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                  FCC 96-311
                               Before the
                     FEDERAL COMMUNICATIONS COMMISSION
                          Washington, D.C.  20554
In the Matter of       )
      )
Rulemaking to Amend Parts 1, 2, 21, and 25       )          CC Docket No. 92-297
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     )
      )
                          FIRST REPORT AND ORDER
                                    and
                   FOURTH NOTICE OF PROPOSED RULEMAKING
Adopted:            July 17, 1996                 Released:      July 22, 1996
Comment Date:      August 12, 1996
Reply Comment Date:August 22, 1996
By the Commission:
                            TABLE  OF  CONTENTS
I.   INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . 1-5
II.   BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
   A.   Proposed systems in the 28 GHz band  . . . . . . . . . . . . . .13
   1.  LMDS Proposals. . . . . . . . . . . . . . . . . . . . . . . . 14-16
   2.  Satellite Proposals . . . . . . . . . . . . . . . . . . . . . . .17
   a.  Geostationary-orbit fixed satellite service proposals ("GSO/FSS")18-19
   b.  Non-geostationary-orbit fixed satellite service proposal ("NGSO/FSS")20
      c.  Non-geostationary-orbit mobile satellite service ("NGSO/MSS") feeder
            links. . . . . . . . . . . . . . . . . . . . . . . . . . .  21
   B.   Outcome of The World Radiocommunications Conference 1995 . . 22-24
III.   DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
   A.   NGSO/FSS or GSO/FSS LMDS - Co-frequency Sharing Issues . . . 25-28
   B.   Services above 40 GHz. . . . . . . . . . . . . . . . . . . . 29-31
   C.   Band Plan Proposed in Third NPRM and Alternative Band Plans Considered .
   1.  Third NPRM. . . . . . . . . . . . . . . . . . . . . . . . . . 32-37
   2.  Commission Band Segmentation Options Considered . . . . . . . 38-40
   D.   Commission Band Segmentation Decision for the 27.5-30.0 GHz Band41-44
   1.  Primary LMDS Spectrum . . . . . . . . . . . . . . . . . . . . 45-50
   a.  Grandfathering CellularVision's NYPMSA License. . . . . . . . 51-55
   b. Effect of Band Segmentation on CellularVision's NYPMSA License . .56
   2.  Primary GSO/FSS Spectrum. . . . . . . . . . . . . . . . . . . 57-58
   3.  Primary NGSO/FSS Spectrum . . . . . . . . . . . . . . . . . . 59-62
   E.   Inter- and Intra- Service Sharing in the 29.1-29.5 GHz Band. . . .
   1.  Sharing in the 29.1-29.25 GHz Band  . . . . . . . . . . . . . 63-66
   2.  Sharing in the 29.1-29.25 GHz Band  . . . . . . . . . . . . . 67-71
     3.  Sharing in the 29.25 - 29.5 GHz Band . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  72-74
   F.   Downlink 17.7-20.2 GHz Frequency Band Segmentation . . . . . 75-80
   1.  Coordination Procedures . . . . . . . . . . . . . . . . . . . . .81
   G.   Allocation at 29.5-30.0 GHz. . . . . . . . . . . . . . . . . 82-85
   H.   Point-to-Point Microwave . . . . . . . . . . . . . . . . . . 86-94
IV.FOURTH NOTICE OF PROPOSED RULEMAKING. . . . . . . . . . . . . . . . . .
 A.Proposal to designate the 31.0-31.3 GHz band for LMDS . . . . . . . . .
   1.Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . .95
   2.Background. . . . . . . . . . . . . . . . . . . . . . . . . . . 96-99
   3.Discussion. . . . . . . . . . . . . . . . . . . . . . . . . . 100-104
 B.LMDS Eligibility NPRM . . . . . . . . . . . . . . . . . . . . . . . . .
   1.Introduction; Executive Summary . . . . . . . . . . . . . . . 105-106
   2.Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
        a.  Notice . . . . . . . . . . . . . . . . . . . . . . . . 107-109
        b.  Comments . . . . . . . . . . . . . . . . . . . . . . . 110-118
        c.  1996 Act . . . . . . . . . . . . . . . . . . . . . . . 119-124
   3.Discussion. . . . . . . . . . . . . . . . . . . . . . . . . . 125-136
V. CONCLUSION137
VI.PROCEDURAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . .
 A.Regulatory Flexibility Act. . . . . . . . . . . . . . . . . . . 138-139
 B.Ex Parte Rules -- Non-Restricted Proceeding . . . . . . . . . . . . 140
 C.Comment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
 D.Initial Paperwork Reduction Act of 1995 analysis. . . . . . . . . . 142
 E.Further Information . . . . . . . . . . . . . . . . . . . . . . . . 143
VII. ORDERING CLAUSES. . . . . . . . . . . . . . . . . . . . . . . 144-145
APPENDIX A  List of Parties filing Comments
APPENDIX B   Rule Amendments to 47 C.F.R Part 25 and Part 101
APPENDIX C   Regulatory Flexibility Act Analysis
                             I.  INTRODUCTION
 1.This proceeding involves the development of one of the largest contiguous spectrum
segments available to the Commission, "the 28 GHz band."  The commercialization of this
spectrum enables consumers to receive emerging domestic and global technologies via
multiple service providers.  Our plan for the band permits a competitive market-driven
process to determine which services will succeed.
  2. With this Report and Order, we designate band segments in the 28 GHz band for
several types of wireless systems, clearing the way for licensing Local Multipoint Distribution
Service ("LMDS") providers, Fixed Satellite Service ("FSS") systems, and feeder links for
certain Mobile Satellite Service ("MSS") systems.  The associated downlink bands for satellite
services are designated as well.  We also adopt a Fourth Notice of Proposed Rulemaking
proposing to designate an additional band segment, 31.0-31.3 GHz, for LMDS use on a
primary protected basis.  The Fourth Notice also seeks comment on whether the Commission
should adopt eligibility or use restrictions for incumbent local exchange carriers ("LECs")and
cable operators for acquisition of LMDS spectrum within their geographic service areas.
