**[JOINT STATEMENT OF]{.underline}**

**[CHAIRMAN MICHAEL POWELL AND]{.underline}**

**[COMMISSIONER KATHLEEN Q. ABERNATHY]{.underline}**

In re: Amendment of Parts 2 and 25 of the Commission's Rules to Permit
Operation of NGSO FSS Systems Co-Frequency with GSO and Terrestrial
Systems in the Ku-Band Frequency Range (ET Docket No. 98-206, RM-9147,
RM-9245) (rel. May 23, 2002).

This proceeding has challenged the Commission to balance conflicting
goals, promote competition through new technology, and minimize
interference to existing licensees. We believe the Commission and its
excellent staff have done an admirable job.

Nonetheless, we believe a few aspects of the decision deserve particular
attention. First, the Commission has wisely chosen not to saddle the new
Multichannel Video Distribution and Data Service (MVDDS) with regulatory
burdens based on the types of services some expect it to provide.
Instead the Commission has exercised regulatory restraint to allow MVDDS
to evolve in the marketplace first and as a topic of regulation second.
In addition, we believe the Commission wisely adopted strict
interference rules for MVDDS operations to ensure a regulatory regime
that is clear and enforceable, yet flexible. Although many
well-intentioned proposals were considered, including compensation
formulas, mandated service calls, mitigation zones and hundreds of
precision measurements, we believe the Commission correctly chose the
best approach in this Order that limits the equivalent power flux
density (EPFD) at DBS receive sites. Although there has been some
criticism of certain variables used in the technical analysis, we
believe the Commission's engineering staff has developed a reasonable
calculation methodology consistent with best engineering practices and
the record in this proceeding.

**What is MVDDS?**

The short answer is that we do not know. Its name, Multichannel Video
Distribution and Data Service, seems to suggest everything is possible
-- and perhaps it is. But the service rules the Commission has adopted
do not [require]{.underline} MVDDS to provide any particular kind of
service -- it could be a multichannel video, or data, or digital radio
service, or any other permutation on spectrum use. The Commission was
once in the business of requiring spectrum holders to provide a certain
type of service. That approach failed because government is a very bad
predictor of technology and markets -- both of which move a lot faster
than government. Over the past decade or so, the Commission has adopted
more flexible service rules that bound a service based largely on
interference limitations and its allocation (fixed or mobile,
terrestrial or satellite). In this Order, we follow that flexible model
for MVDDS.

Regardless of the type of service MVDDS ultimately is, if successful, it
has remarkable potential to benefit the American people.

If successful, MVDDS creates the possibility of an additional
competitive provider of MVPD service. That service is now dominated by
the satellite and cable platforms. In turn, consumers spend a
significant amount of their communications budget on these services. In
response to the limited intermodal competition for MVPD services, the
Commission has long sought to facilitate the development of a
terrestrial wireless alternative, with limited success. MVDDS offers the
possibility of another MVPD alternative.

Yet it is also quite possible that MVDDS will be used to provide a
one-way data path for broadband services. Today that market too is
dominated by two platforms -- cable and wireline telephony. As demand
for broadband increases, it will become increasingly important to
Americans' communications needs. The Commission has sought to facilitate
the development of a wireless alternative, thus far with limited
success. MVDDS offers the possibility of another broadband alternative.

Because the Commission has not dictated what type of service MVDDS will
become, we believe it is premature to impose obligations inherent in
other service offerings (like Title VI cable television regulation or
Title II common carrier regulation). For example, imposing must carry
obligations on a broadband service does not serve the public interest;
nor would open access be a reasonable regulation of MVPD service.
Moreover, some mandates -- such as must carry -- are statutorily limited
to certain platforms (such as cable or satellite).[^1] It is not at all
clear that we have the statutory authority to impose these obligations
on other MVPD providers, such as MVDDS. Since we do not believe it is
desirable or necessarily legal to impose these obligations, we would not
do so here. Moreover, potential individual licensee's business plans
should not guide Commission policy because the Commission cannot know
who will prevail at auction. Developing service rules based on one
applicant's business plan, even with the best of intentions, may
inadvertently tip the auction in their favor. If MVDDS ultimately offers
a service that fits squarely into one of our regulatory boxes, we can
assess what additional regulatory safeguards, if any, are required. In
the meantime, we are not troubled that a nascent service may initially
not be constrained by legacy regulatory strictures.

