordingly.

-   Second, the Proponent would be permitted to invoke dispute
    resolution procedures for a determination as to whether its proposed
    Transition Plan is reasonable and take no action to implement the
    Transition Plan until a determination as to the reasonableness of
    the Transition Plan is made.

-   Third, they say, the Proponent should be allowed to invoke the
    dispute resolution procedures for a determination as to whether its
    proposed Transition Plan is reasonable but, instead of awaiting a
    ruling, implement the counterproposal immediately. To do so, the
    Proponent should be required to file copies of the Transition Plan
    and counterproposal with the Commission and advise the Commission
    that it is electing to proceed with the provisions of the
    counterproposal under protest. The Proponent would then be free to
    implement the counterproposal. If the counterproposal is implemented
    pending dispute resolution, and the Transition Plan ultimately is
    found to be unreasonable, the Proponent should be required to
    reimburse the party that submitted the counterproposal for the fees
    and expenses arising out of the dispute resolution process
    (including the fees and costs of the arbitrator(s), and reasonable
    legal and engineering fees and expenses). The Coalition says that,
    if the counterproposal is implemented pending dispute resolution,
    and the Transition Plan ultimately is found to be reasonable, the
    party that submitted the counterproposal should be required to
    reimburse the Proponent for those additional documented costs
    incurred by the Proponent that were (i) over and above what the
    Proponent proposed in its Transition Plan, and (ii) directly related
    to implementing the counterproposal. This approach, they say, will
    assure that licensees do not create a dispute merely to frustrate a
    transition and/or force the payment of greenmail.[^648]

#### Physically Shifting Educational ITFS Programming Tracks to New Channels and Outfitting Eligible ITFS Reception Sites with Improved Downconverters {#physically-shifting-educational-itfs-programming-tracks-to-new-channels-and-outfitting-eligible-itfs-reception-sites-with-improved-downconverters .unnumbered}

28. The Coalition transition plan requires MDS licensees to pay their
    own expenses to transition to its proposed band plan. However, to
    implement the objective of protecting those ITFS licensees that
    choose to continue traditional high-power, high-site downstream
    video and data distribution systems against interference from LBS
    and UBS cellularized operations, the Coalition recommends that the
    Proponent be required, at its cost, to satisfy two fundamental
    responsibilities: (1) installing at eligible ITFS receive sites
    improved downconverters designed to limit the reception of
    potentially-interfering signals from outside the MBS; and (2)
    physically shifting every ITFS video programming or data
    transmission tracks currently being transmitted to appropriate
    transmission facilities operating on MBS channels. The intent is
    that the Proponent will bear all equipment, installation and other
    direct costs incurred to provide for the continued reception of the
    ITFS video programming and data transmission tracks at the eligible
    receive sites.[^649]

#### Terminating Existing Operations in Transitioned Markets That Do Not Comport with the New Rules {#terminating-existing-operations-in-transitioned-markets-that-do-not-comport-with-the-new-rules .unnumbered}

29. Once the transition process is complete, licensees in the market
    will hold spectrum called for under the plan and be subject to the
    new rules.[^650] The Coalition says that, in the process of
    transitioning the nation to the new bandplan, some licensees will be
    required to cease their current service offerings before they are in
    a position to launch new services under the new bandplan. They say
    that it may be necessary for licensees in one market to cease
    high-power, high-site operations in the LBS and UBS in order to
    avoid cochannel interference to next generation operations in
    markets quite some distance away. The Coalition says that the only
    build-out requirement under such circumstances should be that a
    licensee demonstrate substantial service at the expiration of its
    license. Thus, says the Coalition, licensees who have yet to
    construct facilities should not have their authorizations
    jeopardized by a failure to construct during this transitional
    period but should instead be judged under the "substantial service"
    standard that is applied to other services regulated by the Wireless
    Telecommunications Bureau. If the Commission chooses to apply
    Section 27.66 or some similar rule regarding the discontinuance,
    reduction or impairment of existing service, says the Coalition, the
    Commission should clarify the application of that rule to the
    MDS/ITFS transition process. Specifically, the Coalition proposes
    that the Commission issue a blanket waiver of that rule for all MDS
    and ITFS licensees, require the filing of a notice when service is
    commenced by a transitioned licensee operating under the new
    bandplan and thereafter apply the rule to that licensee in
    accordance with its terms. In this manner, they say, MDS and ITFS
    licensees will be able to smooth the transition process without fear
    that licenses will be jeopardized as stations cease operations to
    facilitate the transition. In addition, the Coalition says we should
    clarify that when a licensed MDS or ITFS channel is used as a guard
    band rather than for transmissions, no filings will be required to
    safeguard the license for the channel being utilized as a guard
    band.[^651]

### Response Channels {#response-channels-1 .unnumbered}

30. As noted above, the seven 125 kHz response channels (part of the R
    channels under the Coalition band plan) associated with MDS channels
    E3, E4, F3, F4, H1, H2, and H3 were allocated to the Private
    Operational Fixed Service (POFS). The Coalition proposes to return
    these channels for MDS use.[^652] There are no POFS licensees
    currently on these channels. As the Coalition notes, the R channels
    taken from MDS licensees were never licensed as OFS channels,
    probably because they are too narrow to be usable by themselves. The
    Coalition contends that returning those channels to their original
    licensees, i.e., MDS operators, would enable them to accumulate the
    channels with other R channels, increasing the probability that the
    channels would be used.[^653] On that basis, they propose to
    reallocate the seven response channels -- 2686.9375, 2687.9375,
    2688.5625, 2688.6875, 2688.9375, 2689.5625 and 2689.6875 -- for MDS
    (broadband) use.

31. The Coalition recommends that operation on the response ® channels
    be secondary to operation on the LBS, MBS, and UBS channels. In
    other words, operation on the response channels would not be allowed
    to cause harmful interference to operations on the LBS, MBS, and UBS
    channels and would be required to accept any interference caused by
    an LBS, MBS, or UBS licensee operating in accordance with the
    Commission's Rules.[^654]

### Geographic Area Licensing {#geographic-area-licensing .unnumbered}

32. The Coalition argues that elimination of site-by-site licensing and
    adoption of a geographic area-licensing concept for low-power
    operations will promote deployment of advanced low-power systems
    because a site-by-site licensing system is cumbersome and the
    transaction costs are too high to permit competitive businesses to
    flourish using next generation technology.[^655] It notes that
    high-powered, one-way operations could benefit from a streamlined
    site-by-site licensing approach.[^656]

33. MDS auction winners already hold geographic service area ("GSA")
    authorizations. The Coalition proposes to give existing site-based
    MDS and ITFS licensees a geographic service area or GSA, based on
    the current rules.[^657] Applicants for new stations on ITFS
    channels must provide protection to incumbents based on a Protected
    Service Area (PSA).[^658] MDS incumbents that obtained their
    licenses prior to our 1996 MDS BTA auction have 35-mile PSAs around
    their main stations.[^659]

34. The Coalition also proposes that we grandfather certain ITFS receive
    sites located outside the PSA.[^660] Under the Coalition's proposal,
    ITFS licensees must provide technical information to co-channel and
    adjacent channel licensees concerning the receive sites within
    twenty-one days of a request.[^661]

35. In discussing the issue of a protected area for incumbents, the
    Coalition points out that the rules defining a protected area have
    changed over the years. As a result, the protected service areas
    assigned co-channel incumbent MDS and ITFS licensees can
    overlap.[^662] The Coalition argues that since none of the licensees
    with service areas that overlap can satisfy the interference
    protection criteria in the overlap area, no one can operate in these
    areas.[^663] According to the Coalition, the MDS/ITFS industry has
    informally developed a method for handling this problem. The
    Coalition notes that the general method for dividing the overlap
    area is to draw a straight-line (chord) beginning and ending at the
    two points where the protected service areas intersect.[^664] This
    approach has the effect of drawing a boundary along the line
    connecting the ends of the football-shaped overlap area, with the
    licensees on either side agreeing to limit the interference they
    generate outside their boundaries. The Coalition proposes that we
    codify this approach.

### Treatment of Incumbent Licensees {#treatment-of-incumbent-licensees .unnumbered}

36. The Coalition would have the transition proceed on a
    market-by-market basis, triggered by Proponent offers to compensate
    incumbents for changing their operations from high-power to
    low-power. Rather than apply a deadline, the Coalition describes
    nine "safe harbors" -- offers that incumbents would be required to
    accept if Proponents offer them.

37. The Coalition says that implementing market transitions should be a
    relatively simple process where all of the 2.5 GHz channels are
    collocated and operating with matched technical parameters and all
    of the ITFS licensees are using just one 6 MHz channel for the
    transmission of educational programming but that there will be
    situations that deviate from that standard. To minimize disputes
    between Proponents and licensees in such cases, they say, the
    Commission should establish a series of safe harbors that will allow
    Proponents to craft Transition Plans with the knowledge that they
    will be deemed reasonable in the event of a dispute. They recommend
    that we adopt the following safe harbor definitions and deem them to
    be reasonable Transition Plan provisions that can be offered by a
    Proponent and implemented absent agreement from affected
    licensees.[^665]

-   *Safe Harbor \# 1* As is discussed above, the default high-power
    channel assigned each channel group generally will be authorized to
    operate after the transition with the same transmission parameters
    (coordinates, antenna pattern, height of center of radiation, EIRP,
    etc.) as the current downstream facilities authorized for the
    channel group. However, the Coalition says that situations are
    likely to arise where minor changes to the operating parameters are
    necessary to accomplish the transition. They say that neighboring
    cochannel or adjacent channel licensees should not be permitted to
    object to any change from the default configuration so long as
    either: (1) the change is not a major modification under the new
    high-power rules; or (2) the change is a major modification and the
    Transition Plan calls for the appropriate application for Commission
    consent to be filed, for it to be processed in accordance with the
    procedures assuring public notice and an opportunity to object, and
    for it to be granted prior to implementation. They say that the ITFS
    licensee being migrated should not be permitted to object to a
    Transition Plan that proposes affording the ITFS licensee with
    post-transition operating equipment that is as good as or better
    than that used before the transition. Provided that the Proponent is
    not proposing a change in the geographic coordinates of the
    facilities (other than as necessary to conform the actual location
    with the Commission's Antenna Survey Branch database) and provided
    further that the minimum D/U benchmarks discussed above will be
    achieved, they say, the Proponent should be permitted in the
    Transition Plan to propose:

    -   An increase in the height of the center of radiation of the
        transmission antenna or a decrease in such height of no more
        than 8 meters (provided that such change does not result in an
        increase in antenna support structure lease costs to the ITFS
        licensee and the consent of the owner of the antenna support
        structure is obtained).

    -   A change in the EIRP of the transmission system of up to 1.5 dB
        in any direction.

    -   Digitization, which is discussed in more detail below in Safe
        Harbor \# 3, precision frequency offset, or other upgrades to
        the ITFS transmission or reception systems that allow the
        Proponent to invoke more advantageous interference protection
        requirements applicable to upgraded systems.[^666]

-   *Safe Harbor \# 2* The Coalition says that, in some cases, prior to
    the transition, an ITFS licensee may have channel-shifted its single
    video programming or data transmission track to spectrum licensed to
    another licensee. Under the transition rules, they note, that track
    must be on the high-power channel licensed to the ITFS licensee upon
    completion of the transition. For example, the A Group licensee
    might have shifted its ITFS video programming to channel C1. If one
    of the A Group channels is currently licensed with technical
    parameters substantially similar to those of channel C1, we should
    allow a Transition Plan to call for high-power channel A4 to be
    licensed with the same technical parameters as current channel C1.
    However, if the current A Group channels are licensed to operate
    with technical parameters materially different from those of channel
    C1, the Proponent should have two options. First, it should be
    allowed to arrange a channel swap with the licensee of the C Group
    so that the A Group licensee will receive high-power channel C4
    (which will automatically be licensed with the same transmission
    parameters as current channel C1) in exchange for channel A4.
    Second, the Proponent should be allowed to arrange for high-power
    channel A4 to operate with transmission parameters substantially
    similar to those of current channel C1 (see Safe Harbor \# 1
    ).[^667]

-   *Safe Harbor \# 3* The Coalition says that, where an ITFS licensee
    would be entitled to two or more video programming or data
    transmission tracks in the high-power band, absent agreement prior
    to or during the Transition Planning Period to the contrary, we
    should allow the Proponent two options:

    -   First, we should allow the Transition Plan to call for migration
        of one of those programming tracks to the ITFS licensee's
        default channel in the high-power band segment (*e.g.,* channel
        A4 in the case of the A Group licensee) and provide the ITFS
        licensee an additional 6 MHz channel in the high-power band for
        each additional ITFS video programming or data transmission
        track. If the Proponent chooses this option, we should require
        it to assure that the additional high-power channels will be
        able to operate with transmission parameters substantially
        similar to those of the channel(s) on which the ITFS video or
        data tracks were broadcast before the transition (see Safe
        Harbor \# 2 ). In exchange, the contributor of each additional
        high-power channel would be entitled to one of the recipient
        ITFS licensee's channels in one of the low-power bands for each
        additional high-power channel provided. They say we should allow
        the additional high-power channels for this purpose to be ones
        that would have been licensed to the Proponent under the default
        system, or be made available by way of channel swapping
        arrangements with other licensees in the market orchestrated by
        the Proponent. The Coalition says that the channels the
        contributor receives in exchange for its high-power channel
        should be located at one of the ends of the recipient ITFS
        licensee's default allocation, rather than in the middle.

    -   In the alternative, they say, we should allow the Proponent to
        exercise the power of calling for the installation of digital
        compression technology to transmit multiple tracks on the
        licensee's default high-power channel(s). In any case where the
        licensee's existing tracks are provided on only one channel
        using digital compression, however, the Proponent should be
        required to install digital compression technology on a single
        channel.[^668]

-   *Safe Harbor \# 4* In some cases, multiple licensees currently share
    a channel group, with each licensed individually to one or more
    channels. The Coalition says that, if the licensees are either MDS
    licensees or ITFS licensees who do not choose to migrate programming
    to the high-power band and those licensees are unable to reach
    agreement with each other on the post-transition licensing of
    channels, we should allow the Proponent's Transition Plan to provide
    for the licensing of the spectrum in each segment on a pro rata
    basis (with channel(s) in each segment being disaggregated when and
    if necessary to provide each licensee with its pro rata share of the
    spectrum in each segment). If the multiple licensees are ITFS
    licensees and each is entitled to video programming or data
    transmission tracks, as in Safe Harbor \# 3, they say, the Proponent
    should have two choices absent agreement otherwise:

    -   First, the Proponent should be allowed to secure for each
        licensee its own 6 MHz high-power channel in exchange for
        low-power channels assigned to the group. Following the channel
        swap(s) necessary to secure those additional high-powerchannels,
        we should allow the Transition Plan to provide for the licensing
        of the remaining channels in the low-power band segments and
        response channels on a pro rata basis (with channel(s) in each
        segment being disaggregated when and if necessary to provide
        each with its pro rata share of the spectrum in each segment).

    -   Second, the Coalition argues, we should allow the Transition
        Plan to call for pro rata segmentation of the default high-power
        channel for the group, provided that the Proponent commits to
        provide each of the licensees with the technology necessary for
        its ITFS video programming or data transmissions to be
        digitized, transmitted and received utilizing the provided
        bandwidth. Under this approach, the low-power channels would be
        divided among the sharing licensees on a pro rata basis (with
        channel(s) in each segment being disaggregated when and if
        necessary to provide each with its pro rata share of the
        spectrum in each segment). If only one of the sharing ITFS
        licensees elects to migrate video programming or data
        transmissions to the high-power band, we should provide that the
        default high-power channel assigned to that channel group be
        licensed to that licensee. The remaining spectrum assigned to
        the group should be allocated among the licensees on a pro rata
        basis, with the 6 MHz in the high-power band counting against
        that licensee's portion. To the extent necessary, they say, we
        should provide that the low-power spectrum could be
        disaggregated when and if necessary to provide each licensee
        with its pro rata share of the spectrum in each segment. If the
        one licensee that elects to migrate ITFS video programming
        transmits multiple ITFS video programming tracks, they say, the
        options identified in Safe Harbor \# 3 should be available to
        the Proponent to satisfy its migration obligations. We should
        further provide that, if the proponent chooses to effectuate a
        channel swap to provide more than one channel in the high-power
        band, they add, the remaining channels assigned to the group
        (after considering that one or more low-power channels and
        associated Transition Band channels will have been swapped away
        to provide the additional high-power channel) could be allocated
        among the licensees on a pro rata basis (with channel(s) in each
        segment being disaggregated when and if necessary to provide
        each with its pro rata share of the spectrum in each
        segment).[^669]

-   *Safe Harbor \# 5* Cases may arise in which, prior to the
    transition, the ITFS licensee of a single four channel group was
    operating some channels from one location and the other channels in
    the group from a second (or a third, or a fourth location). The
    Coalition says that, if the simultaneous ITFS video or data tracks
    are being transmitted from only one location, we should provide that
    the technical parameters of that location will govern the high-power
    license. If ITFS tracks are being transmitted from multiple
    locations, they say, we should require that the Proponent provide
    for the post-transition transmission of the appropriate number of
    ITFS tracks at each such location. They say we should consider the
    Transition Plan to be considered reasonable if it calls either for
    the licensing of a separate high-power channel at each location (in
    which case spectrum in the low-power band would be swapped) or if it
    calls for the split-licensing of the default high-power channel at
    multiple locations.[^670]

-   *Safe Harbor \# 6* The Coalition says that, although Transition
    Plans should generally be designed to minimize the amount of time
    ITFS transmissions will have to cease, some disruption is
    inevitable. For that reason, they say that a Transition Plan should
    not be considered unreasonable if it calls for interruptions in ITFS
    transmissions, so long as those interruptions are limited to a
    period of seven or less consecutive days at any reception site.
    However, they add, we should require the Proponent to coordinate
    with each ITFS licensee to minimize the extent of any disruption. We
    should allow the Transition Plan to call for the shifting of an ITFS
    licensee's program to alternative channels, and such shifting should
    not be considered an interruption so long as the ITFS licensee's
    receive sites are equipped to receive and internally distribute the
    channel to which the programming is shifted.