 3. Our band segmentation plan seeks to promote competition by permitting all proposed
services to develop and offer innovative consumer services such as video program
distribution, two-way interactive video, teleconferencing, telemedicine, telecommuting, and
high speed data services within our borders and around the globe.
   4. In a Third Notice of Proposed Rulemaking, adopted July 28, 1995,  we proposed a
band plan to permit all of the proposed services in the 28 GHz band - LMDS, geostationary-
orbit FSS ("GSO/FSS") systems, non-geostationary orbit FSS ("NGSO/FSS") systems, and
feeder links for non-geostationary orbit MSS ("NGSO/MSS" or "Big LEO") systems.  We
also proposed rules and policies to govern the LMDS service, issued a Supplemental
Tentative Proposal on CellularVision U.S.A.'s ("CellularVision") pioneer's preference
application, proposed auction rules for LMDS, and proposed to change the MSS allocation at
the 29.5-30.0 GHz band.
    5.  In response to the Third NPRM, we received forty-four comments and nineteen reply
comments from entities representing diverse segments of the communications industry.  The
majority of commenters, representing LMDS proponents and the satellite industry, recognized
that our proposed band plan was a reasonable compromise to accommodate all interested
parties in the band and generally expressed the desire for more unencumbered spectrum in the
28 GHz band for their proposed service.  We will address issues relating to service rules for
both GSO/FSS and NGSO/FSS systems proposing to operate in the 28 GHz band in a
forthcoming Report and Order.  Service and auction rules relating to LMDS will also be
addressed in a separate Report and Order.
                              II.  BACKGROUND
    6.   The 27.5-29.5 GHz frequency band is allocated for fixed service, fixed-satellite
service uplinks and mobile service.   In January 1991, the Commission granted the
application of CellularVision's predecessor-in-interest, Hye Crest, Inc., for a license to provide
LMDS in the 27.5-28.5 GHz frequency band within the New York City Primary Metropolitan
Statistical Area (NYPMSA).
    7.  Meanwhile, NASA's successful launch and operation of its experimental Advanced
Communications Technology Satellite (ACTS) initiated demand by satellite entities for the
use of the 28 GHz band, and its associated downlink bands.  In 1990, Motorola Satellite
Communications, Inc. applied for feeder links for its NGSO/MSS system in this band.
    8.  This Report and Order is the culmination of a proceeding that was initiated in 1992
by three petitions for rulemaking proposing changes in the rules concerning fixed stations in
the 28 GHz band.   In the First NPRM, released in January 1993, the Commission tentatively
concluded that redesignation from fixed point-to-point use to fixed point-to-multipoint could
stimulate greater use of the 27.5-29.5 GHz band.  The Commission also proposed rules for
implementation of LMDS service.  Based on CellularVision's existing technology, we also
proposed two spectrum blocks of 1000 MHz each for LMDS.  In the First NPRM the
Commission also requested comment regarding the effect of redesignation and the proposed
rules on any proposed satellite use of the band.
    9.  The majority of commenters and reply commenters supported the Commission's
finding of widespread interest in both point-to-multipoint and satellite use of the 28 GHz
band.  The Commission considered various proposals for the 28 GHz band and released the
Second NPRM in February 1994.  We tentatively concluded that it would serve the public
interest to allow terrestrial and satellite providers to co-exist in the 28 GHz band.  We then
established the LMDS/FSS 28 GHz Band Negotiated Rulemaking Committee ("NRMC") to
develop technical rules for sharing the band.
    10. Despite the significant efforts of the parties involved, the NRMC did not reach
consensus on a sharing plan.  It concluded that LMDS and FSS service uplinks are not
technically able, at this time, to reasonably share the same spectrum.  However,
CellularVision, Texas Instruments, and Motorola were able to reach general agreement on
technical parameters allowing LMDS hub-to-subscriber links and feeder links for NGSO/MSS
systems to share the same spectrum, subject to specific agreement on sharing criteria.  LMDS
proponents and Motorola have not been able to develop any mutually agreed upon sharing
criteria for NGSO/MSS feeder links and LMDS subscriber-to-hub links.  See infra  37.
There was also some preliminary indication that limited sharing could be achieved between
FSS gateway stations (either non-geostationary or geostationary orbit) and LMDS.
    11. In the time between the NRMC and the Third NPRM, Commission staff conducted
several meetings with interested parties to discuss further issues regarding band segmentation
and sharing.  In the Third NPRM we proposed a band segmentation plan that divides the 28
GHz band into discrete spectrum segments with each segment designated to either GSO/FSS,
NGSO/FSS, MSS feeder links, or LMDS, on a primary or co-primary basis.  We requested
that "any commenter asserting that the band plan does not provide sufficient capacity for its
system, . . . specify the minimum spectrum required to support its system, supporting this
assertion with a concrete technical and economic analysis, and . . . propose a plan that
accommodates the reasonable requirements of all qualified applicants."
    12. Below we provide a summary of systems proposing service in the 28 GHz band and
discuss relevant international allocation decisions influencing our domestic band plan.  We
then discuss issues concerning the proposed band plan, alternative band plans considered, and
present our final band plan.
A.  Proposed systems for the 28 GHz band
    13. In the Third NPRM we described the characteristics of the LMDS, FSS, and MSS
systems proposed for the 28 GHz band.  Following is a summary of these characteristics,
including a description of new satellite applicants and any modifications in the system
proponents' applications since the adoption of the Third NPRM.
1.  LMDS Proposals:
    14. LMDS proponents indicate that this new technology will allow LMDS providers to
offer services that compete both with LECs in the provision of local exchange service, and
with cable operators in the provision of video programming.  Very high subscriber capacity
for two-way video telecommunications is available through LMDS technology developed for
use in the 28 GHz frequency band.  Hub transceivers operate in small cells, typically six
miles in diameter, which transmit to and receive transmissions from subscriber locations.
Because the cells are small, and arranged in a typical cellular pattern, a very high level of
frequency reuse is possible.  This pattern, combined with the availability of broadband
microwave spectrum, results in sufficient capacity in the proposed LMDS system designs
offer services that compete both with local exchange carriers in the provision of local
exchange service, and with cable operators in the provision of video programming even in
urban areas.  We expect that LMDS providers will offer facilities-based competition to
traditional cable and telephone carriers -- greatly enhancing customer choice, and facilitating
the rapid dissemination of innovative communications services with the entry of multiple
providers into the market.
