Before the

**[Federal Communications Commission]{.smallcaps}**

**Washington, D.C. 20554**

In the Matter of )

)

Amendments to Parts 1, 2, 87 and 101 )

of the Commission's Rules ) WT Docket No. 99-327

To License Fixed Services )

at 24 GHz )

**REPORT AND ORDER**

**Adopted:** July 25, 2000 **Released:** August 1, 2000

By the Commission: Commissioner Ness issuing a statement; Commissioners
Furchgott-Roth and Tristani concurring and issuing separate statements.

**[Table of Contents]{.smallcaps}**

[Paragraph No.]{.underline}

I. INTRODUCTION [3](#introduction)

II\. EXECUTIVE SUMMARY [3](#executive-summary)

III\. BACKGROUND [4](#background)

IV\. DISCUSSION [6](#discussion)

A. Licensing Plan for 24 GHz Services
[6](#licensing-plan-for-24-ghz-services)

1\. Table of Allocations [6](#table-of-allocations)

2\. Geographic Area Licensing [8](#geographic-area-licensing)

3\. Spectrum Blocks [11](#spectrum-blocks)

4\. Treatment of Incumbents [12](#treatment-of-incumbents)

B. Application, Licensing and Processing Rules
[13](#application-licensing-and-processing-rules)

1\. Regulatory Status [13](#regulatory-status)

2\. Open Eligibility [15](#open-eligibility)

3\. Performance Requirements [17](#performance-requirements)

4\. License Term and Renewal Expectancy
[19](#license-term-and-renewal-expectancy)

5\. Application of Title II Requirements to Common Carriers
[20](#application-of-title-ii-requirements-to-common-carriers)

6\. Aggregation, Disaggregation and Partitioning
[22](#aggregation-disaggregation-and-partitioning)

7\. Foreign Ownership Restrictions [24](#foreign-ownership-restrictions)

C. Technical Rules [26](#technical-rules)

1\. Emission Mask [26](#emission-mask)

2\. Equipment Requirements [27](#equipment-requirements)

3\. Efficiency Standard [29](#efficiency-standard)

4\. Antenna Directivity [29](#antenna-directivity)

5\. Licensing and Coordination [30](#licensing-and-coordination)

6\. RF Safety [31](#rf-safety)

D. Competitive Bidding Procedures [31](#competitive-bidding-procedures)

1\. Statutory Requirements [31](#statutory-requirements)

2\. Incorporation by Reference of Part 1 Standardized Auction Rules
[32](#incorporation-by-reference-of-part-1-standardized-auction-rules)

3\. Provisions for Designated Entities
[33](#provisions-for-designated-entities)

V. PROCEDURAL MATTERS [38](#procedural-matters)

VI\. ORDERING CLAUSES [38](#ordering-clauses)

APPENDIX A List of Pleadings

APPENDIX B Final Regulatory Flexibility Analysis

APPENDIX C Final Rules

# INTRODUCTION

1.  By this *Report and Order* we adopt service rules for licensing the
    24.25-24.45 GHz and 25.05-25.25 GHz bands (24 GHz band[^1]). We
    adopt, in part, service rules proposed in the *Notice of Proposed
    Rulemaking* (*NPRM*)[^2] to govern the licensing and operation of
    the 24 GHz band. We also adopt, in part, competitive bidding rules
    proposed in the *NPRM* to select among new licensees for this band.
    In this *Report and Order*, we amend Parts 1, 2, 87 and 101 of the
    Commission's Rules to promote effective use of the 24 GHz band and
    to accommodate deployment of point-to-point, point-to-multipoint,
    and multipoint-to-multipoint fixed wireless technology at 24 GHz.
    The rule changes we adopt today establish a flexible regulatory and
    licensing framework. Our decision today will enhance opportunities
    to provide a broadband wireless service, foster effective
    competition, and further our efforts for consistent rule application
    regarding broadband wireless services.

# EXECUTIVE SUMMARY

2.  In this *Report and Order* we make the following major
    determinations regarding the 24 GHz band.

-   We assign the 24 GHz band for licensing throughout the United States
    by Economic Areas (EAs) (constituting 172 service areas). We also
    authorize additional areas for licensing covering the following
    United States territories and possessions: Guam, Northern Mariana
    Islands, Puerto Rico, the United States Virgin Islands, American
    Samoa and the Gulf of Mexico.

-   We permit 24 GHz band licensees to offer a variety of fixed
    services, however, we decline to allocate mobile operations for the
    24 GHz band at this time.

-   24 GHz licensees, including incumbent Digital Electronic Message
    Service (DEMS) licensees, will be governed by Part 101 of the
    Commission's Rules as discussed herein.

-   We license the 24 GHz band in 40 MHz flexible channel pairs. In
    addition, we provide 24 GHz band licensees more flexibility in
    system design, by designating that either the upper or lower side of
    the 40 MHz channel pairs can be used for the nodal station or the
    subscriber station.

-   We permit open eligibility for 24 GHz band licensees.

-   We adopt our proposed framework for license terms for 24 GHz band
    licensees. Licensees will have a ten-year license term from the date
    of grant. Licensees must demonstrate that they are providing
    substantial service when they file their renewal application.

-   We allow 24 GHz band licensees to partition and/or disaggregate
    their licenses. We also allow licensees to aggregate 24 GHz band
    spectrum.

-   We adopt technical standards that are both consistent with our Part
    101 rules and provide licensees increased flexibility in system
    design, including but not limited to, an emission mask for the
    24 GHz band; allowing the use of non-directional antennas as well as
    one-foot diameter parabolic antennas; eliminating individual
    licensing for nodal stations; and allowing a maximum contiguous
    bandwidth of up to 200 MHz through aggregation.

-   The general competitive bidding rules set forth in Part 1, Subpart
    Q, of the Commission's Rules apply to the 24 GHz band, unless
    otherwise provided herein.

-   We adopt a three-tiered approach to small business bidding credits.
    Very small businesses with average annual gross revenues not
    exceeding \$3 million are eligible to receive a 35 percent bidding
    credit; small businesses with average annual gross revenues not
    exceeding \$15 million are eligible to receive a 25 percent bidding
    credit; and entrepreneurs with average annual gross revenues not
    exceeding \$40 million are eligible to receive a 15 percent bidding
    credit.

# BACKGROUND

3.  In 1983, the Commission adopted rules for the Digital Electronic
    Message Service (DEMS). DEMS systems are common carrier
    point-to-multipoint microwave networks designed to communicate
    information between a fixed (nodal) station and a number of fixed
    user terminals.[^3] This service was intended to accommodate
    operation of high-speed, two-way, point-to-multipoint terrestrial
    microwave transmission systems.[^4] Initially, DEMS was allocated
    spectrum in the 18.36-18.46 GHz bands coupled with the
    18.94-19.04 GHz band. Subsequently, the Commission amended the
    initial DEMS allocation and designated spectrum in the
    18.82-18.92 GHz and 19.16-19.26 GHz bands for DEMS.[^5] The
    Commission began granting DEMS licenses in the early 1980's;
    however, due to several factors, including the high cost of
    equipment, the service was not deployed widely. In the early 1990s,
    a small number of companies, including Associated Communications,
    L.L.C., Digital Services Corporation, Microwave Services, Inc., and
    Firstmark Communications, Inc., began acquiring licenses in
    approximately thirty of the Nation's largest markets.[^6]

4.  On March 14, 1997, the Commission adopted a *Reallocation Order*
    requiring the relocation of DEMS operations from the 18 GHz band to
    the 24 GHz band.[^7] These actions were taken in an effort to
    protect two government earth stations, alleviate sharing issues
    between 18 GHz non-government satellite services (NGSO) and DEMS
    licensees, and to ensure the viability of DEMS.[^8] In order to
    protect the government earth stations, the incumbent DEMS licensees
    in the Washington, D.C. and Denver, Colorado areas were required to
    immediately cease operations in the 18 GHz band. In all other areas,
    incumbent DEMS were directed to discontinue operations in the 18 GHz
    band no later than January 1, 2001.[^9] The Commission concluded
    that the 400 MHz in the 24 GHz band was sufficient to meet the
    spectrum needs of the DEMS licensees.[^10] In order to accommodate
    this relocation, the Commission, in the *Reallocation Order* amended
    the Table of Frequency Allocations and Part 101 of the Commission's
    Rules regarding Fixed Microwave Service to permit fixed service use
    of the 24 GHz band.[^11] On June 25, 1997, the Wireless
    Telecommunications Bureau (Bureau) issued a *Modification Order*
    modifying existing DEMS licenses to provide for operation in the
    24 GHz band.[^12]

5.  On November 10, 1999, we released a *Notice of Proposed Rulemaking*
    (*NPRM*) proposing licensing and service rules to govern both
    incumbents and new licensees in the 24 GHz band.[^13] Therein, we
    proposed to auction new licenses in the 24 GHz band and to apply the
    Part 101 service rules, as modified to reflect the particular
    characteristics and circumstances of the band, to both these new
    licensees and to the relocated incumbents.[^14] We also proposed to
    apply competitive bidding procedures under the Part 1 competitive
    bidding rules for future licensing in this band.[^15] We sought
    comment on whether to adopt rules providing for a Broadcasting
    Satellite Service (BSS) in the 24 GHz band, while proposing to
    remove and/or reallocate certain non-government radionavigation
    services. Additionally, we sought comment on whether to expand the
    array of services offered in the 24 GHz band to include mobile
    operations, rather than exclusively fixed service.

# DISCUSSION

## Licensing Plan for 24 GHz Services

### Table of Allocations

6.  *Background.* In the *Reallocation Order*, we adopted fixed service
    as the only authorized use under the Table of Frequency
    Allocations.[^16] In keeping with this allocation, we proposed to
    permit 24 GHz band licensees to use the spectrum for any fixed
    service.[^17] Generally, we proposed service rules that would enable
    licensees to offer a wide variety of services and minimize
    regulatory burdens. In that vein, in the *NPRM*, we raised questions
    concerning the possibility of expanding the array of services
    offered in the 24 GHz band to include mobile operations.[^18]

7.  *Discussion.* As a general matter, commenters in this proceeding
    strongly support our goal of providing licensees maximum flexibility
    in the use and design of their systems in the 24 GHz band.[^19]
    Teligent, for instance, agrees that our proposal to adopt rules
    promoting flexibility provides a proper framework to encourage local
    competition and the growth and development of innovative
    services.[^20] Several commenters, however, while still desirous of
    flexibility with regard to the provision of fixed services, urge us
    not to allow mobile operations, but rather to retain primary status
    for fixed services in the 24 GHz band.[^21] These commenters concur
    with our statement concerning the current lack of equipment for
    mobile use and point out that no demonstration has been made that
    mobile operations would be compatible with fixed operations.[^22]
    Moreover, our recent decision to allocate 200 MHz of spectrum at
    25.05-25.25 for BSS feeder links adds another layer of complexity to
    the coordination process.[^23] Several of the commenters suggest
    that we authorize mobile services on a secondary basis[^24] or limit
    the use of mobile operations to the 24 GHz band fixed licensees so
    that they can "introduce mobile options, when feasible, within the
    frequency parameters of their existing licenses."[^25] We agree with
    the majority of commenters that it is premature to consider mobile
    operations for this service, and therefore, we will not allocate for
    mobile operations in the 24 GHz band at this time. Nevertheless, we
    concur with Teligent that, since equipment for mobile operations may
    become available in the future, we should not completely preclude
    the possibility of mobile operations in the 24 GHz band.[^26] Thus,
    while we conclude that the 24 GHz band will remain a fixed service
    at this time, we reserve the discretion to revisit permitting mobile
    operations if we are presented with technical information
    demonstrating that such operations are technically feasible (*e.g.,*
    concerns regarding possible harmful interference to 24 GHz band
    fixed operations and BSS are addressed).[^27]

8.  [Sharing Criteria for Satellite Services and Terrestrial Fixed
    Services]{.underline}. *Background*. We recently amended the Table
    of Frequency Allocations to allocate spectrum for BSS use, effective
    April 1, 2007.[^28] In the *18 GHz Report and Order*, we allocated
    spectrum in the downlink band at 17.3-17.7 GHz for primary BSS
    use.[^29] In the uplink band, we allocated 300 MHz of spectrum at
    24.75-25.05 GHz for primary Fixed Satellite Service (FSS)
    Earth-to-space use, limited to feeder links for the BSS allocation
    in the 17.3-17.7 GHz band, and in addition, we allocated 200 MHz of
    spectrum at 25.05-25.25 GHz for co-primary sharing between FSS and
    the 24 GHz Service, requiring coordination between these
    services.[^30] In the *NPRM* in this proceeding, we tentatively
    concluded, because the corresponding downlink BSS allocation is not
    immediately effective, to defer the implementation of a sharing
    methodology between the satellite interests and the terrestrial
    fixed service interests. Nevertheless, we solicited comment on the
    interaction between these two services.[^31]

9.  *Discussion.* In light of the fact that the downlink BSS allocation
    in the 17.3-17.7 GHz band will not become effective until April 1,
    2007,[^32] we continue to believe that it would be premature to
    implement sharing criteria at this time. Teligent, PCIA, and FWCC
    agree that it is too early for the Commission to implement a sharing
    criteria, because of the seven-year delay before BSS can effectively
    use the 24 GHz band.[^33] In the alternative, DIRECTV contends that,
    because the preparation of technical rules and international
    coordination agreements will take several years to finalize, it is
    not too early to begin developing the necessary rules to support BSS
    operations in the 24 GHz band.[^34]

10. We agree with Teligent that it would be premature to undertake a
    precise set of rules for sharing, in that the potential parameters
    of such a satellite system are also unknown.[^35] Therefore,
    consistent with the *18 GHz Report and Order*, we will consider any
    sharing criteria in a future rulemaking proceeding.[^36] In this
    context, Teligent suggests that a formal working group composed of
    fixed wireless operators and satellite representatives should
    convene near the 2007 benchmark date to develop sharing criteria and
    the necessary separation distance for non-ubiquitous BSS uplink
    earth stations.[^37] We agree that industry consensus can be helpful
    for developing any sharing criteria and separation distances, and
    although we are not requiring that a working group be established at
    this time, we encourage industry representatives to engage in
    ongoing collaboration prior to the April 1, 2007 milestone. With
    seven years prior to any potential BSS allocation becoming effective
    in the 25.05-25.25 GHz band, we are not adopting sharing criteria
    between the co-primary fixed service licensees and satellite
    operators in the 24 GHz band at this time because we believe that
    there will be sufficient opportunity to develop appropriate sharing
    methodologies. In the interim, we encourage negotiations between
    parties regarding terms and conditions, consistent with our 24 GHz
    band rules, to allow a satellite operator to provide an uplink earth
    station service within a licensee's license area (such as through
    partitioning, disaggregation or a leasing arrangement). We further
    note that satellite operators could choose to pursue use of the 24
    GHz band for BSS feeder links through a license won at the upcoming
    auction (thereby becoming a wireless licensee).[^38] It is
    contemplated that, because this spectrum will be used in the U.S. by
    BSS operators for feeder links, the satellite operators will provide
    predominantly domestic service.

11. [Non-Government Radionavigation Service]{.underline}. In the *NPRM*,
    we proposed to delete the non-Government radionavigation service
    allocations in the 24.25-24.45 GHz and 25.05-25.25 GHz bands.[^39]
    We also proposed to modify the Table of Frequency Allocations to
    reflect the FAA\'s decommissioning of a radar facility at the
    Newark, New Jersey International Airport.[^40] We note that footnote
    US341, addressing the Newark radar facility, has already been
    removed from the Table of Allocations pursuant to a proceeding by
    the Office of Engineering and Technology (OET).[^41] Finally, we
    proposed to amend Section 87.173(b) of our Rules to change the entry
    for aeronautical radionavigation from 24.25-25.25 GHz to
    24.75-25.05 GHz.[^42] We received no comments related to these
    proposals. Therefore, for the reasons underlying our proposals
    regarding Aeronautical Radionavigation Service operations in
    24.25-25.25 GHz and 24.75-25.05 GHz, we adopt them as final rules.

### Geographic Area Licensing

12. *Background.* In the *NPRM*, we requested comment on the type of
    service area that should be used to license the 24 GHz band. The
    Commission originally used Standard Metropolitan Statistical Areas
    (SMSA) to license the DEMS service.[^43] However, SMSAs did not
    include rural communities, and thus DEMS licensees were unable to
    provide service to these communities. Therefore, we tentatively
    concluded to license the 24 GHz band on the basis of 172 EAs with
    additional EA-like areas, covering United States territories and
    possessions. We indicated our belief that the use of EAs, in
    conjunction with the proposed partitioning and disaggregation rules,
    would create reasonable opportunities for the dissemination of
    24 GHz band licenses among a large number of entities.[^44] While we
    concluded that the EA licensing scheme would best serve the public
    interest in facilitating efficient use of this spectrum, we
    nonetheless solicited comment on alternative geographic areas.[^45]

13. *Discussion*. Although we received a mixed reaction to our EA
    licensing approach, we have concluded that EAs are the best basis
    for geographic area licensing in the 24 GHz band. Teligent and
    Wireless One agree with our decision to use EAs to license
    24 GHz.[^46] In this regard, Teligent states that the relatively
    small size of an EA should minimize the burden of performance
    requirements and thereby encourage rapid and intensive use of the
    spectrum.[^47]

14. Several commenters, however, oppose an EA licensing approach.[^48]
    PCIA, RTG and SBA argue that the large size of EAs precludes small
    entities and start-up companies from participating at auction.[^49]
    SBA indicates that the use of EAs discourages small business
    participation by allowing the high value of urban areas to influence
    the bidding for the less valuable rural areas included within the
    EA.[^50] These commenters argue that the adoption of even smaller
    license areas would reduce spectrum warehousing and speed service to
    rural areas,[^51] and they offer a range of smaller alternative
    geographic areas.[^52] We do not believe that service areas smaller
    than EAs would prove a beneficial licensing approach for the 24 GHz
    band.

15. We agree with Teligent that smaller alternative service areas are
    unlikely to permit the efficiencies necessary to justify the large
    cost of providing fixed wireless service.[^53] Rather, we agree that
    EA based licenses are more likely to offer licensees the opportunity
    to realize the necessary economies of scale.[^54] In the recently
    released *Narrowband PCS Second Report and Order*, we found that
    large service areas are more appropriate, because they serve the
    needs of a wider range of entities, including both large and small
    service providers.[^55] We believe that this finding is
    appropriately applied to the 24 GHz band. We do not believe that EAs
    are so large that they will preclude smaller businesses from
    participating at auction. Our recent experience with the 39 GHz
    auction, where EAs were used, indicates that small entities were
    able to successfully bid at auction.[^56] Moreover, entities
    desiring larger service areas will be able to create such areas by
    aggregating licenses.[^57] Finally, in response to PCIA's request
    that we reconsider BTAs, we note that issues surrounding Rand
    McNally's copyright interest in BTAs are not easily resolved and,
    therefore, rule out the use of BTAs for this service.[^58]

16. Moreover, we have received comments regarding the necessity for
    parity within the broadband services.[^59] Therefore, we believe
    that retaining the same service area as that used for the 39 GHz
    Service[^60] would place both services on an equal footing. Also, we
    believe that the three-tiered approach to bidding credits we are
    adopting herein will ameliorate concerns regarding the inability of
    smaller entities to participate at auction and aid these smaller
    entities when seeking financial backing.[^61]

17. Some commenters find our rationale that post-auction partitioning
    and disaggregation will open up opportunity to smaller entities to
    be faulty and argue that we should encourage small business
    participation at auction.[^62] NTCA argues, for example, that rural
    telephone companies have not been successful in obtaining
    partitioned areas, because licensees are generally able to meet the
    Commission's performance requirements by serving the more urban
    areas, and therefore are able to hold onto the entire service
    area.[^63] As stated above, we believe that flexible partitioning
    and disaggregation/aggregation fosters rapid delivery of service to
    rural areas and encourages the participation of smaller entities at
    auction, consistent with our mandate to ensure that licenses are
    disseminated among a wide array of applicants.[^64] NTCA offers no
    concrete evidence, indicating otherwise. In fact, the benefits of
    post-auction partitioning and disaggregation are demonstrated in
    recent assignments of C Block Broadband PCS licenses.[^65] Moreover,
    entities such as rural telephone companies may form a bidding
    consortium in order to level the playing field at auction, and
    thereafter, partition or disaggregate to the consortium members in
    order to form a smaller service area.[^66] Thus, we continue to
    believe that our flexible partitioning rules provide an effective
    mechanism/vehicle by which smaller or newly formed entities can gain
    access to the broadband wireless market.[^67]

18. For these reasons, we determine that EAs constitute the most
    appropriate geographic area licensing for the 24 GHz band. EAs will
    provide ample population coverage and allow 24 GHz band licensees
    the flexibility to provide a multitude of service offerings. Thus,
    we determine to use a total of 176 service areas---the 172 EAs
    specified by the Department of Commerce and four EA-like areas for
    Guam and the Northern Mariana Islands, Puerto Rico and the United
    States Virgin Islands, American Samoa, and the Gulf of Mexico.

### Spectrum Blocks

19. *Background.* In the *Reallocation Order*, the Commission determined
    that the differences in propagation, rain attenuation, and available
    equipment between the 18 GHz and 24 GHz bands would require DEMS
    systems in the 24 GHz band to use approximately four times as much
    bandwidth as DEMS systems operating at 18 GHz to maintain comparable
    reliability and coverage.[^68] Therefore, we decided to license the
    relocated operations in 40 MHz channel pairs. We concluded that DEMS
    licensees require 40 MHz channel pairs at 24 GHz for their capacity
    to be equivalent to the capacity they had at 18 GHz.[^69] Section
    101.147(r)(9) of the Commission's Rules currently separates the
    frequencies between the transmit and receive and it establishes one
    set of channels for nodal station use (24.25-24.45 GHz) and another
    set for use as user stations (25.05-25.25 GHz).[^70] We proposed
    that the same amount of spectrum be provided to each new 24 GHz
    licensee as is provided under the rules for the relocated licensees.
    We sought comment on these proposals.

20. *Discussion*. Commenters generally support the spectrum block
    proposal to retain five blocks of 40 MHz channel pairs, however,
    they seek additional flexibility to make more efficient use of the
    blocks.[^71] In this regard, commenters seek the amendment of the
    channel designations in Section 101.147(r)(9) to eliminate the
    directional dictates of the spectrum pairs, and thereby, accommodate
    the use of time division duplex (TDD) technology.[^72] TDD is a
    technical design for duplex communications whereby both upstream and
    downstream communications utilize the same RF channel by sharing it
    in the time domain.[^73] One commenter includes among the benefits
    of TDD improved spectral efficiency and less expensive
    equipment.[^74] In that vein, PCIA and FWCC also seek to amend
    Section 101.147(r)(9) to allow aggregation of channel blocks to
    create spectrum blocks larger than 40 MHz.[^75]

21. One of the desired uses for the 24 GHz band is to provide high-speed
    data. In many situations the downstream (*i.e.,* from
    node-to-subscriber) data path needs to be larger than the upstream
    (*i.e.,* from subscriber-to-node) data path. For example, a licensee
    may want to use 60 MHz for the downstream data and only 20 MHz for
    the upstream data path. Thus, in order to allow licensees more
    flexibility, we will change the designation of the 40 MHz channel
    pairs to indicate that either the upper or lower side can be used
    for the nodal station or the subscriber station. In doing so, we
    will designate the 40 MHz channel pairs as before, but remove the
    requirement that the upper or lower side can be used for the nodal
    station or for the subscriber station. This will also allow all 80
    MHz or any portion thereof to be used for one-way communications if
    so desired by the area licensee and allow 24 GHz band licensees the
    additional flexibility of fixed use for technologies such as TDD and
    applications like high speed Internet access. We note that allowing
    the channels to be used in this manner will change the emission mask
    standards by increasing the maximum bandwidth. This issue will be
    addressed in the technical rules section.[^76]

### Treatment of Incumbents

22. *Background*. As was discussed above, incumbent DEMS licensees are
    required to relocate their operations to the 24 GHz band by January
    1, 2001. After the completion of this relocation, such licensees
    shall be governed by Part 101 of the Commission's Rules.[^77] In the
    *NPRM,* we proposed to make the incumbent licensees subject to any
    changes we make in this proceeding to the Part 101 Rules.
    Accordingly, we sought comment on our tentative conclusion that no
    special rules for the protection of incumbents are necessary.[^78]

23. *Discussion.* In general, commenters support the Commission's
    proposal that 24 GHz band operations be governed by Part 101.
    Wireless One states that it is essential that all licensees be
    subject to uniform licensing and service rules.[^79] Accordingly, we
    conclude that all licensees in the 24 GHz band including incumbent
    licensees previously licensed under our DEMS rules, will be governed
    by Part 101 of the Commission's Rules, as discussed herein. Further,
    we are eliminating all reference to DEMS in our rules governing the
    operations in the 24 GHz band.