-   *Safe Harbor \# 7* The Coalition says that a Proponent may determine
    that interference from transmissions in the high-power band to
    operations outside the high-power band can be mitigated by the
    installation of an appropriate filter on the high-power transmitter.
    In such case, they say, we should require the licensee operating the
    high-power transmitter to accept any filter proffered by the
    Proponent as part of a Transition Plan or thereafter and to
    cooperate reasonably with installation of that filter, as long as
    the Proponent can demonstrate that the installation of such a filter
    would not unreasonably degrade the performance of the licensee's
    system. If installation of the proposed filter would not cause a
    delta group delay of more than 100 nanoseconds for analog operation
    or more than 20 nanoseconds for digital operation, says the
    Coalition, we should not deem the installation of the filter to be
    unreasonably degrading the performance of the system. They argue
    that we should require the Proponent to supply technical information
    regarding the proposed filter to the high-power licensee to allow
    the high-power licensee to make that determination.[^671]

-   *Safe Harbor \# 8* The Coalition notes that, in some cases, the
    facilities being transitioned will be used by a commercial
    multichannel video programming distributor ("MVPD") that either is
    not eligible for the opt-out program proposed by the Coalition or
    has chosen not to avail itself of the opportunity. In such a
    situation, they say, we should deem a Transition Plan to be
    reasonable if it provides the greater of two years from the date of
    the filing date of the Coalition Plan (October 7, 2002) or six
    months from the Proponent's transition notice before the MVPD and
    its affiliated licensees are required to comply with the technical
    rules applicable to the low-power band segments. The Coalition say
    they recognize that compliance with such a rule may require
    modification to the MVPD system, which will have to be undertaken at
    the MVPD's cost except as they relate to the transition of ITFS
    programming to the new high-power band. They say that the time
    afforded by this safe harbor should provide an ample opportunity for
    the MVPD and its affiliated licensees to make the appropriate
    adjustments.[^672]

-   *Safe Harbor \# 9* The Coalition notes that there will be situations
    in which an ITFS licensee uses one or more of its channels for
    studio-to-transmitter links. In such a case, they say, we should
    consider the Transition Plan to be reasonable if it provides for
    either of the following:

    -   the use of one of the low-power band segments for the
        point-to-point transmission of the ITFS video or data (through
        superchannelization of the licensee's contiguous low-power
        channels), provided the Proponent commits to re-tune the
        existing point-to-point equipment to operate on those channels
        or to replace the existing equipment with new equipment tuned to
        operate on those channels and the proposal complies with the
        low-power technical and interference protection rules;

    -   the migration of the ITFS programming to the high-power band by
        re-tuning the existing point-to-point equipment to operate in
        the high-power band or replacing it with equipment tuned to
        operate in the high-power band;

    -   the replacement of the point-to-point link with point-to-point
        equipment licensed to the ITFS licensee in alternative spectrum,
        so long as the replacement facilities meet the definition of
        "comparable facilities" set out in Section 101.75(b) of the
        Commission's rules.[^673]

# APPENDIX D {#appendix-d .unnumbered}

# LIST OF PLEADINGS {#list-of-pleadings .unnumbered}

The following documents were filed in response to the *Public Notice:*
Wireless Telecommunications Bureau Seeks Comment on Proposal to Revise
Multichannel Multipoint Distribution Service and the Instructional
Television Fixed Service Rules, RM-10586, 17 FCC Rcd 20526 (WTB 2002).

**[LIST OF PARTIES RESPONDING TO THE PUBLIC NOTICE]{.underline}**

**[Comments]{.underline}**

Adams Telecom, Inc.

Archdiocese of Chicago

Archdiocese of Detroit

Archdiocese of Hartford

Archdiocese of Los Angeles Education and Welfare Corporation

Atlanta Educational Services, Inc. and Atlanta Board of Education

Bellsouth Corporation et al.

Board of Trustees of the Leland Standard Junior University

Burns, Patrick J.

Caritas Telecomunications

Catholic Telemedia Network

Central Texas Communications Inc.

Clarendon Foundation

Clearwire Equipment, LLC

ClearwireTechnologies, Inc.

CNI Wireless, Inc.

Comspec Corporation

Counterpoint Communications, Inc.

Crowell & Moring

Dallas MDS Partners

Department of education Archdiocese of New York

Diocese of Dallas

Diocese of Orange

F Corporation

Illinois Institute of Technology

Independent & Wireless Video Operators

IP Wireless, Inc.

IT&E Overseas, Inc.

ITFS Parties

ITFS Spectrum Development Alliance

Kessler and Gehman Associates

Leano Rural Telephone Cooperative Inc.

Maui Sky Fiber, LLC

Michael Kelly Revocable Trust, d/a/a Shannondale Wireless

MMDS License Coalition

National Telecommunications Cooperative Association

Navini Networks, Inc.

Network for Instructional TV, Inc.

Nokia Inc.

Nucentrix Broadband Networks Inc.

Qualcomm Incorporated

Rioplex Wireless, Ltd

Roman Catholic Diocese of Rockville Centre

Sprint Corporation

The Alliance of Independent Wireless Video Operators

Texas State Technical College, Harlingen

University of Colorada

W.A.T.C.H. TV Company

Wireless Communications Association (WCA), National Instructional
Television Fixed Service (NIA) and Catholic Television Network (CTN)

WH-TV, Inc. d/b/a Digital TV One

Winbeam, Inc.

Worldcom, Broadband Solutions, Inc.

**[Reply Comments]{.underline}**

Intel Corporation

ITFS Spectrum Development Alliance, Inc.

Microsoft Corporation

Network for Instructional TV, Inc.

Nucentrix Broadband Networks, Inc.

NTELOS, Inc.

Polar Communications Mutual Aid Corporation

Sprint Corporation

[^1]: The terms MDS and MMDS are often used interchangeably. The
    Commission coined the term "MDS" at a time when it was making only
    two channels available for the service, at 2150-2162 MHz. We began
    using the term "MMDS" when formulating rules making additional
    channels for the service available in the 2500-2690 MHz band. For
    the purposes of this *NPRM*, we will use the term "MDS" to signify
    both services. For the reasons discussed in paras. 152-153, below,
    we do not propose new rules affecting MDS channels in the 2150-2162
    MHz band in this notice, but we intend to address requirements
    affecting the licensees that are presently assigned to those
    channels in a further notice of proposed rulemaking in this
    proceeding.

[^2]: A Proposal for Revising the MDS and ITFS Regulatory Regime,
    submitted by the Wireless Communications Association International,
    Inc., the National ITFS Association and the Catholic Television
    Network, RM-10586 (filed Oct. 7, 2002). WCA is the trade association
    of the wireless broadband industry. NIA is a non-profit,
    professional organization of ITFS licensees, applicants and others
    interested in the ITFS. CTN is an association of Roman Catholic
    archdioceses and dioceses that operate many of the largest parochial
    school systems in the United States. These entities represent that
    the proposals contained in the paper reflect a consensus among the
    organizations concerning rule changes for the 2500-2690 MHz band.
    *See* Coalition Proposal at 1, n.1.

[^3]: Two-way data and mobile communications are permissible in the
    2500-2690 band under existing rules, but the existing regulatory
    structure has limited the ability of operators to deploy two-way
    services and made it nearly impossible to provide mobile services.

[^4]: *See* Amendment of Parts 21 and 74 of the Commission's Rules With
    Regard to Licensing in the Multipoint Distribution Service and in
    the Instructional Television Fixed Service for the Gulf of Mexico,
    *Notice of Proposed Rulemaking,* WT Docket No. 02-68, 17 FCC Rcd
    8446 (2002) (*Gulf Notice*); *see also,* Amendment of Parts 1, 21
    and 74 to Enable Multipoint Distribution Service and Instructional
    Television Fixed Service Licensees to Engage in Fixed Two-Way
    Transmissions, *Report and Order on Further Reconsideration and
    Further Notice of Proposed Rulemaking*, MM Docket No. 97-217, 15 FCC
    Rcd 14,566 (2000) (*Two-Way FNPRM*).

[^5]: Amendment of the Commission\'s Rules With Regard to the
    Instructional Television Fixed Service, the Multipoint Distribution
    Service, and the Private Operational Fixed Microwave Service; and
    Applications for an Experimental Station and Establishment of
    Multi-Channel Systems, *Report and Order*, 48 Fed. Reg. 33873 ¶ 8
    (1983) (*1983 R&O*).

[^6]: *See 1983 R&O*, 48 Fed. Reg. 33873 ¶ 12. Other Part 101 licensees
    have been authorized to use the band by waiver. *See* Applications
    of Nevada Bell for Construction and Authorization in the
    Point-to-Point Microwave Radio Service and Request for Waiver of the
    Rules, *Memorandum Opinion and Order*, 3 FCC Rcd 7217 (CCB and MMB
    1988)

[^7]: *See* Educational Television *Report and Order*, Docket No. 14744,
    39 FCC 846 (1963) (*MDS R&O*), *recon. denied*, 39 FCC 873 (1964)
    (*ETV Decision*).

[^8]: *See 1983 R&O,* 48 Reg. Fed. 33873, 33875 ¶ 9 *citing ETV
    Decision*, 39 FCC 846, 853 ¶ 25.

[^9]: *Id.*

[^10]: *Id*.

[^11]: *Id*.

[^12]: *See 1983 R&O*, 48 Fed. Reg. 33873, 33875 ¶ 8, *citing ETV
    Decision* 39 FCC 846.

[^13]: *Id*. This review of the use of the band was delayed because
    educational interests encountered problems in preparing, funding,
    implementing and developing operational expertise with regard to
    ITFS.

[^14]: Each of the six megahertz channels in the 2500-2690 MHz band has
    an associated 125 kilohertz response channel. The response channels
    are narrowband audio channels located in the 2686-2689.875 MHz
    segment of the band and generally used with the associated primary
    6-megahertz channel for two-way communications (*e.g.,* talk-back
    capability from remote sites such as classrooms).

[^15]: *See* Amendment of Parts 2 and 74 of the Commission\'s Rules and
    Regulations to Establish a New Class of Educational Television
    Service for the Transmission of Instructional and Cultural Material
    to Multiple Receiving Locations on Channels in the 2500-2690 MHz
    Frequency Band, Amendment of Parts 81, 87, 89, 91, and 93, *Second
    Report and Order*, Docket No. 14744, 30 F.C.C.2d 197 ¶ 12 (1971)
    (*MDS 2^nd^ R&O*).

[^16]: Amendment of Parts 1, 2, 21, and 43 of the Commission's Rules and
    Regulations to Provide for Licensing and Regulation of Common
    Carrier Radio Stations in the Multipoint Distribution Service,
    *Report and Order*, Docket No. 19493, 45 FCC 2d 616 (1974), *recon.
    denied*, 57 FCC 2d 301 (1975) (*1974 R&O)*. *See also 1983 R&O,* 48
    Fed. Reg. 33873 ¶ 5. Amendment of Parts 2 and 74 of the Commission's
    Rules to Establish a New Class of Educational Television Service for
    the Transmission of Instructional and Cultural Material to Multiple
    Receiving Locations on Channel in the 2500-2690 MHz Frequency Band,
    Docket No. 14744, *Second Report and Order*, 30 F.C.C.2d 197, ¶ 8
    (1971).

[^17]: *Id*.

[^18]: Amendment of Part 21.703(g), and (h) of the Commission's Rules,
    *Memorandum Opinion and Order*, 47 F.C.C.2d 957 (1970).

[^19]: Amendment of Parts 2, 21, 74 and 94 of the Commission\'s Rules
    and Regulations in regard to frequency allocation to the
    Instructional Television Fixed Service, the Multipoint Distribution
    Service, and the Private Operational Fixed Microwave Service;
    Inquiry into the development of regulatory policy with regard to
    future service offerings and expected growth in the Multipoint
    Distribution Service and Private Operational Fixed Microwave
    Service, and into the development of provisions of the Commission\'s
    Rules and Regulations in regard to the compatibility of the
    operation of satellite services with other services authorized to
    operate in the 2500-2690 MHz band; Amendment of Part 21 of the
    Commission\'s Rules to Permit the Use of Alternative Procedures in
    Choosing Applicants for Radio Authorizations in the Multipoint
    Distribution Service; Petition for Rulemaking filed by Microband
    Corporation of America to amend Section 21.901 of the Commission\'s
    Rules and Regulations, *Report and Order*, Gen Docket No. 80-112 and
    CC Docket No. 80-116, 94 F.C.C.2d 1203 (1983) (*Allocation R&O*).

[^20]: Amendment of Parts 2, 21, 74 and 94 of the Commission\'s Rules
    and Regulations in regard to frequency allocation to the
    Instructional Television Fixed Service, the Multipoint Distribution
    Service, and the Private Operational Fixed Microwave Service,
    *Report and Order*, 94 F.C.C.2d 1203 ¶ 4 (1980).

[^21]: *Id*.

[^22]: Amendment of the Commission's Rules With Regard to the
    Instructional Television Fixed Service, the Multipoint Distribution
    Service, and Applications for an Experimental Station and
    Establishment of Multi-Channel Systems, *Report and Order*, 94
    F.C.C.2d 1203 (1983) (*First* *Leasing Decision*).

[^23]: *See* paras. 113-118 for further discussion of leasing practices
    and issues.

[^24]: Amendment of Part 74 of the Commission's Rules and Regulations in
    Regard to the Instructional Television Fixed Service, *Second Report
    and Order*, 101 FCC 2d 50, 87 ¶ 95 (1985).

[^25]: *See* para. 109, *infra*.

[^26]: *See* Amendment of Parts 21 and 74 to Enable Multipoint
    Distribution Service and Instructional Television Fixed Service
    Licensees to Engage in Fixed Two-Way Transmissions, *Report and
    Order*, 13 FCC Rcd 19112, 19157 ¶¶ 86-87 (1998).

[^27]: Multipoint Distribution Service Regulatory Classification,
    *Report and Order,* 52 Fed. Reg. 27553 (1987) (summarizing FCC
    87-210, released July 16, 1987).

[^28]: Amendment of Parts 21, 43, 74, 78, and 94 of the Commission\'s
    Rules Governing Use of the Frequencies in the 2.1 and 2.5 GHz Bands
    Affecting: Private Operational-Fixed Microwave Service, Multipoint
    Distribution Service, Multichannel Multipoint Distribution Service,
    Instructional Television Fixed Service, & Cable Television Relay
    Service, GN Docket No. 90-54, *Order on Reconsideration*, 6 FCC Rcd
    6764, 6774 (1991).

[^29]: For example, the Commission eliminated the requirement that ITFS
    licensees fulfill their minimum educational usage obligations by
    transmitting such content on their own stations, allowing them the
    option of transmitting it on other licensees' ITFS or MDS stations.
    *See Two-Way R&O*, 13 FCC Rcd at 19165-19166 ¶¶ 100-101.

[^30]: *See Final Acts of the World Radiocommunication Conference*
    (*Istanbul, WRC-2000*). At WRC-2000, the United States proposed that
    the 698-960 MHz, 1710-1885 MHz, and 2500-2690 MHz bands be
    identified for the terrestrial component of IMT-2000 and other
    advanced communication applications. During preparations for
    WRC-2000, the United States committed to studying the feasibility of
    using all or parts of these bands for IMT-2000.

[^31]: *Id. See* also RR 5.384A in the ITU Radio Regulations, Edition of
    2001, Geneva.

[^32]: Amendment of Parts 21, 43, 74, 78, and 94 of the Commission\'s
    Rules Governing Use of the Frequencies in the 2.1 and 2.5 GHz Bands
    Affecting: Private Operational-Fixed Microwave Service, Multipoint
    Distribution Service, Multichannel Multipoint Distribution Service,
    Instructional Television Fixed Service, and Cable Television Relay
    Service, *Second Report and Order,* Gen Docket No. 90-54, 6 FCC Rcd
    6792 (1991), *recon. denied,* 7 FCC Rcd 5648 (1992). In the *First
    Report & Order* in this proceeding, the Commission made MDS
    operators eligible to use microwave frequencies in the Cable
    Television Relay Service (CARS). Amendment of Parts 21, 43, 74, 78
    and 94 of the Commission's Rules Governing Use of the Frequencies in
    the 2.1 and 2.5 GHz Bands Affecting Private Operational-Fixed
    Microwave Service, Multipoint Distribution Service, Multi-Channel
    Multipoint Distribution Service, Instructional-Television Fixed
    Service, and Cable Television Relay Service, *Report and Order*, 5
    FCC Rcd 6411, 6423 (1990). CARS is primarily a service for carrying
    video. Amendment of Eligibility Requirement in Part 78 Regarding 12
    GHz Cable Television Relay Service, *Report and Order*, 17 FCC Rcd
    9930, 9945-6 (2002). ITFS operators are not eligible for CARS
    licenses, except in very limited circumstances. 47 C.F.R. §
    78.13(e).

[^33]: *Id.* The specific response channels are centered on 2686.9375,
    2687.9375, 2688.5625, 2688.6875, 2688.9375, 2689.5625 and 2689.6875
    MHz. *See* 47 C.F.R. § 101.147(g).

[^34]: The response channels associated with Channels E3, E4, F3, and F4
    are allocated to the Private Operational Fixed Point-to-Point
    Microwave Service. *See* 47 C.F.R. §§ 74.902(c) note, 101.147(g).

[^35]: *See* Amendment of Part 2 of the Commission\'s Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, *First Report and Order and Memorandum
    Opinion and Order*, ET Docket No. 00-258, 16 FCC Rcd 17,222 (2001)
    (*Mobile Report and Order*).

[^36]: *Id. a*t 2.

[^37]: *Id.* at 30.

[^38]: *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, *Report and
    Order,* MM Docket No. 94-131, 10 FCC Rcd 9589 (1995) (*MDS Auction
    R&O*). In March 1996, the Commission completed an auction of MDS
    licenses for unused spectrum in each of 493 BTAs and BTA-like areas.
    FCC Fact Sheet, *Auction 6: Multipoint/Multichannel Distribution
    Services,* accessible on the Commission's web site at
    http://wireless.fcc.gov/auctions/06/factsheet.html.

[^39]: *See* 47 C.F.R. §§ 21.902(a)(3),(4); 21.938(b)(2).

[^40]: 47 C.F.R. § 21.932(a).

[^41]: 47 C.F.R. §§ 21.925(c)(4), 21.932(c).

[^42]: Amendment of Part 74 of the Commission's Rules Governing Use of
    the Frequencies in the Instructional Television Fixed Service,
    *Report and Order,* MM Docket 93-106, 9 FCC Rcd 3,360 ¶ 2. *See
    also* 47 C.F.R. § 74.931(e)(9).

[^43]: *See* Use of Digital Modulation by Multipoint Distribution
    Service and Instructional Television Fixed Service Stations,
    *Declaratory Ruling and Order*, 11 FCC Rcd 18,839 (1996) (*Digital
    Modulation Declaratory Ruling and Order*).

[^44]: Amendment of Parts 21 and 74 to Enable Multipoint Distribution
    Service and Instructional Television Fixed Service Licensees to
    Engage in Fixed Two-Way Transmissions, MM Docket No. 97-217, *Report
    and Order*, 13 FCC Rcd 19,112 (1998), *recon.,* 14 FCC Rcd 12,764
    (1999), *further recon*., 15 FCC Rcd 14,566 (2000) (*Two-Way
    Order*).

[^45]: *See Mobile Report and Order*, 16 FCC Rcd 17,222.

[^46]: *See* Amendment of Parts 2, 25 and 87 of the Commission's Rules
    to Implement Decisions from World Radiocommunication Conferences
    Concerning Frequency Bands Between 28 MHz and 36 GHz and to
    Otherwise Update the Rules in this Frequency Range, *Notice of
    Proposed Rule Making,* ET Docket No. 02-305, 17 FCC Rcd 19,756
    (2002).