    15.  The wealth of innovative services possible with the LMDS broadband spectrum we
make available includes two-way video, teleconferencing, telemedicine, telecommuting, data
services and global networks.  LMDS systems have the capacity to provide broadband video-
on-demand and distance learning.  Moreover, LMDS' cellular-like capabilities enable it to
offer diverse services within the same region, and to jointly offer services traditionally
provided by separate communications service providers.
    16.  LMDS has attracted attention from both developed and developing countries.  Canada
has begun licensing this technology (called LMCS) in three gigahertz of spectrum in the
frequency band 25.35 to 28.35 GHz.  At least six other countries, including Mexico and
Venezuela, have licensed LMDS on an experimental or permanent basis in the 28 GHz
band.  LMDS developers offer the prospect of modern wireless telephone systems, video
distribution, and other communications services to developing countries that lack wireline or
cable infrastructure.
    2.  Satellite Proposals:
    17. The satellite industry perceives the 28 GHz band as primarily the location for the
development of new FSS broadband services provided directly to the home, but also as the
expansion band for accommodating growth in existing FSS services.  The band is also seen as
the location of feeder links for MSS use.  The 28 GHz band has the capability to sustain the
use of very small earth station antennas and to provide high-speed, broadband interactive
services on demand.  Three different types of satellite system uses have been proposed in this
band: GSO/FSS, NGSO/FSS and feeder links for NGSO/MSS systems.  Below we describe
new applications, modifications or amendments to existing applications since the adoption of
the Third NPRM.
    a.  Geostationary-Orbit Fixed-Satellite Service Proposals ("GSO/FSS")
    18. Concurrent with the release of the Third NPRM, the Commission placed the five Ka-
band satellite applications which were on file on public notice and established a September
29, 1995 cut-off date for filing applications to be considered with them.  In response, we
received thirteen new satellite system applications, amendments, or modifications to
applications for GSO/FSS systems in this band.
    19. The GSO/FSS applicants propose a variety of broadband services such as:   interactive
digital voice, data, and video; electronic messaging; facsimile; video telephony;
videoconferencing; satellite news gathering; computer access; direct-to-home ("DTH") video,
and telemedicine.  Eight applicants propose global coverage and five applicants propose
regional coverage.
    b.  Non-Geostationary-Orbit Fixed-Satellite Service Proposal ("NGSO/FSS")
    20. Teledesic Corporation is the only NGSO/FSS applicant on file with the Commission.
Teledesic proposes a constellation of 840 low-Earth Orbit ("LEO") satellites to provide
"broadband capacity in the sky" such as voice, facsimile, two-way digital data,
videoconferencing, interactive multi-media and other types of broadband services.  Teledesic
requests 500 MHz of spectrum in each direction for its standard terminal links, specifically,
28.6-29.1 GHz (uplink) and 18.8-19.3 GHz (downlink).  It also requests authority to operate
using an additional 800 MHz in the 28 GHz band for gateway-to-satellite feeder links.
    c.  Non-Geostationary-Orbit Mobile Satellite Service ("NGSO/MSS") Feeder Links
    21.    Feeder links for NGSO/MSS systems use frequencies allocated to the FSS to
interconnect a mobile satellite space station with other fixed communications networks by
means of one or more central earth stations.  The user transceivers are connected to the
mobile satellite space station using other mobile satellite frequencies.  Motorola, Inc. and
TRW Inc. are currently the only two licensed NGSO/MSS systems that have applications for
NGSO/MSS feeder links in the 28 GHz band.  Specifically, the Commission conditionally
authorized Motorola to construct feeder uplinks in the 29.1-29.3 GHz band, and feeder
downlinks in the 19.4-19.6 GHz band.  Motorola's licensed NGSO/MSS system, Iridium, is
under construction and is scheduled for launch this year.  TRW was conditionally authorized
to construct feeder uplinks in the 29.7-30.0 GHz frequency band, and feeder downlinks in the
19.8-20.1 GHz frequency bands.  The 29.7-30.0 GHz band however, was eliminated from
consideration as a potential MSS feeder link band as part of the preparations for the World
Radio Communications Conference 1995 ("WRC-95").  In response to the frequency bands
designated for feeder links for NGSO/MSS systems at WRC-95, TRW Inc. submitted a
proposed modification to its authorization requesting use of the 29.1-29.4 GHz band for
feeder uplinks, and the 19.3-19.6 GHz for its feeder downlinks.
B.  Outcome of WRC-95
    22.  We stated in the Third NPRM that the outcome of WRC-95 could affect our ability to
implement the proposed band plan.  At WRC-95 the U.S. proposals, which were consistent
with our proposed 28 GHz domestic band plan, were very successful.  Some parties suggested
that we request supplemental comments after the conclusion of WRC-95.  However, because
the results of WRC-95 were consistent with our proposed band plan, as well as the band plan
we adopt here, we do not think that it was necessary to do so.  In any event, pursuant to our
ex parte rules, a number of parties have addressed this issue subsequent to WRC-95.
    23. Resolution 118 of WRC-95 addresses the bands 18.8-19.3 GHz and 28.6-29.1 GHz.
The Conference adopted changes concerning the 18.9-19.3 GHz (downlinks) and 28.7-29.1
GHz (uplinks) bands to facilitate the operation of  NGSO/FSS systems on a co-primary basis
with the GSO/FSS.  The other 100 MHz of spectrum in each band, 18.8-18.9 and 28.6-28.7
GHz is "frozen" internationally until WRC-97.  Resolution 118 also calls for the ITU
Radiocommunication Sector (ITU-R) to study conditions for sharing between GSO and
NGSO/FSS systems, between NGSO/FSS systems, and between NGSO/FSS and terrestrial
systems.  These studies are to be taken into account in determining whether the types of
changes adopted for the 28.7-29.1/18.9-19.3 GHz bands should also be adopted in the frozen
bands, and whether any other adjustments in spectrum allocations are warranted.