24. Teligent seeks reassurance that incumbent areas will be protected
    from harmful interference. In this regard, it requests clarification
    that incumbents licensed on a SMSA basis will retain exclusive right
    to their licensed channels within their service area and that the
    new 24 GHz band licensees will be required to protect the incumbents
    against harmful interference.[^80] We clarify that we will exclude
    the SMSAs of authorized incumbent licensees from the applicable EAs
    offered at auction and that incumbents will retain exclusive rights
    to use those channels located within its SMSA. Furthermore, as
    stated in the *NPRM,* we believe that the protection requirements
    afforded by Section 101.509 of the Commission's Rules will allow the
    incumbent licensees and new licensees to effectively coordinate
    their systems to avoid harmful interference.[^81] As we have done
    with other services, we note that should an incumbent lose its
    authority to operate, the incumbent's authorization will revert to
    the relevant EA licensee.[^82] Thus, the EA license holder will be
    permitted to operate within the portion of the forfeited SMSA
    situated within its EA without being subject to competitive
    bidding.[^83] We believe that this approach best serves the public
    interest by ensuring efficient use of spectrum and reassuring that
    any disruption in service will be remedied as expediently as
    possible.

## Application, Licensing and Processing Rules

### Regulatory Status

25. *Background*. In the *NPRM*, we sought comment on a proposed
    licensing framework, similar to that adopted for other broadband
    services,[^84] wherein a license applicant may request common
    carrier status and/or non-common carrier status under a single
    authorization, rather than require the applicant to choose between
    these services.[^85] We also proposed that if licensees change their
    service offering, such that it would alter their regulatory status,
    they must notify the Commission, although such a change would not
    require prior Commission authorization.[^86]

26. *Discussion*. As stated above, commenters in this proceeding
    supported the proposition that 24 GHz band licensees be provided
    with maximum flexibility to offer a variety of services.[^87] Our
    proposed licensing framework, intended to allow further market
    development, was met with support among the commenters.[^88]
    Teligent noted that our proposal to allow applicants to request both
    common carrier and non-common carrier status in a single license
    provides the licensee with maximum flexibility and minimal
    regulatory burden.[^89] Thus, similar to the approach taken towards
    regulatory status for both the LMDS and the 39 GHz band,[^90] we
    adopt a broad licensing framework in order to encourage further
    market development by allowing 24 GHz licensees to provide a wide
    array of services without unwarranted regulatory restraint.

27. As we have stated in the past, it is within the licensee's
    discretion to determine the exact nature of the service to be
    provided under the regulatory classifications it selects.[^91] By
    way of guidance for future applicants, we note that an election to
    provide service on a common carrier basis requires the elements of
    common carriage be present in the type of service the license
    applicant seeks to provide; otherwise, the service is categorized as
    non-common carriage. The 1996 Act provides that a telecommunications
    carrier shall be treated as a common carrier only to the extent that
    it is engaged in providing telecommunications services.[^92]
    Telecommunications service is defined as the offering of
    telecommunications for a fee directly to the public, or to such
    classes of users as to be effectively available to the public,
    regardless of the facilities used.[^93] As we indicated in the
    *NPRM*, we depend on the license applicant to notify the Commission
    of its intent to provide common carrier services, thereby enabling
    us to determine whether to apply the statutory requirements of Title
    II of the Communications Act.[^94] We note that to the extent that a
    24 GHz band licensee is a telecommunications carrier it will be
    governed by the duties required under Part 51, including
    interconnection with other telecommunications carriers.[^95] Also to
    the extent that a 24 GHz band provider meets the definition of a
    local exchange carrier it will also be governed by the requirements
    set forth in Subpart C of Part 51 of our Rules.[^96]

28. We also adopt our proposal requiring licensees to notify the
    Commission of a change in the service or services they offer, if
    such a change would result in a change of their regulatory status,
    although such change would not require prior Commission
    authorization.[^97] Licensees must notify the Commission within
    thirty days of a change in regulatory status, unless the change
    results in the discontinuance, reduction, or impairment of the
    existing service, in which case a different time period may apply.
    In this instance, the licensee is governed by Section 101.305 of the
    Commission's Rules and must submit an application under Section
    1.947 of the Commission's Rules in conformance with the deadlines
    established by Section 101.305.[^98]

29. In addition, we adopt our proposal that 24 GHz band license
    applicants are not required to detail the specific services they
    seek to provide. As we stated in the *NPRM*, we believe it is
    sufficient that an applicant indicate its choice of regulatory
    status in the context of our streamlined application process.[^99]
    We conclude that a 24 GHz band licensee will be able to provide all
    permissible services anywhere within the licensed geographic service
    area, consistent with its regulatory status.[^100] Licensees are
    permitted to add remove, or relocate sites within their service area
    without prior Commission approval, unless requirements otherwise set
    forth in our rules would entail the filing of a separate
    authorization.[^101] In this regard, we note that a licensee may be
    required to comply with separate filing or authorization
    requirements in modifying a station where: (1) there is a National
    Environmental Policy Act (NEPA) concern pursuant to Section 1.1301
    through 1.1319; (2) areas where radio frequency quiet zones are in
    place under Section 1.924; (3) antenna structure requirements under
    Part 17 requires licensees to register with the Commission prior to
    construction; (4) any restrictions regarding border areas under
    international agreement;[^102] and (5) any applicable technical
    rules in Part 101.[^103]

### Open Eligibility

30. *Background.* In the *NPRM*, we reiterated that our primary goal in
    this proceeding was to encourage efficient competition, particularly
    in the local exchange telephone market.[^104] We tentatively
    concluded that, because of current market conditions in the 24 GHz
    band, it was unnecessary to impose an eligibility restriction on
    either incumbent local exchange carriers (ILECs) or incumbent cable
    operators.[^105] However, we sought comment as to whether open
    eligibility would indeed pose a significant likelihood of
    competitive harm in specific markets, and if so, whether eligibility
    restrictions are an effective way to address that harm.[^106]

31. *Discussion*. We received relatively few comments concerning our
    tentative conclusion not to impose eligibility restrictions on the
    participation of ILECs or incumbent cable operators. Those comments
    we did receive supported open eligibility, but did not specifically
    address the likelihood of competitive harm. For example, RTG
    "vigorously" supports this initial decision and states that open
    eligibility will foster competition and encourage innovation.[^107]
    In addition, RTG contends that open eligibility will aid in
    promoting the deployment of 24 GHz band service to rural areas "by
    broadening the number of potential providers."[^108]

32. We believe that substantial competitive harm is unlikely to result
    from ILEC and incumbent cable eligibility in this service. The
    number of broadband present and anticipated competitors in the
    marketplace lessens the likelihood that ILECs and incumbent cable
    operators can thwart competition.[^109] For instance, CLECs are
    providing competitive broadband services (*i.e.,* digital subscriber
    line (DSL)) either over their own facilities and/or through
    unbundled network elements (UNEs) obtained through the incumbent
    local exchange carrier (ILEC). Also, as noted in the *LMDS Third
    Report and Order**, ***CLEC and ILECS are increasing their use of
    DSL service, in turn cable modem providers are competing with the
    DSL offerings, and satellite companies are now providing one-way
    nationwide broadband service.[^110] In addition, emerging broadband
    providers are likely to offer consumers even more choices.[^111]
    Moreover a number of fixed wireless service providers are offering
    comparable services (i.e., 39 GHz, MMDS and LMDS). Therefore, the
    possibility that incumbents could foreclose the development of
    competition by acquiring licenses in the 24 GHz band is remote.

33. Finally, we note that no such restriction was placed on the 39 GHz
    band at its onset and the eligibility restriction placed on ILECs
    and incumbent cable operators in LMDS[^112] sunset on June 30,
    2000.[^113] Moreover, we believe that there are several service
    specific distinctions between the 24 GHz band and LMDS, at its
    inception, that further substantiate our decision not to impose an
    eligibility restriction for the 24 GHz band. In the *LMDS Second
    Report and Order*, the Commission concluded that several factors
    increased the feasibility of anti-competitive preemption. First, the
    Commission concluded that, because of the unusually large spectrum
    offering (1150 MHz) and the service's potential to offer a variety
    of fixed services, an LMDS license would be of particular value to
    an incumbent both for the purpose of providing increased services
    and also to preserve excess profits that a competitor could
    erode.[^114] The 24 GHz band, however, involves a smaller allocation
    of 400 MHz of non-contiguous bandwidth. Another factor that the
    Commission relied on in the LMDS proceeding was the offering of one
    large license for each mostly unencumbered geographic area.[^115]
    However, in this instance, we will be offering five licenses each
    per geographic area.[^116] Furthermore, in the 24 GHz band, unlike
    LMDS, there are broadband services currently being provided.

34. We received no comments providing information disputing our
    conclusion that the 24 GHz band spectrum may be inadequate for the
    provision of competitive multi-channel video programming
    distribution (MVPD).[^117] We based this conclusion both on our own
    assessment and on the current services offered by Teligent, which
    are limited to voice and data.[^118] Moreover, even if an MVPD
    offering were possible, we believe that the number of available
    licenses in each EA (five) would hinder any anti-competitive conduct
    by incumbent cable operators. Therefore, we continue to believe that
    it is unnecessary to adopt a restriction excluding the participation
    of incumbent cable companies in this service.

35. Finally, we note that Teligent has expressed concern regarding ILEC
    dominance in access to multi-tenant buildings and requests that we
    consider adopting safeguards to prevent ILEC dominance in the
    marketplace.[^119] Specifically, Teligent requests that we prohibit
    "any telecommunications carrier . . . from entering into or
    maintaining a contract with a building owner or manager that
    provides for that carrier's exclusive access to a multi-tenant
    building."[^120] We share Teligent's concern and are currently
    considering rooftop access issues in the *Competitive Networks*
    proceeding.[^121] We believe that the *Competitive Networks*
    proceeding is the more appropriate proceeding in which to consider
    these issues. Moreover, as Teligent itself noted in the LMDS
    eligibility restriction proceeding, the acquisition of a license
    does not reduce or eliminate an ILECs' motivation or ability to
    restrict the multiple-unit rooftop access of competitors.[^122]
    Thus, we adopt our proposal to allow open eligibility in the 24 GHz
    band.

### Performance Requirements

36. *Background.* The Commission has, in other wireless services,
    imposed performance requirements to ensure that the spectrum is used
    effectively and that service is deployed rapidly. More recently, the
    Commission has employed a substantial service standard as a
    mechanism to foster rapid development of spectrum. In the *NPRM*, we
    solicited comment on whether a substantial service requirement or,
    in the alternative, a minimum coverage requirement is more
    appropriate for this band.[^123] In this connection, we asked
    whether a safe harbor standard is warranted and requested comment on
    possible sanctions for licensees that fail to meet the performance
    requirements.[^124]

37. *Discussion.* The majority of commenters preferred the application
    of a renewal expectancy based on the substantial service
    requirement, noting the flexibility that such a standard will offer
    licensees as they determine how best to implement business plans for
    the 24 GHz band.[^125] However, RTG preferred a minimum coverage
    requirement to ensure the deployment of services in the 24 GHz band
    to rural areas if the Commission uses EA-based service areas for
    this band.[^126] We disagree with RTG that strict minimum coverage
    requirements are necessary. In this regard, we note that some
    commenters believe that the suggested alternative minimum coverage
    requirements would be inconsistent with other fixed services.[^127]
    In addition, PCIA asserts that imposition of a numerical minimum
    coverage requirement might adversely affect the financing
    opportunities for 24 GHz band applicants and licensees.[^128] 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 the service providers in this band.

38. We define substantial service as "a service that is sound,
    favorable, and substantially above a level of mediocre service which
    might minimally warrant renewal."[^129] As a result of the
    flexibility that this standard affords, we have, in past
    proceedings, provided safe harbor examples to provide guidance to
    licensees in meeting this requirement. Safe harbor examples for the
    a 24 GHz point-to-point/multipoint licensee may consist of a showing
    of four links per million population within a service area[^130] or
    service to an area that has very limited access to either wireless
    or wireline telecommunications services. In order to determine
    whether a licensee has provided substantial service at the end of
    the license term, we will consider factors such as: i) whether the
    licensee's operations service niche markets or focus on serving
    populations outside of areas serviced by other licensees; ii)
    whether the licensee's operations serve populations with limited
    access to telecommunications services; and iii) a demonstration of
    service to a significant portion of the population or land area of
    the licensed area.[^131] We emphasize that this list is not
    exhaustive and that the substantial service requirement can be met
    in other ways. Hence, we will review licensees' showings on a
    case-by-case basis. If a licensee fails to meet the performance
    requirement, the subject license will not be renewed.

39. We note that several licenses currently held by incumbent licensees
    are scheduled to expire in 2001. Under the previous performance
    requirements, incumbent licensees were required to construct at
    least one link in their service area within eighteen months, without
    any further performance requirements imposed during their license
    term.[^132] We recognize that the substantial service requirement we
    adopt herein differs somewhat from the previous performance
    requirement. We also note that these license terms are of a limited
    duration. Under these circumstances, we believe that we should
    incorporate the build-out showing into the showing required at
    renewal.[^133] Accordingly, we determine that those incumbent 24 GHz
    band licensees who have met the build-out requirements of Section
    101.63 by their 2001 renewal date will satisfy the substantial
    service requirement we have adopted herein. We believe that this
    approach furthers the public interest and affords incumbent
    licensees the opportunity to continue implementation of their
    existing business plans. This decision also allows us to remain
    consistent with our renewal requirements, as discussed below,
    ensuring efficient use of the spectrum, and expeditious service to
    the public.

### License Term and Renewal Expectancy

40. *Background.* In the *NPRM*, we sought comment on the license term
    and renewal expectancy requirements for the 24 GHz band.[^134] We
    indicated that a ten-year license term, combined with a renewal
    expectancy, would promote a stable regulatory environment that will
    encourage the development of this spectrum.[^135] Thus, we proposed
    that the license terms for both incumbent and new 24 GHz band
    licensees be ten years, with a renewal expectancy based on a showing
    that the licensee is providing substantial service.[^136] We also
    requested comment on possible alternatives to this proposal, such as
    whether a longer license term is warranted.[^137] In addition, we
    proposed that the renewal application of a 24 GHz band licensee
    must, at a minimum, include specific showings in order to claim
    renewal expectancy.[^138]

41. *Discussion.* Based on the record in this proceeding, we adopt a
    ten-year license term, in conjunction with a renewal expectancy
    based on substantial service.[^139] Hence, a renewal applicant shall
    receive a preference or renewal expectancy if the applicant has
    provided substantial service during its previous license term and
    has complied with the Communications Act and Commission rules and
    policies. Generally, commenters supported this proposal.[^140] For
    instance, Teligent indicated that a license term in excess of ten
    years may lead to spectrum warehousing because longer license terms
    provide the Commission with fewer opportunities to determine whether
    a licensee is providing substantial service.[^141] In addition, FWCC
    and PCIA stressed the importance of adopting a license term and
    renewal expectancy that is consistent with other fixed wireless
    services.[^142] We have made significant efforts to establish
    consistency and promote regulatory parity with respect to policies
    governing the wireless services.[^143] In other contexts, we have
    recognized the advantages that a ten-year license term and renewal
    expectancy based on a substantial service requirement affords
    nascent providers and, thus, endorsed this approach.[^144]
    Similarly, we believe that adopting a requirement that 24 GHz band
    licensees make a showing of substantial service at renewal in order
    to acquire an expectancy will further the public interest. In
    addition to ensuring regulatory consistency, this approach will
    promote the development of the 24 GHz band.

42. In order to claim a renewal expectancy, we will require the licensee
    to, at a minimum, provide the Commission with 1) a description of
    its current service in terms of geographic coverage and population
    served or links installed and a description of how the service
    complies with the substantial service requirement; and 2) copies of
    any Commission Orders finding the licensee to have violated the
    Communications Act or any Commission rule or policy, and a list of
    any pending proceedings that relate to any matter described by the
    requirements for the renewal expectancy. These requirements are in
    the public interest as these showings ensure that the licensee is
    using the spectrum efficiently to provide services to the public,
    has operated its facilities in compliance with the Commission's
    rules, and has the requisite qualifications to be a Commission
    licensee.

### Application of Title II Requirements to Common Carriers

43. *Background*. We have taken various steps to foster competition
    among telecommunications service providers. We recognize that
    certain provisions of the Communications Act may not be as necessary
    or may prove to be more burdensome to a new entrant and that
    removing and/or reducing unnecessary regulation tends to encourage
    market entry and lower costs. In our effort to facilitate the entry
    of new operators into the various markets, we have exercised our
    authority under Sections 10 and 332(c)(1)(A) of the Communications
    Act to streamline and/or eliminate various Title II requirements for
    common carriers. For example, in the commercial mobile radio service
    (CMRS) proceeding, we utilized our forbearance authority for certain
    requirements involving the filing of tariffs and inter-carrier
    contracts and the maintenance of certain records.[^145] In addition,
    we have applied our forbearance authority in permitting competitive
    access providers (CAPS) and competitive local exchange carriers
    (CLECs) to file permissive tariffs.[^146] We nonetheless note that
    there also have been instances where we specifically declined to
    forbear from enforcing certain provisions against either CLECS or
    CMRS providers.[^147]

44. In the *NPRM*, we noted our forbearance authority pursuant to
    Section 10 of the Communications Act and considered the extent to
    which we should apply Title II requirements to common carriers in
    this context. Thus, we sought comment on whether we should forbear
    from enforcing any provisions of the Communications Act or the
    Commission's Rules on common carrier licensees in the 24 GHz
    band.[^148]

45. *Discussion.* Although we solicited comment on the appropriate use
    of our forbearance authority with respect to the 24 GHz band, we
    received few comments regarding this matter. One commenter indicated
    that we should extend forbearance to all non-dominant carriers in
    the 24 GHz band regardless of the technology they employ to provide
    their services.[^149] Two commenters stated that we should extend
    the maximum possible forbearance to 24 GHz band licensees and also
    initiate a proceeding that applies forbearance to all fixed wireless
    licensees regardless of the frequency band.[^150] Only PCIA offered
    specific provisions for us to consider, suggesting that we
    immediately relieve all fixed wireless carriers from the same common
    carrier regulations as to which it has exercised forbearance with
    respect to CMRS carriers.[^151] However, none of the commenters
    described how forbearance from any of the provisions is warranted
    pursuant to the provision of Section 10 of the Communications Act.
    Section 10 provides the Commission forbearance authority, if the
    Commission determines that 1) enforcement of the regulation and/or
    provision is not necessary to ensure that charges, practices,
    classifications, or regulations are reasonably fair; 2) enforcement
    is not necessary in order to protect consumers; and 3) forbearance
    is consistent with the public interest.[^152]

46. PCIA expressed concern that selective application of forbearance to
    24 GHz band licensees would threaten to provide one group of
    licensees with a regulatory advantage over other fixed licensees
    offering similar services and, thus urged us to adopt a uniform
    policy that relieves all fixed wireless frequency bands from
    unnecessary regulations.[^153] We are currently conducting a broad
    analysis with respect to forbearance from applying Title II
    obligations of the Act and certain provisions of the Commission's
    rules to various wireless telecommunications carriers, including
    fixed wireless service providers.[^154] The *PCIA* *Forbearance
    Order and NPRM* examines our prior efforts to consolidate onerous
    regulations, as well as, previous application of our forbearance
    authority.[^155] For example, we have streamlined Sections 211 and
    214 of the Act and have afforded relief to non-CMRS providers by 1)
    granting blanket entrance authorizations to all carriers for
    domestic services; 2) providing for automatic grant of international
    entrance applications after 14 days in most instances; 3)
    establishing automatic grant of domestic exit applications after 31
    days for non-dominant carriers; and 4) providing that non-dominant
    carriers need not file contracts for domestic services.[^156] In
    addition, we are exploring our forbearance authority with respect to
    the Part 101 Services in an outstanding proceeding.[^157] Hence, a
    decision to utilize our forbearance authority in the *Part 101 MO&O
    and NPRM* will apply to the 24 GHz band as well. As a result, we
    decline to address any specific forbearance measures for the 24 GHz
    band at this time. We note that we are currently preparing a staff
    report in connection with the Section 11 Biennial Review and
    anticipate its release for comment later this year. We encourage
    parties to pursue some of these issues concerning streamlining
    regulations and/or the application of our forbearance authority in
    that proceeding.

### Aggregation, Disaggregation and Partitioning

47. *Background.* In a number of recent proceedings, we have adopted a
    flexible approach for partitioning and disaggregation.[^158] This
    approach is intended to encourage spectrum efficiency and afford all
    parties an opportunity to respond to market demands for services
    and/or spectrum in unserved and underserved areas.[^159] In this
    regard, we sought comment on whether to apply such an approach to
    the 24 GHz band, and if so, what limits, if any, should be placed on
    the ability of a 24 GHz band licensee to partition its service area
    and/or disaggregate its spectrum.[^160] We also sought comment on
    what information we should require parties to file in conjunction
    with this process.[^161]

48. *Discussion.* We received no comments opposing our proposed flexible
    approach to partitioning and disaggregation for the 24 GHz band. In
    addition, we note that our proposal is consistent with the
    approaches adopted in other fixed wireless contexts.[^162] Because
    we continue to believe that the flexibility provided by this
    approach will accommodate license transferability and provide a
    mechanism by which new entrants and small businesses are afforded
    additional opportunities to become service providers in the 24 GHz
    band,[^163] we will adopt our proposal. Thus, we will permit
    incumbents and new 24 GHz band licensees to partition their service
    areas along any area defined by the parties. We will also allow
    aggregation/disaggregation of any spectrum without restriction on
    the amount of spectrum disaggregated.