[^47]: Advanced Wireless Services is the collective term we use for new
    and innovative fixed and mobile terrestrial wireless applications
    using bandwidth that is sufficient for the provision of a variety of
    applications, including those using voice and data (such as internet
    browsing, message services, and full‑motion video) content. Although
    AWS is commonly associated with so‑called third generation (3G)
    applications and has been predicted to build on the success of such
    current‑generation commercial wireless services as cellular and
    Broadband PCS, the services ultimately provided by AWS licensees are
    only limited by the fixed and mobile designation of the spectrum we
    allocate for AWS and the service rules we ultimately adopt for the
    bands.

[^48]: *See AWS Allocation Order,* 17 FCC Rcd 23,193.

[^49]: *Id.* at 23,212-23,213 ¶ 41.

[^50]: *See* Amendment of Part 2 of the Commission\'s Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, ET Docket No. 00-258, *Memorandum
    Opinion and Order and Further Notice of Proposed Rulemaking*, 16 FCC
    Rcd 16,043 ¶¶ 40-41 (2001).

[^51]: *See* Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, *Third Report and Order, Third Notice
    of Proposed Rulemaking, and Second Memorandum Opinion and Order*, ET
    Docket No. 02-258, FCC 03-16, rel. Feb. 10, 2003.

[^52]: Amendment of Part 74 of the Commission's Rules with Regard to the
    Instructional Television Fixed Service, *Notice of Proposed
    Rulemaking,* MM Docket No. 93-24, 8 FCC Rcd 1275 (1993).

[^53]: *Id.* at 1277 n.13. *See also* Amendment of Part 74 of the
    Commission's Rules with Regard to the Instructional Television Fixed
    Service, *Order and Further Notice of Proposed Rulemaking,* MM
    Docket No. 93-24, 9 FCC Rcd 3348, 3354 (1994). The Commission
    reiterated this policy in the *Report and Order* in MM Docket No.
    93-24, 10 FCC Rcd 2907, 2911 (1995).

[^54]: *See* Notice of Instructional Television Fixed Service Filing
    Window From October 16, 1995, through October 20, 1995, *Public
    Notice*, Report No. 23565A (rel. Aug. 4, 1995).

[^55]: Mass Media Bureau Announces Commencement of Sixty (60) Day Period
    for Filing ITFS Modifications and Amendments Seeking to Co-Locate
    Facilities with Wireless Cable Operations, *Public Notice*, 11 FCC
    Rcd 22,422 (1996).

[^56]: 47 U.S.C. § 309(j).

[^57]: Implementation of Section 309(j) of the Communications
    Act---Competitive Bidding for Commercial Broadcast and Instructional
    Television Fixed Services Licenses, Reexaminiation of the Policy
    Statement on Comparative Broadcast Hearings, Proposals to Reform the
    Commission's Comparative Hearing Process to Expedite the Resolution
    of Cases, *First Report and Order,* MM Docket No. 97-234, GC Docket
    No. 92-52, and GEN Docket No. 90-264, 13 FCC Rcd 15920, 15999-16001
    (1998), *recon. denied*, 14 FCC Rcd 8724, *modified*, 14 FCC Rcd
    12,541 (1999), *aff'd sub nom. Orion Communications, Ltd. v. FCC*,
    213 F.3d 761 (D.C. Cir. 2000).

[^58]: Implementation of Section 309(j) of the Communications
    Act---Competitive Bidding for Commercial Broadcast and Instructional
    Television Fixed Service, *First Report and Order*, MM Docket No.
    97-234, 13 FCC Rcd 15920, 16002 ¶ 204 (1998).

[^59]: *Id.*

[^60]: Section 257 Report to Congress, *Report*, 15 FCC Rcd 15376, 15445
    ¶ 183 (2000).

[^61]: In preparing for the 1996 MDS auction, the Commission noted that
    the industry was beginning to deploy digital rather than analog
    transmission facilities and that digital transmission would allow
    more flexibility to tailor signal coverage to geographic boundaries
    using multiple transmitting facilities. *MDS Auction Report and*
    Order, 10 FCC Rcd 9,589, 9,606, ¶ 29. The Commission considered
    alternative kinds of geographic service areas and concluded that
    BTAs most closely approximated the territories served by MDS
    operators. *Id.* at 9604-9606, ¶¶ 26-27.

[^62]: In many cases, such systems use channels held by multiple
    licensees.

[^63]: *See, e.g.,* Joint Comments of ITFS Parties, filed Nov. 14, 2002.

[^64]: *See* sections III.C and III.D, below.

[^65]: *BIA Financial Network, The MMDS Industry: A Look Into the
    Industry's Most Significant Operators*, Sept. 2002, at 5.

[^66]: *Coalition Proposal* at 4. While operators have only begun to
    provide mobile data services on channels allocated to MDS and ITFS,
    a strong growth spurt in such services on other bands suggests that
    there is ample unsatisfied demand for mobile data. The number of
    wireless data users may have quintupled during 2001, to between
    eight and ten million subscribers. *See* Implementation of Section
    6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual
    Report and Analysis of Competitive Market Conditions with Respect to
    Commercial Mobile Services, *Seventh Report,* 17 FCC Rcd 12,985,
    13,038 n.367 (2002) *(Seventh Report*) *citing* *U.S. Wireless
    Industry Data Sub and Revenue Projections, Interactive Mobile
    Investor,* Kagan World Media, Mar. 31, 2002, at 3 (7.8 million
    wireless Internet subscribers in the United States at the end of
    2001); Yankee Group, *The Yankee Group: Highlights of New Surveys
    and Publications* (visited Mar. 6, 2002)
    http://www.yankeegroup.com/webfolder/yg21a.nsf/0/
    16AE3A28DBFF8EC85256B19005F8428?OpenDocument\> (wireless Internet
    adoption was "rapidly approaching 10 million users").

[^67]: *Id.*

[^68]: *Id.*

[^69]: *Id.*

[^70]: Clearwire Technologies, Inc., Comments in RM-10586, at 2 filed
    November 14, 2002. On January 7, 2003, Clearwire announced the
    availability of its service in Jacksonville, Florida. News Release,
    Clearwire Launches Next-Generation Wireless Broadband Service, Jan.
    7, 2003 (accessible online at
    http://www.clearwire.com/default.asp?NodeId=967).

[^71]: Wireless Telecommunications Bureau Seeks Comment on Proposal to
    Revise Multichannel Multipoint Distribution Service and the
    Instructional Television Fixed Service Rules, *Public Notice*, 17
    FCC Rcd 20526 (WTB 2002) (*MDS/ITFS Comment Public Notice*). The due
    dates for comments and replies were initially set to November 14 and
    21, 2002, but were later extended to November 21 and 29,
    respectively.

[^72]: *See* Archdiocese of Los Angeles Comments, filed Nov. 14, 2002,
    at 2 (50,000 Los Angeles area students); *See* Department of
    Education, Archdiocese of New York Comments, filed Nov. 14, 2002
    (47,000 New York area students); Catholic Telemedia Network
    Comments, at 1-2, filed Nov. 14, 2002, (38,000 San Francisco area
    students); Diocese of Orange Comments, at 1, filed Nov. 14, 2002,
    (18,000 Orange County area students); *see also*, Diocese of Dallas
    Comments, at 1, filed Nov. 14, 2002, (Claims to serve more than
    600,000 "constituents" but does not indicate how many use or have
    access to its ITFS channels). Forty-seven ITFS licensees filed joint
    comments that did not include quantified information on the extent
    of their operations. Joint Comments of ITFS Parties, filed Nov. 14,
    2002.

[^73]: F Corp. Informal Comments, dated Nov. 8, 2002 (Provide
    programming to more than 1,750 offices, government agencies, law
    firms, trade associations, schools and universities in more than 540
    buildings throughout metropolitan Washington, D.C., Maryland, and
    Virginia.

[^74]: Network for Instructional TV, Inc. and North Carolina Assn. of
    Community College Presidents Comments, at 1 n.1, filed Nov. 14,
    2002.

[^75]: Illinois Institute of Technology Comments, at 3, filed Nov. 21,
    2002.

[^76]: Stanford University Comments, at 1-2, filed Nov. 14, 2002.

[^77]: *Final Report: Spectrum Study of the 2500-2690 MHz Band -- The
    Potential for Accommodating Third Generation Mobile Systems*, FCC
    Staff Report, March 30, 2001 at 34-35 (3G *Final Report*)
    (accessible on the Commission's web site at
    [http://hraunfoss.fcc.gov/edocs
    public/attachmatch/DOC-211542A1.doc]{.underline}).

[^78]: *Id.* at 32.

[^79]: A detailed summary of the Coalition Plan is attached as Appendix
    C.

[^80]: For example, the Coalition contends that it has become clear that
    the growth of DBS and cable systems has "closed the window of
    opportunity for wireless cable" in all but a relatively few markets
    where wireless cable has gained a foothold. Coalition Proposal at 2.
    In regard to two-way services, the Coalition states because of
    problems associated with first generation two-way technology many in
    the industry have decided to halt deployment of additional first
    generation systems until those problems can be resolved. Coalition
    Proposal at 4.

[^81]: Coalition Proposal at 5-7.

[^82]: *See* Letter from the Coalition to Thomas J. Sugrue, Chief,
    Wireless Telecommunications Bureau, Federal Communications
    Commission dated Oct. 7, 2002 (accompanied the Coalition Proposal).

[^83]: The Coalition does not fully explain why it narrowed the channels
    in the LBS and UBS to 5.5 megahertz. The Coalition explains that

    > \[a\]lthough the channels in the LBS and the UBS will be 5.5 MHz
    > wide rather than 6 MHz wide and the channels in the Transition
    > Band will be 1.5 MHz wide, no change in the current rules
    > affording licensees the flexibility to subchannelize and
    > superchannelize is proposed. Therefore, even after the transition
    > licensees can continue to utilize 6 MHz channels in the LBS, the
    > UBS, and the Transition Bands, provided that appropriate consents
    > are achieved.

    Coalition Proposal at 13, n.32.

[^84]: For example, the Coalition contends that under the current
    licensing model, it will take substantially more applications to
    license a populated market for second generation MDS service
    (*e.g.,* low power, two-way broadband service). It estimates that it
    could take close to two thousand applications under the current
    licensing approach to fully license the band for a second generation
    system in just one major market. This licensing model, according to
    the Coalition, results in substantial transaction costs and delays
    of providing service. *See* Coalition Proposal at 7-8.

[^85]: For example, the Coalition argues that "an applicant is required
    by the complex 'Appendix D' interference-prediction methodology to
    assume in conducting analyses that each and every one of its
    subscribers is located at the very point most likely to cause
    interference to a neighbor. In other words, an applicant proposing
    to provide service on a given channel to 1000 subscribers
    simultaneously is required to assume that all 1000 subscribers will
    be at the very spot most likely to cause interference.
    Unfortunately, these hypothetical assumptions, for all practical
    purposes, preclude system operators from serving substantial
    portions of their authorized territories. *See* Coalition Proposal
    at 3.

[^86]: *MDS/ITFS Comment Public Notice*. Fifty-three entities filed
    comments and eight filed reply comments. A list of commenting
    parties is provided in Appendix D.

[^87]: *See* Telecommunications Act of 1996, Pub. L. 104-104, § 706(a),
    110 Stat. 56 (1996); 47 U.S.C. § 157.

[^88]: *See Spectrum Policy Report*.

[^89]: *Id.*

[^90]: *Id.*

[^91]: Coalition Proposal at ii. *See also,* *Interim Report* at ii.

[^92]: High-Speed Access to the Internet Over Cable and Other
    Facilities, GN Docket No. 00-185, *Declaratory Ruling and Notice of
    Proposed Rulemaking*, 17 FCC Rcd 4798, 4802 ¶ 5 (2002) (*Declaratory
    Ruling*).

[^93]: License-Exempt Alliance Comments at 3 to *Spectrum Policy
    Report*.

[^94]: *Declaratory Ruling*, 17 FCC Rcd at 4803-4804 ¶ 9.

[^95]: *See* para. 33*, supra.*

[^96]: See 47 U.S.C. §§ 157(a). *See also* 47 U.S.C. §
    309(j)(4)(C)(iii).

[^97]: Federal Communications Commission, Strategic Plan FY 2003-FY 2008
    at 5 (2002) (Strategic Plan).

[^98]: *Id.* at 14.

[^99]: 47 U.S.C. § 303(y).

[^100]: Federal Communications Commission, *Seventh Annual CMRS
    Competition Report* (FCC 02-179, rel. July 3, 2002) at 5.

[^101]: *Id.*

[^102]: Coalition Proposal at 4 *See also,* *3G Final Report* at 13.

[^103]: *See* FCC Staff Report, *Spectrum Policy Task Force Report in ET
    Docket No. 02-135,* released Nov. 2002 (*Spectrum Policy Report*).

[^104]: 47 C.F.R. § 74.931.

[^105]: The definition of "3G" is discussed at note Error: Reference
    source not found, [supra]{.underline}.

[^106]: *Id.* at 31.

[^107]: *Id.* at 32.

[^108]: *Id.* at 40-41.

[^109]: Coalition Proposal at 1.

[^110]: *Id.*, *citing* Amendment of Parts 2 and 74 of the Commission's
    Rules and Regulations to Establish a New Class of Educational
    Television Station of the Transmission of Instructional and Cultural
    Material to Multiple Receiving Locations on Channels in the
    1990-2110 Mc/S or 2500-2690 Mc/S Frequency Band*,* FCC 63-722 (rel.
    July 30, 1963), *on recon*. 2 Rad. Reg.2d 1619 (P&F 1964); Amendment
    of Sec. 74.902 of the Rules Governing Instructional Television Fixed
    Stations to Assign Alternate Channels to Stations Operating in the
    Same Area Instead of Every Sixth Channel*,* 2 Rad. Reg.2d 1615 (P&F
    1964).

[^111]: Coalition Proposal at 9.

[^112]: *Id.*

[^113]: *Id.* at 10.

[^114]: The service provider would not necessarily know, and might not
    need to know, whether a new subscriber was seeking to obtain mobile
    or fixed two-way data service. A laptop computer might be fixed part
    of the time and mobile at other times.

[^115]: We also seek comment on amending the Table of Allocations to
    adopt a US footnote listing the radio observatories that use
    2655-2690 MHz on a secondary basis and 2690-2700 MHz on a primary
    basis.

[^116]: *3G Final Report* at 37-57.

[^117]: *Id.* at 42.

[^118]: *Spectrum Policy Report* at 58-60.

[^119]: We address the complex transitional issues implicated by that
    process in section III.D.6.

[^120]: *MDS Second R&O,* 6 FCC Rcd at 6795.

[^121]: Coalition Proposal at 12, n.30

[^122]: *See* para. 22, *supra*.

[^123]: MMDS Licensee Coalition Comments at 8.

[^124]: *See* 47 C.F.R. §§ 74.910, 74. 911.

[^125]: *See M**DS Auction Report and Order,* 10 FCC Rcd 9607.

[^126]: *See* Coalition Proposal at 19.

[^127]: *Id.*

[^128]: *Spectrum Policy Report* at 35.

[^129]: *Id.*

[^130]: *Id.*

[^131]: Implementation of Sections 309(j) and 337 of the Communications
    Act: Promotion of Spectrum Efficient Technologies on Certain Part 90
    Frequencies and Establishment of Public Service Radio Pool in the
    Private Mobile Frequencies Below 800 MHz, *Notice of Proposed
    Rulemaking*, 14 FCC Rcd 5206, 5238 ¶ 63 (1999); Amendment of Parts
    2, 15, and 97 of the Commission's Rules to Permit Use of Radio
    Frequencies Above 40 GHz for New Radio Applications, *Second Report
    and Order*, 12 FCC Rcd 10,571, 10,599 ¶ 63 (1997); Revised
    Competitive Bidding Authority to Implement Sections 309(j) and 337
    of the Communications Act of 1934, as Amended by the Balanced Budget
    Act of 1997*,* 64 Fed. Reg. 23571-01 (1999).

[^132]: *See* Implementation of Sections 3(n) and 332 of the
    Communications Act and Amendment of Part 90 of the Commission's
    Rules to Facilitate Future Development of SMR Systems in the 800 MHz
    Frequency Band, *Third Re**port and Order,* PR Docket Nos. 89-553,
    93-144, GN Docket No. 93-252, 9 FCC Rcd 7988, 8044. *See also*,
    Amendment of the Commission's Rules Regarding Multiple Address
    Systems, WT Docket No. 97-81, *Report and Order,* 15 FCC Rcd 11956
    (2000). *S**ee also,* Reallocation and Service Rules for the 698-746
    MHz Spectrum Band (Television Channels 52-59), *Report and Order,*
    17 FCC Rcd 1,022 (2002) (*Lower 700 MHz Band R&O*).

[^133]: *See, e.g.,* Amendment of Part 90 of the Commission\'s Rules to
    Facilitate Future Development of SMR Systems in the 800 MHz
    Frequency Band, PR Docket No. 93-144, *First Report and Order,
    Eighth Report and Order, and Second Further Notice of Proposed Rule
    Making,* 11 FCC Rcd 1463 (1995) (restructuring licensing framework
    for 800 MHz Specialized Mobile Radio Service and adopting wide-area
    licensing). *See also* Gregory L. Rosston & Jeffrey S. Steinberg,
    *Using Market-Based Spectrum Policy to Promote the Public Interest*,
    50 Fed. Comm. L.J. 87, 94 (1997).

[^134]: *See* Part 20 (Commercial Mobile Radio Services), Part 22
    (Public Mobile Services), Part 24 (Personal Communications
    Services), Part 26 (General Wireless Communications Service), Part
    27 (Miscellaneous Wireless Communications Services), and Part 90
    (Private Land Mobile Radio Services) of our rules.

[^135]: *See* 47 U.S.C. § 309(j)(3)(B), (4)(C).

[^136]: *See* 47 U.S.C. § 309(j)(3)(A).

[^137]: *See* 47 U.S.C. § 309(j)(4)(C)(iii).

[^138]: *See, e.g.,* Service Rules for the 746-764 and 776-794 MHz
    Bands, and Revisions to Part 27 of the Commission's Rules, WT Docket
    No. 99-168, *First Report and Order*, 15 FCC Rcd 476, 499 ¶ 55
    (2000) (*Upper 700 MHz First Report and Order)*.

[^139]: Package bidding may take many forms. Under the design that the
    Wireless Telecommunications Bureau developed for the 700 MHz band
    auction (Auction No. 31), bidders were not restricted to placing
    bids on individual licenses, but were allowed to place
    all-or-nothing bids on packages of licenses. Auction of Licenses in
    the 747-762 and 777-792 MHz Bands Scheduled for September 6, 2000;
    Procedures Implementing Package Bidding For Auction No. 31, *Public
    Notice*, 15 FCC Rcd 11,526 (2000) (describing package bidding
    procedures); *see also* Auction of Licenses on the 747-762 and
    777-792 MHz Bands Scheduled for June 19, 2002, Round Results Process
    and Results Replication, *Public Notice*, 17 FCC Rcd 8,128 (2002).
    Under this approach, for example, a bidder desiring to inaugurate a
    nationwide service could bid on a package of licenses that covers
    the entire nation, and not face the risk of winning only some of the
    desired licenses and paying more than the bidder values those
    licenses by themselves (without the other licenses needed to provide
    nationwide coverage).

