**DA 01-1072**

**April 25, 2001**

**IN THE MATTER OF EXTENSION OF THE FIVE-YEAR**

**BUILD-OUT PERIOD FOR BTA AUTHORIZATION**

**HOLDERS IN THE MULTIPOINT DISTRIBUTION SERVICE**

**Comment Date: May 9, 2001**

**Reply Comment Date: May 16, 2001**

By the Chief, Mass Media Bureau:

1\. Pursuant to Sections 1.3 of the Commission's rules, 47 C.F.R. § 1.3,
the Mass Media Bureau ("Bureau"), on its own motion, hereby seeks
comment on a proposal to extend the current five-year build-out
requirement imposed upon Basic Trading Area ("BTA") authorization
holders in the Multipoint Distribution Service ("MDS") by two years. In
March 1996, the Commission completed its auction of the remaining unused
MDS spectrum with the expectation that such spectrum would be used for
the provision of wireless cable services. The United States was divided
into 493 BTAs and these markets were auctioned to the highest bidders.
Pursuant to 47 C.F.R. § 21.930, BTA authorization holders have five
years from the grant date of the initial BTA authorization to construct,
develop and expand MDS station operations in their respective protected
service areas. Specifically, within five years of the grant, the BTA
authorization holder must construct MDS stations to provide signals that
are capable of reaching at least two-thirds of the population of the
service area, excluding the populations within protected service areas
of incumbent stations. The purpose of this requirement was to ensure
that service was promptly delivered to the public. *See* 47 U.S.C. §
309(j)(4)(B).[^1] On August 16, 1996, the Commission granted 334 of the
493 BTA authorizations to 54 different entities. These BTA authorization
holders will be the first entities to reach the five-year build-out date
of August 16, 2001. By this Public Notice, we seek comment on our
proposal to extend the five-year build-out requirement set forth in 47
C.F.R. § 21.930 by two years, as described below.

2\. Traditionally, MDS spectrum has been used to deliver multichannel
video programming services similar to cable television. As noted above,
the Commission auctioned 493 BTAs for the provision of these wireless
cable services.[^2] Since the 1996 auction, the MDS industry has been
rapidly evolving. In July 1996, the Commission's *Digital* *Declaratory
Ruling* permitted licensees to digitize their MDS spectrum.[^3] In
October 1996, the Commission allowed MDS operators to use their spectrum
for high-speed digital data applications, including Internet access.[^4]

3\. In March 1997, the Wireless Cable Association International,
Inc.,[^5] along with over 100 participants, petitioned the Commission to
grant the industry the right to use MDS and Instructional Television
Fixed Service ("ITFS") spectrum for two-way services. Two-way
authorization would effectively enable voice, video, and data over the
spectrum. In 1998, the Commission approved the use of two-way
transmissions on MDS and ITFS frequencies. In the two-way proceeding,
the Commission decided to: (1) permit both MDS and ITFS licensees to
provide two-way services on a regular basis; (2) permit increased
flexibility on permissible modulation types; (3) permit increased
flexibility in spectrum use and channelization, including combining
multiple channels to accommodate wider bandwidths, dividing 6 MHz
channels into smaller bandwidths, and channel swapping; (4) adopt a
number of technical parameters to mitigate the potential for
interference among service providers and to ensure interference
protection to existing MDS and ITFS; (5) simplify and streamline the
licensing process for stations used in cellularized systems; and (6)
modify the ITFS programming requirements in a digital environment.[^6]

4\. In the initial filing window for two-way service, which was held
August 14 - 18, 2000, MDS and ITFS licensees filed approximately 2,267
applications. On April 6, 2001, the Bureau released its first Public
Notice announcing the grant of 1,024 of these applications.[^7] The
Bureau will continue to grant additional two-way applications and on
April 16, 2001, the Bureau began the transition to the rolling one-day
filing window procedure.[^8]

5\. Section 21.930(c)(1) of the Commission\'s rules, 47 C.F.R. §
21.930(c)(1), provides that within five years of the grant of a BTA
authorization, the authorization holder must construct MDS stations to
provide signals pursuant to Section 21.907, 47 C.F.R. § 21.907, 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 stations. In addition, sixty days prior to
the end of the five-year build-out period, the BTA authorization holder
must file with the Commission proof that demonstrates that the holder
has met the build-out requirements. 47 C.F.R. § 21.930(c)(2).

6\. The build-out benchmarks were originally established in order to
ensure that BTA authorization holders would promptly deliver their
anticipated video programming service to the public. We propose to
extend the five-year build-out requirement as set forth in Section
21.930(a)(1) of the Commission\'s rules, 47 C.F.R. § 21.930(a)(1), by
two years. In light of the service rule changes promulgated in the
*Two-Way Order*, the timing of the initial filing window, the recent
two-way application grants allowing BTA authorization holders to provide
broadband service, the forthcoming grants of other pending two-way
applications, and the upcoming August 16, 2001 build-out deadline for
many BTAs, we tentatively conclude that extension of the five-year
build-out requirement by two years for all BTAs will promote the
maximization of efficient and effective use of this service. We believe
that it would be inequitable to require authorization holders to follow
build-out criteria applicable to rules governing wireless cable
operations since many of them are now providing high-speed broadband
services. We tentatively conclude that requiring BTA authorization
holders to meet the five-year construction build-out requirement would
be unreasonable, would not promote efficient use of the spectrum, and
would be contrary to the public interest.