49. In the event that a 24 GHz license is partitioned or disaggregated,
    any partitionee or disaggregatee is authorized to hold its license
    for the remainder of the original licensee's (i.e., partitionor or
    disaggregator) license term and a demonstration must be made that
    the applicable construction requirements have been met for the
    partitioned area or disaggregated spectrum at the time of renewal.
    However, we have determined that participants to a partitioning
    agreement should be permitted to negotiate whether one party or both
    will be responsible for compliance with these requirements. In
    addition to being consistent with provisions in other services, we
    conclude that this approach is appropriate because it will "ensure
    that licensees have the flexibility to structure their business
    plans while ensuring that partitioning not be used as a vehicle to
    circumvent the applicable construction requirements."[^164] Thus,
    parties will be given two options to meet the substantial service
    construction requirement. Under the first option the parties to the
    partitioning agreement would certify that they would each separately
    satisfy the substantial service requirement for their portion of the
    service area.[^165] If either party fails to meet the substantial
    service requirement by the end of the license term, then the
    non-performing licensee's authorization would be subject to
    cancellation at the end of the initial license term.[^166] Under the
    second option, the original licensee or partitionor certifies that
    it has met or will meet the substantial service requirement for the
    entire service area during the license term. If the original
    licensee fails to make the required showing, then this licensee's
    authorization will be subject to cancellation, but the partitionee's
    license will not be affected by this cancellation.[^167]

50. We also conclude that parties to a disaggregation agreement should
    be given the flexibility to determine which party will assume
    responsibility for complying with our construction requirements in
    regard to the disaggregated portion of the license. As with
    partitioning agreements, parties must certify whether one licensee
    will fulfill the applicable requirements or whether the parties will
    share responsibility.[^168] In addition, we will permit 24 GHz band
    licensees to enter into combined partitioning and disaggregation
    agreements. As we have stated in the past, we believe that offering
    this option will promote spectral efficiency.[^169] We also believe
    that combined partitioning and disaggregation will speed service to
    unserved or underserved areas, enhance competition, and encourage
    new entrants into the market.

51. We consider partitioning and disaggregation to be a form of license
    assignment that will require prior Commission approval, unless
    pro-forma in nature.[^170] Therefore, a 24 GHz band licensee will be
    required to file a standard application for approval of assignment
    on a FCC Form 603.[^171] We note that if a licensee has negotiated a
    frequency coordination agreement with another licensee, such
    agreement shall remain in effect on all parties regardless of an
    assignment or partitioning and/or disaggregation arrangements unless
    a new agreement is reached. In effect, the frequency coordination
    agreement will convey with the license. Finally, 24 GHz band
    licensees who receive bidding credits at auction and subsequently
    seek to partition or disaggregate their spectrum holding(s) will be
    subject to the unjust enrichment provisions contained in Section
    1.2111(e) of our Rules.[^172]

### Foreign Ownership Restrictions

52. *Background.* Foreign ownership and citizenship requirements for
    24 GHz band licensees are set forth in Sections 310(a) and 310(b) of
    the Communications Act, as modified by the 1996 Act, which restricts
    the issuance of licenses to certain applicants.[^173] Section 310(a)
    prohibits any foreign government or representative from holding a
    station license. Section 310(b) prohibits certain defined foreign
    ownership interests in common carrier licenses. In the *NPRM*, we
    concluded that Section 101.7 of the Commission's Rules,[^174] which
    implements Section 310 of the Act, should be applied to the 24 GHz
    band.[^175] Section 101.7(a) prohibits the granting of any license
    to be held by a foreign government or its representative.[^176]
    Section 101.7(b) prohibits the grant of a common carrier license to
    an applicant who fails any of the four citizenship requirements
    listed therein.[^177]

53. *Discussion*. We received one comment supporting our proposal to
    extend the Part 101 foreign ownership requirements to 24 GHz band
    licensees. This commenter agrees that requiring Part 101 compliance
    is consistent with the application of Section 310 and the World
    Trade Organization (WTO) Basic Telecommunications Agreements.[^178]
    Based on our review of the record in this proceeding and for the
    reasons stated in the *NPRM*, we will apply Section 101.7 of the
    Commissions Rules without modification to the 24 GHz band.

54. As we have done in the case of MDS, satellite service, and LMDS, we
    will require an applicant electing non-common carrier status to also
    submit the same information that common carriers applicants must
    submit in order to address the alien ownership restrictions under
    Section 310(b) of the Act.[^179] Because 24 GHz band licensees are
    permitted to offer both common and non-common carrier services, we
    believe this requirement is necessary in order to enable us to
    ascertain compliance of all 24 GHz band licensees with the alien
    ownership restrictions set forth in Section 101.7 of the
    Commission's Rules. This information can be used whenever the
    licensee changes to common carrier status without imposing an
    additional filing requirement when the licensee makes the
    change.[^180] We note, moreover, that we would not disqualify an
    applicant requesting authorization exclusively to provide non-common
    carrier service from obtaining a 24 GHz band license solely on the
    basis that its citizenship information would disqualify it from
    receiving a common carrier license.

55. Accordingly, common carrier and non-common carrier licensees in the
    24 GHz band will be required to provide the alien ownership
    information requested by FCC Form 601. Moreover, both common
    carriers and non-common carriers must amend their FCC Form 602 to
    reflect any changes in foreign ownership information. We note that,
    in response to the WTO Basic Telecommunications Agreement, we have
    relaxed our policy concerning foreign ownership of common carrier
    licenses under Section 310(b)(4). We now presume that ownership by
    entities that are WTO members serves the public interest. However,
    ownership by entities from countries that are not WTO members
    continues to be subject to the effective competitive opportunities
    test established by the Commission.[^181]

## Technical Rules

56. As discussed above, our general proposal was to apply the technical
    rules in Part 101 to govern the use of the 24 GHz band, including
    the technical parameters, such as channelization, frequency
    tolerance and stability, power and emission limitations, antennas,
    and equipment authorization.[^182] We note, however, that the
    technical parameters currently governing 24 GHz band operations were
    done in the *Reallocation Order* and were derived from those applied
    to DEMS operations at 18 GHz.[^183] Therefore, there was initial
    concern as to whether these parameters were suited specifically for
    the 24 GHz band. We requested comment on our proposed general
    approach for the 24 GHz band.[^184] Specifically, we sought comment
    on whether operations in this band should be limited to digital
    modulation and whether future development of the 24 GHz band will be
    facilitated by adopting technical parameters different from those
    currently provided for in our Part 101 rules.[^185] We also proposed
    the retention of a separate emission mask for the 24 GHz band by
    adding a new subsection, (a)(5), to Section 101.111(a).[^186] In
    addition, we requested comment regarding the licensing and
    coordination of 24 GHz stations. In this connection, we proposed to
    replace the current requirement for licensing of individual nodal
    stations with a coordination requirement. Further, we proposed to
    remove the current 80 km coordination distance, and instead require
    that 24 GHz band licensees coordinate their facilities whenever
    their facilities have line-of-sight into other 24 GHz band
    licensees' facilities or are within the same geographic area.[^187]
    We also proposed that licensees and manufacturers be subject to the
    RF radiation exposure requirements specified in Sections 1.1307(b),
    2.1091 and 2.1093 of the Commission's Rules.

### Emission Mask

57. Many commenters suggest that the proposed emission mask requirement
    in Section 101.111(a)(5) is inappropriate for the 24 GHz band and
    request that we instead apply the emission mask set forth in Section
    101.111(a)(2)(ii) of our Rules.[^188] One commenter notes that the
    proposed mask is too lax with regard to channel roll off and
    requires an unachievable noise floor.[^189] As an alternative,
    commenters suggest that the emission mask in Section
    101.111(a)(2)(ii) will result in an appropriate level of adjacent
    channel interference protection and a consistent mask for all
    frequency bands above 15 GHz, thereby making it easier for
    manufacturers to design equipment.[^190] Teligent requests that we
    grant similar regulatory treatment for 24 GHz band licensees that
    was accorded to 39 GHz licensees regarding the applicability of
    emission limits for aggregated channel blocks.[^191] Teligent
    contends that there is no need to protect against adjacent channel
    interference when adjacent channels are licensed to the same entity,
    and urges us to modify Section 101.109, Note 7 of our Rules to
    include a reference to the 24 GHz band.[^192] Teligent also seeks
    clarification that the proposed emission mask (1) applies only to
    the edge of each channel, and not to subchannels established by
    licensees; (2) can be satisfied by locating the carrier frequencies
    of the subchannel radios sufficiently far from the channel edges so
    that the emission levels of the mask are satisfied; and (3) be
    interpreted such that the value B is the 40 megahertz bandwidth of
    the licensed channel, even in the case where narrower subchannels
    are used.[^193] Teligent also requests that, in the case of
    subchannel use, the mean output power to be used in emission mask
    calculations is the sum of the output power levels of a fully
    populated channel.[^194]

58. Based on the record in this proceeding, we will adopt the emission
    mask set forth in Section 101.111(a)(2)(ii) of the Commission's
    Rules, with some modifications, for the 24 GHz band. We note that
    the maximum value of B in the equation for the emission mask is
    normally taken from the bandwidth table set forth in Section 101.109
    of our Rules which shows a maximum value of 40 MHz. Even though we
    are allowing disaggregation and aggregation of spectrum in addition
    to allowing both sides of the channel pair to be used as transmit,
    the actual value of B can be much larger. However, we will specify
    that the maximum value of B used in the emission mask equation is
    limited to 40 MHz for all cases. Also, the minimum value of B shall
    be 40 MHz regardless of the size of the channel actually used and
    regardless of whether subchannels are being used. We shall also
    modify Section 101.109, Note 7 to include reference to the 24 GHz
    band and its aggregated bandwidths. This will make the roll-off at
    the edges of the band similar no matter how large or small the
    actual bandwidth is.

### Equipment Requirements

59. Both Nortel and Teligent urge the Commission to "grandfather"
    previously deployed equipment. Specifically, Teligent is currently
    operating its transmitters pursuant to a waiver of the DEMS emission
    mask rule in Section 101.111 of the Commission's Rules.[^195] The
    initial waiver was necessary, following the DEMS relocation, because
    the emission mask in Section 101.111 was developed for 18 GHz band
    operations and was not suited for 24 GHz band operations.[^196] When
    the DEMS incumbents first began to relocate from the 18 GHz band, no
    24 GHz band equipment existed. Therefore, the DEMS incumbents were
    forced to modify existing 23 GHz band equipment to utilize the
    24 GHz band. Since we do not wish to adopt a minimum standard for
    this modified equipment, and commenters have not requested it, we
    instead considered the comments requesting that we grandfather this
    equipment. Teligent states that it has entered into long-term
    contracts with its equipment vendors, and thus requests that we
    grandfather its current transmitting equipment for the remainder of
    the useful life of the equipment.[^197] Moreover, Nortel and
    Teligent both request that licensees be given a sufficient
    transition period, wherein licensees would be permitted to continue
    deploying this equipment until new equipment, which satisfies the
    standards adopted in this proceeding, is commercially
    available.[^198] Nortel notes that such a transition period is
    consistent with Commission precedent and will allow licensees to
    "make full use of their equipment, and avoid service disruptions to
    customers."[^199]

60. In the past, we have allowed licensees to continue to use equipment
    that did not comply with newly implemented rules changes either
    indefinitely or for a specified period.[^200] Also, in this
    instance, we do not find that grandfathering the 24 GHz band
    equipment will greatly undermine the technical standards adopted in
    this proceeding. The technical standards for 24 GHz band are
    designed to promote effective means of coordinating stations near
    the boundary regions of adjacent areas, to assist equipment
    manufacturers by providing them with guidelines for the design of
    24 GHz band equipment, and to ensure that licensees utilize the
    spectrum efficiently. Although grandfathering 24 GHz band equipment
    may cause added difficulty to the coordination of existing systems,
    this should only be a problem along the service area boundaries and
    we believe that any risk of harmful interference can be resolved by
    way of coordination among the licensees. Furthermore, we agree with
    Nortel and Teligent that requiring licensees to immediately replace
    existing equipment could potentially disrupt service currently being
    provided to the public. Finally, we believe that any interference
    issues will be short-term in nature, and will be resolved once the
    grandfathered equipment has reached the end of its useful life.
    Thus, we will allow any equipment that is put in place by January 1,
    2001 to be grandfathered indefinitely, thereby allowing 24 GHz band
    operators to continue to utilize their recently deployed
    equipment.[^201] However, any equipment deployed after January 1,
    2001, must comply with the technical standards adopted in this
    proceeding.

61. Additionally, Teligent requests that 24 GHz band equipment be
    subject to our verification procedures, rather than certification.
    Currently, Section 101.139 of the Commission's Rules requires that
    point-to-multipoint transmitters in the 39 GHz band, LMDS and DEMS
    must be a type which has been certified by the Commission, however,
    most other point-to-point microwave transmitters are subject to the
    less onerous verification procedure.[^202] Teligent indicates that
    utilizing the verification procedure promotes the public interest by
    allowing faster implementation of new technology.[^203] We note that
    this matter is being addressed in the *Part 101* proceeding, and
    should be decided in that proceeding.[^204]

### Efficiency Standard

62. Section 101.141 of the Commission's Rules requires that 24 GHz band
    DEMS licensees meet a spectral efficiency standard.[^205] However,
    in this proceeding we have altered the nature of 24 GHz Service to
    allow more flexibility in system design and to license on a
    geographic basis. Moreover, consistent with our actions in other
    proceedings,[^206] we believe it unwise to adopt technical rules
    that will require updating as technology advances. Therefore, we
    eliminate the 24 GHz band from the spectral efficiency standard. We
    believe that this will provide 24 GHz band licensees with the
    necessary maximum flexibility to respond to market forces.

### Antenna Directivity

63. Comsearch requests that we amend the directional antenna standards
    of Section 101.115 of our Rules to allow for use of one foot
    diameter parabolic antennas.[^207] Teligent requests that the user
    station antenna directivity requirement in Section 101.115 be
    eliminated.[^208]

64. Based on our review of the record in this proceeding and the
    proposals presented by Comsearch and Teligent , we conclude that our
    rules regarding antenna directivity should be modified. In this
    regard, we will amend the directional antenna standards of Section
    101.115 of our Rules to allow for use of one foot diameter parabolic
    antennas. We will effectuate this amendment by changing the antenna
    beamwidth value to 2.8 degrees instead of 2.2 and increasing the
    pattern to require a front-to-back ratio of 45 dB for Category B and
    60 dB for Category A instead of 36 dB and 55 dB, respectively**.**
    Although we are not persuaded that the nodal station and user
    station antenna directivity requirement in Section 101.115 should be
    eliminated, we are convinced that it is unnecessary to require
    24 GHz band licensees to comply with these standards in every
    instance. However, we decline to eliminate the requirement entirely,
    because it provides an established technical standard for the
    Commission to apply in the event that licensees are unable to
    resolve a coordination conflict. One such instance where we believe
    that the antenna standards may be needed is within 56 km of the
    U.S./Canadian border where 24 GHz band licensees are required to
    comply with an international coordination agreement.[^209] Another
    example is near the service area boundaries where coordination with
    other licensees takes place. Also, we will require the use of higher
    performance antennas where interference problems can be resolved by
    the use of such antennas. This decision will grant 24 GHz band
    licensees greater flexibility by allowing point-to-point,
    point-to-multipoint, and/or multipoint-to-multipoint service systems
    usage. We note, however, that allowing both the nodal and user
    stations to utilize non-directional antennas may result in more
    complicated and less effective frequency coordination. Licensees are
    expected to resolve such difficulties with sharing agreements.

### Licensing and Coordination

65. As stated above, commenters agree with our proposal to eliminate
    individual licensing for nodal stations and adopt geographic area
    licensing in the 24 GHz band with a frequency coordination
    requirement.[^210] However, we note that most of these commenters
    believe that the coordination requirements we proposed require
    better clarification or delineation. For instance, Teligent comments
    that, while it agrees that an 80 km coordination distance is too
    large, use of a specified coordination distance is an effective
    method of coordination and consistent with operations in other
    frequency bands.[^211] Teligent also suggests that a coordination
    distance be developed by an industry body, such as NSMA, and that,
    in the interim, 40 km would suffice.[^212] Other commenters request
    a more precise definition for the line-of-sight coordination
    requirement or an alternative coordination requirement. These
    commenters recommend that an alternative coordination requirement
    might include one or a possible combination of distance,
    line-of-sight, power flux density (PFD) limit, and radius
    requirements.[^213] Finally, Comsearch requests that we clarify
    whether both nodal and user stations are to be coordinated or only
    nodal stations.[^214] It also requests clarification of any filing
    requirements for station modification and deletion.[^215]

66. Based upon or review of the record in this proceeding, we conclude
    that we should eliminate individual licensing for nodal and user
    stations and adopt a more precise definition for the line of sight
    coordination requirement by requiring coordination of both nodal and
    user stations when they have optical line of sight into other
    licensees' areas or other licensees' facilities within the same
    geographic area. In addition, we note that the U.S. and Canada have
    now agreed on the coordination parameters between the countries in
    the border areas.[^216] The first step to coordination in this
    agreement is for the two parties to form a mutual agreement on the
    use of their systems. If this fails, the agreement specifies PFD
    levels which trigger coordination for stations which are within 56
    km of the border and have an optical line-of-sight into the adjacent
    area. The agreement considers mitigating techniques such as antenna
    discrimination, polarization, frequency offset, shielding, site
    selection and power control to facilitate coordination of systems.
    We are aware that for different areas of the country the rainfall
    varies as well as the terrain and foliage which affect shielding.
    Rather than specify a distance such as 40 km which Teligent
    suggested, we believe the most flexible approach is to recognize the
    variations of each unique area and to allow the relevant licensees
    to mutually resolve their coordination problems with as little input
    from the Commission as possible.

67. The Canadian Agreement specifies that no coordination is required if
    the PFD at the boundary is --114 dBW/m^2^ in any 1 MHz. It also
    specifies that entities can deploy equipment subject to successful
    coordination between affected licensees with PFDs up to --94
    dBW/m^2^ in any 1 MHz. If powers exceed a PFD of to --94 dBW/m^2^ in
    any 1 MHz, the deployment is subject to the consent of the
    licensee(s) in the adjacent service area. Therefore, we will use the
    PFD levels established in the Canadian Agreement as recommended
    guidelines for coordination between U.S. licensees, but not require
    them to be met (other than for Canadian coordination) to allow for
    the licensees in each area to establish values more in line with the
    systems and techniques they deploy. In this connection, we note that
    licensees will have varying requirements based on their specific
    system architecture, the local terrain, and the rainfall
    characteristics of their region. Several commenters suggested that
    the industry, through a group such as NSMA, study the appropriate
    PFD levels and determine a standard for coordination. While we
    endorse this industry study approach in the future, we believe that
    it would be inappropriate at this time to specify, by rule, the PFD
    values at the EA boundary for which coordination is required between
    U.S. licensees. We believe that ultimately the licensees need to
    discuss their systems with each other to optimize the usage in each
    area, and develop sharing agreements, and we will only specify
    recommended PFD guidelines to be followed when a licensee's antenna
    has optical line-of-sight into another area and is within 56 km.

### RF Safety

68. In the *NPRM*, we tentatively concluded that routine environmental
    evaluations for RF exposure should be required in the case of fixed
    operations, including base stations, when the effective radiated
    power (ERP) is greater than 1,000 watts. We received no comments on
    this proposal. Therefore, for the reasons discussed in the *NPRM*,
    we will require licensees and manufacturers to be subject to the RF
    radiation exposure requirements specified in Sections 1.1307 (b) of
    the Commission's Rules.[^217] We will modify this rule accordingly
    to apply to user and nodal stations.

## Competitive Bidding Procedures

### Statutory Requirements

69. *Background.* The Balanced Budget Act of 1997 amended Section 309(j)
    of the Act to require the Commission to award mutually exclusive
    applications for initial licenses or permits using competitive
    bidding procedures, with very limited exceptions.[^218] Based on our
    tentative conclusion that it would serve the public interest to
    implement a geographic area licensing approach, we tentatively
    concluded in the *NPRM* that mutually exclusive applications for
    initial licenses in the 24 GHz band must be resolved through
    competitive bidding.[^219] In the *NPRM* we also stated that in
    determining whether to resolve mutually exclusive applications for
    licenses in the 24 GHz band through competitive bidding, we intend
    to adhere to any conclusions we reach in the Balanced Budget Act
    proceeding regarding the scope of our auction authority.[^220]

70. *Discussion*. In light of our decision to adopt a geographic area
    licensing approach based on EAs for the 24 GHz band,[^221] under
    which mutually exclusive applications may be filed, we conclude that
    mutually exclusive initial applications for the 24 GHz band must be
    resolved through competitive bidding. [^222] We note that we have
    not yet reached any conclusions regarding the issues raised in the
    Balanced Budget Act proceeding related to Section 309(j)(6)(E).
    However, we find no basis in the record for considering an approach
    to licensing the 24 GHz band other than geographic area licensing.
    While certain commenters have suggested the use of geographic areas
    other than EAs, none has argued that we should use a licensing
    scheme that would preclude the filing of mutually exclusive
    applications. For services in which we have found that a licensing
    approach based on geographic area licensing serves the public
    interest, we have assigned licenses through competitive bidding.
    This approach is consistent with other Commission decisions made
    since the enactment of the Balanced Budget Act.[^223]

### Incorporation by Reference of Part 1 Standardized Auction Rules

71. *Background*. In the *NPRM* we proposed to conduct the auction for
    initial licenses in the 24 GHz 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 Commission auctions.
    Specifically, we proposed to employ the Part 1 rules governing
    designated entities, application issues, payment issues, competitive
    bidding design, procedure and timing issues, and collusion.[^224]

72. *Discussion.* We adopt our proposal to conduct the auction for
    initial licenses in the 24 GHz band in conformity with the general
    competitive bidding rules set forth in Part 1, Subpart Q, of the
    Commission's Rules, unless otherwise provided herein.[^225] This
    decision is consistent with our ongoing effort to streamline our
    general competitive bidding rules for all auctionable services,
    increase the efficiency of the competitive bidding process, and
    provide more guidance to auction participants. Moreover, all
    commenters who addressed the issue agree that use of the Part 1
    competitive bidding rules to award licenses for the 24 GHz band is
    consistent with statutory requirements and will be beneficial in
    that it will lead to the rapid deployment of service in the 24 GHz
    band.[^226] Our application of the Part 1 rules to the 24 GHz band
    will include any amendments that may be adopted in the ongoing Part
    1 proceeding.[^227]

73. Teligent requests that we auction licenses in the 24 GHz band using
    the simultaneous multiple round auction design and not implement
    real time bidding for this auction. Teligent is concerned that the
    implementation of real time bidding may delay the auction due to the
    necessity for development and testing of new software.[^228]
    Consistent with the Balanced Budget Act[^229] and current practice,
    the Bureau will seek comment on matters such as auction design in a
    public notice prior to the auction.

74. Teligent also recommends that the Commission implement the shortest
    period allowable for the filing of petitions to deny against
    long-form applications following the auction.[^230] Section
    1.2108(b) provides that the Commission shall not grant a license
    less than seven days after public notice that long-form applications
    have been accepted for filing and that, in all cases, the period for
    filing petitions to deny such applications shall be no shorter than
    five days.[^231]

75. We will adopt a ten-day period for filing petitions to deny against
    long-form applications. Although we have the authority to reduce the
    filing period to five days, we find that a ten-day filing period
    serves the public interest by providing parties, including small
    businesses, more flexibility in challenging license awards than a
    five-day period. Nonetheless, we delegate to the Bureau the
    discretion to implement a five-day period in exigent circumstances.

### Provisions for Designated Entities

#### Small Business Definitions and Bidding Credits

76. *Background.* In the *NPRM*, we observed that the capital costs of
    operational facilities in the 24 GHz band are likely to vary widely.
    Accordingly, we sought to adopt small business size standards that
    would afford licensees substantial flexibility. We proposed to adopt
    the definitions the Commission adopted for broadband PCS for "small"
    and "very small" businesses, which the Commission also had adopted
    for 2.3 GHz and 39 GHz applicants.[^232] Thus, we proposed to define
    small businesses as entities with average annual gross revenues not
    to exceed \$40 million for the preceding three years and very small
    businesses as entities with average annual gross revenues not to
    exceed \$15 million for the preceding three years. We further
    proposed to provide a 15 percent bidding credit to small businesses
    and a 25 percent bidding credit to very small businesses.[^233] In
    addition, we sought comment on whether specific provisions should be
    adopted with respect to rural telephone companies.