[^140]: *See* 47 U.S.C. § 309(j)(3)(D).

[^141]: *See* 47 C.F.R. § 24.102(a).

[^142]: *See* 47 C.F.R. § 27.6(f).

[^143]: *See* 47 C.F.R. § 24.102(b).

[^144]: *See* 47 C.F.R. §§ 90.7, 90.761(b).

[^145]: *See* 47 C.F.R. § 27.6(c)(1).

[^146]: *See* 47 C.F.R. § 27.6(a).

[^147]: *See* 47 C.F.R. § 24.202(a). These fifty-one areas were used
    under licenses issued by Rand McNally & Company for certain specific
    radio services, not including AWS, and are therefore not available
    for consideration in this proceeding. *See* Copyright Liabilities,
    *Public Notice*, 11 FCC Rcd 22,429 (MMB 1996).

[^148]: *See* 47 C.F.R. § 27.6(a). WCS MEA number 52 consists of the
    Gulf of Mexico.

[^149]: *See* 47 C.F.R. § 22.503(b)(2), (3). The fifty-one paging MEAs
    do not include the Gulf of Mexico.

[^150]: *See* 47 C.F.R. §§ 90.7, 90.761(a).

[^151]: *See* 47 C.F.R. §§ 90.7, 90.681.

[^152]: *See* 47 C.F.R. § 22.503(b)(2), (3).

[^153]: *See* 47 C.F.R. § 101.1315.

[^154]: *See* 47 C.F.R. § 24.202(b). These 493 areas were used under
    licenses issued by Rand McNally & Company for certain specific radio
    services, not including AWS. *See* Copyright Liabilities, *Public
    Notice*, 11 FCC Rcd 22,429 (MMB 1996).

[^155]: *See* 47 C.F.R. § 22.909.

[^156]: *See* 47 C.F.R. § 27.6(c)(2).

[^157]: *See* Rand McNally 2003 *Commercial Atlas & Marketing Guide* at
    40‑43.

[^158]: See Letter from P. Sinderbrand to W. Caton, Acting Secretary,
    FCC, Jan. 11, 1996. The Commission incorporated the WCA/Rand McNally
    agreement by reference in § 2(a)(iii), dated November 29, 2000. On
    September 18, 1995, Rand McNally reached an agreement with the WCA
    for a blanket copyright license for the conditional use of the
    copyrighted material in MDS.

[^159]: Mass Media Bureau Reminds Licensees that Issuance of a BTA
    Authorization Triggers Copyright Responsibilities, *Public Notice*,
    11 FCC Rcd 22,429 (1996) (*BTA PN*).

[^160]: *See MDS Auction R&O*, 10 FCC Rcd at 9608.

[^161]: See, e.g., Revision of Part 22 and 90 of the Commission\'s Rules
    to Facilitate Future Development of Paging Systems, *Second Report
    and Order and Further Notice of Proposed Rulemaking*, 12 FCC Rcd
    2732, 2735 n.3 (1997); *BTA PN*, 11 FCC Rcd at 22,429.

[^162]: *MDS Auction R&O*, 10 FCC Rcd 9589.

[^163]: *See e.g.,* Interim Arrangement Concerning the Use of the
    Frequency Bands 2150 -- 2162 MHz and 2500 -- 2690 MHz by MCS and MDS
    Stations Near the Canada/United States of America Border (dated Jun.
    25, 2002).

[^164]: *See e.g.,* Amendment of Parts 2 and 90 of the Commission's
    Rules to Provide for the Use of 200 Channels Outside the Designated
    Filing Areas in the 896-901 MHz and the 935-940 MHz Bands Alloted to
    the Specialized Mobile Radio Pool, PR Docket No. 89-553, *Second
    Report and Order and Second Further Notice of Proposed Rule Making,*
    10 FCC Rcd 6884, 6908 (1995).

[^165]: For further discussion concerning unlicensed operation in the
    2500-2690 MHz band, including discussion of the current rules
    relating to unlicensed operation in these bands, see Section
    III.E.6, *infra*.

[^166]: *See* 47 C.F.R. Part 15.

[^167]: *See* 47 C.F.R. § 15.5.

[^168]: 47 C.F.R. § 15.205.

[^169]: *Spectrum Policy Report* at 40.

[^170]: 47 C.F.R. § 21.924(c).

[^171]: 47 C.F.R. § 21.925(b).

[^172]: *See*, *e.g.*, 47 C.F.R. §§ 90.663, 101.525(a), 101.1009.

[^173]: *See* paras. 62 -65 *supra*, regarding geographic area licensing
    for unassigned ITFS spectrum.

[^174]: 47 C.F.R. § 21.932(a).

[^175]: 47 C.F.R. §§ 21.925(c)(4), 21.932(c).

[^176]: *See, e.g.*, 47 C.F.R. § 101.1331 (MAS): Amendment of the
    Commission's Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz
    Bands, ET Docket No. 95-183, 12 FCC Rcd 18600, 18637-8 ¶ 79 (*39 GHz
    Report and Order*).

[^177]: *See, e.g., 39 GHz Report and Order,* 12 FCC Rcd at 18637-8, ¶
    79.

[^178]: (*e.g.,* geographic area licensees must protect existing
    co-channel stations located within their geographic service area)
    *See* Amendment of the Commission's Rules Regarding Multiple Address
    Systems, WT Docket No. 97-81, 15 FCC Rcd 11,956 (2000); *See MDS
    Auction R&O,* 10 FCC Rcd 9589.

[^179]: Coalition Proposal at 10.

[^180]: Other licensees agree that many existing ITFS licensees will
    move or are contemplating moving away from traditional one-way
    high-power video-based operations. *See* Joint Comments of ITFS
    Parties at 2.

[^181]: Coalition Proposal at 20.

[^182]: 47 C.F.R. §§ 74.903, 21.902(d). Beginning on September 15, 1995,
    the initial service boundaries were frozen, i.e., the circular PSA
    boundaries were not to be changed regardless of whether or not the
    licensee subsequently moved its transmitter. *Id.* An ITFS
    licensee's PSA includes the area within a 35-mile radius of its
    transmitter site plus any reception sites beyond that radius that
    were registered with the Commission on September 17, 1998.

[^183]: *See* 47 C.F.R. §§ 21.902(d), 21.933(a).

[^184]: Effective September 15, 1995, the Commission expanded the PSAs
    of incumbent site-based MDS and ITFS licensees from fifteen miles to
    thirty-five miles. *See* Amendment of Parts 21, 43, 74, 78, and 94
    of the Commission's Rules Governing Use of the Frequencies in the
    2.1 and 2.5 GHz Bands Affecting: Private Operational-Fixed Microwave
    Service, Multipoint Distribution Service, Multichannel Multipoint
    Distribution Service, Instructional Television Fixed Service, &
    Cable Television Relay Service, *Second Report and Order*, Gen.
    Docket Nos. 90-54 and 80-113, 10 FCC Rcd 7074 (1995). In doing so,
    it created a number of overlaps between licensees whose PSAs had not
    overlapped before the standard PSA radius was increased.

[^185]: Coalition Proposal at 20-21 (*e.g.,* the rule changes have
    created a "no man's land").

[^186]: *See* Coalition Proposal Appendix C for a detailed explanation.

[^187]: Coalition Proposal at 35.

[^188]: ITFS licensees must identify the location of such receive sites,
    the antenna make and model and the antenna height above ground and,
    if known, the adjacent channel D/U ratio that can be tolerated.
    *See* Coalition Proposal at 35-36.

[^189]: Examples of services where service areas are defined exclusively
    on the basis of signal strength limits at geographic borders include
    the lower 700 MHz band (47 C.F.R. § 27.55(a)(2)), broadband PCS (47
    C.F.R. § 24.236), Part 27 services in the 2305-2320 and 2345-2360
    MHz bands (47 C.F.R. § 27.55(a)(1)), and Part 27 services in the
    1390-1395 and 1432-1435 MHz bands (47 C.F.R. § 27.55(a) (3)).

[^190]: *See MDS R&O*, 10 FCC Rcd at 9608-09; *see also Gulf Notice,* 17
    FCC Rcd at 8448 ¶ 7. Rand McNally defined 487 BTAs in the 1992
    *Commercial Atlas and Marketing Guide*. Because Rand McNally did not
    include some geographic areas that were the subject of the MDS
    auction, those areas were added to Rand McNally\'s list, bringing
    the total number for auctioning to 493 authorizations. The six
    additional areas are American Samoa, Guam, Northern Mariana Islands,
    San Juan, Puerto Rico; Mayaguez/Aguadilla-Ponce, Puerto Rico; and
    the United States Virgin Islands. *Id*. at 8447 n.4. *See also* 47
    C.F.R. § 21.924(b).

[^191]: *See MDS R&O*, 10 FCC Rcd at 9615-18; *see also Gulf Notice*, 17
    FCC Rcd at 8448 ¶ 7.

[^192]: *See MDS R&O*, 10 FCC Rcd at 9615-18; *see also Gulf Notice*, 17
    FCC Rcd at 8448 ¶ 7.

[^193]: *See* 47 C.F.R. § 21.902.

[^194]: *See* 47 C.F.R. § 21.933.

[^195]: *See Gulf Notice*, 17 FCC Rcd at 8448 ¶ 8.

[^196]: Petition for Rulemaking of Gulf Coast MDS Service Company (Gulf
    Coast Petition) (May 21, 1996).

[^197]: Amended Petition for Rulemaking of PetroCom License Corporation
    (Amended Petition) (Nov. 23, 1998).

[^198]: *See* Pleading Cycle Established for Comments on Amended
    Petition for Rulemaking to Amend Parts 21 and 74 of the Commission's
    Rules to Permit Licensing in the Multipoint Distribution Service and
    the Instructional Television Fixed Service for the Gulf of Mexico,
    *Public Notice*, 14 FCC Rcd 13,322 (1999) (*Amended Petition PN*).
    PetroCom also requested that the Commission set aside one of the
    licenses for small businesses, streamlining of the licensing
    process, modification of the two-way rules for stations operating in
    the Gulf. *Id*.

[^199]: Amended Petition at 4.

[^200]: *Id*. The WCA opposed the Amended Petition while PetroCom,
    Bachow/Coastel, L.L.C. (Bachow/Coastel) and RIG Telephones Inc.
    d/b/a Datacom (DataCom) each filed comments on September 10, 1999.
    *See* reply comments on September 27, 1999. Bachow/Coastel, WCA and
    DataCom filed reply comments. Finally, on October 8, 1999 and
    November 10, 1999, WCA and PetroCom filed comments in the form of a
    letters. These letters were not authorized pleadings pursuant to our
    rules; however, in order to develop a full and complete record, they
    were incorporated as part of the record in this proceeding.

[^201]: *Gulf Notice*, 17 FCC Rcd 8446.

[^202]: *See Gulf Notice*, 17 FCC Rcd at 8447 ¶ 2.

[^203]: *Id.*

[^204]: PetroCom Comments at 3-5; Stratos Offshore Services Company
    Comments at 2-3 (Stratos Offshore); WCA Comments at 4; PetroCom
    Reply Comments at 1-4.

[^205]: *See* PetroCom Comments at 3-5; PetroCom Reply Comments at 1-4.

[^206]: *See* WCA Comments; Stratos Offshore Comments at 2-3.

[^207]: *See* para. 132, *infra*.

[^208]: *See* Gulf Coast Petition at 4.

[^209]: *See, e.g.,* Amendment of the Commission's Rules to Establish
    Part 27, the Wireless Communications Service (\"WCS\"), GN Docket
    No. 96-228, *Report and Order*, 12 FCC Rcd 10785, 10816 ¶ 59 (1997)
    (*WCS R&O*).

[^210]: *See* WCA Comments at 7.

[^211]: *See Gulf Notice*, 17 FCC Rcd at 8450 ¶ 13.

[^212]: *Id*. at 8450 ¶ 13.

[^213]: We note that PetroCom's Comments and Reply Comments refer to
    MDS/ITFS spectrum. PetroCom Comments at 5; PetroCom Reply Comments
    at 2.

[^214]: *See Gulf Notice*, 17 FCC Rcd at 8452 ¶ 16.

[^215]: *Id*. at 8453 ¶ 18.

[^216]: *Id*.

[^217]: *Id*.

[^218]: WCA Comments at 6.

[^219]: PetroCom Comments at 5-6 *citing* Cellular Service and Other
    Commercial Mobile Radio Services in the Gulf of Mexico, *Report and
    Order*, 17 FCC Rcd 1209 (2001) (*Gulf Cellular Order*); PetroCom
    Reply Comments at 4-6 *citing Gulf Cellular Order*, 17 FCC Rcd at
    1219 ¶ 31.

[^220]: PetroCom Comments at 6.

[^221]: PetroCom Reply Comments at 5.

[^222]: PetroCom Comments to the Amended Petition at 4.

[^223]: *Spectrum Policy Report* at 49.

[^224]: *Id.*

[^225]: A detailed description of the Coalition transition process is
    contained in Appendix C.

[^226]: Coalition Plan, Appendix B at 5.

[^227]: *Id.*, Appendix B at 28-29.

[^228]: *Id.*, Appendix B at 13.

[^229]: *Id.*, Appendix B at 14.

[^230]: *Id.,* Appendix B at 21-28.

[^231]: The Coalition does not propose that any MDS licensees receive
    compensation from Proponents.

[^232]: *See* 47 C.F.R. § 90.699.

[^233]: Comments of MMDS Licensee Coalition ("MMDS Licensees"), filed
    November 14, 2002, at 3.

[^234]: *Id*.

[^235]: 47 U.S.C. § 316(a). We note that converting existing licensees
    to geographic service area licenses would eliminate the need to
    modify authorizations for individual transmitters.

[^236]: 47 C.F.R. § 1.87.

[^237]: *See* Amendment of Part 22 of the Commission\'s Rules to Provide
    for Filing and Processing of Applications for Unserved Areas in the
    Cellular Service and to Modify Other Cellular Rules*, Notice of
    Proposed Rulemaking,* 5 FCC Rcd 1,044, 1,048 ¶ 25 (1990), *citing
    WBEN, Inc. v. United States*, 396 F.2d 601 (2d Cir. 1968); *American
    Airlines, Inc. v. CA*B, 359 F.2d 624 (D.C.Cir. 1966); *Upjohn Co. v.
    Food and Drug Admin.*, 911 F.2d 1583 (D.C.Cir. 1987).

[^238]: *See generally*, Cellular Communication Systems (Cellular
    Systems), *Report and Order*, 86 F.C.C.2d 469 (1981), *modified*, 89
    F.C.C.2d 58 (1982), *further modified,* 90 F.C.C.2d 571 (1982);
    *appeal dismissed sub nom.* *United States v. FCC*, No. 82-1526,
    Slip Op. (D.C. Cir. Mar. 3, 1983); Rules for Rural Cellular Service,
    *First Report and Order*, 60 Rad. Reg. 2d 1029 (1986), *modified*, 2
    FCC Rcd 733 (1987), *further modified*, 2 FCC Rcd 3366 (1987), 4 FCC
    Rcd 5272 (1988), 3 FCC Rcd 4403 (1988), 4 FCC Rcd 4,464 (1989).

[^239]: *See* 47 C.F.R. §§ 101.69-101.79.

[^240]: *See* 47 C.F.R. §§ 101.85-101.95.

[^241]: *See* Section III.J, *infra*.

[^242]: *See* Evan Kwerel and John Williams, *A Proposal for a Rapid
    Transition to Market Allocation of Spectrum* (FCC Office of Plans
    and Policy Working Paper, Nov. 2002).

[^243]: Some MDS licensees, who also lease ITFS channels, employ CARS
    for their video operations as Wireless Cable Systems. They would
    continue to be eligible to be CARS licensees for those video
    operations, but not for low power broadband operations. Transition
    to the new band plan must also consider modification of those
    operations.

[^244]: 47 C.F.R. § 74.931(a)(1).

[^245]: *See* 47 C.F.R. § 74.932(a). Under certain circumstances,
    "wireless cable entities" may obtain access to ITFS channels so long
    as at least eight other ITFS channels remain available for future
    ITFS use. *See* 47 C.F.R. § 74.990-74.992.

[^246]: Amendment of Parts 2 and 74 of the Commission's Rules and
    Regulations to Establish a New Class of Educational Television
    Service for the Transmission of Instructional and Cultural Material
    to Multiple Receiving Locations on Channels in the 2500-2690 MHz
    Frequency Band, Docket No. 14744, *Second Report and Order*, 30
    F.C.C. 2d 197, 200 ¶ 10 ("*ITFS Second R&O"*).

[^247]: Amendment of Part 74 of the Commission's Rules and Regulations
    in Regard to the Instructional Television Fixed Service, *Second
    Report and Order*, 101 F.C.C.2d 50, 80 ¶¶ 75-78 (1985) (*emphasis
    added*) *Part 74 Second R&O*). The Commission also eliminated the
    requirement to transmit course-oriented material to selected
    accredited school sites if in lieu thereof the licensee names "the
    school(s) and the degree(s) or diploma(s) for which the formal
    programming will be offered and describe\[s\] the administration of
    the courses(s)," along with supporting documentation. 47 C.F.R. §
    74.931(a)(2).

[^248]: Amendment of Parts 21, 43, 74, 78, and 94 of the Commission\'s
    Rules Governing Use of the Frequencies in the 2.1 and 2.5 GHz Bands
    Affecting: Private Operational-Fixed Microwave Service, Multipoint
    Distribution Service, Multichannel Multipoint Distribution Service,
    Instructional Television Fixed Service, & Cable Television Relay
    Service, *Second Report and Order*, 6 FCC Rcd 6,764, 6,774 ¶ 48 n.45
    (1991).

[^249]: *Id.*

[^250]: *Id.* at 6 FCC Rcd 6,774 n.45.

[^251]: Amendment of Parts 1, 2, and 43 of the Commission's Rules and
    Regulations to Provide for Licensing and Regulation of Common
    Carrier Radio Stations in the Multipoint Distribution Service,
    *Report and Order*, 45 FCC 2d 616, 617 ¶ 5 (1974).

[^252]: Comments of WCA in ET Docket No. 02-135, at 5-6, filed Jan. 27,
    2003.

[^253]: Amendment of Part 74 of the Commission's Rules and Regulations
    in Regard to the Instructional Television Fixed Service*, Second
    Report and Order*, 101 F.C.C.2d 50, 87 ¶ 95 (1985).

[^254]: *Id.* at 99-91, ¶¶ 98-106.

[^255]: Amendment of Part 74 of the Commission's Rules and Regulations
    in Regard to the Instructional Television Fixed Service*, Order on
    Reconsideration*, 6 FCC Rcd 6,764 ¶¶ 51-52 (1991).