    24. Resolution 120 of WRC-95 addresses the use of the bands 19.3-19.7 GHz and 29.1-
29.5 GHz by NGSO/MSS feeder links.  The Conference adopted allocation changes to
facilitate use of the 19.3-19.6 GHz (downlink) and 29.1-29.4 GHz (uplink) bands for the
operation of NGSO/MSS feeder links on a co-primary basis with the GSO/FSS.  Studies will
be performed on the other 100 MHz spectrum blocks, 19.6-19.7 GHz and 29.4-29.5 GHz with
a view to similar actions in 1997.  In addition, WRC-95 adopted the U.S. proposal to permit
"reverse band working" in the 19.3-19.6 GHz band for feeder links for NGSO/MSS systems.
                             III.  DISCUSSION
 A.  NGSO/FSS or GSO/FSS and LMDS - Co-Frequency Sharing Issues
    25. In the Third NPRM, we tentatively concluded, based on the record at that time, that
co-frequency sharing between NGSO/FSS or GSO/FSS systems and LMDS systems was not
feasible.  Many commenters agree with our tentative conclusion.  Some proponents of
LMDS systems in this band disagree, and contend that we should not preclude the possibility
of future co-frequency sharing in the band.  For example, CellularVision suggests that the
Commission adopt a mechanism that would allow it to incorporate co-frequency sharing into
the band plan, should any party demonstrate that sharing is feasible.  Bell Atlantic asserts
that the Commission should permit interested parties to develop the record further on this
issue or negotiate co-frequency arrangements.  However, these proponents do not supply any
additional technical findings on the co-frequency sharing issue and how such co-frequency
operations could be implemented.
    26. Hughes argues that the Commission should decline to "leave the door open" for co-
frequency sharing between LMDS and FSS.  Teledesic also asserts that there has been no
engineering study submitted in this proceeding demonstrating that such sharing is technically
achievable.  NASA further asserts that studies by Bellcore and GeoWave have been
unsuccessful in finding techniques that would allow co-frequency sharing between LMDS and
satellite systems each with ubiquitous consumer terminals operating in the same geographical
areas.  Comtech Associates asserts that "sharing arrangements as proposed in the Bellcore
study will place unnecessary technical and financial burdens on small LMDS operators.
Additionally the technical uncertainty surrounding the inability to adequately field test the
necessary conditions resulting from multiple service providers in the 28 GHz band will
introduce business and financial uncertainty making raising capital for service providers more
difficult."
   27.    We conclude, based on the entire record before us, that co-frequency sharing between
either GSO/FSS or NGSO/FSS ubiquitously deployed terminals and LMDS with its
ubiquitously deployed subscriber terminals, is not feasible at this time.  At this time no party
has demonstrated the feasibility of sharing, and our conclusion in the Third NPRM was
clearly supported by the record to date.  However, if future technology becomes available to
facilitate this type of sharing we would consider revisiting this conclusion.
    28. We also deny Qualcomm Incorporated's request to reopen the record in this
proceeding, on a limited basis, for supplemental comments on sharing issues among
NGSO/FSS systems.  Teledesic opposes this request.  QualComm's Petition raises issues
directly relating to intra-service sharing and licensing policies for NGSO/FSS systems.  A
forthcoming Report and Order will address NGSO/FSS service rules and we do not believe
that the adoption of the domestic band segmentation plan precludes the possibility of sharing
between NGSO/FSS systems.  Therefore, we conclude that reopening the formal comment
period in this proceeding is not warranted.  Consistent with our ex parte rules, several
parties have filed comments after the formal comment deadline.
B.  Services above 40 GHz
    29. In the Third NPRM, we also tentatively concluded that the 40.5-42.5 GHz  ("40 GHz
band") is not currently suitable for either the LMDS or fixed satellite services, as proposed in
this docket.  Many LMDS proponents agree with our tentative conclusion.  CellularVision,
for example, contends it and other parties demonstrated in comments in ET Docket 94-124
that based on "significant differences in signal propagation characteristics, component
technology and system implementation, the cost of providing LMDS service at 40 GHz would
be significantly more expensive than the cost at 28 GHz, thus rendering 40 GHz LMDS
commercially unviable."  However, GHz Equipment Company, a manufacturer of equipment
for MMDS video distribution, asserts that it can produce inexpensive analog equipment at 40
GHz and further asserts that digital delivery systems are being tested by GHz Equipment and
can be accommodated in this spectrum.  It indicates, however, that digital equipment will cost
significantly more with today's pricing regardless of the spectrum band employed.
Moreover, some LMDS proponents envision that specialized terrestrial services may become
suitable for the 40 GHz band in the future, as technology advances and 40 GHz equipment is
developed and becomes commercially available.
    30. NASA asserts that the principal accommodation of LMDS should be in the 40 GHz
band.  NASA argues that the Commission erred in its conclusion based on representations of
28 GHz LMDS proponents which claim LMDS is not viable at 40 GHz, and that many
telecommunications and technology development companies in the country assert that
technology is readily available to develop LMDS in the 40 GHz frequency band.  TRW
contends that the Commission failed to provide a rational basis for its tentative conclusion
that locating LMDS at 40 GHz is not feasible.  Lockheed Martin and GE Americom assert
that the record has not demonstrated that the cost increase of providing LMDS in the 40 GHz
band would make LMDS service prohibitive.  TRW and GE Americom also suggest that the
40 GHz band provides an alternative for LMDS if the 28 GHz band sharing issues cannot be
worked out.
    31. The record indicates that equipment for provision of LMDS is already available in the
near term for the 28 GHz bands, while substantial additional development and costs would be
required for implementation of this service in the 40 GHz band.  In light of our recognition of
LMDS as a potential source of competition in the local telephony and multi-channel video
programming distribution ("MVPD") markets, we believe it is important to immediately
authorize deployment of LMDS.  While the 40 GHz band may prove useable in the longer
term for some or all of the types of services proposed by LMDS, or satellite services, we
make no decisions here regarding use of the 40 GHz band.  Rather, we will address such uses
in the pending above 40 GHz proceeding.