77. *Discussion.* We will modify our proposal and adopt three small
    business definitions. Two of the commenters, PCIA and RTG, state
    that, in light of our proposal to use EAs, the proposed two-tiered
    system is not sufficient to allow small businesses the opportunity
    to participate at auction.[^234] Because the capital costs of
    operational facilities in the 24 GHz band are likely to vary widely,
    we believe that the use of three small business definitions will be
    useful in promoting opportunities for a wide variety of applicants
    in the 24 GHz band. Accordingly, we will define a very small
    business as an entity with average annual gross revenues not to
    exceed \$3 million for the preceding three years, a small business
    as an entity with average annual gross revenues not to exceed \$15
    million for the preceding three years, and an entrepreneur as an
    entity with average annual gross revenues not to exceed \$40 million
    for the preceding three years.

78. Some of the commenters are concerned that our proposed level of
    bidding credits is too low.[^235] PCIA and RTG request that we
    consider the three levels of bidding credits that were provided to
    participants in the LMDS auction.[^236] Teligent supports bidding
    credits mirroring those offered for 39 GHz.[^237] While we agree
    with PCIA and RTG that we should adopt three-tiered bidding credits,
    we decline to adopt the higher level of credits provided to
    participants in the LMDS auction. We will adopt the bidding credits
    provided in the Part 1 general competitive bidding rules. Thus, very
    small businesses will receive a bidding credit of 35 percent, small
    businesses will receive a bidding credit of 25 percent, and
    entrepreneurs will receive a bidding credit of 15 percent.[^238]

79. In the *Part 1 Third Report and Order*, the Commission established a
    standard schedule of bidding credits for small businesses.[^239]
    While these bidding credits are higher than some previously adopted
    for specific services, we concluded in the *Part 1 Third Report and
    Order* that, based on our auction experience and the fact that we
    have decided to suspend the use of installment payments, the
    schedule adopted would provide adequate opportunities for small
    businesses to participate in spectrum auctions.[^240] We find that
    it is not necessary to depart from the Part 1 schedule here by
    providing the same levels of bidding credits that were offered for
    LMDS. The higher LMDS bidding credits were established prior to our
    adoption of the Part 1 bidding credits, at a time when we were
    beginning to reexamine our installment payments plans and were
    concerned about compensating for the decision not to offer
    installment payments to LMDS licensees.[^241] Based on our
    subsequent experience, we believe that the levels of bidding credits
    in the Part 1 schedule are sufficient to promote the participation
    of small businesses in the 24 GHz band.

80. Teligent stresses that bidding credits should be uniform among
    competing services and that the credits offered for the 39 GHz band
    should be adopted for the 24 GHz band because of similarities
    between the bands and the need to eliminate any regulatory
    disparities that may lead to marketplace distortions.[^242] We are
    not persuaded by Teligent's argument. Our proposal of bidding
    credits in the 39 GHz band predates the effective date of the Part 1
    amendments. As we noted above, our general competitive bidding rules
    increase the efficiency of the competitive bidding process and
    provide more guidance to auction participants. We also note that
    there are many variables affecting auction behavior of bidders.
    While differing credit levels result in differing trade-offs of the
    interests of designated entities and non-designated entities within
    each auction, it is not clear that differing credit levels
    disadvantage winning bidders in one auction as a whole relative to
    the winning bidders of another auction. Success of a company after
    licensing will not depend on the bidding credit initially afforded,
    but upon the ability to keep up with ever changing marketplace
    conditions and needs. Thus, we are not persuaded at this time that
    it would be in the public interest to deviate from the general
    competitive bidding rules set forth in Part 1, subpart Q, of the
    Commission\'s rules.

81. RTG suggests that the Commission should provide bidding credits to
    rural telephone companies irrespective of such companies' gross
    revenues.[^243] Teligent, however, opposes RTG's suggestion, arguing
    that RTG has presented no sound basis for additional bidding credits
    for rural telephone companies and that the application of such
    bidding credits would distort the free and efficient operation of
    the market.[^244] We are not persuaded by RTG's suggestion that the
    Commission should provide special bidding credits for rural
    telephone companies in order to meet its obligation under
    Section 309(j) to ensure that rural telephone companies have the
    opportunity to participate in spectrum-based services. The record in
    this proceeding does not provide sufficient evidence that large
    rural telephone companies encounter barriers to capital formation
    comparable to those faced by other designated entities. Moreover,
    the vast majority of rural telephone companies that have
    participated in the Commission's auctions to date have identified
    themselves as small businesses and have qualified for bidding
    credits on that basis. [^245] Thus, we conclude that small business
    bidding credits are sufficient to ensure that rural telephone
    companies have opportunities to participate in the 24 GHz auction.
    However, if in future proceedings a sufficient record can be
    adduced, we may adopt incentives including bidding credits to
    promote the deployment of wireless telecommunications services to
    areas with little or no access to telecommunication services. [^246]

82. Further, we remain committed to meeting the statutory objectives of
    promoting economic opportunity and competition, avoiding excessive
    concentration of licenses, and ensuring access to new and innovative
    technologies 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. In
    addition to helping rural telephone companies, we believe the
    bidding credits we adopt here for small businesses will assist in
    meeting these objectives because many minority- and women-owned
    entities are small businesses and will therefore qualify for these
    special provisions.[^247] We note too that the Commission's Office
    of Communications Business Opportunities has initiated several
    studies to gather information regarding barriers to entry faced by
    minority- and women-owned firms that wish to participate, or have
    participated, in Commission auctions. In addition, we will continue
    to track the rate of participation in our auctions by minority- and
    women-owned firms and evaluate this information with other data
    gathered to determine whether provisions to promote participation by
    minorities and women can satisfy judicial scrutiny.[^248] If a
    sufficient record can be established, it may be appropriate to
    consider race- and gender-based auction provisions at that time.

#### Attribution of Gross Revenues of Investors and Affiliates

83. *Background.* In the *NPRM,* in the context of proposing the use of
    the Part 1 general competitive bidding rules, we noted that we have
    sought comment on attribution rules in the *Second Further Notice of
    Proposed Rule Making* in the Part 1 proceeding. [^249]

84. *Discussion.* We will adopt attribution rules for the 24 GHz band
    that are consistent with the Commission's proposal in the *Part 1*
    *Second Further Notice of Proposed Rule Making,* wherein we proposed
    a \"controlling interest\" standard as the general attribution rule
    for all future auctions.[^250] Under this standard, we will
    attribute to the applicant the gross revenues of its controlling
    interests and their affiliates in assessing whether the applicant is
    qualified to take advantage of our small business provisions.

85. A \"controlling interest\" includes individuals or entities, or
    groups of individuals or entities, that have control of the
    applicant under the principles of either *de jure* or *de facto*
    control. *De jure* control is typically evidenced by the holding of
    more than 50 percent of the voting stock of a corporation or, in the
    case of a partnership, general partnership interests. *De facto*
    control is determined on a case-by-case basis; our analysis includes
    the criteria set forth in *Ellis Thompson*.[^251]

86. The rule we adopt here provides specific guidance on the calculation
    of various types of ownership interests. For purposes of calculating
    equity held in an applicant, the definition provides for full
    dilution of certain stock interests, warrants and convertible
    debentures. In addition, the definition provides for attribution of
    partnership and other ownership interests, including stock interests
    held in trust, non-voting stock and indirect ownership through
    intervening corporations. When an applicant cannot identify
    controlling interests under the definition, the revenues of all
    interest holders in the applicant and their affiliates will be
    attributed.[^252] For example, if a company is owned by four
    entities, each of which has 25 percent voting equity, and no
    shareholders\' agreement or voting trust gives any one of them
    control of the company, the revenues of all four entities must be
    attributed to the applicant. Treating such a corporation in this way
    is similar to our treatment of a general partnership---all general
    partners are considered to have a controlling interest.

87. Our intent is to provide flexibility that will enable legitimate
    small businesses to attract passive financing in a highly
    competitive and evolving telecommunications marketplace. At the same
    time, we believe that this controlling interest threshold will
    function effectively to ensure that only those entities truly
    meriting small business status are eligible for small business
    provisions. In particular, we believe that the *de jure* and *de
    facto* concepts of control used to determine controlling interests
    in an applicant and the application of our affiliation rules will
    effectively prevent larger firms from illegitimately seeking status
    as a small business.

88. Wireless One requests that we clarify that for the purpose of
    determining eligibility for bidding credits, personal income is not
    to be included in calculating the aggregate gross revenues of the
    applicant, its affiliates and controlling principals.[^253] As
    Wireless One points out, we have previously stated that the personal
    income of an individual is part of personal net worth and thus not
    attributable.[^254] However, we note that operation of our
    definition of \"affiliate\" will cause all affiliates of a
    controlling interest to be affiliates of the applicant. Thus,
    although we do not attribute the personal income of an individual
    with a controlling interest in an applicant, if this individual has
    a controlling interest in another entity our affiliation rules would
    make attributable to the applicant the gross revenues of that
    entity.[^255]

# PROCEDURAL MATTERS

89. *[Paperwork Reduction Analysis]{.underline}*. This *Report and
    Order* contains either a new or modified information collection. As
    part of its continuing effort to reduce paperwork burdens, the
    Commission invites the general public and the Office of Management
    and Budget (OMB) to take this opportunity to comment on revision to
    the information collections contained in the *Report and Order.* As
    required by the Paperwork Reduction Act of 1995, Pub. L. No. 104-13
    public comments on the information collections contained in the
    *Report and Order* are due 30 days after publication of the summary
    of the *Report and Order* in the Federal Register. Comments on the
    modified and proposed information collections contained in the
    *Report and Order* should address: (a) whether the collection of
    information is necessary for the proper performance of the functions
    of the Commission, including whether the information shall have
    practical utility; (b) the accuracy of the Commission\'s burden
    estimates; (c) ways to enhance the quality, utility, and clarity of
    the information collected; and (d) ways to minimize the burden of
    the collection of information on the respondents, including the use
    of automated collection techniques or other forms of information
    technology. These comments should be submitted to Judy Boley,
    Federal Communications Commission, Room 1‑C804, 445 12th Street,
    S.W., Washington, D.C. 20554, or via the Internet to jboley@fcc.gov.
    Furthermore, a copy of any such comments should be submitted to
    Virginia Huth, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W.,
    Washington, D.C. 20503.

**Regulatory Flexibility Act**

90. As required by Section 604 of the Regulatory Flexibility Act
    (\"RFA\"), 5 U.S.C. § 604 (1981), we have prepared a Final
    Regulatory Flexibility Analysis (\"FRFA\") of the expected impact on
    small entities by the policies and rules adopted in this *Report and
    Order*. The FRFA is contained in Appendix B.

**Further Information**

91. For further information regarding this *Report and Order*, contact
    Catherine Fox, Michael Pollak, Shellie Blakeney or Paul Moon,
    Wireless Telecommunications Bureau, Public Safety and Private
    Wireless Division, Policy and Rules Branch, at (202) 418-0680
    (voice), (202) 418-7233 (TTY); or Nese Guendelsberger of the
    Auctions and Industry Analysis Division, Wireless Telecommunications
    Bureau at (202) 418-0660 (voice), (202) 418-7233 (TTY).

# ORDERING CLAUSES

92. Accordingly, IT IS ORDERED that the actions of the Commission herein
    ARE TAKEN pursuant to Sections 4(i), 257, 303, 309(j) of the
    Communications Act of 1934, as amended, 47 U.S.C. §§  154(i), 257,
    303, 309(j).

93. Accordingly, IT IS ORDERED that Parts 1, 2, 87 and 101 of the
    Commission's Rules ARE AMENDED as set forth in Appendix C, effective
    sixty days after their publication in the Federal Register,
    following OMB approval. If OMB approval is not issued within sixty
    days after publication of a summary of this *Report and Order* in
    the Federal Register, a notice shall be published in the Federal
    Register specifying a revised effective date.

94. IT IS FURTHER ORDERED pursuant to Section 4(i) of the Communications
    Act of 1934, as amended, 47 U.S.C. § 154(i), that the Commission's
    Consumer Information Bureau, Reference Information Center, SHALL
    SEND a copy of this *Report and Order*, including the Final
    Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy
    of the Small Business Administration.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**APPENDIX A**

**LIST OF PLEADINGS**

**The following documents were filed in response to the *Notice of
Proposed Rulemaking*:**

> Amendments to Parts 1, 2 and 101 of the Commission's Rules to License
> Fixed Services at 24 GHz, *Notice of Proposed Rulemaking*, WT Docket
> No. 99-327, 14 FCC Rcd. 19263.

**[LIST OF PARTIES RESPONDING TO NOTICE OF PROPOSED
RULEMAKING]{.underline}**

**Comments**

Comsearch

DIRECTV Enterprises, Inc. (DIRECTV)

Ensemble Communications, Inc. (Ensemble)

Fixed Wireless Communications Coalition (FWCC)

Nortel Networks, Inc. (Nortel)

Office of Advocacy, U.S. Small Business Administration (SBA)

Personal Communications Industry Association (PCIA)

Rural Telecommunications Group (RTG)

Teligent, Inc. (Teligent)

Wireless One Holding Company (Wireless One)

**Reply Comments**

Teligent, Inc. (Teligent)

National Telephone Cooperative Association (NTCA)

**APPENDIX B**

**FINAL REGULATORY FLEXIBILITY ANALYSIS**

As required by the Regulatory Flexibility Act (\"RFA\"),[^256] an
Initial Regulatory Flexibility Analysis (\"IRFA\") was incorporated in
Appendix A of the *Notice of Proposed Rulemaking (NPRM)* issued in this
proceeding.[^257] The Commission sought written public comment on the
proposals in the *NPRM*, including comment on the IRFA. No comments were
filed in direct response to the IRFA. This Final Regulatory Flexibility
Analysis (\"FRFA\") conforms to the RFA.[^258]

**I. Need for, and Objectives of, the Report and Order**

1.  In the *Report and Order* we adopt rules for licensing and operation
    of the 24.25-24.45 GHz and 25.05-25.25 GHz bands. In addition, the
    Commission adopts competitive bidding rules to select among new
    licensees for this band. We amend Parts 1, 2, 87 and 101 of the
    Commission's Rules and expect such amendments to promote the
    effective use of the 24 GHz band and to accommodate deployment of
    point-to-point, point-to-multipoint, and multipoint-to-multipoint
    fixed wireless technology at 24 GHz. The rule changes we adopt today
    establish a flexible regulatory and licensing framework, which will
    enhance opportunities to provide a broadband wireless service,
    foster effective competition, and further our efforts for consistent
    rule application regarding broadband wireless services.

**II. Summary of Significant Issues Raised by the Public Comments in
Response to the IRFA**

95. No comments were filed in direct response to the IRFA. However, as
    described in Section V, we have taken into account all comments
    submitted generally by small entities.

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

96. 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, if adopted.[^259] The RFA defines
    the term \"small entity\" as having the same meaning as the terms
    \"small business,\" \"small organization,\" and \"small governmental
    jurisdiction.\"[^260] In addition, the term \"small business\" has
    the same meaning as the term \"small business concern\" under the
    Small Business Act.[^261] 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 Small Business Administration (SBA).[^262]
    A small organization is generally \"any not-for-profit enterprise
    which is independently owned and operated and is not dominant in its
    field.\"[^263] Nationwide, as of 1992, there were approximately
    275,801 small organizations.[^264] \"Small governmental
    jurisdiction\" generally means \"governments of cities, counties,
    towns, townships, villages, school districts, or special districts,
    with a population of less than 50,000.\"[^265] As of 1992, there
    were approximately 85,006 such jurisdictions in the United
    States.[^266] This number includes 38,978 counties, cities, and
    towns; of these, 37,566, or ninety-six percent, have populations of
    fewer than 50,000.[^267] The Census Bureau estimates that this ratio
    is approximately accurate for all governmental entities. Thus, of
    the 85,006 governmental entities, we estimate that 81,600
    (ninety-one percent) are small entities.

97. *Incumbent Licensees*. The rules we are adopting today will affect
    incumbent licensees who were relocated to the 24 GHz band from the
    18 GHz band, and applicants who wish to provide services in the
    24 GHz band. The Commission has not developed a definition of small
    entities applicable to licensees in the 24 GHz band. Therefore, the
    applicable definition of small entity is the definition under the
    SBA rules for the radiotelephone industry that provides that a small
    entity is a radiotelephone company employing fewer than 1,500
    persons.[^268] The 1992 Census of Transportation, Communications,
    and Utilities, conducted by the Bureau of the Census, which is the
    most recent information available, shows that only 12 radiotelephone
    firms out of a total of 1,178 such firms that operated during 1992
    had 1,000 or more employees.[^269] This information notwithstanding,
    we believe that there are only two licensees in the 24 GHz band that
    were relocated from the 18 GHz band, Teligent and TRW, Inc. It is
    our understanding that Teligent and its related companies have less
    than 1,500 employees, though this may change in the future. However,
    TRW is not a small entity. Therefore, only one incumbent licensee in
    the 24 GHz band is a small business entity.[^270]

98. *New Licensees*. The proposals also affect potential new licensees
    on the 24 GHz band. Pursuant to 47 C.F.R. § 24.720(b), the
    Commission has defined "small business" for Blocks C and F broadband
    PCS licensees as firms that had average gross revenues of less than
    \$40 million in the three previous calendar years. This regulation
    defining "small business" in the context of broadband PCS auctions
    has been approved by the SBA.[^271] With respect to new applicants
    in the 24 GHz band, we shall use this definition of "small business"
    and apply it to the 24 GHz band under the name "entrepreneur." With
    regard to "small business," we shall adopt the definition of "very
    small business" used for 39 GHz licenses and PCS C and F block
    licenses: businesses with average annual gross revenues for the
    three preceding years not in excess of \$15 million. Finally, "very
    small business" in the 24 GHz band shall be defined as an entity
    with average gross revenues not to exceed \$3 million for the
    preceding three years.

99. The Commission will not know how many licensees will be small or
    very small businesses until the auction, if required, is held. Even
    after that, the Commission will not know how many licensees will
    partition their license areas or disaggregate their spectrum blocks,
    if partitioning and disaggregation are allowed.

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

100. This *Report and Order* adopts rules that will entail reporting,
     recordkeeping, and/or third-party consultation. However, the
     Commission believes that these requirements are the minimum needed.
     By this *Report and Order*, we require licensees to notify the
     Commission within 30 days of a change in regulatory status between
     common carrier and/or non-common carrier. We also require licensees
     to substantiate their renewal expectancies with information
     demonstrating substantial service. In addition, because we consider
     partitioning and disaggregation to be a form of license assignment,
     we require such action to receive Commission approval via
     application for assignment on FCC Form 603. With regard to alien
     ownership, we require licensees to amend their FCC Form 602 to
     reflect any changes in foreign ownership information, together with
     the initial information required by FCC Form 601.

**V. Steps Taken To Minimize Significant Economic Impact on Small
Entities, and Significant Alternatives Considered**

101. 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 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.[^272]

102. *Geographic Area Licensing*. In the *NPRM*, we noted that the
     Commission originally used Standard Metropolitan Statistical Areas
     (SMSA) to license the DEMS service, which failed to include rural
     communities because SMSAs are too large. We then proposed to reduce
     the licensing service area in order to: (1) include rural
     communities; (2) maximize the opportunities for the dissemination
     of 24 GHz licenses among a wide array of entities; and (3)
     facilitate efficient use of this spectrum. While adopting Economic
     Areas (EAs) in this *Report and Order*, we cite to our experience
     with the 39 GHz auction in which the majority of small, very small
     and rural qualified bidders won licenses.[^273] We also note that
     our decision to offer flexible partitioning and
     disaggregation/aggregation will speed service to rural areas and
     encourage the participation of smaller entities at auction.[^274]
     In addition, we adopt flexible bidding credits for smaller
     entities, while noting that small entities may further form bidding
     consortiums to prevail at auction.[^275] In sum, we believe that
     adopting EAs for licensing this service will serve the public
     interest best, in light of the overall changes we are making here
     to specifically benefit small entities.

103. *Changes in Regulatory Status.* In this *Report and Order*, we
     authorize 24 GHz licensees to provide common carrier service,
     non-common carrier service, or both under a single license. We also
     adopt our proposal in the *NPRM* to require licensees to notify us
     within 30 days of such a change in regulatory status. However, we
     minimize the reporting burden by declining to require licensees to
     obtain Commission authorization prior to a change in regulatory
     status. In addition, we decline to require that the licensees
     detail the specific services they seek to provide. This is
     consistent with our streamlined application process, and it serves
     to simplify the reporting requirements for small entities.[^276]

104. *Renewal Expectancy*. In this *Report and Order*, we adopt a
     ten-year license term in conjunction with a renewal expectancy
     based on substantial service. In order to demonstrate substantial
     service, licensees must provide the Commission with a description
     of geographic coverage and population served or links installed,
     and a description of how the service complies with the substantial
     service requirement. In addition, licensees must submit copies of
     any violations or proceedings that relate to their renewal
     expectancy. While taking into account this burden on small
     entities, we note that such recordkeeping ensures that the 24 GHz
     band is not "warehoused" or abused to the preclusion of small
     business opportunities. In this context, we also note that we
     declined here to adopt a license term in excess of ten years, in
     order to afford more opportunities for entities, including small
     businesses, to capture licenses that fail to meet substantial
     service.

105. *Aggregation, Disaggregation and Partitioning*. In order to
     overcome entry barriers for smaller entities, we adopt here
     flexible partitioning and disaggregation rules. Parties to
     partitioning and disaggregation agreements may negotiate whether
     one party or both will be responsible for demonstrating fulfillment
     of pertaining construction requirements. Parties may also combine
     partitioning and disaggregation agreements. Any such agreements are
     treated, however, as a form of license assignment and therefore
     require Commission approval via filing FCC Form 603. Licensees who
     received bidding credits at auction and who subsequently partition
     or disaggregate are also subject to the unjust enrichment provision
     contained in our Rules.[^277] We believe that these recordkeeping
     and unjust enrichment restrictions are the minimum needed, when
     weighed against the significant benefits to small entities that
     result from the flexible approach we are adopting here.

106. *Foreign Ownership Restrictions*. In order to supervise effectively
     the compliance of 24 GHz licensees with regard to our alien
     ownership restrictions,[^278] we require both common carrier and
     non-common carrier licensees in the 24 GHz band to provide the
     alien ownership information requested in FCC Form 601, as well as
     amendments in FCC Form 602 to reflect any changes in foreign
     ownership information. This enforcement is a mutual benefit to all
     licensees and a minimal reporting burden.

107. *Competitive Bidding Procedures.* In the *Report and Order*, we
     adopt a ten-day period for filing petitions to deny long-form
     applications. We decline to adopt a five-day period in order to
     give small businesses more flexibility in challenging license
     awards. We also adopt a third level of small business bidding
     credits in addition to those proposed in the *NPRM*, in respect of
     the fact that the capital costs of operating facilities in the 24
     GHz band will vary widely.[^279] Finally, we adopt attribution
     rules based on a "controlling interest" standard to determine
     eligibility for our small business provisions. We believe these
     rules, along with our affiliation rules, will prevent larger firms
     from illegitimately seeking status as a small business. All of
     these decisions regarding competitive bidding procedures will work
     to the benefit of small entities.

**Report to Congress:** The Commission will send a copy of this *Report
and Order*, including this FRFA, in a report to be sent to Congress
pursuant to SBREFA, 5 U.S.C. § 801(a)(1)(A). In addition, the Commission
will send a copy of the *Report and Order,* including this FRFA, to the
Chief Counsel for Advocacy of the Small Business Administration. A copy
of the *Report and Order* and this FRFA (or summaries thereof) will also
be published in the Federal Register. *See* 5 U.S.C. § 604(b).