[^256]: Amendment of Part 74 of the Commission's Rules and Regulations
    in Regard to the Instructional Television Fixed Service, *Report and
    Order*, 9 FCC Rcd 3,360, 3,365 *¶* 18 (1994)*.*

[^257]: *Id.* at 3,365 ¶ 20.

[^258]: *Id.* at 2,920 ¶ 75.

[^259]: *Digital Modulation* *Declaratory Ruling and Order,* 11 FCC Rcd
    at 18872-18873*, ¶ *58*.*

[^260]: Amendment of Parts 21 and 74 to Enable Multipoint Distribution
    Service and Instructional Television Fixed Service Licensees to
    Engage in Fixed Two-Way Transmissions*, Report and Order,* 13 FCC
    Rcd 19112, 19166, ¶ 101 (1998).

[^261]: *Id.* at 19159 ¶ 89. The Commission also maintained its
    longstanding requirement that the ITFS operator transmit at least 20
    hours per week of educational programming per 6 MHz channel. *Id.*

[^262]: *Id.* at 19154 ¶ 81.

[^263]: *Id.* at 19,155 ¶ 82.

[^264]: Revisions to Part 21 of the Commission's Rules Regarding
    Multipoint Distribution Service*,* *Report and Order*, 2 FCC Rcd
    4,251 (1987). In 1983, we determined that ITFS operators could
    choose to provide service on either a private or common carrier
    basis and would be subject to regulation commensurate with their
    style of operation. *Allocation R&O*, 94 F.C.C.2d 1203, 1248-1255,
    ¶¶ 111-129.

[^265]: Amendment of Parts 21 and 74 to Enable Multipoint Distribution
    Service and Instructional Television Fixed Service Licensees to
    Engage in Fixed Two-Way Transmissions, MM Docket No. 97-217, *Report
    and Order*, 13 FCC Rcd 19,112 (1998), *recon.*, 14 FCC Rcd 12,764
    (1999), *further recon*., 15 FCC Rcd 14,566 (2000) (*Two-Way
    Order*).

[^266]: *Mobile Report and Order,* 16 FCC Rcd 17,222 (2001).

[^267]: Principles for Promoting the Efficient Use of Spectrum by
    Encouraging the Development of Secondary Markets, 15 FCC Rcd 24,178
    (2000) (Spectrum Policy Statement).

[^268]: Amendment of Eligibility Requirements in Part 78 Regarding 12
    GHz Cable Television Relay Service, *Report and Order*, 17 FCC Rcd
    9,930 (2002).

[^269]: *See* Reallocation and Service Rules for the 698-746 MHz
    Spectrum Band (Television Channels 52-59)*, Notice of Proposed
    Rulemaking*, 16 FCC Rcd 7,278 (2001).

[^270]: Service Rules for 746-764 and 776-794 MHz Bands, and Revisions
    to Part 27 of the Commission\'s Rules, *First Report and Order*, 15
    FCC Rcd 476 (2000).

[^271]: Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, Including Third
    Generation Wireless Systems*,* *Notice of Proposed Rulemaking and
    Order*, 16 FCC Rcd 596 (2001).

[^272]: Promoting Efficient Use of Spectrum Through Elimination of
    Barriers to the Development of Secondary Markets, *Notice of
    Proposed Rulemaking*, 15 FCC Rcd 24,203 (2000).

[^273]: *WCS R&*O, 12 FCC Rcd 10,785.

[^274]: 47 C.F.R. § 74.931(d)(1).

[^275]: *See* 47 C.F.R. § 100.5.

[^276]: Jared Bleak, *Educated by the Market: A Researcher's Look at
    Educational Entrepreneurialism* (Harvard Graduate School of
    Education, Oct. 5, 2001)
    http://www.gse.harvard.edu/news/features/market10052001.html).

[^277]: *Id.*

[^278]: *Broadband Increases Household Penetration, Silicon Valley/San
    Jose Business Journal,* Nov. 13, 2002, *citing* a Gartner Dataquest
    survey of 45,000 U.S. households. The article is accessible online
    at the following World Wide Web address:
    (http://sanjose.bizjournals.com/sanjose/stories/2002/11/11/daily39.html).

[^279]: As noted in para. 113, [supra]{.underline}. DBS operators must
    reserve four percent of their channel capacity for use by qualified
    programmers for noncommercial programming of an educational or
    informational nature. *See* 47 C.F.R. § 100.5.

[^280]: Presumably, licensees in the new Broadband Radio Service or ITFS
    licensees under the revised eligibility requirements would be
    eligible for CARS licenses, as MDS licensees currently are, but only
    to the extent they carry video programming---broadband data is not a
    permissible use for CARS stations.

[^281]: *See, e.g.,* *Part 74 Second R&O*, 101 F.C.C.2d at 91 ¶ 105
    (existing operators who begin to lease out excess capacity required
    to submit copies of their leases to the Commission).

[^282]: *See* 47 U.S.C. § 309(j)(3).

[^283]: *Id.*

[^284]: *See* 47 U.S.C. § 257.

[^285]: Section 21.912 of our rules implements Section 613 of the Act.
    Section 613 of the Act states that: It shall be unlawful for a cable
    operator to hold a license for multichannel multipoint distribution
    service, or to offer satellite master antenna television services
    separate and apart from any franchised cable service in any portion
    of the franchise area served by that cable operator's cable system.
    The Commission (1) shall waive the requirements of this paragraph
    for all existing multichannel multipoint distribution services . . .
    which are owned by a cable operator on October 5, 1992; (2) may
    waive the requirements of this paragraph to the extent the
    Commission determines is necessary to ensure that all significant
    portions of a franchise area are able to obtain video programming;
    and (3) shall not apply the requirements of this subsection to any
    cable operator in any franchise area in which a cable operator is
    subject to effective competition as determined under section 623(l)
    (47 U.S.C. § 533(a)). Section 613(a) was added to the Act by Section
    11(a) of the 1992 Cable Act (Cable Television Consumer Protection
    and Competition Act 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992
    Cable Act)).

[^286]: Implementation of Sections 11 and 13 of the Cable Television
    Consumer Protection and Competition Act of 1992 Horizontal
    Limitations and Anti-Trafficking Provisions, *Report and Order and
    Furthermore Notice of Proposed Rulemaking*, MM Docket No. 92-264, 8
    FCC Rcd 6,828, 6,845 ¶ 121 (1993) *citing* Senate Report 102-92
    (1991) at 46 *(Cable R&O).*

[^287]: *Cable R&O*, 8 FCC Rcd 6,828, 6841 ¶ 92 *citing* Senate Report
    102-92 at 46. The Senate Committee also indicated that such
    cross-ownership rules were necessary to enhance competition and to
    further diversity, by preventing cable operators from warehousing
    spectrum in an attempt to preclude entry by alternative MVPD
    providers. *Id*.

[^288]: *Id.* at 6841 ¶ 93 *citing* 47 U.S.C. § 533(c)(2)(B).

[^289]: 47 U.S.C. § 533(a). *See* 47 U.S.C. § 543(l). Section 623(l) of
    the Communication's Act defines "effective competition" as: A) fewer
    than 30 percent of the households in the franchise area subscribe to
    the cable service of a cable system; B) the franchise area is served
    by a minimum of two unaffiliated multichannel video programming
    distributors each of which offers comparable video programming to at
    least fifty percent of the households in the franchise area and the
    number of households subscribing to programming services offered by
    multichannel video programming distributors other than the largest
    multichannel video programming distributor exceeds fifteen percent
    of the households in the franchise area; C) a multichannel video
    programming distributor operated by the franchising authority for
    that franchise area offers video programming to at least fifty
    percent of the households in that franchise area; or D) a local
    exchange carrier or its affiliate (or any multichannel video
    programming distributor using the facilities of such carrier or its
    affiliate) offers video programming services directly to subscribers
    by any means (other than direct-to-home satellite services) in the
    franchise area of an unaffiliated cable operator which is providing
    cable service in that franchise area, but only if the video
    programming services so offered in that area are comparable to the
    video programming services provided by the unaffiliated cable
    operator in that area.

[^290]: 47 U.S.C. § 522(13).

[^291]: *See 39 GHz Report and Order*, 12 FCC Rcd at 18637 ¶ 79.

[^292]: *See* 47 U.S.C. § 151.

[^293]: Rule Making to Amend Parts 1, 2, 21,and 25 of the Commission's
    Rules to Redesignate the 27.5-29.5 GHz Frequency Band, to Reallocate
    the 29.5-30.0 GHz Frequency Band, to Establish Rules and Policies
    for Local Multipoint Distribution Services and for Fixed Satellite
    Services, *Third Order on Reconsideration*, 13 FCC Rcd 4856, 4861 ¶
    7, 4863 ¶ 12 (1998).

[^294]: 1992 Horizontal Merger Guidelines, U.S. Department of Justice
    and the Federal Trade Commission, p. 25.

[^295]: *Declaratory Ruling,* 17 FCC Rcd at 4804.

[^296]: http://www.cabledatacomnews.com/cmic/cmic16.html (visited Feb.
    5, 2002)

[^297]: Figures derived from Table 1 of "High Speed Services for
    Internet Access: Status as of June 30, 2002," Industry Analysis and
    Technology Division, Wireline Competition Bureau, Dec. 2002.

[^298]: High Speed Services for Internet Access: Status as of June 30,
    2002, Industry Analysis and Technology Division, Wireline
    Competition Bureau, Dec. 2002, Table 5.

[^299]: Note that we do not have the data necessary to explicitly
    delineate the relevant product and geographic markets but believe
    that this analysis can give us a general idea of likely
    concentration levels.

[^300]: The market shares do not sum to one due to rounding. The data
    consists of information gathered from qualifying service providers
    who must submit FCC Form 477 on a biannual basis.

[^301]: The mutually exclusive types of technology are, respectively:
    Asymmetric digital subscriber line (ADSL) technologies, which
    provide speeds in one direction greater than speeds in the other
    direction; wireline technologies "other" than ADSL, including
    traditional telephone company high-speed services and symmetric DSL
    services that provide equivalent functionality; coaxial cable,
    including the typical hybrid fiber-coax (HFC) architecture of
    upgraded cable TV systems; optical fiber to the subscriber's
    premises (e.g., Fiber-to-the-Home, or FTTH); and satellite and
    (terrestrial) fixed wireless systems, which use radio spectrum to
    communicate with a radio transmitter at the subscriber's premises.

[^302]: For example, there are residences and businesses in
    Jacksonville, FL that have neither access to DSL nor cable modem
    service. Wireless Communications Association Bulletin, "Clearwire
    Launches Next-Gen ITFS Service In Jacksonville," Jan. 9, 2003, p. 3.

[^303]: *See* 47 C.F.R. § 20.6.

[^304]: *See* 2000 Biennial Regulatory Review: Spectrum Aggregation
    Limits for Commercial Mobile Radio Services, WT Docket No. 01-14,
    *Report and Order*, 16 FCC Rcd 22,668 (2001) (*Spectrum Cap Order*),
    *recon. pending*.

[^305]: *Spectrum Cap Order*, 16 FCC Rcd at 22,679 ¶ 26 n.71 (*citing*
    Implementation of Sections 3(n) and 332 of the Communications
    Act---Regulatory Treatment of Mobile Services, GN Docket No. 93-252,
    *Third Report and Order*, 9 FCC Rcd 7,988, 8,105 ¶ 251 (1993)).

[^306]: "\[I\]n light of the growth of both competition and consumer
    demand in CMRS markets, we conclude that case-by-case review,
    accompanied by enforcement of sanctions in cases of misconduct, is
    now preferable to the spectrum cap rule because it gives the
    Commission flexibility to reach the appropriate decision in each
    case, on the basis of the particular circumstances of that case."
    *Spectrum Cap Order*, 16 FCC Rcd at 22,693-94 ¶ 50.

[^307]: *Id.* at 22,696 ¶ 54.

[^308]: *See* *Lower 700 MHz Band R&O*, 17 FCC Rcd at 1,070 ¶ 119. This
    limit is codified at 47 C.F.R. § 27.55(a)(2).

[^309]: 47 C.F.R. § 24.236.

[^310]: 47 C.F.R. § 27.55(a)(1) and (3).

[^311]: *See* 47 C.F.R. §§ 21.909(g)(2) and 74.939(g)(2).

[^312]: *See* 47 C.F.R. § 24.232.

[^313]: Coalition Proposal at 25.

[^314]: *Id.* at 26.

[^315]: Amendment of the Commission's Rules to Establish New Personal
    Communications Services, *Second Report and Order*, 8 FCC Rcd 7,700,
    7,764-7,765 ¶ 156 (1993).

[^316]: At frequencies above 1.5 GHz, mobile devices whose effective
    radiated power (ERP) is less than 3 watts are not required to
    undergo even routine environmental evaluation for radio frequency
    exposure prior to equipment authorization or use. 47 C.F.R.
    § 2.1091. A mobile device is defined for this purpose as "a
    transmitting device designed to be used in other than fixed
    locations and to generally be used in such a way that a separation
    distance of at least 20 centimeters is normally maintained between
    the transmitter's radiating structure(s) and the body of the user or
    nearby person." *Id.* Units designed to be used within twenty
    centimeters of a person are defined as "portable devices" and are
    subject to more stringent requirements. 47 C.F.R. § 2.1093.

[^317]: *See* Second Supplement to the Coalition Proposal at 3-7, filed
    Feb. 7, 2003.

[^318]: *Id.* at 5.

[^319]: *Id.* at 6.

[^320]: 47 C.F.R. § 24.232(a).

[^321]: *See* 47 C.F.R. § 74.935.

[^322]: *See* Coalition Proposal at 25 n.70.

[^323]: Coalition Proposal at 29.

[^324]: *Lower 700 MHz Band R&O*, 17 FCC Rcd at 1,070 ¶ 122.

[^325]: According to the Coalition's Proposal, the written request must
    include a certification from the requesting licensee that it intends
    to initiate service on the affected adjacent channel group at a date
    certain (not more than one year after the date of the written
    request), and that the additional attenuation is required due to the
    respective technical characteristics of the requesting licensee's
    planned facilities and those of the party receiving the request. The
    requesting licensee must also include in the written request
    currently available information regarding its planned network design
    comparable in scope to the information required to be filed upon
    completion of the construction of its facilities. *See* Coalition
    Proposal at 29.

[^326]: The Coalition states "\[i\]n addition to the other requirements
    imposed on out-of-band emissions by stations operating outside the
    MBS, the licensee of any transmitter operating in the LBS, UBS, I,
    J, or K channels shall manage its out-of-band emissions such that
    the noise power introduced into an MBS channel does not exceed an
    EIRP of -37 dBm without the consent of the affected MBS channel
    licensee. Notwithstanding the foregoing, if the licensee of a
    channel outside the MBS digitizes a channel within the MBS, the
    noise power introduced into that channel of the MBS shall not exceed
    an EIRP of -20 dBm without the consent of the affected MBS channel
    licensee." *See* Coalition Proposal at 30.

[^327]: *See* Coalition Proposal at 16, nn.39, 41.

[^328]: For example, the Coalition suggests that we measure out-of-band
    emissions at the outermost edges of the combined channels where two
    or more contiguous channels are employed in the same system. *See*
    Coalition Proposal at 29 n.79. *See also* Coalition Proposal at 30
    n.81.

[^329]: Flexibility for Delivery of Communications by Mobile Satellite
    Service Providers in the 2 GHz Band, the L-Band, and the 1.6/2.4 GHz
    Bands, IB Docket No. 01-185, *Report and Order and Notice of
    Proposed Rulemaking*, FCC 03-15 (rel. Feb. 10, 2003) at ¶ 119.

[^330]: *See* 47 C.F.R. § 2.106 n.US246.

[^331]: Coalition Proposal at 11 and 15.

[^332]: The Coalition points out that the Commission's *Interim Report*
    stated that a separation of at least 30 megahertz between upstream
    (customer to base) and downstream (base to customer) transmissions
    is needed to provide sufficient isolation of signals in the
    duplexer. *See* Coalition Proposal at 16. *See also* *Interim
    Report* at 54.

[^333]: Coalition Proposal at 16.

[^334]: In raising these questions, we recognize that the Coalition
    Proposal does not provide for formal pairings of channels but that,
    as the Coalition notes, operators could choose to pair channel
    groups that are sufficiently separated to allow upstream and
    downstream FDD communications. *See* Coalition Proposal at 15, n.40.

[^335]: Intel Reply Comments in RM-10586, at 5; Microsoft Reply Comments
    in RM-10586, at 3-4.

[^336]: Additional Spectrum for Unlicensed Devices Below 900 MHz and in
    the 3 GHz Band, ET Docket No. 02-380, *Notice of Inquiry*, 17 FCC
    Rcd 25,632, (2002) ("*Unlicensed NOI*")

[^337]: *Id.* ¶ 13.

[^338]: *Id.*

[^339]: *Id.* ¶ 21.

[^340]: We also seek comment on a proposal to allow unlicensed operation
    on a primary basis for unassigned ITFS spectrum. *See paras. 79-82*,
    *supra*.

[^341]: WCA Comments in ET Docket No. 02-135, at 10.

[^342]: *Unlicensed NOI*, ¶ 14.

[^343]: *See paras.79-82*, *supra*.

[^344]: 47 C.F.R. § 15.205.

[^345]: *See* 47 C.F.R. §§ 1.1307(b)(2), 2.1091(c) and 2.1093(c).

[^346]: *See* Coalition Proposal at 20, n.51 and 26.

[^347]: The existing requirements are located in 47 C.F.R. §§ 1.1307(b),
    1.1310, 2.1091 and 2.1093.

[^348]: Coalition Proposal at 56.

[^349]: With regard to the Coalition's request to convert the database,
    we note that the Wireless Bureau has asked MDS and ITFS licensees to
    review their license data, including coordinate data, to determine
    if it is correct. *See* Wireless Telecommunications Bureau Seeks to
    Verify ITFS, MDS and MMDS License Status and Pending Applications,
    *Public Notice,* DA 02-2751, released Oct. 18, 2002.

[^350]: *See* 47 C.F.R. §§ 1.1104 and 21.909(c)(1).

[^351]: 47 C.F.R. § 21.909(h)(i)(2).

[^352]: *See* *Public Notice*, Mass Media Bureau Multipoint Distribution
    Service and Instructional Television Fixed Service Applications
    Tendered For Filing, Report No. 148, (Nov. 29, 2000).

[^353]: *See* Amendment of Part 2 of the Commission\'s Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, *Third Report and Order, Third Notice
    of Proposed Rulemaking*, *and Second Memorandum Opinion and Order*,
    ET Docket No. 00-258, FCC 03-16, ¶72 (2003) (*AWS Third R&O, Third
    NPRM, and Second MO&O*).