Relatedly, we do not support adopting a rule barring DBS providers from
holding an MVDDS license. We are generally extremely reluctant to
artificially limit auction participants for any reason. We agreed to
limit cable providers ability to bid in their own regions based on the
well-reasoned economic analysis in the Order. In contrast, DBS providers
explain that they may well have a need for a terrestrial MVDDS component
as either a broadband pipe or as an alternative path to carry even more
local signals. DBS providers contend that they are currently capacity
constrained for broadband offerings and comprehensive local-into-local
service. Indeed, the original vision for the new, terrestrial use of
this spectrum was as a method for DBS licensees to get local broadcast
signals to their subscribers.[^2] Based on these factors, the best
course is to allow DBS the opportunity to hold these licenses. There are
two important caveats to this policy. First, MVDDS networks should not
be utilized by DBS providers as a means of avoiding their carry-one
carry-all responsibilities. Second, in the event that the
EchoStar-DirecTV merger is approved, the Commission may need to
re-examine the eligibility of the combined provider to bid for MVDDS.
With these two caveats, we believe open eligibility to DBS best serves
the interests of the American people by providing an alternative method
to expand broadband and local broadcast carriage.

**DBS Installations More than Thirty Days After MVDDS Begins Service**

The dissent raises a legitimate concern about the fate of DBS antennas
installed more than thirty days after initiation of MVDDS service.[^3]
The interference limits in the new rules will apply to all existing DBS
customers 30 days after the MVDDS provider notifies the DBS carriers
that it intends to construct a tower. During this period, the MVDDS
provider is responsible for ensuring that no DBS customers will
experience greater than the mandated EPFD limit at the site of each DBS
antenna. It is important to recognize that there may be substantial
variation in the amount of interference based on antenna placement. That
is, an antenna placed on an exposed roof may exceed the EPFD limit,
while an antenna under the eaves of the same roof may not. Once the DBS
provider is on notice of the pending MVDDS tower, it is reasonable to
expect the DBS provider to place future antenna dishes so as to ensure
that interference is minimized. The burden on DBS to act responsibly to
avoid interference is consistent with the approach we have taken for
similarly situated services and is consistent with our statutory
charge.[^4] In contrast, if we were to require the EPFD limit to be met
for DBS antennas installed more than 30 days after notice of the MVDDS
tower's construction, each MVDDS tower could be forced to "turn off"
whenever a customer places their DBS antenna such that the EPFD limit is
violated. Since DBS and MVDDS are likely competitors, the ability of any
single DBS customer to force MVDDS off the air due to poor antenna
placement would render the service unworkable.[^5] Whether by preventing
MVDDS deployment in certain areas or showing some interference to new
DBS deployments, there will be some limitations on each service as a
result of our decision today. These are difficult choices -- but we
believe getting a new competitor for the vast majority of the American
people outweighs the possible loss of a single competitor for a few.[^6]

**Calculation Methodological Concerns**

Interference issues are among the most vexing public policy problems
this agency faces. The Commission has defined "harmful interference"[^7]
-- but our service rules are generally based on a permissible level of
interference that far more narrowly restricts operations. Here the
Commission has followed the permissible interference course and
determines that MVDDS service should not exceed an EPFD limit set in
each of four regions.[^8] The EPFD limits are designed to limit the
increase in average outage times to an average of 10%. Therefore if the
average consumer loses service for 10 minutes a year, the EPFD figure is
calculated so that the average increase would be to no more than 11
minutes of total outage a year. The 10% figure and the Commission's
calculation methodology echoes the international approach adopted in
this band for NGSO/DBS sharing.[^9] The 10% figure is also significantly
less than the variation in outage times between different parts of the
country, different satellites, different providers or weather variations
in a given region from year to year. For example, the outage levels from
different DBS dishes serving New York currently vary dramatically: 200.1
minutes per year from the satellite at 101^o^, 1323.6 minutes per year
from the satellite at 110^o^, and 822.1 minutes per year from the
satellite at 119^o^. Based on this multitude of variables, the
Commission adopted rules that create average interference thresholds. Of
course, in some averaged areas, the outage time will be less and in
other areas more.

To the extent that individual market areas have rain or other
characteristics not adequately captured by the regional EPFD limits, the
Commission has adopted a safety valve approach that allows licensees to
petition the Commission for a distinct EPFD limit for that license
area.[^10]

The Commission's calculations are very conservative and likely overstate
the amount of additional interference that will result from MVDDS
operations. None of these calculations take into account any natural
shielding or manmade attenuation that occurs for the vast majority of
DBS antennas. Our calculations essentially assume the worst case
scenario -- that no attenuation due to natural shielding or manmade
structures occurs. This is a highly unlikely event and as a result the
model will generally overstate the amount of increased interference that
any individual DBS subscriber may experience. The Commission model also
adopted a conservative assumption regarding a second key variable -- the
relative strength of the DBS and MVDDS signals. The model assumed a
rain-faded DBS signal and a full strength MVDDS signal. Yet rain would
likely impact the MVDDS signal as well, further reducing outage times.