7\. Accordingly, by this Public Notice, we propose to extend the
five-year build-out requirement by two years. [^9] For MDS BTA
authorization holders whose build-out requirement ends on August 16,
2001, the new build-out deadline would be August 16, 2003. For BTA
authorization holders whose build-out requirement ends after August 16,
2001, the new build-out deadline would be two years from the date that
the original five-year deadline was to have taken place.

8\. Persons making oral *ex parte* presentations are reminded that
memoranda summarizing the presentations must contain summaries of the
substance of the presentations and not merely a listing of the subjects
discussed. More than a one or two sentence description of the views and
arguments presented is generally required. *See* 47 C.F.R. § 1.1206(b).
Other rules pertaining to oral and written *ex parte* presentations in
permit-but disclose proceedings are set forth in Section 1.1206(b) of
the Commission\'s rules, 47 C.F.R. § 1.1206(b).

9\. Comments must be filed on or before May 9, 2001, and reply comments
by May 16, 2001. All documents filed in this proceeding should indicate
in the caption that this matter is before the Mass Media Bureau and
reference Public Notice DA No. 01-1072. Comments may be filed via the
Commission\'s Electronic Comment Filing System (ECFS) via the Internet
to http:/ www.fcc.gov/e - file/ecfc.html\>. In completing the
transmittal screen, commenters should include their full name and Postal
Service mailing address, and reference Public Notice DA No. 01-1072.
Parties may also submit electronic comments by Internet e-mail. To get
filing instructions for e-mail comments, commenters should send an
e-mail to: ecfs@fcc.gov, including \"get form \<your e-mail
address\>\'\' in the body of the message. A sample form and directions
will be sent in reply. Interested parties who choose to file by paper
must file an original and four copies of their comments with the Office
of the Secretary, Federal Communications Commission, 445 Twelfth Street,
S.W., Room TW-A325, Washington, D.C. 20554. In addition, parties should
send: one paper copy to Brad Lerner, Room 2-A733, Mass Media Bureau,
Federal Communications Commission, 445 Twelfth Street, S.W., Washington,
D.C. 20554; one paper copy to the Reference Information Center, Federal
Communications Commission, 445 Twelfth Street, S.W., 20554; and one
paper copy and one diskette copy to ITS, Room CYB-400, 445 Twelfth
Street, S.W., Washington, D.C. 20554.

For further information, contact Brad Lerner of the Mass Media Bureau,
at 202-418-7066 (email: blerner@fcc.gov).

\- FCC -

[^1]: The build-out requirement was also enacted to deter the
    warehousing of spectrum. *See In the Matter of 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*, 10 FCC Rcd 9589, 9613 (1995).

[^2]: Although a BTA holder has rights to transmit throughout its
    authorized area, incumbent licensees whose authorizations predate
    the 1996 auction continue to operate within any BTA as before the
    auction. *See* 47 C.F.R. § 21.902.

[^3]: *See In the Matter of Request for Declaratory Ruling on the Use of
    Digital Modulation by Multipoint Distribution Service and
    Instructional Television Fixed Service Stations*, 11 FCC Rcd 18839
    (1996).

[^4]: *See Public Notice, The Mass Media Bureau Implements Policy for
    Provision of Internet Service on MDS and Leased ITFS Frequencies*,
    11 FCC Rcd 22419 (1996).

[^5]: The organization subsequently changed its name to the Wireless
    Communications Association International, Inc.

[^6]: *See In the Matter of Amendment of Parts 21 and 74 to Enable
    Multipoint Distribution Service and Instructional Television Fixed
    Service Licensees to Engage in Fixed Two-Way Transmissions ("Two-Way
    Order")*, 13 FCC Rcd 19112 (1998), *recon.*, 14 FCC Rcd 12764
    (1999), *further recon.*, 15 FCC Rcd 14566 (2000).

[^7]: *Public Notice*, Report No. 337 (MMB April 6, 2001).

[^8]: *Public Notice*, DA 01‑751 (MMB March 26, 2001).

[^9]: We note that in similar proceedings, Nextel subsidiary FCI 900
    ("Nextel") and NeoWorld License Holdings, Inc. ("NeoWorld") filed
    respective expedited waiver requests with the Wireless
    Telecommunications Bureau regarding the five-year construction
    period for 900 MHz major trading area ("MTA") licenses. Nextel asks
    for extension of the deadline from August 12, 2001 to August 12,
    2004, for all 900 MHz MTA licensees, while NeoWorld requests an
    extension until December 31, 2002. Commission rules require MTA
    licensees to provide coverage to at least two-thirds of the
    population within five years of licenses being granted. Nextel and
    NeoWorld assert that they need waivers because appropriate digital
    equipment is not yet available and that deployment of that broadband
    service would be delayed if they had to build analog 900 MHz systems
    to meet the August 12 construction deadline. The Wireless
    Telecommunications Bureau accepted comments on the waiver requests
    through February 1, 2001 and reply comments were due on February 8,
    2001. *See Public Notice, Wireless Telecommunications Bureau Seeks
    Comment of FCI 900, Inc.'s Expedited Request for 3-year Extension of
    900 MHz Band Construction Requirements*, DA 01-121 (Released January
    18, 2001); *Public Notice, Wireless Telecommunications Bureau Seeks
    Comment on NeoWorld License Holdings, Inc.'s Request for Waiver of
    900 MHz Band Construction Requirements and Petition for Declaratory
    Ruling*, DA 01-122 (Released January 18, 2001).