**APPENDIX C**

**FINAL RULES FOR REPORT AND ORDER**

Parts 1, 2, 87, and 101 of Title 47 of the Code of Federal Regulations
are amended as follows:

**PART 1 --- PRACTICE AND PROCEDURE**

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

AUTHORITY: 47 U.S.C. sections 151, 154, 303, and 309(j) unless otherwise
noted.

2\. The entry in the Table in Section 1.1307(b)(1) for Local Multipoint
Distribution Service is amended to add "24 GHz Service" after every
occurrence of LMDS, to read as follows:

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

\* \* \* \* \*

\(b\) \* \* \*

\(1\) \* \* \*

TABLE 1 --- TRANSMITTERS, FACILITIES AND OPERATIONS SUBJECT TO ROUTINE
ENVIRONMENTAL EVALUATION

+-----------------------------------+-----------------------------------+
| Service (title 47 CFR rule part)  | Evaluation required if:           |
+-----------------------------------+-----------------------------------+
| \* \* \*                          | \* \* \*                          |
+-----------------------------------+-----------------------------------+
| Local Multipoint Distribution     | *Non-building-mounted antennas:*  |
| Service (subpart L of part 101)   | height above ground level to      |
| and 24 GHz (subpart G of part     | lowest point of antenna \< 10 m   |
| 101).                             | *and* power \> 1640 W EIRP        |
|                                   |                                   |
|                                   | *Building-mounted antennas:*      |
|                                   | power \> 1640 W EIRP              |
|                                   |                                   |
|                                   | LMDS and 24 GHz Service licensees |
|                                   | are required to attach a label to |
|                                   | subscriber transceiver antennas   |
|                                   | that:                             |
|                                   |                                   |
|                                   | \(1\) provides adequate notice    |
|                                   | regarding potential               |
|                                   | radiofrequency safety hazards,    |
|                                   | e.g., information regarding the   |
|                                   | safe minimum separation distance  |
|                                   | required between users and        |
|                                   | transceiver antennas; and         |
|                                   |                                   |
|                                   | \(2\) references the applicable   |
|                                   | FCC-adopted limits for            |
|                                   | radio-frequency exposure          |
|                                   | specified in § 1.1310 of this     |
|                                   | chapter                           |
+-----------------------------------+-----------------------------------+

\* \* \* \* \*

**PART 2 --- FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL
RULES AND REGULATIONS**

3\. The authority citation for Part 2 continues to read as follows:

AUTHORITY: 47 U.S.C. 154, 302, 303, 307, 336, and 337, unless otherwise
noted.

4\. Section 2.106, the Table of Frequency Allocations, is amended by
revising pages 71 and 72 of the Table.

The revisions read as follows:

**§ 2.106 Table of Frequency Allocations.**

\* \* \* \* \*

+-----------+-----------+-----------+-----------+-----------+---------+
| 22.5-27.5 |           |           |           |           | Page 71 |
| GHz (SHF) |           |           |           |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| Inte      |           |           | United    |           | FCC     |
| rnational |           |           | States    |           | Rule    |
| Table     |           |           | Table     |           | Part(s) |
+-----------+-----------+-----------+-----------+-----------+---------+
| Region 1  | Region 2  | Region 3  | Federal   | No        |         |
|           |           |           | G         | n-Federal |         |
|           |           |           | overnment | G         |         |
|           |           |           |           | overnment |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 2         |           |           | 2         |           |         |
| 2.5-22.55 |           |           | 2.5-22.55 |           |         |
|           |           |           |           |           |         |
| FIXED     |           |           | FIXED     |           |         |
|           |           |           |           |           |         |
| MOBILE    |           |           | MOBILE    |           |         |
|           |           |           |           |           |         |
|           |           |           | US211     |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 22        |           |           | 22        |           | Sa      |
| .55-23.55 |           |           | .55-23.55 |           | tellite |
|           |           |           |           |           |         |
| FIXED     |           |           | FIXED     |           | Communi |
|           |           |           |           |           | cations |
| INTER-    |           |           | INTER-    |           | (25)    |
| SATELLITE |           |           | SATELLITE |           |         |
|           |           |           |           |           | Fixed   |
| MOBILE    |           |           | MOBILE    |           | Mi      |
|           |           |           |           |           | crowave |
| S5.149    |           |           | S5.149    |           | (101)   |
|           |           |           | US278     |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 2         |           |           | 2         |           | Fixed   |
| 3.55-23.6 |           |           | 3.55-23.6 |           | Mi      |
|           |           |           |           |           | crowave |
| FIXED     |           |           | FIXED     |           | (101)   |
|           |           |           |           |           |         |
| MOBILE    |           |           | MOBILE    |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 23.6-24   |           |           | 23.6-24   |           |         |
|           |           |           |           |           |         |
| EARTH     |           |           | EARTH     |           |         |
| EXP       |           |           | EXP       |           |         |
| LORATION- |           |           | LORATION- |           |         |
| SATELLITE |           |           | SATELLITE |           |         |
| (passive) |           |           | (passive) |           |         |
|           |           |           |           |           |         |
| RADIO     |           |           | RADIO     |           |         |
| ASTRONOMY |           |           | ASTRONOMY |           |         |
|           |           |           | US74      |           |         |
| SPACE     |           |           |           |           |         |
| RESEARCH  |           |           | SPACE     |           |         |
| (passive) |           |           | RESEARCH  |           |         |
|           |           |           | (passive) |           |         |
| S5.340    |           |           |           |           |         |
|           |           |           | US246     |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 24-24.05  |           |           | 24-24.05  | 24-24.05  | ISM     |
|           |           |           |           |           | Eq      |
| AMATEUR   |           |           | S5.150    | AMATEUR   | uipment |
|           |           |           | US211     |           | (18)    |
| AMATEUR-  |           |           |           | AMATEUR-  |         |
| SATELLITE |           |           |           | SATELLITE | Amateur |
|           |           |           |           |           | (97)    |
| S5.150    |           |           |           | S5.150    |         |
|           |           |           |           | US211     |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 24        |           |           | 24        | 24        | ISM     |
| .05-24.25 |           |           | .05-24.25 | .05-24.25 | Eq      |
|           |           |           |           |           | uipment |
| RADI      |           |           | RADI      | Radi      | (18)    |
| OLOCATION |           |           | OLOCATION | olocation |         |
|           |           |           | US110     | US110     | Private |
| Amateur   |           |           |           |           | Land    |
|           |           |           | G59       | Amateur   | Mobile  |
| Earth     |           |           |           |           | (90)    |
| exp       |           |           | Earth     | Earth     |         |
| loration- |           |           | exp       | exp       | Amateur |
| satellite |           |           | loration- | loration- | (97)    |
| (active)  |           |           | satellite | satellite |         |
|           |           |           |           |           |         |
| S5.150    |           |           | (active)  | (active)  |         |
|           |           |           |           |           |         |
|           |           |           | S5.150    | S5.150    |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 24        | 24        | 24        | 24        | 24        | Fixed   |
| .25-24.45 | .25-24.45 | .25-24.45 | .25-24.45 | .25-24.45 | Mi      |
|           |           |           |           |           | crowave |
| FIXED     | RADION    | RADION    |           | FIXED     | (101)   |
|           | AVIGATION | AVIGATION |           |           |         |
|           |           |           |           |           |         |
|           |           | FIXED     |           |           |         |
|           |           |           |           |           |         |
|           |           | MOBILE    |           |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+

+-----------+-----------+-----------+-----------+-----------+---------+
| 24        | 24        | 24        | 24        |           | Sa      |
| .45-24.75 | .45-24.65 | .45-24.65 | .45-24.65 |           | tellite |
|           |           |           |           |           |         |
| FIXED     | INTER-    | FIXED     | INTER-    |           | Communi |
|           | SATELLITE |           | SATELLITE |           | cations |
| INTER-    |           | INTER-    |           |           | (25)    |
| SATELLITE | RADION    | SATELLITE | RADION    |           |         |
|           | AVIGATION |           | AVIGATION |           |         |
|           |           | MOBILE    |           |           |         |
|           | S5.533    |           | S5.533    |           |         |
|           |           | RADION    |           |           |         |
|           |           | AVIGATION |           |           |         |
|           |           |           |           |           |         |
|           |           | S5.533    |           |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
|           | 24        | 24        | 24        |           |         |
|           | .65-24.75 | .65-24.75 | .65-24.75 |           |         |
|           |           |           |           |           |         |
|           | INTER-    | FIXED     | INTER-    |           |         |
|           | SATELLITE |           | SATELLITE |           |         |
|           |           | INTER-    |           |           |         |
|           | RADIOLOCA | SATELLITE | RADIO     |           |         |
|           | TION-SAT- |           | LOCATION- |           |         |
|           |           | MOBILE    | SATELLITE |           |         |
|           | ELLITE    |           | (Earth-   |           |         |
|           | (Earth-   | S5.533    | to-space) |           |         |
|           | to-space) | S5.534    |           |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 24        | 24        | 24        | 24        | 24        | Sa      |
| .75-25.25 | .75-25.25 | .75-25.25 | .75-25.05 | .75-25.05 | tellite |
|           |           |           |           |           |         |
| FIXED     | FIXED-    | FIXED     | RADION    | FIXED-    | Communi |
|           | SATELLITE |           | AVIGATION | SATELLITE | cations |
|           |           | FIXED-    |           |           | (25)    |
|           | (Earth-   | SATELLITE |           | (Earth-   | A       |
|           | to-space) |           |           | to-space) | viation |
|           | S5.535    | (Earth-   |           | NG167     | (87)    |
|           |           | to-space) |           |           |         |
|           |           | S5.535    |           | RADION    |         |
|           |           |           |           | AVIGATION |         |
|           |           | MOBILE    |           |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
|           |           | S5.534    | 25        | 25        | Sa      |
|           |           |           | .05-25.25 | .05-25.25 | tellite |
|           |           |           |           |           |         |
|           |           |           |           | FIXED-    | Communi |
|           |           |           |           | SATELLITE | cations |
|           |           |           |           |           | (25)    |
|           |           |           |           | (Earth-   |         |
|           |           |           |           | to-space) | Fixed   |
|           |           |           |           | NG167     | Mi      |
|           |           |           |           |           | crowave |
|           |           |           |           | FIXED     | (101)   |
+-----------+-----------+-----------+-----------+-----------+---------+
| 2         |           |           | 2         | 25.25-27  | Note:   |
| 5.25-25.5 |           |           | 5.25-25.5 |           | In its  |
|           |           |           |           | Standard  | *M      |
| FIXED     |           |           | FIXED     | frequency | anual*, |
|           |           |           |           | and       | NTIA    |
| INTER-    |           |           | MOBILE    |           | has     |
| SATELLITE |           |           |           | time      | added a |
| S5.536    |           |           | Standard  | signal-   | primary |
|           |           |           | frequency | satellite | i       |
| MOBILE    |           |           | and time  | (Earth-   | nter-sa |
|           |           |           |           |           | tellite |
| Standard  |           |           | signal-   | to-space) | service |
| frequency |           |           | satellite |           | all     |
| and time  |           |           | (         | Earth     | ocation |
| signal-   |           |           | Earth-to- | exp       | to the  |
| satellite |           |           |           | loration- | band    |
| (Earth-   |           |           | space)    | satellite | 25.     |
| to-space) |           |           |           |           | 25-27.5 |
|           |           |           |           | (space-   | GHz,    |
|           |           |           |           | to-space) | limited |
|           |           |           |           |           | the use |
|           |           |           |           |           | of this |
|           |           |           |           |           | all     |
|           |           |           |           |           | ocation |
|           |           |           |           |           | by      |
|           |           |           |           |           | a       |
|           |           |           |           |           | dopting |
|           |           |           |           |           | f       |
|           |           |           |           |           | ootnote |
|           |           |           |           |           | S5.536, |
|           |           |           |           |           | and has |
|           |           |           |           |           | changed |
|           |           |           |           |           | the     |
|           |           |           |           |           | dire    |
|           |           |           |           |           | ctional |
|           |           |           |           |           | in      |
|           |           |           |           |           | dicator |
|           |           |           |           |           | for the |
|           |           |           |           |           | Earth   |
|           |           |           |           |           | explora |
|           |           |           |           |           | tion-sa |
|           |           |           |           |           | tellite |
|           |           |           |           |           | service |
|           |           |           |           |           | all     |
|           |           |           |           |           | ocation |
|           |           |           |           |           | in the  |
|           |           |           |           |           | band    |
|           |           |           |           |           | 25.5-27 |
|           |           |           |           |           | GHz     |
|           |           |           |           |           | from    |
|           |           |           |           |           | space-t |
|           |           |           |           |           | o-space |
|           |           |           |           |           | to      |
|           |           |           |           |           | s       |
|           |           |           |           |           | pace-to |
|           |           |           |           |           | -Earth. |
+-----------+-----------+-----------+-----------+-----------+---------+
| 25.5-27   |           |           | 25.5-27   |           |         |
|           |           |           |           |           |         |
| EARTH     |           |           | FIXED     |           |         |
| EXP       |           |           |           |           |         |
| LORATION- |           |           | MOBILE    |           |         |
| SATELLITE |           |           |           |           |         |
| (space-   |           |           | Standard  |           |         |
| to-Earth) |           |           | frequency |           |         |
| S5.536A   |           |           | and time  |           |         |
| S5.536B   |           |           |           |           |         |
|           |           |           | signal-   |           |         |
| FIXED     |           |           | satellite |           |         |
|           |           |           | (         |           |         |
| INTER-    |           |           | Earth-to- |           |         |
| SATELLITE |           |           |           |           |         |
| S5.536    |           |           | space)    |           |         |
|           |           |           |           |           |         |
| MOBILE    |           |           | Earth     |           |         |
|           |           |           | exp       |           |         |
| Standard  |           |           | loration- |           |         |
| frequency |           |           | satellite |           |         |
| and time  |           |           |           |           |         |
| signal-   |           |           | (space-   |           |         |
| satellite |           |           | to-space) |           |         |
| (Earth-   |           |           |           |           |         |
| to-space) |           |           |           |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+
| 27-27.5   | 27-27.5   |           | 27-27.5   | 27-27.5   |         |
|           |           |           |           |           |         |
| FIXED     | FIXED     |           | FIXED     | Earth     |         |
|           |           |           |           | exp       |         |
| INTER-    | FIXED-    |           | MOBILE    | loration- |         |
| SATELLITE | SATELLITE |           |           | satellite |         |
| S5.536    | (Earth-   |           |           |           |         |
|           | to-space) |           |           | (space-   |         |
| MOBILE    |           |           |           | to-space) |         |
|           | INTER-    |           |           |           |         |
|           | SATELLITE |           |           |           |         |
|           | S5.536    |           |           |           |         |
|           | S5.537    |           |           |           |         |
|           |           |           |           |           |         |
|           | MOBILE    |           |           |           |         |
+-----------+-----------+-----------+-----------+-----------+---------+

> **PART 87 --- AVIATION SERVICES**
>
> 5\. Section 87.173(b), the Frequency Table, is amended as follows:
>
> • Revise the radionavigation entry from 24,250-25,250 MHz to
> 24,750-25,050 MHz.

**PART 101 --- FIXED MICROWAVE SERVICES**

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

AUTHORITY: 47 U.S.C. §§ 154, 303, 309(j), unless otherwise noted.

7\. The subpart G in the table of contents is amended to read as
follows:

**24 GHz Service and Digital Electronic Message Service**

8\. Section 101.1 is amended by inserting the words "24 GHz Service"
between the words \"carrier\" and \"and\" in subsection 101.1(b).

9\. Section 101.3 is amended by adding a definition of 24 GHz Service
and by changing the definition of Digital Electronic Message Service to
read as follows:

**§ 101.3 Definitions**

As used in this part:

\* \* \*

*Digital Electronic Message Service.* A two-way end-to-end fixed radio
service utilizing digital termination systems for the exchange of
digital information in the frequency bands 10,550-10,680 MHz,
18,820-18,920 MHz, and 19,160-19,260 MHz. This service may also make use
of point-to-point microwave facilities, satellite facilities or other
communications media to interconnect digital termination systems to
comprise a network.

\* \* \*

*Nodal station*. The central or controlling stations in a microwave
radio system operating on point-to-multipoint or
multipoint-to-multipoint frequencies with one or more user stations or
internodal links.

\* \* \*

*24 GHz Service.* A fixed point-to-point, point-to-multipoint, and
multipoint-to-multipoint radio system in the 24.25-24.45 GHz band and in
the 25.05-25.25 GHz band consisting of a fixed main (nodal) station and
a number of fixed user terminals. This service may encompass any digital
fixed service.

\* \* \*

*User or subscriber station*. The station(s) in a microwave radio system
operating at the users' premises on point-to-multipoint or
multipoint-to-multipoint frequencies and communicating with one or more
nodal stations.

\* \* \* \* \*

> 10\. Section 101.21 is amended by inserting the words \"and 24 GHz
> Service\" after the words \"Local Multipoint Distribution Service\" in
> subsection 101.21(g).

11\. Section 101.21 is amended by inserting the words \"and 24 GHz
Service\" after the words \"Local Multipoint Distribution Service\" in
subsection 101.21(g).

12\. Section 101.45 is amended by adding the words \"and in the 24 GHz
Service\" after the words \"Local Multipoint Distribution Service\" in
subsection 101.45(b).

13\. Section 101.61 is amended by adding the words "and in the 24 GHz
Service" to the heading and by inserting, at the end of the section, the
sentence: \"This section also applies to 24 GHz licensees that are
licensed according to Economic Areas."

14\. Section 101.63 is amended by inserting the words \"and in the
24 GHz Service\" after the words \"Local Multipoint Distribution
Service\" in subsection 101.63(a).

15\. Section 101.101 is amended by changing the entry for 24,250-25,250
MHz in the table to read as follows:

**§ 101.101 Frequency availability.**

  -----------------------------------------------------------------------------
                    Radio                                            
                    service                                          
  ----------------- ------------ ------------ ----------- ---------- ----------
  Frequency band    Common       Private      Broadcast   Other      Notes
  (MHz)             carrier      radio        auxiliary   (Parts 15, 
                    (Part 101)   (Part 101)   (Part 74)   21, 22,    
                                                          24, 25,    
                                                          74, 78 &   
                                                          100)       

  \* \* \*                                                           

  24,250-25,250     CC           OFS                                 

  \* \* \*                                                           
  -----------------------------------------------------------------------------

\* \* \* \* \*

16\. Section 101.105 is amended by deleting the words \"and all
point-to-multipoint channels in the 18 GHz band\" after the words \"in
the 10.6 GHz band\" in subsection 101.105(c)(6).

17\. Section 101.109(c) is amended by adding footnote 7 to the bandwidth
entry for 24, 250-25,250 MHz and by revising footnote 7 to read as
follows:

  ----------------------------------- -----------------------------------
  Frequency band (MHz)                Maximum authorized bandwidth

  \* \* \*                            \* \* \*

  24,250 to 25,250                    40 MHz ^7^

  \* \* \*                            \* \* \*
  ----------------------------------- -----------------------------------

\* \* \*

^7^For channel block assignments in the 24,250-25,250 MHz and
38,600-40,000 MHz bands, the authorized bandwidth is equivalent to an
unpaired channel block assignment or to either half of a symmetrical
paired channel block assignment. When adjacent channels are aggregated,
equipment is permitted to operate over the full channel block
aggregation without restriction.

**Note to Footnote 7:** Unwanted emissions shall be suppressed at the
aggregate channel block edges based on the same roll-off rate as is
specified for a single channel block in paragraph 101.111(a)(1) or in
paragraphs 101.111(a)(2)(ii) and (iii) of this chapter as appropriate.

18\. Section 101.111 is amended to add a new Section 101.111(a)(2)(iv)
and to replace the paragraph in 101.111(a)(4) to read as follows:

**§ 101.111 Emission Limitations.**

\* \* \* \* \*

(a)(2)(iv) The emission mask for 24 GHz Service used the equation in
section (a)(2)(ii) above and applies only to the edge of each channel,
but not to subchannels established by licensees. The value of P in the
equation is for the percentage removed from the carrier frequency and
assumes that the carrier frequency is the center of the actual bandwidth
used. The emission mask can be satisfied by locating a carrier of the
subchannel sufficiently far from the channel edges so that the emission
levels of the mask are satisfied. The 24 GHz emission mask shall use a
value B (bandwidth) of 40 MHz, for all cases even in the case where a
narrower subchannel is used (for instance the actual bandwidth is 10
MHz) and the mean output power used in the calculation is the sum of the
output power of a fully populated channel.

\* \* \*

(a)(4) For DEMS channels in the 17,700-19,700 MHz band:

\(i\) \* \* \*

\* \* \* \* \*

19\. Section 101.115 is amended by revising the entries for "24,250 to
25,250" and footnote 10 to the Antenna Standards table in section
101.115(c) to read as follows:

**§ 101.115 Directional antennas.**

\* \* \* \* \*

\(c\) \* \* \*

Antenna Standards

<table style="width:100%;">
<colgroup>
<col style="width: 16%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td rowspan="2">Frequency (MHz)</td>
<td rowspan="2">Category</td>
<td rowspan="2">Maximum beamwidth to 3 dB points <sup>1</sup> (included
angle in degrees)</td>
<td rowspan="2">Minimum antenna gain (dbi)</td>
<td colspan="7">Minimum radiation suppression to angle in degrees from
center line of main beam in decibels</td>
</tr>
<tr class="even">
<td>5<sup>o</sup> to 10<sup>o</sup></td>
<td>10<sup>o</sup> to 15<sup>o</sup></td>
<td>15<sup>o</sup> to 20<sup>o</sup></td>
<td>20<sup>o</sup> to 30<sup>o</sup></td>
<td>30<sup>o</sup> to 100<sup>o</sup></td>
<td>100<sup>o</sup> to 140<sup>o</sup></td>
<td>140<sup>o</sup> to 180<sup>o</sup></td>
</tr>
<tr class="odd">
<td>24,250 to 25,250<sup>10</sup></td>
<td><p>A</p>
<p>B</p></td>
<td><p>2.8</p>
<p>2.8</p></td>
<td><p>38</p>
<p>38</p></td>
<td><p>25</p>
<p>20</p></td>
<td><p>29</p>
<p>24</p></td>
<td><p>33</p>
<p>28</p></td>
<td><p>36</p>
<p>32</p></td>
<td><p>42</p>
<p>35</p></td>
<td><p>55</p>
<p>36</p></td>
<td><p>60</p>
<p>45</p></td>
</tr>
</tbody>
</table>

\* \* \*

^10^DEMS User Station antennas in this band must meet performance
Standard B and have a minimum antenna gain of 34 dBi. The maximum
beamwidth requirement does not apply to DEMS User Stations. DEMS Nodal
Stations need not comply with these standards. Stations authorized to
operate in the 24,250-25,250 MHz band do not have to meet these
standards, however, the Commission may require the use of higher
performance antennas where interference problems can be resolved by the
use of such antennas.

\* \* \* \* \*

20\. Section 101.139 is amended to add a new Section 101.139(g) to read
as follows:

\* \* \* \* \*

\(g\) After January 1, 2001, a transmitter operating on the 24,250 -
24,450 MHz and 25,050 - 25,250 MHz bands must meet the emission
limitation set forth in § 101.111(a)(2)(ii).

21\. Section 101.141 is amended by deleting the phrase "and in the
24.25-25.25 GHz band" in the introductory paragraph.