The dissent attempts to make much of the alleged imprecision of the
Commission's EPFD figures and the alleged corresponding lack of
protection for DBS subscribers. While these arguments may seem facially
persuasive, the Order adopts a more sound approach. As an initial
matter, the dissent fails to describe how it would calculate these
figures, and instead second-guesses our engineering staff's
calculations. It appears, however, that one of the dissent's proposed
alternatives would be to impose a "hard and fast" 10% limit per service
area. Even putting aside the failure to acknowledge the conservative
assumptions about shielding and the strength of the MVDDS signal set out
above, there is no technical way to achieve, in all cases and in all
circumstances, the \"hard and fast\" 10% limit the dissent claims as its
goal. As in all of our proceedings where the Commission grants licensees
the privilege of accessing public airwaves that are necessarily shared
with others, it strives to achieve rational sharing rules. And in all
cases the licensees utilize the spectrum with the knowledge that
interference protection will not be [exactly]{.underline} the same
across the country with diverse terrain and atmospheric conditions.

Fundamentally, the dissent's two stated goals are mutually exclusive.
The very use of [any]{.underline} generalized formula requires that
[some]{.underline} consumers will experience a greater than 10% increase
in outage times. For example, even if the Commission were to average the
satellite orbital position, power, and antenna gain pattern across five
DBS satellites (as the dissent argues), any individual DBS customer is
likely only to receive service from one. Then, under this standard, by
definition some subscribers would experience greater than 10%
interference, thereby violating the steadfast limit. Similarly, in 2001
Louisville Kentucky may have received 50 inches of rain, and the dissent
would have us base that service area's EPFD limit on last year's
rainfall amount. Yet this year Louisville may receive half that amount,
resulting in a significant increase in the outage time percentage for
the entire service area -- once again, violating the steadfast limit. So
even if one believes in a "hard" limit -- there is no practical
sustainable way of achieving it.[^11] In fact, it would seem to require
an impossibly burdensome and complex individualized real-time dynamic
measurement at each DBS subscriber's home.

If we move beyond these inconsistencies, it appears the dissent's
concerns are not with the formula used to calculate the EPFD limits --
rather the concerns are with weather prediction and failure to include
two DBS satellite orbital locations in the interference calculation.
Thus, it is the input data points for two variables in the formula --
rather than the calculation itself that appears to motivate the dissent.

The EPFD limits are based on at least seven key variables -- satellite
orbital position, power, antenna gain pattern, receiver elevation angle,
antenna size, gain and pattern, and a propagation and rain model. Each
DBS customer has a unique combination of these variables -- plus a
unique shielding pattern based on where the dish is installed, etc. So
even assuming some of the variable modifications in the dissent were
adopted, there would still be thousands of customers that would have
interference levels above and below what the model produces. Each
customer has a distinct combination of a particular satellite with a
particular orbital position, power and antenna gain pattern. Each
customer would also have distinct receiver elevation angle, antenna
size, gain and pattern. Finally each customer has distinct weather
conditions.[^12]

Fundamentally, the dissent is mostly concerned about the imprecision of
weather forecasting. While we recognize that reasonable people can
disagree about the best method, the Commission has exercised its
reasoned technical judgment with the advice and consultation of the FCC
engineering staff to arrive at the regionalized rainfall estimates. The
dissent argues that the Commission should predict annual rainfall in
each of 354 areas.[^13] Others argued that the Commission should conduct
measurements at each MVDDS transmitter. We believe that a regionalized
approach that divides the country into four rainfall zones is
appropriate. Yet rainfall varies significantly from year to year and
even within the same region. The Commission used the top 32 cities to
generate the regionally averaged rainfall data. When plotted they
appeared to cluster into four sets, each representing a relatively small
incremental change in EPFD characteristics. For example, under the
-172.1 EPFD limit for the Northwest, there is a 9.3% average potential
increase in outage times in Sacramento, 9.8% in Seattle, 9.9% in
Portland, and 10.5% in San Francisco. Our engineering staff also did
some random sampling of additional locales to confirm the legitimacy of
the regional figures. For example, applying the regional average to
Alaska yields an average increase in outage times of 5.4% and for Hawaii
11.5%. As a technical matter these measurements confirm that the overall
rainfall data and the regionalized figures are reasonable. Although more
data points (through the addition of more locales or the tower-by-tower
approach) could be added, we believe they would add little to the
accuracy of the EPFD.