[^354]: In 1992, when the 2160-2165 MHz band was reallocated to emerging
    technologies, the Commission implemented a policy by which incumbent
    MDS licensees that were using the 2160‑2162 MHz band would continue
    such use on a primary basis. *See* Redevelopment of Spectrum to
    Encourage Innovation in the Use of New Telecommunications
    Technologies, *First Report and Order and Third Notice of Proposed
    Rule Making*, 7 FCC Rcd 6886, 6889 ¶17 (1992). However, any MDS
    station that applied for use of this band after January 16, 1992
    would be granted only on a secondary basis to emerging technology
    use. *Id*. at n.22.

[^355]: *Two-Way R&O*, 13 FCC Rcd 19,112.

[^356]: Amendment of Parts 1, 21 and 74 to Enable Multipoint
    Distribution Service and Instructional Television Fixed Service
    Licensees to Engage in Fixed Two-Way Transmissions, *Report and
    Order on Reconsideration*, 14 FCC Rcd 12,764 (1999) (*Two-Way R&O on
    Recon*).

[^357]: IPWireless, Inc. Petition for Reconsideration, filed Dec. 22,
    1999.

[^358]: Petitioners Consolidated Comments and Partial Opposition at 5
    (Consolidated Comments) filed Feb. 10, 2000. Although the Commission
    inadvertently indicated that WCA requested clarification, we take
    this opportunity to correct the record to reflect that the
    Petitioners requested clarification of this issue. *See* Amendment
    of Parts 1, 21 and 74 to Enable Multipoint Distribution Service and
    Instructional Television Fixed Service Licensees to Engage in Fixed
    Two-Way Transmissions, *Report and Order on Further Reconsideration
    and Further Notice of Proposed Rulemaking*, 15 FCC Rcd 14,566,
    14,576 (2000) (*Two-Way FNPRM*).

[^359]: Petitioners Consolidated Comments at 6.

[^360]: *Id*.

[^361]: *Id.*

[^362]: Petitioners and IPWireless, *Ex Parte*, filed May 11, 2000.

[^363]: *Id.* at 1.

[^364]: *Id.*

[^365]: *Two-Way FNPRM*, 15 FCC Rcd at 14,576.

[^366]: *Two-Way FNPRM*, 15 FCC Rcd 14,576-7 ¶¶ 39-40.

[^367]: Biennial Regulatory Review -- Amendment of Parts 0, 1, 13, 22,
    24, 26, 27, 80, 87, 90, 95, 97, and 101 of the Commission's Rules to
    Facilitate the Development and Use of the Universal Licensing System
    in the Wireless Telecommunications Services, *Report and Order*, 13
    FCC Rcd 21,027, 21,054 ¶ 56 (*ULS R&O*).

[^368]: *Id*.

[^369]: *Id*.

[^370]: 47 C.F.R. §§ 21.40, 21.41.

[^371]: *See* 47 C.F.R. § 21.40. A major modification for an MDS license
    includes a substantial modification of the engineering proposal such
    as (but not limited to) a change in, or addition of, a radio
    frequency channel; a change in polarization of the transmitted
    signal; a change in type of transmitter emission or an increase in
    emission bandwidth of more than ten percent; a change in the
    geographic coordinates of a station's transmitting antenna of more
    than ten seconds of latitude or longitude or both; any change which
    increases the antenna height by three meters or more; any technical
    change that would increase the effective radiated power in any
    direction by more than 1.5 dB; or any changes or combination of
    changes that would cause harmful electrical interference to an
    authorized facility or result in a mutually exclusive conflict with
    another pending application. 47 C.F.R. § 21.23.

[^372]: *Id.*

[^373]: 47 C.F.R. § 74.951.

[^374]: 47 C.F.R. § 73.5000. We note that our rules permit ITFS
    licensees to exchange channels evenly with each other or with MDS
    licensees after filing pro forma applications. 47 C.F.R. §
    74.902(f).

[^375]: Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding for Commercial Broadcast and Instructional
    Television Fixed Service Licenses, *First Report and Order,* 13 FCC
    Rcd 15,920 ¶ 207 (1998).

[^376]: *See* 47 C.F.R. § 74.986.

[^377]: *See* 47 C.F.R. § 1.929.

[^378]: *See* 47 C.F.R. § 1.947.

[^379]: *See* 47 C.F.R. § 1.929.

[^380]: *See* 47 C.F.R. § 1.947(b).

[^381]: Our rules treat certain amendments as new applications that
    receive a new filing date as of the date the applicant submits the
    amendment. Amendments that we treat as new applications include
    applications submitted up to fourteen days after the application
    appeared as accepted on public notice and that reflects any change
    in the technical specifications of the proposed facility; submitted
    with a new or modified analysis of potential interference to another
    facility; or submitted with an interference consent statement from a
    neighboring licensee. 47 C.F.R. § 21.23. In such cases, the amended
    application must include an applicant certification that it has met
    all requirements regarding interference protection to existing and
    prior proposed facilities, and that it has obtained any necessary
    consent letters in lieu of interference protection. The applicant
    must also certify that it has served all potentially affected
    parties with copies of its amended application and engineering
    materials, and that the engineering analyses comply with the rules
    and methodology. *See* 47 C.F.R. §§ 21.23, 73.3522(a). Furthermore,
    ITFS applicants may amend applications to cure defects noted in
    deficiency letters to the applicant. *See* 47 C.F.R. § 73.3522(a).
    MDS BTA applicants may amend a long-form application up to the date
    the application has appeared on public notice as accepted for filing
    or by written petition demonstrating good cause if the application
    is already on public notice. *See* 47 C.F.R. § 21.926. In both
    Services, applicants may not amend applications if the proposed
    amendment seeks more than a pro forma change of ownership or
    control.

[^382]: Generally, under our consolidated approach for processing
    wireless applications, applicants may file amendments to pending
    applications as a matter of right if we have not designated the
    application for hearing or listed it in a competitive bidding public
    notice as accepted for filing. *See* 47 C.F.R. § 1.927. Where an
    amendment to an application constitutes a "major change" as defined
    in Section 1.929, we treat the amendment as a new application for
    determination of filing date, public notice, and petition to deny
    purposes. *See* 47 C.F.R. § 1.927(h). Where an amendment to an
    application specifies a substantial change in beneficial ownership
    or control (de jure or de facto) of an applicant, the applicant must
    provide an exhibit with the amended application containing an
    affirmative, factual showing as set forth in Section 1.948(h)(2).
    *See* 47 C.F.R. § 1.927(g).

[^383]: Memorandum to WCA Government Relations Committee from Paul J.
    Sinderbrand, Esq., Petition for Rulemaking - Amendment of Parts 21
    and 74, at 11, August 1, 2001.

[^384]: *See* 47 C.F.R. § 21.11(d) (Assignment of License); 47 C.F.R. §
    21.11(e) (Transfer of control of corporation holding a conditional
    license or license); 47 C.F.R. § 21.13 (General Application
    Requirements); 47 C.F.R. § 21.15 (Technical Content of
    Applications); 47 C.F.R. § 21.17 (Certification of Financial
    Qualifications); 47 C.F.R. § 21.19 (Waiver of Rules); 47 C.F.R. §
    21.38 (Assignment or Transfer of Station Authorizations); 47 C.F.R.
    § 21.39 (Considerations Involving Transfer or Assignment
    Applications); 47 C.F.R. § 21.912 (Cable Television Eligibility
    Requirements and MDS/Cable Cross Ownership); 47 U.S.C. § 310
    (Limitation on Holding and Transfer of Licenses (Alien Ownership
    Restriction).

[^385]: 47 C.F.R. § 21.11(e).

[^386]: *Id.*

[^387]: *Id.*

[^388]: *Id.*

[^389]: *See* 47 C.F.R. § 21.934. We note that exceptions exist if there
    is not a substantial change in ownership or control of the
    authorized facility from the transaction (assignment/transfer);
    involuntary transaction due to the licensee\'s bankruptcy, death, or
    legal disability; and if the transaction involves BTA
    authorizations. *See id.*

[^390]: *See* 47 C.F.R. §§ 74.910, 73.3500.

[^391]: *See* 47 C.F.R. § 73.3540.

[^392]: *See* 47 C.F.R. § 73.3541.

[^393]: *See* 47 C.F.R. § 73.3541.

[^394]: *ULS R&O*, 13 FCC Rcd at 21079 ¶ 113.

[^395]: *Id.*

[^396]: *See* 47 C.F.R. §§ 21.901(d); 74.902(f); 74.951(e).

[^397]: *See* 47 C.F.R. § 74.951(e).

[^398]: *See* 47 C.F.R. § 74.902; *see also* 47 C.F.R. § 21.901.

[^399]: Coalition Proposal at Appendix B n.49.

[^400]: *See*, *e.g.*, 47 C.F.R. §§ 27.15, 101.535, 101.1111, 101.1323.

[^401]: "Partitioning" is the assignment of geographic portions of a
    license along geopolitical or other boundaries. "Disaggregation" is
    the assignment of discrete portions of "blocks" of spectrum licensed
    to a geographic area licensee or qualifying entity.

[^402]: 47 C.F.R. § 21.931.

[^403]: Coalition Proposal at 13.

[^404]: *See, e.g*., 47 C.F.R. § 21.901, 47 C.F.R. § 74.902.

[^405]: *Spectrum Policy Report* at 19.

[^406]: *See* 47 C.F.R. § 21.11(c).

[^407]: *Id*.

[^408]: *See* 47 C.F.R. § 21.44(a)(2).

[^409]: *See* 47 C.F.R. § 21.43(b).

[^410]: *See* 47 C.F.R. § 21.929(b).

[^411]: *See Public Notice*, Wireless Telecommunications Bureau Suspends
    Electronic Filing for the Broadband Licensing System on October 11,
    2002 , 17 FCC Rcd 18,365 (2002).

[^412]: *See* 47 C.F.R. § 73.3539.

[^413]: *See, e.g.,* Jonsson Communications Corp*., Memorandum Opinion
    and Order*, (DA 02-3099, released Nov. 13, 2002). There is no
    codified rule specifically addressing reinstatement of ITFS
    licenses.

[^414]: *ULS R&O*, 13 FCC Rcd at 21071 ¶ 96.

[^415]: *See* Rules and Regulations to Facilitate the Development and
    Use of the Universal Licensing System in the Wireless
    Telecommunications Service, 63 Fed. Reg. 68904, 68908 (1998).

[^416]: *See* Biennial Regulatory Review - Amendment of Parts 0, 1, 13,
    22, 24, 26, 27, 80, 87, 90, 95, and 101 of the Commission\'s Rules
    to Facilitate Development and Use of the Universal Licensing System
    in the Wireless Telecommunications Service, *Memorandum Opinion and
    Order on Reconsideration*, WT Docket No. 98-20, 14 FCC Rcd 11476,
    11485 ¶ 22 (1999).

[^417]: *See id*. at 11485 ¶ 22.

[^418]: *Id*.

[^419]: *Id*.

[^420]: *Id*. at 11485-6 ¶ 22.

[^421]: *ULS R&O,* 13 FCC Rcd at 21,071 ¶ 96. The Commission excluded
    Commercial Radio Operators Licenses and Amateur licenses from this
    policy. *Id*.

[^422]: *Id*.

[^423]: *See* 47 C.F.R. § 21.25.

[^424]: 47 C.F.R. § 21.5.

[^425]: *Id.*

[^426]: *See* 47 C.F.R. § 73.3542; *see also* 47 C.F.R. §§ 73.1635;
    74.910.

[^427]: *See* 47 C.F.R. § 1.931.

[^428]: *See* 47 U.S.C. § 310.

[^429]: *See ULS NPRM*, 13 FCC Rcd 9672, 9691 ¶ 43 (1998).

[^430]: ULS will pre-fill information that the licensee has previously
    submitted on a Form 602, enabling the licensee to limit new
    submissions to changed information, and ULS can also fill in certain
    parts of a Form 602 by reference to other previously filed
    information. For example, if Party A has previously submitted its
    own ownership filing and is subsequently listed as a disclosable
    interest holder on the ownership filing of of another licensee
    (Party B), Party A\'s FCC-regulated businesses may be automatically
    copied to Party B\'s filing. *Public Notice*, Wireless
    Telecommunications Bureau Announces Availability of Electronic
    Filing of FCC Form 602, 17 FCC Rcd 16,779 (2002).

[^431]: *See Public Notice*, Wireless Telecommunications Bureau Answers
    Frequently Asked Questions Concerning Reporting of Ownership
    Information on FCC Form 602, DA 99-1001 (May 25, 1999).

[^432]: *Public Notice*, Wireless Telecommunications Bureau to
    Temporarily Suspend Electronic Filing of FCC Form 430 via the
    Broadband Licensing System, 17 FCC Rcd 11,131 (2002).

[^433]: *See* para. 176 *supra*.

[^434]: *See e.g.,* 47 C.F.R. § 27.10; 47 C.F.R. § § 101.511 and
    101.133.

[^435]: *ULS R &O*, 13 FCC Rcd 21027 at Appendix C.

[^436]: 47 U.S.C. § 158.

[^437]: *Id.* § 158(b).

[^438]: 47 U.S.C. § 159.

[^439]: 47 U.S.C. § 159(a).

[^440]: Establishment of a Fee Collection Program to Implement the
    Provisions of the Consolidated Omnibus Budget Reconciliation Act of
    1985, *Notice of Proposed Rulemaking*, 51 Fed. Reg. 25792 ¶ 68
    (1986).

[^441]: Governmental entities are statutorily exempt from Section 8
    fees, and both governmental entities and nonprofit entities are
    statutorily exempt from Section 9 fees. 47 U.S.C. §§ 158(d)(1),
    159(h).

[^442]: 47 U.S.C. § 158(d)(1).

[^443]: *Compare* 47 U.S.C. § 159(h) (exceptions to regulatory fees) and
    47 C.F.R. § 74.932 (ITFS eligibility).

[^444]: 47 U.S.C. § 159(b)(3). Increases or decreases in fees made by
    amendments pursuant to this paragraph shall not be subject to
    judicial review. *Id.*

[^445]: 47 C.F.R. § 1.1153.

[^446]: *See* 47 C.F.R. § 1.1152 (CMRS Mobile Services and CMRS
    Messaging Services).

[^447]: *See* Reorganization and Revision of Parts 1, 2, 21, and 94 of
    the Rules to Establish a New Part 101 Governing Terrestrial
    Microwave Fixed Radio Services, WT Docket No. 94-148, *Report and
    Order*, 11 FCC Rcd 13,449, 13,465 (1996).

[^448]: *See* 47 C.F.R. §§ 21.44; 21.303; 21.910; 21.932; 21.936;
    73.3534; 73.3598; 74.932.

[^449]: *See* 47 C.F.R. §§ 21.903(d); 21.910.

[^450]: *See* 47 C.F.R. § 21.903(d) which provides that the notification
    must state whether there is any affiliation or relationship to any
    intended or likely subscriber or program originator.

[^451]: *See* 47 C.F.R. § 21.910 which provides that the notice shall be
    in writing and shall include the name and address of the carrier,
    the date of the event, the area(s) affected and the channels that
    are affected by the event. *Id*. at § 21.910(b).

[^452]: Coalition Proposal at 44-45.

[^453]: 47 U.S.C. § 310(a), (b).

[^454]: 47 C.F.R. §§ 101.7, 1.913, 1.919. Moreover, as we observed in
    the *LMDS 2d R&O*, requiring submission of ownership information
    that may not be immediately necessary to assess the qualifications
    of a licensee (i.e., one who currently operates as a non-common
    carrier) is an efficient and reasonable measure to facilitate the
    flexibility accorded licensees to change status with a minimum of
    regulatory interference. With this approach, updated information can
    be used whenever the licensee changes to common carrier status
    without imposing an additional filing requirement when the licensee
    makes the change. Moreover, having access to this ownership
    information allows the Commission to monitor all of the licensed
    providers more effectively, in light of their ability to provide
    both common and non-common carrier services. Rulemaking to Amend
    Parts 1, 2, 21, and 25 of the Commission's Rules to Redesignate the
    27.5-29.5 GHz Frequency Band, to Reallocate the 29.5-30.0 GHz
    Frequency Band, To Establish Rules and Policies for Local Multipoint
    Distribution Service and For Fixed Satellite Services, *Second
    Report and Order, Order on Reconsideration, and Fifth Notice of
    Proposed Rulemaking,* CC Docket No. 92-297, 12 FCC Rcd 12545 (1997)
    (*LMDS 2d R&O*).

[^455]: "\[T\]he Commission is required under Section 309 (j) of the
    Communications Act to include 'safeguards to protect the public
    interest in use of the spectrum' and performance requirements 'to
    ensure prompt delivery of service to rural areas, to prevent
    stockpiling or warehousing of spectrum by licensees or permittees,
    and to promote investment in and rapid deployment of new
    technologies and services." *WCS Report and Order*, 12 FCC Rcd. at
    10841 (quoting 47 U.S.C. § 309(j)(4)(B))(footnote omitted).

[^456]: *See* 47 C.F.R. § 21.930(a)(1).

[^457]: *See* 47 C.F.R. § 21.930(a)(2).

[^458]: *See* 47 C.F.R. § 21.930(a)(3).

[^459]: 47 C.F.R. § 21.907.

[^460]: *See* 47 C.F.R. § 21.930(c)(1).

[^461]: *See* 47 C.F.R. § 21.930(c)(2).

[^462]: *See* 47 C.F.R. § 21.930(d)(1).

[^463]: *See* 47 C.F.R. § 21.930(d)(2).

[^464]: *See* 47 C.F.R. § 21.930(d)(2)(ii).

[^465]: Amendment of the Commission's Rules to Establish Part 27, the
    Wireless Communications Service *("WCS")*, GN Docket No. 96-228,
    *Report and Order*, 12 FCC Rcd 10785, 10843-45 (1997) (*WCS Report
    and Order*); *LMDS 2d R&O,* 12 FCC Rcd at 12,659-61, *aff'd Melcher
    v. FCC*, 134 F.3d 1143, 1161-2 (D.C. Cir. 1998)*;* Amendments to
    Parts 1, 2, 87, and 101 of the Commission's Rules to License Fixed
    Services at 24 GHz, WT Docket No. 99-327, *Report and Order,* 15 FCC
    Rcd 16934, 16950-52 (2000) (*24 GHz Report and Order*); 39 *GHz
    R&O,* 12 FCC Rcd at 18624-25; Amendment of Parts 2 and 25 of the
    Commission's Rules to Permit Operation of NGSO FSS Systems
    Co‑Frequency with GSO and Terrestrial Systems in the Ku‑Band
    Frequency Range, ET Docket No. 98‑206, *Memorandum Opinion and Order
    and Second Report and Order*, 17 FCC Rcd 9614, 9684-9685, ¶ 177
    (2002) (*MVDDS* *Memorandum Opinion and Order and Second Report and
    Order*).

[^466]: "Based on the record in this proceeding, we believe that the
    substantial service standard, in lieu of specific coverage
    requirements best serves the public interest. In addition to being
    consistent with the approach used in other wireless services, we
    believe that this standard is sufficiently flexible to foster
    expeditious development and deployment of systems and will
    ultimately create competition among service providers in this band."
    *24 GHz Report and Order*, 15 FCC Rcd at 16951. "This approach
    \[substantial service\] will permit flexibility in system design and
    market development, while ensuring that service is being provided to
    the public." *39 GHz Report and Order*, 12 FCC Rcd 18624.