22\. Section 101.147 is amended by revising the first sentence of the
introductory paragraph of Section 101.147(r) by adding the words:
"except 24 GHz band licensees" after the word "Applicants". Section
101.147(r)(9) is amended by renumbering the introduction as
"§ 101.147(r)(9)(i)" and by renumbering existing "§§ 101.147(r)(9) (i)
and (ii)" as "§§ 101.147(r)(9)(i)(A)and (B)," respectively, and Section
101.147(r)(9) is also amended by adding a new "§ 101.147(r)(9)(ii)"
(immediately preceding § 101.147(r)(10)) to read as follows:

**§ 101.147 Frequency assignments.**

\* \* \* \* \*

\(r\) *17,700 to 19,700 MHz and 24,250 to 25,250 MHz.* Applicants,
except 24 GHz band licensees, may use \* \* \*

\* \* \*

(r)(9)(i) The following frequencies are available for
point-to-multipoint DEMS Systems, except that channels 35-39 were
available only to existing 18 GHz DEMS licensee as of March 14, 1997 and
are now available by geographic area licensing in the 24 GHz Service to
be used as the licensee desires. The 24 GHz spectrum can be aggregated
or disaggregated and does not have to be used in the transmit/receive
manner shown except to comply with international agreements along the US
borders. Systems operating on Channels 25-34 must cease operations as of
January 1, 2001, except that those stations on these channels within 150
km of the coordinates 38^o^ 48' N/ 76^o^ 52' W (Washington, DC, area)
and 39 ^o^ 43' N/ 101 ^o^ 46' W (Denver, Colorado area) must cease
operations of June 5, 1997:

\* \* \*

\(A\) Each station on channels 25 - 34 will be limited to one frequency
pair per SMSA. Additional channel pairs may be assigned upon a showing
that the service to be provided will fully utilize the spectrum
requested. A channel pair may be subdivided as desired by the licensee.

\(B\) A frequency pair on channels 25 - 34 may be assigned to more than
one licensee in the same SMSA or service area so long as the
interference protection criteria of § 101.105 are met.

\(ii\) Channels 35 - 39 are licensed in the 24 GHz Service by Economic
Areas for any digital fixed service. Channels may be used at either
nodal or subscriber station locations for transmit or receive but must
be coordinated with adjacent channel and adjacent area users in
accordance with the provisions of Section 101.509. Stations must also
comply with international coordination agreements.

23\. Section 101.305(a) is revised by deleting the word "and" and adding
a comma after the words "Common Carrier Services" and adding the words:
"or 24 GHz Service" after the words "Local Multipoint Distribution
Service." Section 101.305(b) is revised by adding the words: "and 24 GHz
Service" after the words "Local Multipoint Distribution Service."
Section 101.305(c) is revised by adding the words: "and 24 GHz Service"
after the words "Local Multipoint Distribution Service."

24\. Section 101.311 is amended by inserting the words \"and 24 GHz
Service\" after the words \"Local Multipoint Distribution Service\".

25\. Subpart G is amended to read as follows:

**24 GHz Service and Digital Electronic Message Service**

26\. Section 101.501 is amended to read as follows:

**§ 101.501 Eligibility.**

See § 101.147(n) for licensing of DEMS facilities in the 10.6 GHz band.
Applications for new facilities using the 18 GHz band are no longer
being accepted. Any entity, other than one precluded by § 101.7 of this
part, is eligible for authorization to provide 24 GHz Service under this
subpart.

27\. Section 101.503 is amended by adding the words \"10.6 GHz\" before
the word \"DEMS\" wherever it appears.

28\. Section 101.505 is amended by replacing the words
\"§ 101.147(r)(9)\" with \"§§ 101.147(m), (n), and (r)(9).\"

29\. Section 101.509 is amended to read as follows:

**§ 101.509 Interference Protection Criteria.**

As a condition for use of frequencies in this service each licensee is
required to:

\(1\) Engineer the system to be reasonably compatible with adjacent and
co-channel operations in the same or adjacent areas on all frequencies;
and

\(2\) Cooperate fully and in good faith to resolve whatever potential
interference and transmission security problems may be present in
adjacent and co-channel operations.

All harmful interference to other users of co-channel and adjacent
channel use in the same or adjacent geographical area are prohibited. In
areas where Economic Areas are in close proximity, careful consideration
should be given to minimum power requirements and to the location,
height, and radiation pattern of the transmitting and receiving
antennas. Licensees are expected to cooperate fully in attempting to
resolve problems of potential interference before bringing the matter to
the attention of the Commission.

Licensee shall coordinate their facilities whenever the facilities have
optical line-of-sight into other licensees' areas or are within the same
geographic area. Licensees are encouraged to develop operational
agreements with relevant licensees in the same or adjacent areas.
Incumbent SMSA licensee(s) shall retain exclusive rights to its
channel(s) within its SMSA and must be protected.

Licensees shall comply with the appropriate coordination agreements
between the United States and Canada and the United States and Mexico
concerning cross-border sharing and use of the 24 GHz bands which may
require using channels pairs in accordance with the table in Section
101.147(r)(9).

The Commission recommends that coordination is not necessary if the
power flux density (pfd) at the boundary of the relevant adjacent area
is lower than --114 dBW/m^2^ in any 1 MHz. This value can be changed and
agreed upon by both coordinating parties. Licensees should be able to
deploy with a pfd up to --94 dBW/m^2^ in any 1 MHz at the boundary of
the relevant adjacent area without negatively affecting the successful
operations of the adjacent area licensee.

30\. Section 101.511 is amended to read as follows:

**§ 101.511 Permissible services.**

\(a\) Authorizations for stations in the 24 GHz Service will be granted
to provide services on a common carrier basis or a non-common carrier
basis or on both a com­mon carrier and non-common carrier basis in a
single authorization.

\(b\) Stations may render any kind of digital communications service
con­sistent with the Commission\'s rules and the regulatory status of the
station to provide services on a common carrier or non-common carrier
basis.

\(c\) An applicant or licensee may submit a petition at any time
requesting clarification of the regulatory status required to provide a
specific communications service.

31\. Section 101.521 is amended by adding the words \"in the 10.6 GHz
band\" after the word \"frequencies.\"

32\. Section 101.523 is added to read as follows:

**§ 101.523 Service areas.**

\(a\) The service areas for 24 GHz are Economic Areas (EAs) as defined
below. EAs are delineated by the Regional Economic Analysis Division,
Bureau of Economic Analysis, U.S. Department of Commerce. The Commerce
department organizes the 50 States and the District of Columbia into 172
EAs. Additionally, there are three EA-like areas: Guam and Northern
Mariana Islands; Puerto Rico and the U.S. Virgin Islands; and American
Samoa and the Gulf of Mexico. A total of 176 authorizations will be
issued for the 24 GHz Service by the FCC.

\(b\) Where an incumbent SMSA license area in the 24 GHz band occupies
only a portion of an EA available for application under the competitive
bidding rules, the SMSA portion will be excluded from auction and the
incumbent licensee will retain the exclusive right to those channels
within the SMSA.

33\. Section 101.525 is added to read as follows:

**§ 101.525 24 GHz system operations.**

\(a\) A licensee using the 24 GHz band may construct and operate any
number of fixed stations anywhere within the area authorized to serve
without prior authorization, except as follows:

\(1\) A station would be required to be individually licensed if:

\(A\) international agreements require coordination;

\(B\) submission of an Environmental Assessment is required under
§ 1.1307 of this Chapter.

\(C\) 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.

\(b\) Whenever a licensee constructs or makes system changes as
described in paragraph (a)(1), the licensee is required to notify the
Commission within 30 days of the change under § 1.947 of this chapter
and include a statement of the technical parameters of the changed
station.

34\. Section 101.526 is added to read as follows:

**§ 101.526 License term.**

The license term for stations licensed under this subpart is ten years
from the date of license grant or license renewal for incumbent
licensees.

35\. Section 101.527 is added to read as follows:

**§ 101.527 Construction requirements for 24 GHz operations.**

\(a\) Each licensee must make a showing of "substantial service" within
ten years of its license grant. A "substantial service" assessment will
be made at renewal pursuant to the provisions and procedures set forth
in § 1.949 of this chapter.

\(1\) "Substantial service" is a service which is sound, favorable, and
substantially above a level of mediocre service which just might
minimally warrant renewal during its past license term.

\(b\) Each licensee must, at a minimum file:

\(1\) A report, maps and other supporting documents describing its
current service in terms of geographic coverage and population served to
the Commission. The report must also contain a description of the
licensees' investments in its operations. The report must be labeled as
an attachment to the renewal application; and

\(2\) Copies of all FCC orders finding the licensee to have violated the
Communications Act or any FCC rule or policy; and a list of any pending
proceedings that relate to any matter described in this paragraph.

\(c\) Failure to demonstrate that substantial service is being provided
in the service area will result in forfeiture of the license, and the
licensee will be unable to regain it.

\(d\) The frequencies associated with incumbent authorizations, licensed
on a SMSA basis, that have cancelled automatically or otherwise been
recovered by the Commission will automatically revert to the applicable
EA licensee.

36\. Section 101.529 is added to read as follows:

**§ 101.529 Renewal expectancy criteria for 24 GHz licenses.**

\(a\) A renewal applicant involved in a renewal proceeding shall receive
a preference, commonly referred to as a renewal expectancy, that is the
most important factor to be considered in the proceeding as long as the
applicant\'s past record for the relevant license period demonstrates
that:

\(1\) The renewal applicant has provided "substantial service" pursuant
to § 101.527; and

\(2\) The renewal applicant has substantially complied with applicable
FCC rules, policies, and the Communications Act of 1934, as amended.

\(b\) In order to establish its right to a renewal expectancy, a
licensee in the 24 GHz service involved in a renewal proceeding must
submit a showing explaining why it should receive a renewal expectancy.
At a minimum, this showing must include:

\(1\) A description of how the licensee has complied with the
"substantial service" requirement; and

\(2\) Copies of all FCC orders finding the licensee to have violated the
Communications Act or any FCC rule or policy; and a list of any pending
proceedings that relate to any matter described in this paragraph.

\(c\) In making its showing of entitlement to a renewal expectancy, a
renewal applicant may claim credit for any system modification
applications that were pending on the date it filed its renewal
application. Such credit will not be allowed if the modification
application is dismissed or denied.

37\. Section 101.531 is added to read as follows:

**§ 101.531 Application form and contents.**

\(a\) Applications for initial authorization of 24 GHz facilities are
filed on FCC Form 175 in accordance with Subpart M of this Part, and
Subpart Q of Part 1. FCC Form 601 is submitted subsequently either by
the winning bidder, if an auction is held to decide among two or more
mutually exclusive applications, or, in cases of no mutual exclusivity,
by the sole applicant. Applications to amend pending applications and to
modify licenses are filed on FCC Form 601.

\(b\) *Foreign ownership information*. All applicants for 24 GHz
licenses must provide the information requested on FCC Form 601 to
address all of the eligibility requirements in § 101.7 of this Part. All
licensees will keep the information updated.

38\. Section 101.533 is added to read as follows:

**§ 101.533 Regulatory status.**

\(a\) *Initial applications.* An applicant for a 24 GHz license must
specify on FCC Form 601 if it is requesting authorization to provide
services on a common carrier basis, a non-common carrier basis, or on
both a common carrier and non-common carrier basis.

\(b\) *Amendment of pending applications.* Any pending application may
be amended to: (i) change the carrier status requested; or (ii) add to
the pending request in order to obtain both common carrier and
non-common carrier status in a single license.

\(c\) *Modification of license.* A licensee may modify a license to: (i)
change the carrier status authorized; or (ii) add to the status
authorized in order to obtain both common carrier and non-common carrier
status in a single license.

39\. Section 101.535 is added to read as follows:

**§ 101.535 Geographic partitioning and spectrum
aggregation/disaggregation.**

\(a\) *Eligibility*.

\(1\) Parties seeking approval for partitioning and disaggregation shall
request from the Commission an authorization for partial assignment of a
license pursuant to § 1.948 of this chapter.

\(2\) 24 GHz 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. 24 GHz
licensees may aggregate or disaggregate their licensed spectrum at any
time following the grant of a license.

\(3\) Any existing frequency coordination agreements shall convey with
the assignment of the geographic area or spectrum, and shall remain in
effect unless new agreements are reached.

\(b\) *Technical standards*.

\(1\) *Aggregation*. There is no limitation on the amount of spectrum
that a 24 GHz licensee may aggregate.

\(2\) *Partitioning*. 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).

\(3\) *Disaggregation*. Spectrum may be disaggregated in any amount. A
licensee need not retain a minimum amount of spectrum.

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

\(c\) *Unjust enrichment*. 24 GHz licensees that received a bidding
credit and partition their licenses or disaggregate their spectrum to
entities not meeting the eligibility standards for such a bidding
credit, will be subject to the provisions concerning unjust enrichment
as set forth in § 1.2111.

\(d\) *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 as provided for in § 101.526 of this subpart.

\(e\) *Construction requirements*. Applications requesting approval for
partitioning or disaggregation must include a certification by each
party stating that one or both parties will satisfy the construction
requirement set forth in § 101.529 of this subpart. Failure by a party
to meet its respective construction requirement will result in the
automatic cancellation of its license without further Commission action.

40\. Section 101.537 is added to read as follows:

**§ 101.537 24 GHz band subject to competitive bidding.**

Mutually exclusive initial applications for licenses in the 24 GHz band
are subject to competitive bidding procedures. The procedures set forth
in part 1, subpart Q, of this chapter will apply unless otherwise
provided in this part.

41\. Section 101.538 is added to read as follows:

**§ 101.538 Designated entities.**

\(a\) *Eligibility for small business provisions*.

\(1\) A very small business is an entity that, together with its
controlling interests and affiliates, has average gross revenues not
exceeding \$3 million for the preceding three years.

\(2\) A small business is an entity that, together with its controlling
interests and affiliates, has average gross revenues not exceeding \$15
million for the preceding three years.

\(3\) An entrepreneur is an entity that, together with its controlling
interests and affiliates, has average gross revenues not exceeding \$40
million for the preceding three years.

\(4\) For purposes of determining whether an entity meets one of the
definitions set forth in paragraphs (a)(1), (a)(2), and (a)(3) of this
section, the gross revenues of the entity, its controlling interests and
affiliates shall be considered on a cumulative basis and aggregated. An
applicant seeking status as a very small business, small business, or
entrepreneur under this section must disclose on its short- and
long-form applications, separately and in the aggregate, the gross
revenues of the applicant (or licensee), its controlling interests and
affiliates for each of the previous three years.

\(5\) Persons or entities that hold interests in an applicant (or
licensee) that are affiliates of each other or have an identity of
interests identified in § 1.2110(b)(4)(iii) of this chapter will be
treated as though they were one person or entity and their ownership
interests aggregated for purposes of determining an applicant's (or
licensee's) compliance with the requirements of this section.

\(6\) Where an applicant (or licensee) cannot identify controlling
interests under the standards set forth in this section, the gross
revenues of all interest holders in the applicant, and their affiliates,
will be attributable.

\(7\) A consortium of very small businesses, a consortium of small
businesses, or a consortium of entrepreneurs is a conglomerate
organization formed as a joint venture between or among mutually
independent business firms, each of which individually satisfies the
applicable definition in paragraph (a)(1), (a)(2), or (a)(3) of this
section. Where an applicant or licensee is a consortium of very small
businesses, a consortium of small businesses, or a consortium of
entrepreneurs, the gross revenues of each very small business, small
business, or entrepreneur shall not be aggregated.

\(8\) Designated entities must describe on their long-form applications
how they satisfy the requirements for eligibility for designated entity
status, and must list and summarize on their long-form applications all
agreements that affect designated entity status such as partnership
agreements, shareholder agreements, management agreements and other
agreements, including oral agreements, establishing, as applicable, *de
facto* or *de jure* control of the entity. Such information must be
maintained at the licensee's facilities or by its designated agent for
the term of the license in order to enable the Commission to audit
designated entity eligibility on an ongoing basis.

\(b\) *Controlling interest.*

\(1\) For purposes of this section, a controlling interest includes
individuals or entities with either *de jure* or *de facto* control of
the applicant. *De jure* control is evidenced by holdings of greater
than 50 percent of the voting stock of a corporation, or in the case of
a partnership, general partnership interests. *De facto* control is
determined on a case-by-case basis. An entity must disclose its equity
interest and demonstrate at least the following indicia of control to
establish that it retains *de facto* control of the applicant:

\(i\) The entity constitutes or appoints more than 50 percent of the
board of directors or management committee;

\(ii\) The entity has authority to appoint, promote, demote, and fire
senior executives that control the day-to-day activities of the
licensee; and

\(iii\) The entity plays an integral role in management decisions.

\(2\) The following rules apply for the calculation of certain
interests*.*

\(i\) Ownership interests shall be calculated on a fully diluted basis;
all agreements such as warrants, stock options, and convertible
debentures will generally be treated as if the rights thereunder already
have been fully exercised.

\(ii\) Partnership and other ownership interests and any stock interest
equity, or outstanding stock, or outstanding voting stock shall be
attributed as specified below.

\(iii\) Stock interests held in trust shall be attributed to any person
who holds or shares the power to vote such stock, to any person who has
the sole power to sell such stock, and to any person who has the right
to revoke the trust at will or to replace the trustee at will. If the
trustee has a familial, personal, or extra‑trust business relationship
to the grantor or the beneficiary, the stock interests held in trust
will be attributed to the grantor or beneficiary, as appropriate.

\(iv\) Non‑voting stock shall be attributed as an interest in the
issuing entity.

\(v\) Limited partnership interests shall be attributed to limited
partners and shall be calculated according to both the percentage of
equity paid in and the percentage of distribution of profits and losses.

\(vi\) Officers and directors of an entity shall be considered to have a
controlling interest in the entity. The officers and directors of an
entity that controls a licensee or applicant shall be considered to have
a controlling interest in the licensee or applicant.

\(vii\) Ownership interests that are held indirectly by any party
through one or more intervening corporations will be determined by
successive multiplication of the ownership percentages for each link in
the vertical ownership chain and application of the relevant attribution
benchmark to the resulting product, except that if the ownership
percentage for an interest in any link in the chain exceeds 50 percent
or represents actual control, it shall be treated as if it were a 100
percent interest.

\(viii\) Any person who manages the operations of an applicant or
licensee pursuant to a management agreement shall be considered to have
a controlling interest in such applicant or licensee if such person, or
its affiliate, has authority to make decisions or otherwise engage in
practices or activities that determine, or significantly influence:

\(A\) The nature or types of services offered by such an applicant or
licensee;

\(B\) The terms upon which such services are offered; or

\(C\) The prices charged for such services.

\(ix\) Any licensee or its affiliate who enters into a joint marketing
arrangement with an applicant or licensee, or its affiliate, shall be
considered to have a controlling interest, if such applicant or
licensee, or its affiliate, has authority to make decisions or otherwise
engage in practices or activities that determine, or significantly
influence:

\(A\) The nature or types of services offered by such an applicant or
licensee;

\(B\) The terms upon which such services are offered; or

\(C\) The prices charged for such services.

\(c\) *Bidding credits*. A winning bidder that qualifies as a very small
business or a consortium of very small businesses as defined in this
section may use the bidding credit specified in § 1.2110(e)(2)(i) of
this chapter. A winning bidder that qualifies as a small business or a
consortium of small businesses as defined in this section may use the
bidding credit specified in § 1.2110(e)(2)(ii) of this chapter.
A winning bidder that qualifies as an entrepreneur or a consortium of
entrepreneurs as defined in this section may use the bidding credit
specified in § 1.2110(e)(2)(iii) of this chapter.

**SEPARATE STATEMENT OF COMMISSIONER SUSAN NESS**

> *Re: In the Matter of 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.*

I support our decision today making available spectrum in the 24 GHz
band for fixed wireless service. We have attempted to promulgate
flexible rules that will permit fixed wireless service providers using
this spectrum to compete aggressively with fixed wireless providers
using other spectrum and other technologies to provide broadband data
and voice services to consumers on a local and nationwide basis.

In this order, we license the 24 GHz band on the basis of 172 Economic
Areas ("EAs"), with additional areas covering the United States'
territories and possessions. In adopting EAs, we choose a service area
size that balances the needs of national service providers and the needs
of smaller, regional providers. In addition, since we also used EAs for
fixed wireless services in the 39 GHz band, the use of EAs here will
apply a consistent licensing scheme providing for fair competition
between services in each band.

While I support this decision, I am troubled about the difficulties that
rural carriers face in obtaining spectrum to provide fixed wireless
services to their communities. A review of the issues raised in this
proceeding, and in other contexts, indicates that our current policies
may not maximize the potential of wireless technology to serve rural
areas. While it may not be appropriate to address these issues in this
proceeding, I believe that we need to undertake a more comprehensive
review of the ways in which we can encourage the more rapid build-out of
rural wireless systems. There are at least three areas of relevant
inquiry:

*Service Areas of License.* We need to evaluate our trend to use larger
service areas in our licensing processes. Auction of larger service
areas limits the ability of smaller providers with rural strategies to
obtain spectrum. While the theory behind our partitioning and
disaggregation rules[^280] would suggest that rural carriers could
obtain access to spectrum, there is evidence that in practice this has
not happened.[^281] We should determine whether our use of larger
service areas promotes or inhibits the development of service in rural
areas, and whether we can adjust our policies to provide greater
incentives for the deployment service in rural areas if we license
spectrum using large service areas.

*Substantial Service Requirement*. We have adopted a "substantial
service" option in the construction and coverage requirements for
various spectrum licensees.[^282] This standard is intentionally
flexible. The vagueness of the current standard, however, may inhibit
the deployment of wireless service to rural areas. We must examine
whether licensees satisfying their construction requirements by
providing "substantial service" provide service to rural areas, or
whether they rely on service in more densely populated areas to justify
a claim that they substantially serve their entire licensed area.

*Intermountain Microwave Test*. Under Section 310(d) of the
Communications Act, a licensee cannot relinquish or transfer "control"
of a wireless license without Commission approval. The factors the
Commission uses to determine the locus of *de facto* control were set
forth in *Intermountain Microwave*, decided more than thirty-five years
ago.[^283] The indicia of control in that case were developed in the
context of a "mom-and-pop" owner of a stand-alone microwave system.
Modern wireless systems and providers, to put it mildly, are often
organized quite differently, making the test less useful.

I think it is time we revisited the *Intermountain Microwave* test for
*de facto* control, at least as it is applied in the context of Section
310(d). The modern realities of financing and operating
telecommunications systems using wireless technology argue for adoption
of a test that would permit licensees to extend service throughout their
service area by permitting other operators to use spectrum without
formal partitioning or disaggregation. We should consider whether and
how we could adopt such an approach, and whether it would further speed
deployment of wireless services into rural areas.[^284]

**CONCURRING STATEMENT OF**

**COMMISSIONER HAROLD FURCHTGOTT-ROTH**

> *Re In the Matter of 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 (rel. July 31, 2000).*

I support today's decision to promptly make available spectrum in the 24
GHz band. The fixed wireless industry has experienced exponential growth
in recent years and today's decision will provide still more spectrum
for this rapidly developing industry segment. In this context the
precise contours of the fixed wireless industry continue to evolve.
Unlike PCS, where the majority of service providers have developed
national footprints, it is not clear today how fixed wireless service
fits into the marketplace. Will it become a largely urban and local
service, or will a regional approach prevail? Alternatively, will fixed
wireless at 24 GHz become a nationwide service offering? From the
Commission's standpoint there is no "right" answer. Instead, the FCC
must attempt to develop a flexible spectrum policy that is "business
plan neutral."