The assertion that the Order "ignored" two satellites is inaccurate. The
Commission decided to utilize three satellites because those three (101,
110 and 119) are the only orbital locations with full coverage of the
United States and provide the overwhelming majority of service to DBS
subscribers today.[^14] Including the two satellites would actually make
the ultimate calculations less precise because they would give equal
weight to satellites that do not provide service to a similar number of
consumers. In order to assure that customers receiving service from
these two satellites do not suffer from dramatically different
interference, the staff sampled data from these locations in assessing
the accuracy of the other numbers. The staff concluded that the two
excluded satellite slots have similar operating characteristics to the
other three. Thus, there are sound interference reasons for looking
predominantly to the three satellites that provide most DBS
service.[^15] The dissent also later argues that the Order failed to
adopt the Mitre Report's recommendation that EPFD be based on a single
satellite with the largest baseline of unavailability.[^16] Yet such an
approach would, by necessity, render the first criticism (ignoring two
satellites) completely irrelevant because under the Mitre approach we
would ignore four of the five. The Commission rejected the Mitre
approach because the satellite that would have set the baseline is soon
to be retired.

Concerns were also raised regarding the final drafting of the item that
should be addressed.[^17] In response to the draft item, the dissent
raised some concerns about various aspects of the Order that had not
previously been discussed. Some of those concerns were well thought-out
and prompted the majority to rethink its position and further explain
its rationale.[^18] Those steps improved this Order -- and in turn
resulted in a higher quality product for the American people. At the end
of the day that should be the goal of all the Commissioners. It is ours.
And while ideally we would engage in the dialogue at an earlier stage,
continuous improvement of our items is the right thing to do. The end
result is one that this Commission can and should be proud of --
efficient and effective spectrum sharing on a broad scale that allows us
to license an entirely new service.

**Why an auction?**

Broadwave USA (commonly known as Northpoint), and its affiliates, have
vigorously argued that an auction is not required or in the public
interest for these licenses. Northpoint arrived at the Commission many
years ago with a proposal for a new and innovative way to share the DBS
spectrum. Today, thanks in large part to its fine work and diligence,
that service will go forward. Many have claimed that Northpoint deserves
a nationwide 500 MHz terrestrial license for free based on its
regulatory and technical efforts to make this service a reality. We
sympathize with the sentiments that underlie these claims. There is
little question that had it not been for Northpoint, the MVDDS service
would not be ready to move forward today. Northpoint has put significant
time and resources into developing its service model as well as its
Commission and congressional advocacy over a long period of time. We
applaud these efforts. But the statute does not support exempting this
spectrum from auction nor does it grant Northpoint the exclusive
privilege it seeks. We also do not believe other licensing distribution
mechanisms that avoid mutual exclusivity are appropriate for this
service. While we understand the equitable basis for Northpoint's
claims, we cannot support that equitable concern trumping the auction
regime Congress created in the statute, or the value of allowing other
competitors to vie for a chance to offer service to the public. If
Northpoint's service model is a winner, the market will reward it just
as it has done for other technology companies.

> \* \* \* \* \*

This has been an extremely difficult docket for the Commission, but I
believe we have arrived at a policy that appropriately balances the
competing interests while allowing an important new service to move
forward. We look forward to an auction for these licenses and the
provision of the corresponding new services to the American people.

[^1]: See 47 U.S.C. § 614 (cable); 47 U.S.C. § 338 (satellite).

[^2]: See Northpoint Petition for Rulemaking, RM 9245, filed March 6,
    1998.

[^3]: The term "dissent" here and subsequently refers to Commissioner
    Martin's dissent.

[^4]: The Commission elsewhere requires primary users to incorporate
    protective measures, up to and including antenna replacement, to
    avoid receiving harmful interference. See, e.g., 47 C.F.R. 74.937(a)
    (\"Should interference occur and it can be demonstrated that the
    existing \[primary ITFS\] receiving antenna is inadequate, a more
    suitable antenna should be installed. In such cases, installation of
    the new receiving antenna will be the responsibility of the \[ITFS\]
    system operator serving the receive site.\"); 47 C.F.R. 101.115(d)
    (\"The Commission shall require the replacement of any \[primary
    Fixed microwave directional\] antenna . . . that does not meet
    performance Standard A . . . at the expense of the licensee
    operating such antenna, upon a showing that said antenna \[is likely
    to\] receive interference from . . . any other authorized antenna or
    applied for station whereas a higher performance antenna is not
    likely to involve such interference.\"); 47 C.F.R. 90.361 (finding
    that primary multilateration LMS systems cannot claim harmful
    interference from parts 15 and 97 operations that operate under
    certain conditions).