[^467]: 47 C.F.R. §§ 1.946(c) and 1.955(a)(2). *See also* 47 C.F.R. §
    101.1325.

[^468]: *See* 47 C.F.R. § 21.43(a).

[^469]: Revision of Part 21 of the Commission's Rules, *Notice of
    Proposed Rulemaking,* CC Docket No. 86-128, 104 F.C.C.2d 116, 125
    n.41 (1986). We permit extensions of time to construct when the
    authorization holder applies for the extension and submits: 1) a
    verified statement of diligent efforts to construct, and 2a) the
    delay is due to circumstances beyond the applicant's control, or 2b)
    there are unique and overriding public interest concerns. *See* 47
    C.F.R. §§ 21.11(b), 21.40(b). A carrier who does not promptly
    construct facilities precludes others who are willing and able to
    construct from access to the spectrum." *See* Revision of Part 21 of
    the Commission's Rules, *Report and Order*, 2 FCC Rcd 5713, 5721
    (1987) (*1987 Report and Order*). "In order to ensure timely
    construction of facilities, the Commission announced its intent to
    enforce strictly construction deadlines . . . when it established a
    construction period of 12 months." *See also* *Miami MDS Co.*, 7 FCC
    Rcd 4347, 4349 (1992), *aff'd mem, Miami MDS Co., v. FCC*, 14 F.3d
    658 (D.C Cir. 1994). Consequently, we do not grant extensions of
    time for delays caused by the lack of financing or the lack of site
    availability. *See* 47 C.F.R. § 21.40(b).

[^470]: *See* 47 C.F.R. § 73.3534(a). The Commission recognized that a
    one-year period may not be sufficient for ITFS licensees due to the
    budgeting and scheduling processes for educational institutions
    could delay the construction of ITFS facilities beyond the one year
    period." Amendment of Part 74 of the Commission's Rules and
    Regulations in Regard to the Instructional Television Fixed Service,
    *Report and Order*, MM Docket No. 83-523*,* 98 F.C.C.2d 925, 935
    (1984). However, the Commission provided that ITFS licensees could
    obtain an extension of time to construct by submitting a specific,
    detailed narrative statement demonstrating that the delay is due to
    "causes not under the control of the permittee, or upon a specific
    and detailed showing of other sufficient justification for
    extension. *See* 47 C.F.R. § 73.3534(c). An ITFS extension of time
    applicant must demonstrate that 1) construction is complete and
    testing of facilities has begun; 2) substantial progress has been
    made; or 3) reasons clearly beyond the applicant's control, which
    the applicant has taken all possible steps to resolve, have
    prevented construction*. See ITFS Report and Order,* 10 FCC Rcd at
    2921. Thus, depending on the circumstances, the lack of funding may
    warrant an extension of time to construct for an ITFS licensee.
    *See* Amendment of Parts 21, 43, 74, 78, and 94 of the Commission's
    Rules Governing Use of the Frequencies in the 2.1 and 2.5 GHz Bands
    Affecting Private Operational-Fixed Microwave Service, Multipoint
    Distribution Service, Multichannel Multipoint Distribution Service,
    Instructional Television Fixed Service, and Cable Television Relay
    Service Gen. Docket No. 90-54, Gen. Docket No. 80-113, Amendment of
    Parts 21 and 73 of the Commission's Rules with Regard to Filing
    Procedures in the Multipoint Distribution Service and in the
    Instructional Television Fixed Service, MM Docket No. 94-131, and
    Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding, PP Docket No. 93-253, *Third Order on
    Reconsideration and Order to Clarify*, 11 FCC Rcd 17003, 17011
    (1996).

[^471]: *See e.g.* WCA Comments at 7-11 (filed May 9, 2001); Sprint
    Comments at 2-3 (filed May 9, 2001); WorldCom, Inc. Comments at 4-6
    (filed May 9, 2001); Nucentrix Broadband Networks, Inc. Comments at.
    9-10 (filed May 9, 2001); Hubbard Trust Comments at 5 (filed May 9,
    2001); Wireless One of North Carolina, L.L.C. Reply Comments at 1-3
    (filed May 16, 2001).

[^472]: 47 C.F.R. §§ 1.946(c) and 1.955(a)(2). *See also* 47 C.F.R. §
    101.1325.

[^473]: Coalition Proposal at 43.

[^474]: *Id.*

[^475]: *Id*. at 45.

[^476]: *Id*. at 47-48*.*

[^477]: *Id*. at 45.

[^478]: *Id*. at 46.

[^479]: *Id.*

[^480]: *Id.*

[^481]: *Id.* at 45-46.

[^482]: Coalition Proposal at 49.

[^483]: *See* Facilitating The Provision Of Spectrum-Based Services To
    Rural Areas And Promoting Opportunities For Rural Telephone
    Companies To Provide Spectrum-Based Services, WT Docket No. 02-381,
    *Notice of Inquiry*, 17 FCC Rcd 25,554 at ¶ 22 (2002).

[^484]: *Id.* at 50; *see also* paras. 168- 169.

[^485]: *See* Extension of the Five-Year Build-out Period for BTA
    Authorization Holders in the Multipoint Distribution Service,
    *Memorandum Opinion and Order*, 16 FCC Rcd 12593, 12594-12595 ¶ 5
    (2001). The Commission did not alter the construction deadlines that
    already fell after August 16, 2003.

[^486]: *Id*. at 12593 ¶ 1.

[^487]: *Id*. at 12,596 ¶ 8.

[^488]: *Id*. at 12,596 ¶ 8.

[^489]: *Id*. at 12,597 ¶ 9.

[^490]: *See, e.g.*, Amendment of Parts 2 and 90 of the Commission\'s
    Rules to Provide for the Use of 200 Channels Outside the Designated
    Filing Areas in the 896-901 MHz and 935-940 MHz Bands Allotted to
    the Specialized Mobile Radio Pool Modification of FCC Rule Section
    90.627(b) Governing Multiple Sites for Specialized Mobile Radio
    Service Systems In Rural Markets, *Order*, 8 FCC Rcd 3974 (1993);
    Requests by Interactive Video And Data Service Auction Winners to
    Waive the January 18, 1998, and February 28, 1998, Construction
    Deadlines, *Order*, 13 FCC Rcd 756 (WTB 1998); Requests by
    Interactive Video and Data Service Auction Winners to Waive the
    March 28, 1997 Construction Deadline, *Order*, 12 FCC Rcd 3,181,
    3,184 (WTB 1997); Deferral of Rate of Return Represcription Filings
    Pursuant to Section 65.102(c) of the Rules, *Memorandum Opinion and
    Order*, 3 FCC Rcd 7,220, 7,222 (CCB 1988). *Cf. Channel 16 of Rhodel
    Island, Inc. v. FCC*, 440 F.2d 266, 275-76 (D.C. Cir. 1971).

[^491]: *See, e.g.* Daniel R. Goodman, Receiver; Dr. Robert Chan,
    *Memorandum Opinion and Order and Order on Reconsideration*, 13 FCC
    Rcd 21,944, 21972-973, 21977 ¶¶ 53, 62 (1998).

[^492]: 47 C.F.R. § 21.911.

[^493]: *See* 47 C.F.R. § 74.911(c)(1), (d).

[^494]: *See* 47 C.F.R. § 74.911(d) (amendments were permissible as long
    as they did 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 licensee
    of the stations that would receive the additional interference).

[^495]: *See id*.

[^496]: *See id*.

[^497]: *See* 47 C.F.R. § 21.26.

[^498]: *See id*. Neither the assignment of a file number nor the
    listing on a public notice as accepted for filing indicates that the
    application has been found acceptable for filing or precludes the
    subsequent return or dismissal of the application if it is found
    defective or not in substantial compliance with the Commission's
    rules. *Id*.

[^499]: *See* Amendment of Parts 21 and 74 to Enable Multipoint
    Distribution Service and Instructional Television Fixed Service
    Licensees to Engage in Fixed Two-Way Transmissions, *Report and
    Order*, MM Docket No. 97-217, 13 FCC Rcd 19112, 19150 (1998); 47
    C.F.R. § 21.27(d).

[^500]: Commission Announces Initial Filing Window for Two-Way
    Multipoint Distribution Service and Instructional Television Fixed
    Service, *Public Notice,* 15 FCC Rcd 5,850 (MMB 2000).

[^501]: 47 C.F.R. § 21.27(d).

[^502]: *Pubic Notice*, Mass Media Bureau Implements , May 30, 2000
    (*BLS Implementation PN*).

[^503]: *Id*.; *see also*, Wireless Telecommunications Bureau Suspends
    Electronic Filing for the Broadband Licensing System on October 11,
    2002, *Public Notice*, 17 FCC Rcd 18,365 (2002) (*Electronic Filing
    Suspension PN*).

[^504]: *BLS Implementation PN*.

[^505]: *Id*.

[^506]: *Id*.

[^507]: *Electronic Filing Suspension PN*, 17 FCC Rcd at 18,365. We note
    that effective March 25, 2002, the Commission transferred the
    regulatory functions for the Services from the former Mass Media
    Bureau to the Wireless Telecommunications Bureau. Radio Services are
    Transferred from Mass Media Bureau to Wireless Telecommunications
    Bureau, *Public Notice*, 17 FCC Rcd 5077 (2002).

[^508]: *ULS R&O*, 13 FCC Rcd 21027, 21031 ¶ 4.

[^509]: Phase I Mandatory Electronic Filing Deadline Extended for PCIA
    and ITA, *Public Notice,* 16 FCC Rcd 13,681 (2001) (the Commission
    extended the deadline for mandatory electronic filing to July 25,
    2001).

[^510]: On-line help, including form instructions, is provided for
    electronic filers. Additionally, the FCC Technical Support Hotline
    is available Monday through Friday, 8 a.m. to 6 p.m. *All calls to
    the FCC Technical Support Hotline are recorded*. Wireless
    Telecommunications Bureau Grants Dismissal Requests of Eligible
    Auction No. 35 Winners and Dismisses Applications for Five C and F
    Block Broadband Personal Communications Services (PCS) Licenses,
    P*ublic Notice*, (DA 02-3585, rel. Dec. 24, 2002), Attachment B.

[^511]: *ULS R&O*, 13 FCC Rcd 21027, 21031 ¶ 5.

[^512]: *See* paras. 208-209 *supra*.

[^513]: *See* 47 C.F.R. § 1.933(1).

[^514]: *See* paras. 204-205 *supra*.

[^515]: *See ULS R&O*, 13 FCC Rcd 21,027: *See also* 47 C.F.R. § 1.934.

[^516]: *ULS R&*O, 13 FCC Rcd at 21068 ¶ 90.

[^517]: *ULS R&*O, 13 FCC Rcd at 21068 ¶ 90.

[^518]: *Id*.

[^519]: *See, e.g*., id.

[^520]: *See* Wireless Telecommunications Bureau Clarifies Unified
    Policy for Dismissing and Returning Applications, *Public Notice*,
    17 FCC Rcd 30 (WTB 2001) (*Unified Dismissal and Return PN*);
    Wireless Telecommunications Bureau Revises and Begins Phased
    Implementation of its Unified Policy for Reviewing License
    Applications and Pleadings, *Public Notice*, 14 FCC Rcd 11182, 11185
    (WTB 1999); Wireless Telecommunications Bureau Announces Unified
    Policy for Dismissing and Returning Applications and Dismissing
    Pleadings Associated with Applications, *Public Notice*, 14 FCC Rcd
    5499 (WTB 1999).

[^521]: *Unified Dismissal and Return PN*, 17 FCC Rcd at 30.

[^522]: *Id*. at 32.

[^523]: *ULS R&O*, 13 FCC Rcd 21,027, 21,033-21,034 ¶ 10.

[^524]: *Id*.

[^525]: *Id*.

[^526]: The MDS and ITFS application forms are FCC Forms 304, 304A, 305,
    306, 330, 330A, 330R, 331, 405, 430, and 701.

[^527]: *See* 47 C.F.R. § 1.949 for the rules governing renewals.

[^528]: *See supra* n.Error: Reference source not found; 47 C.F.R. §
    0.408.

[^529]: *See* 47 C.F.R. § 1.948.

[^530]: *See e.g.* 47 C.F.R §§ 73.3500, 73.3536 (elimination of all
    references to FCC Form 330-L, "Application for Instructional
    Television Fixed Station License); 47 C.F.R. §§ 21.11(b); 73.3500;
    73.3533(b) (elimination of all references to FCC Form 307). In
    addition, we propose to delete references to obsolete MDS forms
    mentioned in Part 74. *See* 47 C.F.R. § 74.991.

[^531]: *ULS R&O*, 13 FCC Rcd at 21027, 21038-21039 ¶ 16.

[^532]: *Id.* at 21042-21043 ¶ 24.

[^533]: *Id.*

[^534]: *ULS R&O,* 13 FCC Rcd 21027 (1998) at 21042-3, ¶ 22-4.

[^535]: *See, e.g., Public Notice:* Wireless Telecommunications Bureau
    to Begin Use of Universal Licensing System (ULS) for Microwave
    Services (DA 99-154, rel. Aug. 30, 1999).

[^536]: *See* *Section 257 Report to Congress: Identifying and
    Eliminating Market Entry Barriers For Entrepreneurs and Other Small
    Businesses*, 15 FCC Rcd. 15,376, 15,408, ¶ 77 (2000) (*"Section 257
    Report"*). A list of FCC Public Notices concerning ULS is available
    on the WTB ULS Homepage at www.fcc.gov/wtb/uls.

[^537]: The toll-free number regarding ULS questions is 1-888-CALL-FCC,
    option 2.

[^538]: The Technical Support telephone no. is 202-414-1250 and the
    e-mail address for ULS technical questions is ulstech@fcc.gov.

[^539]: *See* *Section 257* *Report* at 15,407-15,408, ¶ 76.

[^540]: Memorandum to WCA Government Relations Committee from Paul J.
    Sinderbrand, Esq., Petition for Rulemaking - Amendment of Parts 21
    and 74, page 3, August 1, 2001.

[^541]: *See e.g.,* Revision of Part 22 and Part 90 of the Commission's
    Rules to Facilitate Future Development of Paging Systems, WT Docket
    No. 96-18, *Notice of Proposed Rule Making*, WT Docket No. 96-18, PP
    Docket No. 93-253, 11 FCC Rcd 3108 (1996). *See also,* Amendment of
    the Rules Regarding Multiple Address Systems, WT Docket No. 97-81,
    *Notice of Proposed Rule Making*, 12 FCC Rcd 7973 (1997).

[^542]: The Commission reserves the right to classify amendments as
    major or minor on a case-by-case basis. Unless the Commission
    determines otherwise in a specific case, a minor amendment is an
    amendment that does not fall within the Commission's definition of a
    major amendment, which is codified at 47 C.F.R. §21.23(c). *See
    also* n.Error: Reference source not found.

[^543]: *See, e.g.,* Amendment of the Commission's Rules Regarding
    Maritime Communications, PR Docket No. 92-257, *Second Report and
    Order and Second Further Notice of Proposed Rule Making*, 12 FCC Rcd
    16949, 17015-17016 (1997).

[^544]: *See, infra*, para. 231, regarding participation in auctions for
    licenses to use ITFS spectrum in currently unassigned areas.

[^545]: *See, e.g.,* Amendment of the Commission's Rules Regarding
    Maritime Communications, PR Docket No. 92-257, *Second Memorandum
    Opinion and Order and Fifth Report and Order*, 17 FCC Rcd 22585,
    6720 ¶ 83 (2002).

[^546]: *See* 5 U.S.C. §§ 553(b)(A), (d); *Kessler v. FCC*, 326 F.2d 673
    (D.C. Cir 1963).

[^547]: *See* 5 U.S.C. §§ 553(b)(B), (d)(3).

[^548]: See Amendment of the Commission's Rules Regarding the 37.0-38.6
    GHz and 38.6-40.0 Bands, Implementation of Section 309(j) of the
    Communications Act \-- Competitive Bidding, 37.0-38.6 GHz and
    38.6-40.0 GHz Bands, *Memorandum Opinion and Order*, ET Docket No.
    95-183, PP Docket No. 93-253, 12 FCC Rcd 2910, 2915 ¶ 10 *citing
    Kessler v. FCC*, 326 F. 2d 673, 679-81 (D.C. Cir. 1963).

[^549]: *See* *supra,* para. 22.

[^550]: *See* Implementation of Section 309(j) of the Communications Act
    -- Competitive Bidding for Commercial Broadcast and Instructional
    Television Fixed Service Licenses, Reexamination of the Policy
    Statement on Comparative Broadcast Hearings, Proposals to Reform the
    Commission's Comparative Hearing Process to Expedite the Resolution
    of Cases, MM Docket No. 97-234, GC Docket No. 92-52, GEN Docket No.
    90-264, *First Report and Order*, 13 FCC Rcd 15,920, 15,998-16,004
    (1998) ("*Competitive Bidding for ITFS Licenses First Report and
    Order*"), *recon. granted in part*, *Memorandum Opinion and Order,*
    14 FCC Rcd 8,724 (1999) (in relevant part, granting ITFS applicants
    in future auctions a post-short-form settlement period and
    clarifying that the new entrant bidding credit will not be applied
    in any ITFS auction), *and rule modified in part*, 14 FCC Rcd 12,541
    (1999) (modifying rules regarding attribution of ownership for
    determining eligibility for new entrant bidding credit).

[^551]: *Competitive Bidding for ITFS Licenses First Report and Order*,
    14 FCC Rcd at 15,999 n.245 (quoting and adding emphasis to 47 U.S.C.
    § 309(j)(1)).

[^552]: *See* 47 U.S.C. § 309(j)(2).

[^553]: *See supra,* paras. 107-117.

[^554]: White Paper at 41 and n.111 (quoting 13 FCC Rcd at 16,002).

[^555]: *Id.*

[^556]: *See supra*, para. 62.

[^557]: *See generally* Implementation of Section 309(j) of the
    Communications Act -- Competitive Bidding, PP Docket No. 93-253,
    *Second Report And Order*, 9 FCC Rcd 2348, 2360-2361, ¶¶ 70-71
    (1994).

[^558]: *See* 47 U.S.C. § 309(j)(3).

[^559]: *See, e.g.,* Amendment of Part 1 of the Commission's
    Rules---Competitive Bidding Procedures, WT Docket No. 97-82, *Order,
    Memorandum Opinion and Order and Notice of Proposed Rule Making,* 12
    FCC Rcd 5686 (1997); *Third Report and Order and Second Further
    Notice of Proposed Rule Making*, 13 FCC Rcd 374 (1997) (*Part 1
    Third Report and Order)*; *Order on Reconsideration of the Third
    Report and Order, Fifth Report and Order, and Fourth Further Notice
    of Proposed Rule Making*, 15 FCC Rcd 15293 (2000) (*recon. pending*)
    (*Part 1 Recon Order/ Fifth Report and Order* and *Fourth Further
    Notice of Proposed Rule Making*); *Seventh Report and Order*, 16 FCC
    Rcd 17546 (2001); *Eighth Report and Order,* 17 FCC Rcd 2962 (2002).