C.  Band plan proposed in the Third NPRM and Alternative Band Plans Considered
    1.  Third NPRM
    32. The band plan proposed in the Third NPRM was the result of months of discussions
with interested parties and filings in the proceeding.  Specifically, we proposed to segment the
28 GHz band by designating 1000 MHz each for LMDS and GSO/FSS systems; 500 MHz for
NGSO/FSS systems; and 400 MHz for MSS feeder links.  We proposed sharing in 150 MHz
between NGSO/MSS feeder links and LMDS at 29.1-29.25 GHz, with a prohibition on
subscriber-to-hub transmissions for LMDS systems.  We also proposed sharing in 250 MHz
between GSO/FSS systems and NGSO/MSS feeder links at 29.25-29.5 GHz.  We proposed
coordination between these systems on a "first-come-first served" basis.  We also indicated
in the Third NPRM that we may authorize the feeder links of at least one NGSO/MSS system,
TRW, on a reverse band working basis in the 19.4-19.7 GHz band.  The band plan as
proposed in the Third NPRM is represented as follows:
LMDS
fss
850
MHz
GSO/FSS
ngso/fss
250
MHz
NGSO/FSS
gso/fss
500
MHz
MSS
FEEDER
LINKS
     &
LMDS
 (h-s)
150
MHz
MSS
FEEDER
LINKS
     &
GSO/FSS
250
MHz
GSO/FSS
ngso/fss
500
MHz
27.5              28.35       28.60           29.1      29.25       29.5         30.0
     33.       The majority of commenters supported our proposed band plan as a reasonable
compromise to accommodate all proposed services in the band.  However, commenters did
submit alternative band plans and other suggested modifications to our proposal.  Many
parties, as requested in the Third NPRM, also submitted analyses on specific technical sharing
issues raised by the band plan.  Commission staff met repeatedly with representatives of
both satellite and LMDS proponents to discuss concerns regarding specific sharing proposals,
particularly within the 29.1-29.5 GHz band segment.
       34.      We proposed to designate the 29.1-29.25 GHz band segment for assignment to
NGSO/MSS feeder links and LMDS systems on a co-primary basis.  For this 150 MHz we
based our proposed sharing criteria on an agreement reached by Motorola, CellularVision and
Texas Instruments with respect to frequency sharing during the NRMC.  This agreement
provided that subscriber transceivers would not be permitted to transmit in this shared band.
We also proposed specific sharing rules for hub-to-subscriber transmissions in this 150
MHz.  Nevertheless, we did suggest in the Third NPRM that it may be possible to permit
LMDS subscriber-to-hub transmissions in the 150 MHz of the shared spectrum under certain
sharing criteria.  We specifically requested comment on whether, and, if so, the extent to
which, sharing methods may be used to permit two-way LMDS operations in the 150 MHz
shared with MSS feeder links.
       35.      We received extensive comments on sharing in the 29.1-29.25 GHz segment.
Motorola asserts that the restriction on LMDS subscriber-to-hub traffic is necessary for the
unimpeded operation of the Iridium system feeder links.  Several LMDS proponents argue
that the Commission should not adopt any restrictions on subscriber equipment transmitting in
the 150 MHz shared band and view the proposed rules as unreasonably encumbering LMDS
operations.  Specifically, the prohibition of subscriber-to-hub transmissions may effectively
eliminate the ability of interactive LMDS communications in this portion of the 1000 MHz
designated for LMDS.  Moreover, Texas Instruments asserts that using part of the 27.5-28.35
GHz band for return links would require a 120 MHz guardband between hub-to-subscriber
and subscriber-to-hub links at the same cell site to be implemented in this 850 MHz, leaving
only 730 MHz of useful spectrum for LMDS forward and return links.  Texas Instruments
also asserts that in addition to the guardband a diplexer (costing between $70-$100) would
be required in each subscriber's equipment to implement the return link.
       36.      Texas Instruments, Hewlett Packard and Endgate Corporation also submitted
analyses which they assert demonstrate that LMDS subscriber stations in the 29.1-29.25 GHz
band would not cause unacceptable interference to Iridium MSS feeder uplink receivers.
Motorola filed reply comments contending that the analyses were based on "a series of faulty
technical and behavioral assumptions."
       37.      The Commission facilitated discussions among interested parties trying to reach
a sharing arrangement that would permit subscriber-to-hub transmissions in the 150 MHz
band segment.  After months of extensive discussions, the parties failed to agree on a
mutually acceptable sharing arrangement.  We agree with the parties that, at this time,
undesirable constraints would need to be placed on either Motorola's NGSO/MSS system
feeder links or LMDS subscriber-to-hub links in order to permit sharing in this 150 MHz
band segment.  Should the parties in the future agree that LMDS return links can operate
here in this band under mutually acceptable sharing criteria with NGSO/MSS licensees and
applicants, we would reconsider the LMDS uses in this band segment.
       2.  Commission Band Segmentation Options Considered
       38.    The Commission considered various band segmentation plans over the last
several months with the goal of accommodating the various divergent proposals made in
response to the band plan proposed in the Third NPRM.  For example, we considered plans
which ultimately proved to require difficult inter-service sharing rules and to not completely
support interactivity of LMDS systems.  We also considered a band plan that designated
1000 MHz each for GSO/FSS and LMDS service. That plan, however, would have divided
LMDS among three non-contiguous spectrum segments.  This option was not acceptable to
the potential LMDS service providers because, they argued, it would have significantly
decreased spectrum efficiency for LMDS, resulting in increased cost and delay in offering
both subscriber and hub equipment.  We also considered two band plans that designated
GSO/FSS systems with less than 1000 MHz.   These options were unacceptable to the
GSO/FSS applicants because, they argued, any of these plans would result in a significant
loss of system capacity and revenue.  Another plan, resulting from a GSO/FSS applicant's
proposal, was also considered.  It would have designated a total of 1010 MHz to GSO/FSS
applicants and 985 MHz to LMDS, but required sharing of 135 MHz between GSO/FSS and
LMDS.  However, the mutually acceptable sharing principles  required to implement this
plan were not developed by the LMDS and GSO/FSS parties.  We were also unable to
successfully propose sharing criteria.