[^5]: The dissent notes that the majority "allows MVDDS licensees to
    cause harmful interference . . after one year . . . even if it is
    caused by a change in MVDDS operation." Yet the Order concluded that
    any major modification would trigger a new one year period during
    which complaints could be filed. Major modifications include: any
    change in frequency tolerance, bandwidth, emission type, transmit
    antenna height more than 3 meters, antenna polarization, in the
    radius of a circular area of operation, or any change in any other
    kind of area operation. See 47 CFR § 1.929(d)(1).

[^6]: A similar argument applies to DBS interference complaints that
    arise more than a year after the MVDDS service is installed. Any
    interference issues should be detected and repaired in a reasonable
    time -- and providing all parties a year to "get it right" strikes a
    reasonable balance of the interests.

[^7]: See 47 C.F.R. 2.1 ("harmful interference" is defined as
    "interference which endangers the functioning of a radionavigation
    service or of other safety services or seriously degrades obstructs,
    or repeatedly interrupts a radiocommunication service.. .. ")
    Harmful interference has never been defined on a service specific
    basis. Therefore the dissent's criticism of our "failure" to do so
    here also rings hollow. Prior to initiation of service and for one
    year thereafter, existing DBS subscribers may bring a claim
    asserting MVDDS has exceeded the EPFD limit. The MVDDS base
    transmitter must then turn off if it exceeds the cap.

[^8]: The four regions were created to account for variations in DBS
    reliability due to changes in rainfall and the satellite power and
    antenna gain pattern for different locations.

[^9]: The DBS community reached a voluntary agreement on NGSO/DBS
    sharing with the same 10% figure. The 10% for NGSOs is also an
    "average" and is based on the construction and operation of 3.5 NGSO
    systems. In that case, the parallel calculations were based on data
    from 14 U.S. cities -- rather than the 32 cities used for our
    calculations here.

[^10]: Significantly the sum total of the entire range of EPFDs across
    all 32 markets and all three satellites is less than 8 dB. We note
    that DBS providers would have the right to petition for special
    relief from our rules even if we chose not to adopt a specific
    safety valve procedure. *See, e.g.,* 47 CFR §§ 1.2, 1.3.

[^11]: Similarly the dissent criticizes the model for failing to weight
    the rainfall data based on the population. For example by weighting
    Los Angeles at four times the weight given to Denver based on
    population. Yet if such weighting were to occur it would only
    further diminish the weight given to the rural areas that the
    dissent later argues need to be given greater weight.

[^12]: Obviously each customer also has a unique DBS antenna mount with
    particularized shielding and protection dynamics that are not
    accounted for in any proposed formula. These protections make the
    actual occurrence of the predicted interference levels unlikely.

[^13]: The dissent's most recent draft adds the failure to use Nielsen's
    Designated Market Areas (DMAs) to its criticisms. Although we are
    sympathetic to the use of DMAs, the Commission does not have a
    blanket licenses from Nielsen to use these designations. The
    Commission pursued possible use of DMAs with Nielsen during this
    proceeding, but ultimately concluded that use of DMAs could raise
    copyright infringement issues. To the extent the FCC can overcome
    this legal hurdle, the use of DMAs may well serve the public
    interest.

[^14]: The dissent makes much of some city data that shows a potential
    increase in unavailability of 20-30%. However that data is largely
    from the satellite at 110 degrees -- a satellite that is scheduled
    to be retired long before MVDDS is due to be deployed.

[^15]: The selectivity of the dissent's data points is illustrated by
    its discussion of the Seattle market. The dissent chooses to analyze
    Seattle's increase in outage times based on a satellite designed to
    serve the Eastern United States.

[^16]: The satellite with the largest baseline outage time is actually
    at 119 degrees. In February 2002 Echostar launched a new more
    powerful satellite to this orbital position.

[^17]: There is nothing procedurally inappropriate in making changes,
    substantive or non-substantive, after adoption to further elucidate
    the rationale for the Commission's decision. Such revisions are
    permissible when all non-dissenting Commissioners concur in the
    changes. Here all of the Commissioners who supported the relevant
    sections agreed to the post-adoption edits.

[^18]: The Commission did not alter the fundamental policy approach --
    that an EPFD based on a average increase of 10% in outage time was
    appropriate.