[^560]: *See* 47 C.F.R. § 1.2101 *et seq.*

[^561]: *See Fourth Further Notice of Proposed Rule Making*, 15 FCC Rcd
    15293 (2000); *see also Part 1 Recon Order/Fifth Report and Order*,
    15 FCC Rcd 15293 (*recon. pending*).

[^562]: *See* Amendment of Part 1 of the Commission's Rules -
    Competitive Bidding Procedures*, Third Report and Order and Second
    Further Notice of Proposed Rule Making*, 13 FCC Rcd 374, 448-49,
    454-55, ¶¶ 125, 139 (directing the Bureau to seek comment on
    specific mechanisms relating to auction conduct pursuant to the
    Balanced Budget Act of 1997) (*Part 1 Third Report and Order*).

[^563]: *See* 47 U.S.C. § 309(j)(4)(D).

[^564]: *See* 47 U.S.C. § 309(j)(3)(B).

[^565]: *See* 47 C.F.R. § 1.2110(a). Although the Commission previously
    extended designated entity preferences to minority- and women-owned
    businesses, as well as to small businesses, following the Supreme
    Court's rulings in *Adarand Constructors, Inc. v. Pena*, 515 U.S.
    200 (1995), and *United States v. Virginia, et al*., 518 U.S. 515
    (1996), the Commission concluded that it would not be appropriate to
    adopt special provisions for minority-owned and women-owned
    businesses pending the development of a more complete record on the
    propriety of race- and gender-based provisions for future auctions.
    *See* *Part 1 Fifth Report and Order*, 15 FCC Rcd at 15318-20, ¶¶
    45-50 (discussing constitutional standards and governmental
    interests that would justify the use of race- or gender-based
    preferences).

[^566]: *See Part 1 Fifth Report and Order*, 15 FCC Rcd at 15319, ¶ 48;
    *see also* FCC Report to Congress on Spectrum Auctions, WT Docket
    No. 97-150, *Report*, FCC 97-353 at 29 (rel. Oct. 9, 1997) (finding
    that special provisions for small businesses also increase
    opportunities for minority- and women-owned businesses).

[^567]: We recently issued a Notice of Inquiry seeking information about
    the effectiveness of our provisions to promote participation by
    rural telephone companies in our competitive bidding proceedings.
    *See* Facilitating the Provision of Spectrum-Based Services to Rural
    Areas and Promoting Opportunities for Rural Telephone Companies to
    Provide Spectrum-Based Services, WT Docket No. 02-381, *Notice of
    Inquiry*, FCC 02-325 (rel. Dec. 20, 2002).

[^568]: Implementation of Section 309(j) of the Communications
    Act---Competitive Bidding, PP Docket No. 93-253, *Second Memorandum
    Opinion and Order*, 9 FCC Rcd 7245, 7269 ¶ 145 (1994) (*Competitive
    Bidding Second Memorandum Opinion and Order*); 47 C.F.R. §
    1.2110(c)(1).

[^569]: *Part 1 Third Report and Order*, 13 FCC Rcd at 388 ¶ 18; 47
    C.F.R. § 1.2110 (c)(1).

[^570]: *See* White Paper at 11.

[^571]: *See* 47 C.F.R. § 74.932, 990-992. Wireless cable entities may
    be eligible to obtain licenses for ITFS frequencies if there are no
    mutually exclusive ITFS applications. 47 C.F.R. § 74.990(e).

[^572]: *See* 47 C.F.R. § 1.2110(b).

[^573]: *Cf.* Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licenses, *Sixth Report and Order and Order on Reconsideration*, WT
    Docket No. 97-82, FCC 00-313, 15 FCC Rcd 16266, 16288, ¶ 45 (2000).

[^574]: *See* *Part 1 Third Report and* Order, 13 FCC Rcd at 403-04, ¶
    47.

[^575]: *See* 47 C.F.R. § 1.2110(f)(2).

[^576]: *See* *Part 1 Third Report and* Order, 13 FCC Rcd at 404, ¶ 47.

[^577]: *See* 47 C.F.R. § 1.2110(f)(2). We note that we will coordinate
    the small business size standards for ITFS in this proceeding with
    the U.S. Small Business Administration.

[^578]: 47 C.F.R. § 1.2110(f)(2)(i)-(iii).

[^579]: *See* 47 C.F.R. § 21.961(b).

[^580]: As noted previously, *see, supra*, para. 232, this potential
    auction would include licenses to use ITFS spectrum in currently
    unassigned areas and procedures proposed with respect to the auction
    of such licenses would be applicable to this auction as well. A
    recent working paper published by the Commission discusses how such
    two-sided auctions can be used to transition rapidly from existing
    spectrum band plans and policies to new plans and more flexible
    policies. *See, generally,* Evan Kwerel and John Williams, 2002, "A
    Proposal for a Rapid Transition to Market Allocation of Spectrum"
    Office of Plans and Policy Working Paper No. 38, Federal
    Communications Commission. In the case of ITFS and MDS spectrum,
    such an auction should be open to all parties that may be eligible
    to hold a license to use the spectrum in order to best determine the
    market price. Otherwise, the auction price may not reflect
    significant demand for licenses.

[^581]: For example, an entity planning to use ITFS spectrum to provide
    mobile services in a geographic area pursuant to newly proposed
    service rules currently has to obtain the license to use any
    spectrum previously not authorized for use in that area and has to
    negotiate with each incumbent licensee within the relevant area. The
    complexity of these negotiations likely will increase dramatically
    with their number, as each incumbent licensee seeks to obtain terms
    at least as good as all the others. Moreover, competitors seeking
    the spectrum for similar or other uses may enter into negotiations
    with the licensees. If so, it is quite possible that the
    circumstances of negotiation, rather than the relative value of the
    rights to the spectrum, may determine its final use. Even if the
    negotiations are successful, they likely will take considerable
    time, potentially delaying deployment of new services to the public
    and burdening the business plans of all the parties involved. In
    contrast, in an auction to restructure the band, the party planning
    new services can easily determine the current high bids for each
    license that covers the relevant geographic area and decide whether
    or not to proceed in a very short period of time.

[^582]: *See* 47 U.S.C. § 309(j). The Commission's statutory authority
    to grant licenses through a system of competitive bidding extends to
    initial licenses for use of the spectrum. In an auction to
    restructure the band, the Commission would make available initial
    licenses to use the spectrum pursuant to new service rules. New
    services rules would be applicable, regardless of whether the entire
    band plan has been revised. Thus, any restructuring auction would
    offer new licenses, whether conducted without, before, or after the
    adoption of a new band plan. The spectrum associated with these new
    initial licenses would include both spectrum previously licensed for
    use under prior service rules, if the licensees have exchanged their
    original licenses, and spectrum not previously authorized for use.

[^583]: *See* 47 U.S.C. §§ 151, 154(i), and 303(r).

[^584]: We note that 47 U.S.C. § 309(j)(8) requires that "all proceeds
    from the use of a competitive bidding system under this subsection
    shall be deposited in the Treasury in accordance with chapter 33 of
    title 31, United States Code." Accordingly, any two-sided auction
    must be designed so that payments made to incumbent licensees are
    not "proceeds from the use of competitive bidding" within the
    meaning of Section 309(j)(8) or moneys required to be deposited in
    the Treasury by 31 U.S.C. § 3301 *et seq*.

[^585]: The Commission continues to explore innovative policies and
    mechanisms that may further its spectrum management objectives. For
    example, the Commission has found that privately-conducted secondary
    auctions or other such market-oriented mechanisms could be used to
    facilitate the voluntary clearing of incumbent broadcasters from the
    700 MHz bands and promote the early recovery of that spectrum for
    new uses. *See, e.g.,* Service Rules for the 746-776-794 MHz Bands,
    and Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, Carriage of the Transmissions of Digital Broadcast Stations,
    CS Docket No. 98-120, Review of the Commission's Rules and Policies
    Affecting the Conversion to Digital Television, MM Docket No. 00-39,
    *Third Report and Order*, 16 FCC Rcd 2703, 2718-2721, ¶¶ 37-44
    (2001). The Commission also considered employing a
    Commission-conducted secondary auction in the 700 MHz bands, but
    ultimately decided that a privately-organized clearing mechanism
    would be better in that context. *See id.*

[^586]: *See generally* 47 C.F.R. §§ 1.1202, 1.1203, 1.1206.

[^587]: *See* 47 C.F.R. §§ 1.415, 1.419.

[^588]: Electronic Filing of Documents in Rulemaking Proceedings,
    *Report and Order*, 13 FCC Rcd 11,322 (1998).

[^589]: *See* 5 U.S.C. § 603.

[^590]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601-612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996, (SBREFA) Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^591]: *See* 5 U.S.C. § 603(a).

[^592]: *See* 5 U.S.C. § 603(a).

[^593]: 5 U.S.C. § 603(b)(3).

[^594]: 5 U.S.C. § 601(6).

[^595]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    "small business concern" in the Small Business Act 15 U.S.C. § 632).
    Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small
    business applies "unless an agency, after consultation with the
    Office of Advocacy of the Small Business Administration and after
    opportunity for public comment, establishes one or more definitions
    of such term which are appropriate to the activities of the agency
    and publishes such definition(s) in the Federal Register." 5 U.S.C.
    § 601(3).

    ^?^ 15 U.S.C. § 632.

[^596]: 15 U.S.C. § 632.

[^597]: 5 U.S.C. § 601(4).

[^598]: 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation of data under contract to Office of Advocacy of
    the U.S. Small Business Administration).

[^599]: 5 U.S.C. § 601(5).

[^600]: 1992 Census of Governments, U.S. Bureau of the Census, U.S.
    Department of Commerce.

[^601]: *Id.*

[^602]: *See* 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation of data under contract to Office of Advocacy of
    the U.S. Small Business Administration).

[^603]: FCC, Wireline Competition Bureau, Industry Analysis and
    Technology Division, *Trends in Telephone Service*, Table 5.3 (May
    2002) (*Trends in Telephone Service*).

[^604]: 13 C.F.R. § 121.201, North American Industry Classification
    System (NAICS) code 513310 (changed to 517110 in October 2002).

[^605]: 13 C.F.R. § 121.201, NAICS code 513321 (changed to 517211 in
    October 2002).

[^606]: 13 C.F.R. § 121.201, NAICS code 513322 (changed to 517212 in
    October 2002).

[^607]: 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. 94-131 and PP Docket No. 93-253, *Report and Order*,
    10 FCC Rcd 9589, 9593 ¶ 7 (1995) (*MDS Auction R&O)*.

[^608]: 47 C.F.R. § 21.961(b)(1).

[^609]: 13 C.F.R. § 121.201, NAICS code 513220 (changed to 517510 in
    October 2002).

[^610]: U.S. Census Bureau, 1997 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)", Table 4, NAICS code 513220 (issued October 2000).

[^611]: In addition, the term "small entity" within SBREFA applies to
    small organizations (nonprofits) and to small governmental
    jurisdictions (cities, counties, towns, townships, villages, school
    districts, and special districts with populations of less than
    50,000). 5 U.S.C. §§ 601(4)-(6). We do not collect annual revenue
    data on ITFS licensees.

[^612]: 47 C.F.R. § 21.961(b)(1).

[^613]: *See MDS Auction R&O,* 10 FCC Rcd 9589.

[^614]: Basic Trading Areas (BTAs) were designed by Rand McNally and are
    the geographic areas by which MDS was auctioned and authorized. *See
    Id.* at 9608.

[^615]: 47 U.S.C. § 309(j). (Hundreds of stations were licensed to
    incumbent MDS licensees prior to implementation of Section 309(j) of
    the Communications Act of 1934, 47 U.S.C. § 309(j). For these
    pre-auction licenses, the applicable standard is SBA\'s small
    business size standard for \"other telecommunications\" (annual
    receipts of \$11 million or less)). *See* 13 C.F.R. 121.201, NAICS
    code 513220.

[^616]: 13 C.F.R. § 121.201.

[^617]: *See* 5 U.S.C. §§ 601 (3)-(5).

[^618]: *See* 13 C.F.R. § 121.210 (SIC 4833, 4841, and 4899).

[^619]: *See* para 159 *supra*.

[^620]: 47 C.F.R. § 1.913(a)(1).

[^621]: 47 C.F.R. § 1.2107.

[^622]: 47 C.F.R. § 1.1307.

[^623]: *See e.g.*, 47 C.F.R. § 1.928 (regarding frequency coordination
    arrangements between the U.S. and Canada).

[^624]: *See* paras. 161-170 and 173-182, *supra.*

[^625]: *See* 5 U.S.C. § 603(c).

[^626]: *See supra* para. 234.

[^627]: Coalition Proposal at 14. The Coalition states that "high-power,
    high-site one-way operations tend to cause two types of problems.
    First, high-power, high-site one-way operations tend to cause
    interference to co-channel cellular system base stations that are
    located quite far away. This is because those base stations feature
    relatively sensitive reception antennas (to 'hear' signals from
    low-power subscriber equipment) and those base station antennas
    generally are located above the ground clutter (and thus more likely
    to have an uninterrupted transmission path from the co-channel
    high-power, high-site station in a neighboring market). Thus, these
    base stations are by their nature sensitive to co-channel
    interference. Second, transmissions from portable, nomadic and
    mobile subscriber equipment in cellular networks pose the potential
    to cause brute force overload of close-by equipment used to receive
    high-power, high-site services." *See* Coalition Proposal at 10.

[^628]: While comments filed in response to our public notice support
    the Coalition plan, including transition, in general, several
    commenters disagreed with parts of the Coalition plan. *See e.g.,*
    MMDS Licensee Coalition comments and Alliance of Independent
    Wireless Video Operators comments.

[^629]: The Coalition states that it considered the possibility of
    reducing the size of the MBS allocation on a market-by-market basis.
    It concluded, however, that the benefits of a fixed 42 megahertz
    wide MBS far outweigh any possible benefits from a market-by-market
    approach. *See* Coalition Proposal at 17.

[^630]: Coalition Proposal at 12.

[^631]: It could be used for downstream transmissions in a FDD system so
    long as the licensee meets the MBS technical and operational rules.
    Also, with the consent of impacted licensees, it could be used for
    upstream communications. *See* Coalition Proposal at 17 and Appendix
    B at 3.

[^632]: Coalition Proposal, Appendix B at 2.

[^633]: Under the Coalition plan, each licensee contributes spectrum to
    the Transition Bands (500 kHz for every channel in the LBS or UBS).
    *See* Coalition Proposal at 16, n43. Also, the Coalition notes that
    it has not agreed as of yet on a system of licensing and technical
    rules for the Transition Bands. *See* Coalition Proposal at 19,
    n.47.

[^634]: Coalition Proposal at 12.

[^635]: The Coalition asserts that a 6 megahertz separation is required
    between MBS operations and two-way services operating in close
    proximity to an MBS receive site in order to protect reception of
    MBS video signals from beat interference. *See* Coalition Proposal
    at 14, n.35. It also argues that operations in these two bands be
    secondary to operations in the LBS, MBS and UBS bands unless
    otherwise agreed upon. *See* Coalition Proposal at 22. We note that
    the *3G Final Report* noted only that a guardband of at least two
    megahertz was needed to protect incumbent high-powered systems from
    adjacent channel interference. *See 3G Final Report* at 47-52.

[^636]: Coalition Proposal at 17-18.

[^637]: *Id.,* Appendix B at 12-13 n.34.

[^638]: *Id.*

[^639]: *Id.*

[^640]: *Id.*

[^641]: *Id.,* Appendix B at 12-13.

[^642]: *Id.,* Appendix B at 13.

[^643]: Coalition Supplemental Proposal, filed November 14, 2002, at
    4-5; Coalition Proposal at Appendix B, 16-18.

[^644]: *Id.,* Appendix B at 14.

[^645]: *Id.,* Appendix B at 14-15.

[^646]: *Id.,* Appendix B at 15.

[^647]: *Id.,* Appendix B at 20.

[^648]: *Id.,* Appendix B at 20-21.

[^649]: Coalition Proposal Appendix B at 5-11. A number of MDS licenses
    contend that all MDS and ITFS licensees shoulds be required to
    transition at their own expense. *See* MMDS Licensee Coalition
    comments at 3.

[^650]: See Coalition Proposal, Appendix B for a more detailed
    description of the transition process.

[^651]: Coalition Proposal, Appendix B at 4 n.9.

[^652]: Coalition Proposal at 12, n.30

[^653]: *Id.*

[^654]: Coalition Proposal at 31.

[^655]: *See* Coalition Proposal at 19.

[^656]: *Id.*

[^657]: Coalition Proposal at 20.

[^658]: 47 C.F.R. §§ 74.903, 21.902(d). An ITFS licensee's protected
    service area includes the area within a 35-mile radius of its
    transmitter site plus any reception sites beyond that radius that
    were registered with the Commission on September 17, 1998. Beginning
    on September 15, 1995, the initial service boundaries were frozen,
    i.e., the circular PSA boundaries were not to be changed regardless
    of whether or not the licensee subsequently moved its transmitter.
    *Id.*

[^659]: *See* 47 C.F.R. §§ 21.902(d), 21.933(a).

[^660]: Coalition Proposal at 35.

[^661]: ITFS licensees must identify the location of such receive sites,
    the antenna make and model and the antenna height above ground and,
    if known, the adjacent channel D/U ratio that can be tolerated.
    *See* Coalition Proposal at 35-36.

[^662]: Effective September 15, 1995, the Commission expanded the
    protected service areas of incumbent site-based MDS and ITFS
    licensees from fifteen miles to thirty-five miles. Amendment of
    Parts 21, 43, 74, 78, and 94 of the Commission's Rules Governing Use
    of the Frequencies in the 2.1 and 2.5 GHz Bands Affecting: Private
    Operational-Fixed Microwave Service, Multipoint Distribution
    Service, Multichannel Multipoint Distribution Service, Instructional
    Television Fixed Service, & Cable Television Relay Service, *Second
    Order on Reconsideration*, 10 FCC Rcd 7074 (1995). In doing so, it
    created a number of overlaps between licensees whose PSAs had not
    overlapped before the standard PSA radius was increased.

[^663]: Coalition Proposal at 20-21 (*e.g.,* the rule changes have
    created a "no man's land").

[^664]: *See* Coalition Proposal Appendix A for a detailed explanation.

[^665]: *Id.,* Appendix B at 21.

[^666]: *Id.,* Appendix B at 21-22.

[^667]: *Id.,* Appendix B at 22-23.

[^668]: *Id.,* Appendix B at 23-24.

[^669]: *Id.,* Appendix B at 24-25.

[^670]: *Id.,* Appendix B at 25-26.

[^671]: *Id.,* Appendix B at 26.

[^672]: *Id.*

[^673]: *Id.,* Appendix B at 26-27.