       39.      In March 1996, NASA was also asked to undertake an immediate study to
assess whether its space services and LMDS could share spectrum below 27.5 GHz.  NASA
concluded three weeks later that no rules acceptable to all parties could be drafted which
would guarantee protection of NASA space services from harmful interference.   NASA also
concluded that coordination with other space service systems in the band from other
administrations would make this a difficult option to implement effectively.  Texas
Instruments requests that we decide, as part of this Report and Order "to reopen discussions
with NTIA to reexamine the federal spectrum requirements and the possibilities for
federal/non-federal sharing in or reallocation of the 25.25-27.0 GHz and 27.0-27.5 GHz bands
and to pursue those discussions at the earliest possible time."  Notwithstanding NASA's
initial conclusions on sharing, and the band plan we adopt today, we agree that more in-depth
sharing studies of fixed services and LMDS and Government spectrum below 27.5 GHz may
yield more positive results.  Accordingly, we direct the staff to continue discussions with
NTIA through the Interdepartment Radio Advisory Committee (IRAC) process to explore the
feasibility of shared use or reallocation of some portion of this band from the Government for
commercial usage.
       40.      We conclude that many of the alternative band plans described above fail to
provide adequately for the operational needs of one or more of the proposed systems.  We
find, based on the record and for the reasons discussed below, that the band plan proposed in
the Third NPRM, along with the additional inter-service sharing rules, is the most reasonable
compromise to allow all proposed systems in the 28 GHz band to be authorized.  In addition,
we adopt a Fourth Notice of Proposed Rulemaking proposing that the 31.0-31.3 GHz band be
designated for LMDS use.  We propose that potential LMDS service providers be able to use
this additional spectrum to meet the interactive needs of some of the proposed LMDS
technologies.  We are aware that some LMDS proponents oppose, for a variety of reasons,
any plan proposing to designate LMDS in the 31 GHz band.  However, we believe adopting
this band plan along with the Fourth Notice of Proposed Rulemaking, infra Part IV, is in the
public interest and will hasten the availability of all proposed services to consumers.
D.  Commission Band Segmentation Decision for the 27.5-30.0 GHz Band
       41.      We adopt this band segmentation plan with the following objectives in mind:
                Ensuring consistency with international and domestic allocation decisions, as
                set forth in the ITU and FCC Tables of Allocations;
                Providing for coordination of new systems with existing services in the band;
                Designating discrete band segments for services which do not appear capable
       of sharing at this time; and
                Providing maximum flexibility for system implementation, inter-system sharing,
       and future system growth.
 
       42.      The Commission's band segmentation plan is depicted graphically as follows:
                        Uplink Band 27.5 - 30.0 GHz
LMDS
fss
850
MHz
GSO/FSS
ngso/fss
250
MHz
NGSO/FSS
gso/fss
500
MHz
MSS
FEEDER
LINKS
     &
LMDS
 (h-s)
150
MHz
MSS
FEEDER
LINKS
     &
GSO/FSS
250
MHz
GSO/FSS
ngso/
fss
500
MHz
G
O
V
T
LMDS
(h-to-s)
(s-to-h)
300
MHz
27.5           28.35       28.60           29.1      29.25       29.5          30.0 31.0     31.3
GHz
 43.   The plan we adopt designates co-frequency sharing in band segments where the
Commission and the parties have concluded it is technically feasible.  We conclude that
adoption of this band plan promotes spectrum efficiency and facilitates the deployment of
diverse, interactive, competitive services for consumers.
   44.      The band segmentation plan will be implemented through appropriate changes
in Part 25 and Part 101 of our rules.  We are designating discrete spectrum bands for specific
types of systems.  Services designated for domestic licensing priority are specified in capital
letters in the graphic depiction of the band plan.  These services have licensing priority vis-a-
vis any other type of service allocated domestically or internationally in the band.  Lower-
case letters indicate services in a particular band segment which also have licensing priority
vis-a-vis any third service allocated domestically or internationally in the band, but have no
licensing priority over the service in capital letters in the band segment and must operate on a
non-interference basis and must accept interference vis-a-vis that service.  Services
designated with two priority users have equal licensing rights based on the sharing principles
adopted for that particular band segment.  See discussion infra  63-74 on sharing.
   1.  Primary LMDS Spectrum
       45.      We designate 1000 MHz of spectrum for LMDS systems in two non-
contiguous segments.  At 27.5 - 28.35 GHz we designate 850 MHz for LMDS on a primary
basis.   GSO/FSS or NGSO/FSS systems will be permitted on a non-interference basis to the
LMDS systems in the 850 MHz band segment, for the purpose of providing limited gateway-
type services.  We designate another 150 MHz of spectrum at 29.1-29.25 GHz for LMDS
transmissions, in the hub-to-subscriber direction, on a co-primary basis with NGSO/MSS
feeder links.  We also propose to designate 300 MHz at 31.0-31.3 GHz for additional
LMDS use.  See Fourth Notice of Proposed Rulemaking infra Part IV.
       46.       Many LMDS proponents assert that 1000 MHz, with no restriction on
subscriber-to-hub or hub-to-subscriber transmissions, is the minimum amount of spectrum
necessary to provide a competitive interactive LMDS service.  We conclude that some
planned LMDS services and equipment can be supported within this 1000 MHz of spectrum.
Furthermore, this band plan combined with the proposed use of the 31 GHz band will ensure
that a greater array of proposed LMDS systems can be accommodated.  In the Third NPRM,
we also tentatively concluded that we could not designate more than 850 MHz of contiguous
spectrum to LMDS at the lower end of the band, and noted that designating the additional
150 MHz requested by LMDS proponents at 29.1-29.25 GHz would be a reasonable
compromise.
       47.      GE Americom suggests that the Commission offer some protection to FSS
gateways operating in the 27.5-28.35 GHz band segment.  Specifically GE Americom requests
"that if an FSS provider selects and coordinates a gateway site with existing LMDS
operations, it will not be required to terminate its gateway operations if an LMDS licensee
subsequently adds a station within the gateway's potential interference zone."  Some LMDS
proponents voiced concern over secondary FSS gateway operations at 27.5-28.35.  For
example, Endgate Corporation believes it would be appropriate for the Commission to require
the FSS system operator to notify the existing LMDS operator of its intention to install a
"gateway" station and to coordinate with the LMDS operator to prove non-interference before
the installation.  CellularVision believes the Commission should make clear that in order to
operate a gateway station on a secondary basis, an FSS proponent first would have to
demonstrate that it would not cause interference to the operations of the primary user in that
band, the LMDS licensee, and if such FSS operations ever did cause interference to the
primary user, LMDS, the FSS operator would have the burden to resolve the interference or
cease operations.