Accordingly, I am intrigued by the prospect of utilizing smaller service
areas for some of these licenses.[^285] The size of the initial license
areas should not matter. Our disaggregation and partitioning rules
should facilitate a secondary market that permits licensees to slice and
dice spectrum for the highest-valued use.[^286] However, our
partitioning and disaggregation rules have a mixed record and appear to
create substantial transaction costs. These apparent difficulties create
increased pressure on the Commission to craft initial license
allocations that respond to market demand. Here, numerous parties
requested smaller service areas. In response I would have considered
subdividing one or two of the five licenses into smaller licensing units
in order to meet this apparent demand.[^287] Smaller license areas may
also facilitate the deployment of competitive services to underserved
areas and permit the development of business plans based on a more
localized strategy. Going forward, rather than assuming all services are
going to be "national," I believe it is important that we closely
examine our initial license allocation strategy in each service to
permit a whole range of business plans to audition in the marketplace.

CONCURRING STATEMENT OF COMMISSIONER GLORIA TRISTANI

> *Re: Amendments of Parts 1, 2, 87 and 101 of the Commission's Rules To
> License Fixed Services at 24 GHz, WT Docket No. 99-327 (rel. July 31,
> 2000)*

While I support this decision and look forward to the upcoming licensing
of more fixed wireless spectrum in the 24 GHz band, I would have
preferred to take further steps that could serve to foster fixed
wireless build-out in America's smaller cities and rural areas. In
particular, I would have licensed one or two of the five 24 GHz license
blocks in smaller geographic areas.

The record here reflects several parties' conviction that spectrum in
smaller cities and rural areas may lay fallow when bundled in geographic
licenses with urban areas. Simply put, a winning bidder today may
concentrate its investment and build-out in dense urban areas despite
holding a license that covers smaller cities and rural areas. While our
rules allow for partitioning and disaggregation of spectrum, this policy
has produced mixed results at best. By making one or two of the five
licenses available in smaller geographic blocks, we could have offered
an opportunity for providers with a small city/rural focus to bid at
auction for the spectrum necessary for their business plans. A fixed
wireless offering, after all, need not have a regional or national
strategy in order to succeed. At the same time, providers with a
regional or nationwide business strategy could aggregate these licenses
for a larger footprint.

The fixed wireless industry is a wonderful example of intermodal
competition. However, I would have preferred one extra step to promote
widespread deployment. Nonetheless, I believe fixed wireless providers
offer great promise as competitive entrants in large urban settings and
beyond and I support this item.

[^1]: ^?^ We note, as an initial matter, that DEMS licensees who have
    been relocated to the 24 GHz band will be considered incumbents in
    the 24 GHz band and will be governed by the rules we adopt herein,
    unless otherwise indicated.

[^2]: *See* Amendment to Parts 1, 2, and 101 of the Commission's Rules
    To License Fixed Services at 24 GHz, WT Docket 99-327, *Notice of
    Proposed Rulemaking*, 14 FCC Rcd 19263 (1999) (*NPRM*).

[^3]: *See* Amendment of Parts 2, 21, 74 and 94 of the Commission's
    Rules to Allocate Spectrum at 18 GHz for, and to Establish other
    Rules and Policies Pertaining to, the Use of Radio in Digital
    Termination Systems and in Point-to-Point Microwave Radio Systems
    for the Provision of Digital Electronic Message Services, and for
    other Common Carrier, Private Radio, and Broadcast Auxiliary
    Services; and to Establish Rules and Policies for the Private Radio
    Use of Digital Termination Systems at 10.6 GHz, 54 Rad. Reg. 2d 1091
    (1983).

[^4]: *See id.*

[^5]: *See* Amendment of Parts 2, 21, 74 and 94 of the Commission's
    Rules to Allocate Spectrum at 18 GHz for, and to Establish other
    Rules and Policies Pertaining to, the Use of Radio in Digital
    Termination Systems and in Point-to-Point Microwave Radio Systems
    for the Provision of Digital Electronic Message Services, and for
    other Common Carrier, Private Radio, and Broadcast Auxiliary
    Services; and to Establish Rules and Policies for the Private Radio
    Use of Digital Termination Systems at 10.6 GHz, 56 Rad. Reg. 2d 1171
    (1984).

[^6]: *See* Amendment of the Commission's Rules to Relocate the Digital
    Electronic Message Service From the 18 GHz to the 24 GHz Band and to
    Allocate the 24 GHz Band for Fixed Service, ET Docket No. 97-99,
    *Memorandum Opinion and Order*, 13 FCC Rcd 15147, 15149 ¶ 6 (1998)
    (*DEMS MO&O*).

[^7]: The *Reallocation Order* provides a complete background of the
    events preceeding the DEMS relocation from 18 GHz band to the 24 GHz
    band. *See* Amendment of the Commission's Rules to Relocate the
    Digital Electronic Message Service from the 18 GHz Band to the
    24 GHz Band and To Allocate the 24 GHz Band For Fixed Service,
    *Order*, 12 FCC Rcd 3471-3475 ¶¶ 2-10 (1997) (*Reallocation Order*).

[^8]: *Id.*

[^9]: *Id.* at 3475-76 ¶¶ 11, 14. The Commission reasoned that it was
    necessary to relocate the entire DEMS service, as opposed to only
    those licensees in the Washington D.C. and Denver regions, because
    of the unlikelihood that separate 24 GHz equipment would be
    manufactured solely for the Washington and Denver markets. Thus, the
    Commission explained that bifurcating the DEMS licensees would in
    effect preclude these two markets from receiving DEMS service. *DEMS
    MO&O*, 13 FCC Rcd at 15152-53 ¶ 12.

[^10]: *See Reallocation Order*, 12 FCC Rcd at 3475 ¶ 11; *see also DEMS
    MO&O*, 13 FCC Rcd at 15153 ¶ 13.

[^11]: *Reallocation Order*, 12 FCC Rcd 3471.

[^12]: Amendment of the Commission's Rules to Relocate the Digital
    Electronic Message Service from the 18 GHz Band to the 24 GHz Band
    and To Allocate the 24 GHz Band For Fixed Service, *Order*, 12 FCC
    Rcd 8266 (1997).

[^13]: *NPRM,* 14 FCC Rcd at 19263.

[^14]: *Id.* at 19265 ¶ 1.

[^15]: *Id.*

[^16]: *Reallocation Order,* 12 FCC Rcd at 3475 ¶ 13.

[^17]: *NPRM* at 19267-67 ¶ 6, 19271-72 ¶¶ 13-15.

[^18]: *Id*. at 19267 ¶ 6.

[^19]: *See, e.g.,* Teligent Comments at 5; Wireless One Comments at 1.

[^20]: Teligent Comments at 5.

[^21]: Wireless One Comments at 1; PCIA Comments at 4-5; FWCC Comments
    at 2-3.

[^22]: FWCC Comments at 3; PCIA Comments at 4.

[^23]: *See infra* ¶ 8.

[^24]: FWCC Comments at 3; Wireless One Comments at 1.

[^25]: PCIA Comments at 5.

[^26]: Teligent Comments at 7.

[^27]: We note that the Commission has permitted the provision of
    additional operations in existing services when it determined that
    it was in the public interest to do so. *See, e.g.*, Amendment of
    Parts 21 and 74 to Enable Multipoint Distribution Service and
    Instructional Television Fixed Service Licensees to Engage in Fixed
    Two-Way Transmission, MM Docket No. 97-217, *Report and Order*, 13
    FCC Rcd 19112 (1998); Amendment of the Commission's Rules to Permit
    Flexible Service Offerings in the Commercial Mobile Radio Services,
    WT Docket No. 96-6, *First Report and Order and Further Notice of
    Proposed Rulemaking*, 11 FCC Rcd 8965 (1996); Amendment of Part 95
    of the Commission's Rules to Allow Interactive Video and Data
    Service Licensees to Provide Mobile Service to Subscribers, WT
    Docket No. 95-47, *Report and Order*, 11 FCC Rcd 6610 (1996)
    (*IVDS Report and Order*).

[^28]: *See* Redesignation of the 17.7-19.7 GHz Frequency Band, Blanket
    Licensing of Satellite Earth Stations in the 17.7-20.2 GHz and
    27.5-30.0 GHz Frequency Bands, and the Allocation of Additional
    Spectrum in the 17.3-17.8 GHz and 24.75-25.25 GHz Frequency Bands
    for Broadcast Satellite-Service Use, *Report and Order,* FCC 00-212
    (rel. June 22, 2000) (*18 GHz Report and Order*).

[^29]: *Id.* at ¶¶ 96-99.

[^30]: *Id.*

[^31]: *NPRM*, 14 FCC Rcd 19268-69 ¶ 7.

[^32]: *See 18 GHz Report & Order* at ¶¶ 96-99.

[^33]: PCIA Comments at 5; FWCC Comments at 3; Teligent Comments at 9.

[^34]: DIRECTV Comments at 4.

[^35]: Teligent Comments at 9.

[^36]: *18 GHz Report and Order* at ¶ 98.

[^37]: Teligent Comments at 10.

[^38]: Note that a provider of satellite services using BSS feeder links
    at 25.05-25.25 must also obtain a Part 25 license, which could be
    sought after an amendment of the Part 25 service rules or upon a
    waiver of those rules.

[^39]: *NPRM*, 14 FCC Rcd at 19269 ¶ 8.

[^40]: *Id.*

[^41]: Amendment of Part 2 of the Commission's Rules to Make
    Non-Substantive Revisions to the Table of Frequency Allocations,
    *Memorandum Opinion and Order*, 15 FCC Rcd 3459, 3477 ¶ 45 (1999).

[^42]: *Id.*

[^43]: *See NPRM,* 14 FCC Rcd at 19270 ¶ 9.

[^44]: *Id.*

[^45]: *NPRM* at 19269-70 ¶ 9.

[^46]: Teligent Comments at 10-14; Wireless One Comments at 2.

[^47]: Teligent Comments at 11.

[^48]: PCIA Comments at 5-11; SBA Comments at 1-4; RTG Comments 5-12;
    NTCA Reply at 1-4.

[^49]: PCIA Comments at 6-11, SBA Comments at 1-2, RTG Comments at
    11-13.

[^50]: SBA Comments at 2.

[^51]: *See, e.g.,* *id*.

[^52]: PCIA maintains that the Rand McNally copyright issues can be
    resolved and requests that we reconsider our earlier decision not to
    use Basic Trading Areas (BTAs). In the alternative PCIA suggests the
    possible use of the Commerce Department's Component Economic Areas
    (CEAs). PCIA Comments at 6-11. SBA and RTG prefer the use of
    Metropolitan Statistical Areas (MSAs) in conjunction with Rural
    Service Areas (RSAs). SBA Comments at 1-2, RTG Comments at 11-13.

[^53]: Teligent Comments at 12.

[^54]: *See id.*

[^55]: *See* Amendment of the Commission's Rules to Establish New
    Personal Communications Services, Narrowband PCS, GEN Docket No.
    90-314, *Second Report and Order and Second Further Notice of
    Proposed Rulemaking*, FCC 00-159 (rel. May 18, 2000) (*Narrowband
    PCS Second Report and Order*).

[^56]: *See* 39 GHz Band Auction Closes Winning Bidders of 2,173 License
    Announced, *Public Notice*, DA 00-1035 (released May 10, 2000). Out
    of the twenty-two small and very small bidders who participated at
    auction eighteen were successful in winning licenses. *Id.*

[^57]: *Narrowband PCS Second Report and Order*, FCC 00-159 at ¶ 10.

[^58]: *See* 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, *Memorandum
    Opinion and Order*, 14 FCC Rcd 12428, 12452 at ¶ 46 (1999)
    (*39 GHz MO&O*).

[^59]: *See, e.g.,* PCIA Comments at 2; Teligent Comment at 5.

[^60]: The Commission used EAs to license the 39 GHz Service. *See
    39 GHz MO&O*, 14 FCC Rcd at 12452-53 ¶ 46.

[^61]: *See infra* ¶¶ 77, 78.

[^62]: PCIA Comments at 7-8; SBA Comments at 2-3; NTCA Reply Comments at
    2-3.

[^63]: NTCA Reply Comments at 3.

[^64]: 47 U.S.C. §§ 309(j)(3)(B), 309(j)(4)(C); *see* PCIA Comments at
    7.

[^65]: ^?^ *See* Wireless Telecommunications Bureau Grants Consent to
    Assign C and F Block Broadband PCS and SMR Licenses (Application
    File Nos. 0000016887, 0000016892), *Public Notice*, DA 00-213 (rel.
    Feb. 8, 2000).

[^66]: ^?^ 47 C.F.R. § 1.2105.

[^67]: *See, e.g.,* Geographic Partitioning and Spectrum Disaggregation
    by Commercial Mobile Radio Services Licensees and Implementation of
    Section 257 of the Communications Act - Elimination's of Market
    Barriers, WT Docket No.96-148, *Report and Order and Further Notice
    of Proposed Rulemaking*, 11 FCC Rcd 21831, 21843-44 ¶¶ 13-17 (1996)
    (*Partitioning and Disaggregation Report and Order*).

[^68]: *NPRM*, 14 FCC Rcd at 19273 ¶ 16.

[^69]: *Id.*

[^70]: 47 C.F.R. § 101.147(r)(9).

[^71]: FWCC Comments at 3-5; Wireless One Comments at 3-5; PCIA Comments
    at 11-13; Teligent Comments at 40-41; Ensemble Comments at 1-7.

[^72]: *Id.*

[^73]: Ensemble Comments at 4.

[^74]: *Id.* at 1, 4-7.

[^75]: PCIA Comments at 12-13; FWCC Comments 4-5.

[^76]: *See infra* ¶¶ 57, 58.

[^77]: *NPRM,* 14 FCC Rcd at 19271 ¶ 11.

[^78]: *Id.* at ¶ 12.

[^79]: Wireless One Comments at 2.

[^80]: Teligent Comments at 13-14.

[^81]: 47 C.F.R. § 101.509.

[^82]: *See, e.g., 39 GHz Report & Order,* 12 FCC Rcd at 18637 ¶ 79;
    *MAS Report and Order*, FCC 99-415 at ¶ 70.

[^83]: *See, e.g., 39 GHz MO&O*, 12 FCC Rcd at 18637 ¶ 79.

[^84]: *See, e.g.,* 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, CC Docket 92-297, *Second Report and Order,
    Order on Reconsideration and Fifth Notice of Proposed Rulemaking*,
    12 FCC Rcd 12545, 12642-45 ¶ 218-227 (1997) (*LMDS Second Report and
    Order*); *39 GHz Report and Order*, 12 FCC Rcd at 18636 ¶ 76.

[^85]: *See NPRM*, 14 FCC Rcd at 19274 ¶ 19.

[^86]: *Id.*

[^87]: *See supra* ¶ 7.

[^88]: PCIA Comments at 13; Teligent Comments at 18-19; Teligent Reply
    Comments at 2.

[^89]: Teligent Comments at 18.

[^90]: *LMDS Second Report and Order*, 12 FCC Rcd 12545, 12642-45 ¶
    218-227; *39 GHz Report and Order*, 12 FCC Rcd at 18636 ¶ 76.

[^91]: *See, e.g., LMDS Second Report and Order,* 12 FCC Rcd at 12644 ¶
    223.

[^92]: 47 U.S.C. § 153(44).

[^93]: 47 U.S.C. § 153(46).

[^94]: *See NPRM*, 14 FCC Rcd at 19274 ¶ 18.

[^95]: 47 C.F.R. § 51.100.

[^96]: 47 C.F.R. §§ 51.201 - 51.223.

[^97]: *See* 1.947 (b) of the of the Commission's Rules, 47 C.F.R. §
    1.947 (b). A change in regulatory status would require Commission
    prior authorization, however, if the change raised issues concerning
    the benchmark contained in Section 310(b)(4) of the Act. *See infra*
    n. 180.

[^98]: 47 C.F.R. §§  1.947, 101.305.

[^99]: *NPRM*, 14 FCC Rcd at 19274 ¶ 19.

[^100]: *Id.*

[^101]: We note that this applies to incumbent licensees as well as to
    new 24 GHz band licensees.

[^102]: *See infra* ¶ 66 n. 216.

[^103]: *See* 47 C.F.R. §§ 1.1301-1319, 1.924, 17.4.

[^104]: *NPRM*, 14 FCC Rcd at 19275 ¶ 20.

[^105]: *Id.* at 19276-77 ¶¶ 21-22.

[^106]: This standard was adopted in the *39 GHz Report and Order*. *See
    39 GHz Report and Order*, 12 FCC Rcd 18600, 18619 ¶ 32.

[^107]: RTG Comments at 13.

[^108]: *Id.*

[^109]: See the LMDS Third Report and Order for an extensive market
    analysis in relation to the LMDS eligibility restriction. 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, CC
    Docket No. 92-297, *Third Report and Order and Memorandum Opinion
    and Order*, FCC 00-223 (rel. June 27, 2000) (*LMDS Third Report and
    Order*).

[^110]: *Id.* at ¶ 18.

[^111]: *Id.* In addition, we note that we are currently continuing our
    inquiry into broadband deployment. *See* Inquiry Concerning
    Deployment of Advanced Telecommunications Capability to All
    Americans in a Reasonable and Timely Fashion, and Possible Steps to
    Accelerate such Deployment Pursuant to Section 706 of the
    Telecommunications Act of 1996, CC Docket No. 98-146, *Notice of
    Inquiry*, FCC 00-57 (rel. February 18, 2000).

[^112]: *See* 47 C.F.R. § 101.1003. Section 101.1003 prohibited ILECs
    and incumbent cable companies in LMDS from holding an attributable
    interest in a LMDS A Block license, where the LMDS geographic
    service area significantly overlaps the incumbents authorized or
    franchised service area.

[^113]: 47 C.F.R. § 101.1003(a)(1).

[^114]: *LMDS Second Report and Order*, 12 FCC Rcd at 12610 ¶ 149,
    12617-19 ¶¶ 163-165, 12621 ¶ 170.

[^115]: LMDS provided two licenses per BTA. The A Block license is
    comprised of 1150 MHz of total bandwidth and the B Block license is
    comprised of 150 MHz of total bandwidth.

[^116]: *See Reallocation Order*, 12 FCC Rcd at 3471. *See also supra* ¶
    20.

[^117]: *NPRM*, 14 FCC Rcd at 19277 ¶ 22; s*ee* *also* Teligent Comments
    at 7, n.12. Teligent indicates that MVPD is not currently offered in
    the 24 GHz band.

[^118]: *NPRM*, 14 FCC Rcd at 19277 ¶ 22.

[^119]: Teligent Comments at 17-18.

[^120]: *Id.* at 19-24.

[^121]: Promotion of Competitive Networks in Local Telecommunications
    Markets, WT Docket No. 99-217, CC Docket No. 98-98, *Notice of
    Proposed Rulemaking and Notice of Inquiry*, FCC 99-141 (rel. July 9,
    1999).

[^122]: Teligent Comments at 6 in *LMDS Third Report and Order*
    proceeding.

[^123]: *See NPRM*, 14 FCC Rcd at 19280-81 ¶ 32.

[^124]: *See id.* at 19281 ¶¶ 33-34.

[^125]: FWCC Comments at 7; PCIA Comments at 16-18; Teligent Comments at
    26-28.

[^126]: RTG Comments at 14-15.

[^127]: *See* FWCC Comments at 7; PCIA Comments at 17; Teligent Comments
    at 27.

[^128]: *See* PCIA Comments at 17-18.

[^129]: 47 C.F.R. § 22.940(a)(1)(i). *See also* *LMDS Second Report and
    Order,* 12 FCC Rcd 12545, 12660; Amendment of the Commission's Rules
    to Establish Part 27, the Wireless Communications Service, GN Docket
    No. 96-228, Report and Order, 12 FCC Rcd 10785, 10843-10844 (1997)
    (*WCS Report and Order*); Amendment of Part 95 of the Commission's
    Rules to Provide Regulatory Flexibility in the 218-219 MHz Service,
    WT Docket No. 98-169, *Report and Order and Memorandum Opinion and
    Order*, 15 FCC Rcd 1497, 1537-38 (1999) (*218-219 MHz Service Report
    and Order*); *MAS Report and Order*, FCC No. 99-415 ¶ 94.

[^130]: ^?^ *See* *39 GHz Report and Order*, 12 FCC Rcd 18600, 18625 ¶
    46.

[^131]: *See* *LMDS Second Report and Order*, 12 FCC Rcd at 12660; *WCS
    Report and Order*, 12 FCC Rcd at 10843-44; *218-219 MHz Service
    Report and Order*, 15 FCC Rcd at 1538; *MAS Report and Order* at ¶
    95.

[^132]: ^?^ 47 C.F.R. § 101.63.

[^133]: ^?^ *See* *e.g.,* *39 GHz Report and Order*, 12 FCC Rcd 18600,
    18625 ¶ 47.

[^134]: *NPRM*, 14 FCC Rcd at 19279 ¶ 29.

[^135]: *Id.*

[^136]: *See supra* ¶¶ 37-38.

[^137]: *NPRM* at 19279 ¶ 29.

[^138]: *Id.* at 19280 ¶ 30.

[^139]: ^?^ We note that incumbent licensees that currently have a
    license term of less than less than ten years will receive a
    ten-year term upon renewal.

[^140]: *See, e.g.*, FWCC Comments at 7; PCIA Comments at 16-18;
    Teligent Comments at 26-28; Teligent Reply Comments at 10.

[^141]: Teligent Comments at 26.

[^142]: FWCC Comments at 7; PCIA Comments at 16. *See also supra* ¶ 36.

[^143]: *See, e.g.*, *LMDS Second Report and Order* at 12545; *39 GHz
    MO&O*, 14 FCC Rcd 12428; *218-219 MHz Report and Order* at 1497.

[^144]: *See* *39 GHz Report and Order*, 12 FCC Rcd 18600, 18623; *MAS
    Report and Order* at ¶ 95.

[^145]: *See* Implementation of Sections 3(n) and 332 of the
    Communications Act, Regulatory Treatment of Mobile Services, *Second
    Report and Order*, 9 FCC Rcd 1411, 1463-93 (1994) (*CMRS Second
    Report and Order*). The Commission determined to forbear sections
    203, 204, 205, 211, 212, and most application of section 214.
    *Id.* at 1478-80.

[^146]: *See* In the Matters of Hyperion Telecommunications, Inc.
    Petition Requesting Forbearance, Time Warner Communications Petition
    for Forbearance, Complete Detariffing for Competitive Access
    Providers and Competitive Exchange Carriers, *Memorandum Opinion and
    Order and Notice of Proposed Rule Making*, 12 FCC Rcd 8596 at
    8608-10 ¶¶ 23-27.

[^147]: *See* *CMRS Second Report and Order* at 1478 (declining to
    forbear Sections 201 and 202 of the Communications Act); In the
    Matter of Personal Communications Industry Association's Broadband
    Personal Communications Services Alliance's Petition for Forbearance
    for Broadband Personal Communications Services, Forbearance from
    Applying Provisions of the Communications Act to Wireless
    Telecommunications Carriers, WT Docket No. 98-100*, Memorandum
    Opinion and Order and Notice of Proposed Rulemaking*, 13 FCC Rcd
    16857, 16914 (1998) (declining to forbear from applying Section
    20.12(b) of the Commission's Rules (resale rule) and Sections 201
    and 202 of the Communications Act).

[^148]: *NPRM* at 19281-82 ¶ 35.

[^149]: Teligent Comments at 29.

[^150]: PCIA Comments at 13-16; FWCC Comments at 6.

[^151]: PCIA Comments at 16.

[^152]: *See* 47 U.S.C. § 160(a).

[^153]: PCIA Comments at 15-16.

[^154]: *See* Personal Communications Industry Association's Broadband
    Personal Communications Services Alliance's Petition for Forbearance
    for Broadband Personal Communications Services, *Memorandum Opinion
    and Order and Notice of Proposed Rulemaking*, 13 FCC Rcd 16857
    (1998) (*PCIA Forbearance Order and NPRM*).

