# CONCURRING STATEMENT OF COMMISSIONER HAROLD FURCHTGOTT-ROTH 

Re 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, Third
Report and Order and Memorandum Opinion and Order, CC Docket No. 92-297
(rel. June 26, 2000)

Finally, the end.

Today the Commission will finally allow the LMDS ownership restrictions
on LECs and cable operators to sunset. After years of wrangling, after
countless filings, and after virtually no offering of service, the
Commission is willing to let the LMDS eligibility restriction fade into
the sunset on June 30, 2000. On July 1, 2000 I am happy to report, the
American people will finally have their first opportunity to see the
full potential of the LMDS market. After years of fighting to have these
restrictions lifted, I welcome today's decision as a hopeful sign that
such ownership rules will be relegated to the dustbin of history.

All of this, unfortunately, occurs far too late.

Three and a half years ago, the Commission adopted these ownership
restrictions over the strong and prescient dissent of my colleague,
Commissioner Chong. As she wrote, "by precluding the participation of
incumbent LEC and cable operators, competition in those markets may well
be harmed by arbitrarily denying some of the strongest potential
competitors the ability to branch out into new markets."[^1] She
described the majority as subscribing to the belief that "government
must second guess the marketplace and impose heavy regulatory
restrictions on the basis of sheer conjecture."[^2]

Two and a half years ago, when the majority decided to initiate this
proceeding to determine whether or not the eligibility restrictions
should sunset, I dissented as well. In doing so, I stated my view that
"\[e\]ligibility restrictions on an innovative new service are a
draconian measure; such bans on competition should be used only to
prevent a substantial competitive harm to a specific market. Here, the
eligibility restrictions are imposed not to prevent a specific harm, but
in an attempt to enhance the mere possibility of competition."[^3] Six
months ago, as the Commission issued its Sixth Notice of Proposed
Rulemaking, I once again called attention to the speculative basis and
lack of record support for these ownership restrictions.[^4]

Today's Order comes to the same conclusions that Commissioner Chong and
I have been advocating. Most fundamentally, today's Order employs a
different standard of review for these regulatory limitations. The
original restriction was based on a substantial market power test, and
allowed the speculative competitive fears of the majority to withstand
scrutiny. Today's Order evaluates the eligibility restriction based on
the far more reasonable question of whether "open eligibility poses a
significant likelihood of substantial competitive harm in specific
markets, and, if so, whether eligibility restrictions are an effective
way to address this harm."[^5] This standard reflects my reluctance to
impose these types of restrictions.

Two other fundamental principles of Commissioner Chong's and my dissents
were (1) the flexibility afforded LMDS licensees undercut the need for
predictive service-specific ownership limitations, and (2) the
availability of other fixed wireless spectrum made it extremely
difficult, if not impossible, for any provider to monopolize the market.
Years later, today's Order reaches the same conclusions. LMDS is "not
being primarily used to provide local exchange or MVPD services" -- the
original theory for the imposition of the ownership rules. Therefore,
the Order reaches the now obvious conclusion that "\[w\]e do not believe
we should continue the LMDS restriction based on possible competitive
effects in markets that LMDS licensees are not entering.\"[^6]

Second, the Order also notes that there is "no reason here to treat LMDS
differently from other substitutable spectrum", like MMDS, 24 GHz, 39
GHz and other fixed wireless services.[^7] The Order comes to the
well-documented and widely accepted conclusion that "no group of firms
or technology will likely be able to dominate the provision of broadband
services" and that the possibility of monopolizing all of the spectrum
available for broadband is "fairly remote."[^8] Moreover, the Order
cites to a number of potential benefits of sunseting the rule --
benefits also outlined by the dissenting statements of the past three
years: increased access to capital, more rapid deployment, better
equipment availability, etc.[^9]

In short, while I endorse much of the reasoning of today's order, I only
lament that it did not hold sway with my colleagues sooner.

It is not clear whether the lackluster performance of LMDS to date is
the result of the marketplace or our restrictive rules. That is one of
the core problems with intrusive regulation -- one never knows whether a
service has failed or government policy has failed. But with today's
decision, we can finally be sure that LMDS will rise or fall on its own
merits -- not based on government fiat.

[^1]: *Statement of Commissioner Rachelle B. Chong, Dissenting in Part,*
    Second Report and Order, Order on Reconsideration and Fifth Notice
    of Proposed Rulemaking, CC Docket No. 92-297 (March 11, 1997).

[^2]: Id.

[^3]: *Separate Statement of Commissioner Harold Furchtgott-Roth*, in
    Third Order on Reconsideration, CC Docket 92-297 (Feb. 3, 1998); see
    also *Separate Statement of Commissioner Michael Powell*, in Third
    Order on Reconsideration, CC Docket 92-297 (raising some of the same
    concerns).

[^4]: Commissioner Powell raised similar concerns. *See* *Dissenting
    Statement of Commissioner Michael Powell* in Third Order on
    Reconsideration, Sixth Notice of Proposed Rulemaking, CC Docket
    92-297 (Dec. 13, 1999).

[^5]: Third Report and Order and Memorandum Opinion and Order, CC Docket
    No. 92-297 (rel. June 23, 2000), at ¶ 1.

[^6]: Id. at ¶ 15.

[^7]: See id. at ¶ 26.

[^8]: Id. at ¶¶ 19, 21.

[^9]: See *Dissenting Statement of Commissioner Harold Furchtgott-Roth,*
    in Third Order on Reconsideration, Sixth Notice of Proposed
    Rulemaking, CC Docket 92-297 (Dec. 13, 1999)*; Statement of
    Commissioner Rachelle B. Chong, Dissenting in Part,* Second Report
    and Order, Order on Reconsideration and Fifth Notice of Proposed
    Rulemaking, CC Docket No. 92-297 (March 11, 1997).