       48.      We reject GE Americom's proposal that the Commission offer some protection
to FSS gateways operating in the 27.5-28.35 GHz band segment.  GE Americom's proposal is
inconsistent with the designation of FSS for secondary licensing priority in the 27.5-28.35
GHz band and potentially deprives LMDS of its domestic priority designation.  If proponents
of FSS systems implement gateways in this part of the band, it will be on a non-interference
basis to LMDS, and accordingly these systems will not be able to claim protection against
harmful interference from LMDS operators.
       49.      We also reject GE Americom's proposal that NGSO/MSS feeder links be given
a co-primary allocation within the 27.5-28.35 GHz band designated for LMDS, pursuant to
the sharing arrangement that has been worked out between those parties in the Negotiated
Rulemaking.  Such a co-primary allocation would be inconsistent with international
allocations, in that no specific provision has been made in the international frequency
allocation tables for operation of NGSO/MSS feeder links in the 27.5-28.35 GHz band.
Furthermore, even assuming the associated international coordination issues of such a
proposal could be adequately addressed, co-primary operations would impose operational
constraints on both LMDS systems and NGSO/MSS feeder links.
       50.      Teledesic recommends that all authorized users of the 28 GHz band be required
to utilize digital technology.  CellularVision filed reply comments contending that it and
other LMDS proponents may implement digital compression if and when it becomes available
commercially.  CellularVision also asserts that it has been established in this proceeding
that digital technology is not commercially feasible today for LMDS operations.  This issue
will be addressed fully in the satellite and LMDS service rules, respectively.
       a.  Grandfathering CellularVision's NYPMSA License
       51.      In the Third NPRM, we proposed to include, as a condition of CellularVision's
PMSA license renewal, a provision permitting CellularVision to operate on the contiguous
1 GHz for which it is presently licensed for a period of 36 months following the release date
of this Order, or until the first GSO satellite operating in this spectrum is launched, whichever
occurs later.  We further proposed to condition the license upon a provision specifying that
at the end of the grandfather period, CellularVision's license would become subject to our
generally applicable rules for the provision of LMDS service.  Thus, at that time,
CellularVision would be required to cease operation in the 150 MHz designated for GSO/FSS
operations in the 28.35-28.50 GHz band.  Simultaneously, it would be permitted to operate in
the 150 MHz at 29.1-29.25 GHz.
       52.  CellularVision, Bell Atlantic, and Titan filed comments in support of our
grandfather proposal.  With regard to the termination period for the grandfathering provision,
CellularVision requests clarification that the Commission's definition of "launched"
contemplates the point at which a satellite is actually put into service.  It notes that there is
typically a period of several months between the launch of a satellite and its inauguration of
service. CellularVision argues that to require it to migrate from the spectrum prior to that
point would be unnecessary.
       53.  Some GSO/FSS entities expressed concern that this proposal would allow
CellularVision to interfere with deployment of their operations.   Hughes asserts that the
grandfathering provision as proposed could provide an incentive for CellularVision to stall the
licensing of GSO/FSS systems in order to provide a longer transition period for itself.
Hughes argues that it is critical that the Commission establish a definitive deadline for this
transition that is not subject to change or exception.  Hughes states that its investors and
lenders "require comfort" that the satellite launch will not be hindered by further regulatory
delays.  Hughes argues that the Commission should adopt a three-year transition period for
CellularVision and make clear that it will not consider any exceptions or extensions.  GE
Americom agrees with Hughes and believes the Commission must adhere to its deadline for
CellularVision to vacate this spectrum so that CellularVision's operation in the New York
service area will not be permitted to interfere with the development of GSO/FSS services.
Orion claims it is conceivable that CellularVision would attempt to leverage its position as a
service provider to existing subscribers to persuade the Commission to remove the time limit
on its temporary use of the 150 MHz from 28.35-28.50.
       54.  It is our intention to facilitate the development of LMDS in New York and the
rest of the nation, as well as the deployment of GSO/FSS systems.  We recognize that
permitting CellularVision to proceed with its business plan and existing system design in the
contiguous 1 GHz for which it was originally licensed will help ensure a seamless transition
for CellularVision's customers as LMDS is licensed pursuant to the band plan implemented in
this Report and Order.  We also recognize the concerns of potential GSO/FSS licensees that
CellularVision's operations in the band  may interrupt implementation of GSO/FSS systems
designated for the band.  Accordingly, in order to ensure certainty for both CellularVision s
customers and for potential GSO/FSS systems planning to provide service in the United States
in the 28.35-28.50 GHz band, we clarify our reference to "launch" as the date which the first
GSO/FSS satellite, intended to operate in the 28.35-28.50 GHz band, leaves the Earth's
surface.  The satellite licensee is responsible for notifying CellularVision six months prior to
the planned launch date, and for giving CellularVision, upon its request, updates on the
satellite's status.  CellularVision has the responsibility to remain apprised of the satellite's
status and to ensure that LMDS operations cease on the 150 MHz allocated for GSO/FSS
operations in accordance with the order herein.  With these safeguards provided by this
clarification, we do not believe that the concerns expressed by some of the GSO/FSS
applicants regarding interference from LMDS operations will be realized.