[^155]: *Id*.

[^156]: *See* 47 C.F.R. § 43.51; Implementation of Section 402(b)(2)(A)
    of the Telecommunications Act of 1996, Report and Order, 14 FCC Rcd
    11364, 11370-75 ¶¶ 8-18, 11378-81 ¶¶ 26-32 (1999); 1998 Biennial
    Regulatory Review -- Review of International Common Carrier
    Regulations, *Report and Order*, 14 FCC Rcd 4909, 4912-27 ¶¶ 8-40
    (1999).

[^157]: 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, *Memorandum Opinion and
    Order and Notice of Proposed Rule Making*, FCC 00-33 ¶ 83 (rel. Feb.
    14, 2000) (*Part 101 MO&O and NPRM*).

[^158]: *See, e.g., MAS Report and Order*, FCC No. 99-415 at ¶¶ 78-88;
    *39 GHz MO&O*, 14 FCC Rcd 12428; Revision of Part 22 and Part 90 of
    the Commission's Rules to Facilitate Future Development of Paging
    Systems, PR Docket No. 93-253, *Memorandum Opinion and Order on
    Reconsideration and Third Report and Order*, 14 FCC Rcd 10030, 10101
    (1999) (*Paging Systems Third Report and Order*); 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, CC Docket No. 92-297, *Fourth Report and Order*, 13 FCC
    Rcd 11655 (1998) (*LMDS Fourth Report and Order*); *Partitioning and
    Disaggregation Report and Order*, 11 FCC Rcd 21831.

[^159]: *Partitioning Report and Order*, 11 FCC Rcd at 21843 ¶ 12.

[^160]: *NPRM*, 14 FCC Rcd at 19279 ¶¶ 27-28. Partitioning is the
    assignment of geographic portions of a license along geopolitical or
    user defined boundaries other than those defined by Rand McNally.
    Disaggregation is the assignment of discrete portions or blocks of
    licensed spectrum to another entity.

[^161]: *Id.*

[^162]: *See LMDS Fourth Report and Order*, 13 FCC Rcd at 11655; *39 GHz
    MO&O*, 14 FCC Rcd at 12460-61 ¶ 60-63.

[^163]: Teligent Comments at 25-26.

[^164]: *See, e.g., LMDS Fourth Report and Order*, 13 FCC Rcd at
    11664-65 ¶ 16.

[^165]: *See, e.g., PCS Order*, 11 FCC Rcd at 21855; *LMDS Report and
    Order*, 13 FCC Rcd 11665 ¶ 16.

[^166]: *See, e.g., LMDS Report and Order,* 13 FCC Rcd 11665 ¶ 16.

[^167]: *Id.*

[^168]: *Id.* at 11666 ¶ 19.

[^169]: We note that our decision to allow combined partitioning and
    disaggregation is consistent with our approach in other services.
    *See, e.g., MAS Report and Order*, FCC 99-415 ¶ 88; *39 GHz MO&O*,
    14 FCC Rcd at 2460; *Paging Systems Third Report and Order*, 14 FCC
    Rcd at 10110; *PCS Order*, 11 FCC Rcd at 21866.

[^170]: *See, e.g., 39 GHz Report and Order*, 12 FCC Rcd 18635 ¶ 73.

[^171]: *See* 47 C.F.R. § 1.948.

[^172]: 47 C.F.R. § 1.2111(e).

[^173]: *See* 47 U.S.C. §§ 310(a), 310(b).

[^174]: 47 C.F.R. § 101.7(b).

[^175]: *NPRM*, 14 FCC Rcd at 19277 ¶¶ 23-24.

[^176]: 47 C.F.R. § 101.7(a).

[^177]: 47 C.F.R. § 101.7(b).

[^178]: Teligent Comments at 24-25.

[^179]: *See* *MDS Report and Order*, 2 FCC Rcd at 4253 ¶ 16 (1987);
    Streamlining the Commission's Rules and Regulations for Satellite
    Application and Licensing Procedures, IB Docket No. 95-117, *Report
    and Order*, 11 FCC Rcd 21581, 21599 ¶ 43 (1996); *LMDS Second Report
    and Order*, 12 FCC Rcd at 12651 ¶ 243.

[^180]: We note, however, that to the extent that a licensee's decision
    to change its regulatory status raises issues with respect to that
    licensee exceeding the benchmark contained in Section 310(b)(4), the
    rules require the Commission's prior approval before the licensee
    can make this change. Rules and Policies on Foreign Participation in
    the U.S. Telecommunications Market and Market Entry and Regulation
    of Foreign-Affiliated Entities, IB Docket Nos. 97-142 and 95-22,
    Report and Order and Order on Reconsideration, 12 FCC Rcd 23891,
    23940-41 ¶¶ 111-118 (1997).

[^181]: *See* Rules and Policies on Foreign Participation in the U.S.
    Telecommunications Market, IB Docket No. 97-142, Market Entry and
    Regulation of Foreign-Affiliated Entities, IB Docket No. 95-22,
    *Report and Order and Order on Reconsideration*, 12 FCC Rcd 23891,
    23935-47 ¶¶ 97-132 (1997).

[^182]: *NPRM*, 14 FCC Rcd at 19282-83 ¶ 36.

[^183]: *Id*. at ¶ 37.

[^184]: *Id.*

[^185]: *Id.*

[^186]: Amendment to Parts 1, 2, and 101 of the Commission's Rules To
    License Fixed Services at 24 GHz, ET Docket 99-327, *Erratum to
    Notice of Proposed Rulemaking* at ¶ 7 (rel. Dec. 23, 1999).

[^187]: *Id.* at ¶ 38-39.

[^188]: PCIA Comments at 19; FWCC Comments at 5.; Nortel Comments at
    2-4; Teligent Comments at 29-32.

[^189]: Nortel Comments at 3.

[^190]: Nortel Comments at 4-5; Teligent Comments at 31-32.

[^191]: Teligent Comments at 32.

[^192]: *Id.* at 32-33.

[^193]: *Id.*

[^194]: *Id.* at 33-34.

[^195]: *See Modification Order*, 12 FCC Rcd at 8767 ¶ 3.

[^196]: Teligent Comments at 14.

[^197]: *Id.* at 15.

[^198]: Nortel Comments at 5; Teligent Comments at 15.

[^199]: Nortel Comments at 5.

[^200]: *See, e.g.,* Replacement of Part 90 by Part 88 to Revise the
    Private Land Mobile Radio Services and Modify the Policies Governing
    Them and Examination of Exclusivity and Frequency Assignment
    Policies of the Private Land Mobile Services, PR Docket No. 92-235,
    *Second Memorandum Opinion and Order*, 14 FCC Rcd 8642, 8658-59 ¶ 34
    (1999) (*PLMRS Second MO&O*) (allowing low power licensees to remain
    at low power and continue to use wideband equipment on a secondary
    basis); *PLMRS Second MO&O*, 14 FCC Rcd at 8665 ¶ 47 (permitting new
    licensees on emergency medical communications channels to continue
    to use non-compliant equipment for one year following effective date
    of new transmitting and receiving requirements, because type
    accepted equipment was not yet available); Amendment of Part 25 of
    the Commission's Rules and Regulations to Reduce Alien Carrier
    Interference Between Fixed-Satellites at Reduced Orbital Spacings
    and to Revise Applications Processing Procedures for Satellite
    Communications Services, CC Docket No. 86-496, *Second Report and
    Order and Further Notice of Proposed Rulemaking*, 8 FCC Rcd 1316,
    1322 ¶¶ 38-39 (1993) (extending compliance deadline for
    non-conforming antennas by one year); Amendment of Section 94.65(3)
    of the Commission's Rules to Rechannelize the 2450-2483.5 MHz Band,
    PR Docket No. 89-113, *Report and* Order, 5 FCC Rcd 4655, 4656-57 ¶¶
    13-17 (1990) (permitting systems previously authorized to operate at
    2.5 GHz to continue to operate existing 800 kHz channel equipment
    indefinitely, rather than convert to 625 kHz channels).

[^201]: January 1, 2001, is the mandatory deadline for the incumbent
    licensees to relocate from 18 GHz to 24 GHz. *See supra* ¶ 4.

[^202]:
    > 47 C.F.R. § 101.139.

[^203]:
    > Teligent Comments at 42.

[^204]: *Part 101 MO&O and NPRM*, 15 FCC Rcd 1329, 3157-58 ¶ 57.

[^205]: 47 C.F.R. § 101.141.

[^206]: *39 GHz Report and Order*, 12 FCC Rcd at 18629 ¶ 60; *LMDS
    Second Report and Order*, 12 FCC Rcd at 12672 ¶ 301.

[^207]: Comsearch Comments at 6.

[^208]: Teligent Comments at 39.

[^209]: At present no such agreement exists with Mexico.

[^210]: *See* PCIA Comments at 18-19; FWCC Comments at 7-8; Nortel
    Comments at 4; Comsearch Comments at 2-3; Teligent Comments at 34.

[^211]: Teligent Comments at 37.

[^212]: *Id.* at 37-38.

[^213]: FWCC Comments at 8; PCIA Comments at 19.

[^214]: Comsearch Comments at 4.

[^215]: *Id.* at 4-6.

[^216]: *See* Interim Arrangement Concerning the Sharing between Canada
    and the United States of America on Broadband Wireless Systems in
    the Frequency Bands 24.25-24.45 GHz, 25.05-25.25 GHz, and
    38.6-40.0 GHz signed by the FCC on Dec 8, 1999 and Canada on Dec 21,
    1999 (*Canadian Agreement*).

[^217]: 47 C.F.R. §§ 1.1307(b).

[^218]: *See* 47 U.S.C. § 309(j)(1), (2). Section 309(j)(2) exempts from
    auctions licenses and construction permits for public safety radio
    services, digital television service licenses and permits given to
    existing terrestrial broadcast licensees to replace their analog
    television service licenses, and licenses and construction permits
    for noncommercial educational broadcast stations and public
    broadcast stations.

[^219]: *NPRM,* 14 FCC Rcd at 19286 ¶¶ 43-45.

[^220]: *Id. See also* Implementation of Sections 309(j) and 337 of the
    Communications Act of 1934 as Amended, WT Docket No. 99-87, *Notice
    of Proposed Rule Making,* 14 FCC Rcd 5206 (1999).

[^221]: *See* *supra* ¶¶ 13-18.

[^222]: Teligent supports the Commission's tentative conclusion that
    mutually exclusive applications for initial licenses in the 24 GHz
    band must be resolved through competitive bidding. Teligent Comments
    at 43. *See* *also* RTG Comments at 4.

[^223]: *See, e.g.,* Amendment of the Commission's Rules Regarding
    Multiple Address Systems, WT Docket No. 97-81, *Report and Order,*
    FCC No. 99-415 at ¶ 14 (rel. Jan. 19, 2000).

[^224]: *NPRM,* 14 FCC Rcd at 19286 ¶ 46.

[^225]: *See infra* at ¶¶ 83-88 for a discussion of the attribution rule
    we adopt today.

[^226]: *See, e.g.,* Teligent Comments at 42-46.

[^227]: The *Second Further Notice of Proposed Rule Making* in the Part
    1 proceeding is currently pending. Amendment of Part 1 of the
    Commission's Rules -- Competitive Bidding Procedures, WT Docket No.
    97-82, *Third Report and Order and Second Further Notice of Proposed
    Rule Making,* 13 FCC Rcd 374, 471-484 (1998). *See also* Amendment
    of Part 1 of the Commission's Rules -- Competitive Bidding
    Procedures, WT Docket No. 97-82, *Third Further Notice of Proposed
    Rule Making*, 14 FCC Rcd 21558 (1999).

[^228]: Teligent Comments at 46-47.

[^229]: *See* Balanced Budget Act of 1997 § 3002(a)(E)(i); 47 U.S.C.
    § 309(j)(3)(E)(i).

[^230]: Teligent Comments at 47-48.

[^231]: 47 C.F.R. § 1.2108. *See also* Balanced Budget Act of 1997 §
    3008.

[^232]: *NPRM,* 14 FCC Rcd at 19287-19288 ¶¶ 48, 49. *See* *also* 47
    C.F.R. §§ 24.720(b)(1)(2), 27.210(b)(1)(2), 101.1209(b)(1)(i)(ii).

[^233]: *NPRM,* 14 FCC Rcd at 19287-19288 ¶¶ 48, 49.

[^234]: PCIA Comments at 20-21; RTG Comments at 17-18.

[^235]: PCIA Comments at 20-21; RTG Comments at 17-18; Teligent Reply
    Comments at 5-6.

[^236]: PCIA Comments at 20; RTG Comments at 18. In the LMDS auction,
    bidding credits of 35 percent and 45 percent were available for
    small and very small businesses, respectively, and a 25 percent
    bidding credit was available for entrepreneurs. *See* 47 C.F.R.
    § 101.1107.

[^237]: Teligent Comments at 49; Teligent Reply Comments at 5-6. For the
    39 GHz auction, small businesses received a 25 percent bidding
    credit and very small businesses received a 35 percent bidding
    credit. *See* 47 C.F.R. § 101.1208

[^238]: 47 C.F.R. § 1.2110(e).

[^239]: *Part 1 Third Report and Order,* 13 FCC Rcd at 402-04 ¶¶ 45-48;
    47 C.F.R. § 1.2110(e).

[^240]: *Id.* at 403, 404 ¶ 47.

[^241]: *See* 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 Order on Reconsideration,* CC Docket No.
    92-297, 12 FCC Rcd 15082, 15095-15096 ¶¶ 19-20 (1997).

[^242]: Teligent Comments at 49; Teligent Reply Comments at 5-6.

[^243]: RTG Comments at 18.

[^244]: Teligent Reply Comments at 6-7.

[^245]: To date, 89 percent of rural telephone companies participating
    in Commission auctions of wireless licenses have identified
    themselves as small businesses on their FCC Form 175 short-form
    applications.

[^246]: *See* Extending Wireless Telecommunications Services To Tribal
    Lands, *Report and Order and Further Notice of Proposed Rule
    Making,* WT Docket No. 99-266, FCC 00-209 (2000). We remain
    committed to encouraging the deployment of advanced
    telecommunications capability to all Americans on a reasonable and
    timely basis. *See *Section 706(a) of the Telecommunications Act of
    1996, Pub.L. 104-104, Title VII, § 706, Feb. 8, 1996, 110 Stat. 153,
    reproduced in the notes under 47 U.S.C. § 157.

[^247]: *See supra* ¶¶ 77-78.

[^248]: *See Adarand Constructors, Inc. v. Peña,* 515 U.S. 200 (1995);
    *United States v. Virginia,* 518 U.S. 515 (1996).

[^249]: *NPRM,* 14 FCC Rcd at 19287 ¶ 46.

[^250]: *See Part 1 Third Report and Order*, 13 FCC Rcd at 477-78 ¶
    185-86.

[^251]: *See Ellis Thompson Corporation*, 9 FCC Rcd 7138, 7138-7139 ¶ 9
    (1994) (\"*Ellis Thompson*\"), in which the Commission identified
    the following factors used to determine control of a business: (1)
    use of facilities and equipment; (2) control of day-to-day
    operations; (3) control of policy decisions; (4) personnel
    responsibilities; (5) control of financial obligations; and (6)
    receipt of monies and profits. *See also* *Intermountain Microwave*,
    24 Rad. Reg. (P&F) 983 (1963); In re Application of Baker Creek
    Communications, L.P. for Authority to Construct and Operate Local
    Multipoint Distribution Services in Multiple Basic Trading Areas,
    *Memorandum Opinion and Order*, 13 FCC Rcd 18709 (1998) (discussing
    in detail the factors constituting *de facto* control); Stephen F.
    Sewell, *Assignments and Transfers of Control of FCC Authorizations
    Under Section 310(d) of the Communications Act of 1934*, 43 Fed.
    Comm. L.J. 277 (1991).

[^252]: *See* 47 C.F.R. § 1.2110(b)(4).

[^253]: Wireless One Comments at 3.

[^254]: *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, *Memorandum Opinion and Order on Reconsideration and
    Third Report and Order,* 14 FCC Rcd at 10086 ¶ 100 (1999); "Wireless
    Telecommunications Bureau Responds to Questions About the Local
    Multipoint Distribution Service Auction," *Public Notice,* 13 FCC
    Rcd at 346 (1998); *Competitive Bidding* *Fifth Memorandum Opinion
    and Order*, 10 FCC Rcd at 421 ¶ 30 (1994).

[^255]: *See* 47 C.F.R §1.2110(b)(4). *See also* In re Application of
    Baker Creek Communications, L.P. for Authority to Construct and
    Operate Local Multipoint Distribution Services in Multiple Basic
    Trading Areas, *Memorandum Opinion and Order*, 13 FCC Rcd 18709
    (rel. Sept. 22, 1998).

[^256]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et. seq.*,
    has been amended by the Contract With America Advancement Act of
    1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of
    the CWAAA is the Small Business Regulatory Enforcement Fairness Act
    of 1996 (SBREFA).

[^257]: *See* Amendment to Parts 1, 2, and 101 of the Commission's Rules
    To License Fixed Services at 24 GHz, WT Docket 99-327, *Notice of
    Proposed Rulemaking*, 14 FCC Rcd 19263, 19292 (2000) (*NPRM*).

[^258]: *See* 5 U.S.C. § 604.

[^259]: 5 U.S.C. § 603(b)(3).

[^260]: *See* 5 U.S.C. § 601(6).

[^261]: 5 U.S.C. § 601(3) (incorporating by reference the definition of
    \"small business concern\" in 15 U.S.C. § 632). Pursuant to the RFA,
    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).

[^262]: Small Business Act, 15 U.S.C. § 632 (1996).

[^263]: 5 U.S.C. § 601(4).

[^264]: 1992 Economic Census, U.S. Bureau of the Census, Table 6
    (special tabulation of data under contract to Office of Advocacy of
    the SBA).

[^265]: 5 U.S.C. § 601(5).

[^266]: U.S. Dept. of Commerce, Bureau of the Census, \"1992 Census of
    Governments.\"

[^267]: *Id.*

[^268]: *See* 13 C.F.R. § 121.201, Standard Industrial Classification
    (SIC) Code 4812.

[^269]: U.S. Bureau of the Census, U.S. Department of Commerce, 1992
    Census of Transportation, Communications, and Utilities, UC92‑S‑1,
    Subject Series, Establishment and Firm Size, Table 5, Employment
    Size of Firms: 1992, SIC Code 4812 (issued May 1995).

[^270]: Teligent has acquired the DEMS licenses of FirstMark, the only
    other licensee in the 24 GHz band whose license has been modified to
    require relocation to the 24 GHz band.

[^271]: *See* Implementation of Section 309(j) of the Communications Act
    --- Competitive Bidding, *Fifth Report and Order*, 9 FCC Rcd 5532,
    5581-82 ¶ 115 (1994).

[^272]: *See* 5 U.S.C. § 603.

[^273]: *See supra* Section IV.A.2 ¶ 12 (only four such bidders lost,
    out of twenty-eight).

[^274]: *Id.* at ¶ 14, 15.

[^275]: *Id.* at ¶ 17.

[^276]: We do note, however, that some changes may be substantial enough
    to require application under separate part provisions for both
    incumbents and new licensees (*i.e.,* discontinuance, reduction or
    impairment of existing service, environmental impact, quiet zones,
    antenna structure requirements, international borders, and technical
    rules under Part 101). *See supra* Section IV.B.1 ¶¶ 28, 29.

[^277]: 47 C.F.R. § 1.2111(e).

[^278]: *See* 47 C.F.R. § 101.7.

[^279]: We proposed a 15 percent bidding credit for small businesses,
    and a 25 percent bidding credit for very small businesses. *See
    NPRM*, 14 FCC Rcd at 19287, 19288 ¶¶ 48, 49. However, we are
    adopting bidding credits of 15, 25, and 35 percent for three
    categories of small businesses. *See supra* Section IV.D.3.a ¶ 76.

[^280]: 47 C.F.R. § 101.535.

[^281]: In particular, as indicated by NTCA, rural telephone companies
    may not be successful in obtaining partitioned areas because
    licensees are generally able to meet our performance requirements by
    only serving urban areas. *See* Amendments to Parts 1, 2, 87 and 101
    of the Commission's Rules To License Fixed Services at 24 GHz,
    *Report and Order*, WT Docket No. 99-327, at ¶ 17.

[^282]: *See e.g.*, Amendment of the Commission's Rules to Establish New
    Personal Communications Services, Narrowband PCS, *Second Report and
    Order and Second Further Notice of Proposed Rulemaking*, GEN Docket
    No. 90-314, ET Docket No. 92-100 (rel. May 18, 2000); 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 Service and for Fixed Satellite Services, *Fourth
    Report and Order*, 13 FCC Rcd 11655 (1998).

[^283]: 12 F.C.C.2d. 559 (1963) (*Intermountain Microwave*). The factors
    in *Intermountain Microwave* are:

    Does the licensee have unfettered use of all facilities?

    Who controls daily operations?

    Who determines and carries out the policy decisions, including
    preparing and filing applications with the Commission?

    Who is in charge of employment, supervision, and dismissal of
    personnel?

    Who is in charge of the payment of financing obligations, including
    expenses arising out of operation?

    Who receives monies and profits from the operation of the
    facilities?

    *See also Ellis Thompson Corporation*, 10 FCC Rcd 12554 (1995)
    (*Ellis Thompson*); *Baker Creek Communications, L.P.*, 13 FCC Rcd
    18709 (1998).

[^284]: While we have applied the *Intermountain* factors and permitted
    licensees to enter into "turn-key" management agreements under which
    third parties construct and operate communications systems, we
    require the licensees to engage in certain actions that may
    needlessly inhibit service to the public to avoid an unauthorized
    transfer of control. *See generally* *Ellis Thompson*, *supra* note
    Error: Reference source not found; *Miller Communications, Inc.*, 3
    FCC Rcd 6477 (Mob. Serv. Div 1987); *Jacksonville Cellular Telephone
    Corp*., 2 FCC Rcd 6416 (Mob. Serv. Div. 1987), *aff'd*, 3 FCC Rcd
    5386 (1988).

[^285]: One reason for some reluctance to adopt smaller service areas in
    this band is that we failed to pursue this approach in the recent 39
    GHz band auctions. In light of the highly competitive relationship
    between the national players in this band and 39 GHz, it may not be
    fair to subject only the 24 GHz band to these smaller license
    segments. However, other services that compete with these bands are
    subject to smaller license areas.

[^286]: *See* 47 C.F.R. § 101.1323; *Policy Statement: In the Matter of
    Principles for Reallocation of Spectrum To Encourage the Development
    of Telecommunications Technologies for the New Millennium*, 14 FCC
    Rcd 19868, FCC 99-354, ¶¶ 12-13 (rel. Nov. 22, 1999); Federal
    Communications Commission Public Forum on Facilitating the
    Development of Secondary Markets for Radio Spectrum, Partitioning
    and Disaggregation (May 31, 2000), available at
    \<http://www.fcc.gov/Bureaus/Engineering_Technology
    /Public_Notices/2000/da001139.html\>.

[^287]: For businesses with more regional or national strategies,
    smaller service areas should only slightly increase the transaction
    costs of acquiring these licenses at auction. (In this regard, the
    use of combinatorial bidding will enable the FCC more freely to
    utilize smaller license areas by reducing the transaction costs of
    aggregation and maximizing the cumulative value of the licenses.) In
    evaluating our overall spectrum management goals, the small
    increases in transaction costs inherent in smaller license areas
    must be balanced against the apparently substantial reduction in
    transaction costs created by eliminating the need for smaller
    players to acquire their spectrum from the secondary market.