       55.  We also find it necessary to adjust the amount of time for which CellularVision
will be grandfathered from our proposal in the Third NPRM.  Instead of 36 months, we find
that 24 months from the release date of this Report and Order, or by the date of launch of the
first GSO/FSS satellite, whichever occurs later, is appropriate.  Our reasons for this finding
are that the time proposed in the Third NPRM was intended to coincide approximately with
the expected launch date of the first GSO/FSS satellite proposed for this band. At that time,
launch was expected in approximately three years.  Due to delays in adjusting the band
segmentation plan for the 28 GHz band, a full year has passed since adoption of the Third
NPRM.  Since we intend to facilitate both LMDS and the GSO/FSS applicants for the 28
GHz band, we find that it is reasonable to grandfather CellularVision for the same
benchmark, i.e., the expected launch of the first GSO/FSS satellite.  Since that projected
launch date has not changed, we believe it is fair to set the sunset period for 24 months from
the release date of this Report and Order.  Moreover, we do not believe that this decision
results in unfairness to CellularVision because its expansion applications have been granted,
and CellularVision has had the authority to build out its system throughout the NYPMSA on
its original authorization of 1 GHz at 27.5-28.5. The same expansion which would have been
possible under the grandfather provision has been available to CellularVision for this length
of time.  Therefore, we require CellularVision to vacate the 28.35-28.50 GHz band by 24
months following the release date of this Report and Order, or by the date of launch of the
first GSO/FSS satellite intended to provide service in the United States in this band,
whichever occurs later.
      b.   Effect of Band Segmentation on CellularVision's NYPMSA License
      56.   The effect of this band plan is to require CellularVision to transition to the non-
contiguous spectrum designated in this Report and Order, which may necessitate retuning or
replacing existing equipment.  As a result, we believe it is appropriate to facilitate
CellularVision's transition to the band plan we adopt today by authorizing its concurrent use
of its authorized 1 GHz at 27.5-28.5 GHz and the newly designated 150 MHz at 29.1-29.25
for hub-to-subscriber transmissions during the grandfathered period.
      2.  Primary GSO/FSS Spectrum
      57.     We designate 750 MHz of exclusive primary spectrum for GSO/FSS systems,
in two non-contiguous segments at 28.35-28.60 GHz and 29.5-30.0 GHz.  NGSO/FSS systems
will have secondary status in these segments.  We also designate GSO/FSS use for 250 MHz
on a co-primary basis with NGSO/MSS feeder links at 29.25-29.5 GHz.
       58.      In the Third NPRM we stated that broadband satellite applications require more
bandwidth than current data operations, and that 1000 MHz of spectrum is needed to support
multiple 28-GHz band GSO/FSS systems.  NASA and Loral Space Communications, Ltd.
(Loral) contend that GSO/FSS systems require more than 1000 MHz of 28 GHz band
spectrum.   Several GSO/FSS proponents have indicated that 1000 MHz of 28 GHz
spectrum, free from technical constraints, is the minimum amount of spectrum needed to
operate commercially viable GSO/FSS systems.  Although we designate 250 MHz on a
shared basis with NGSO/MSS feeder links, we find that broadband GSO/FSS applications
proposed for this band can be supported within our total designation of 1000 MHz.
       3.  Primary NGSO FSS Spectrum
       59.      Consistent with the band plan proposed in the Third NPRM, the U.S. position
at the WRC-95, and our intention to continue to propose 500 MHz for NGSO/FSS at WRC-
97, we designate 500 MHz at 28.6-29.1 GHz for NGSO/FSS systems.  Until such time as
studies are completed in the ITU-R, we cannot conclude that co-frequency sharing is
possible between GSO/FSS systems and NGSO/FSS systems and therefore a separate band
designation is warranted.   We believe designating 500 MHz is necessary to accommodate
the increasing worldwide demand for 28 GHz spectrum for NGSO/FSS systems.
Significantly, this 500 MHz designation preserves the possibility that competitive NGSO/FSS
systems may be implemented in this band.
       60.      Accordingly, we reject TRW's request that we defer consideration of an
NGSO/FSS designation until we determine whether to grant an authorization to the sole
currently pending domestic applicant for an NGSO/FSS system.  In view of the fact that we
are adopting designations for a number of different types of services, we decline to forego
adopting a designation when that action is both contrary to the international allocation in this
band and could be perceived as foreclosing competitive systems proposed by other countries.
      61.    In its comments, Teledesic also recommends that the Commission designate
use of the 28.6-29.1 GHz and 18.8-19.3 GHz bands for both FSS and MSS.  Hughes
opposes this request.  In the absence of an international allocation for MSS in the 28.6-29.1
or 18.8-19.3 GHz frequency band, we decline to adopt an inconsistent domestic allocation.
We will, however, consider authorizing such uses on a non-interference basis to other services
already allocated in this band.
       62.      GE Americom proposes that the Commission give GSO/FSS operators co-
primary status in the 28.6-29.1/18.8-20.3 GHz bands in order to create incentives for
NGSO/FSS satellite system operators to resolve interference problems between NGSO and
GSO systems.  Teledesic opposes GE's proposal.  We reject GE Americom's proposal.
While GE Americom's proposal would be appropriate if NGSO and GSO services operated
under an international regulatory regime that put both types of systems on equal footing in all
FSS bands, in fact NGSO/FSS systems operate under a handicap in the majority of FSS
frequency bands outside of the 28.7-29.1 GHz band segment, in which RR 2613 applies and
which requires any NGSO/FSS system to cease operations if it causes unacceptable
interference into a GSO/FSS system.  Under these circumstances, access by GSO/FSS
systems to the 28.6-29.1 GHz bands without reciprocal access by NGSO/FSS systems to
bands designated for GSO/FSS does not provide appropriate incentives for resolution of
interference issues.  Therefore, NGSO/FSS systems will be the primary satellite system
licensees, in the United States, in the 28.6-29.1 GHz band.
E.  Inter- and Intra-Service Sharing in the 29.1 - 29.5 GHz Band
       1.  Sharing in the 29.1-29.25 GHz Band between NGSO/MSS Feeder Link Earth
       Stations (150 MHz)
       63.      The sharing principles in the 29.1-29.25 GHz band segment are designed to
accommodate the only two licensed NGSO/MSS systems seeking access to this band, the
Motorola Iridium system and the TRW Odyssey system, and potential additional NGSO/MSS
systems.  Although Motorola initially opposed the addition of a second NGSO/MSS system's
feeder links in the 29.1-29.3 GHz band, after extensive technical discussions an agreement
was reached whereby TRW's and Motorola's NGSO/MSS systems can operate their respective
feeder links in the same assigned spectrum with minimal constraints.  In the Third NPRM we
also proposed that NGSO/MSS feeder links be authorized on a "reverse band working" basis
in the 19.4-19.7 GHz band.  Although we had indicated that we may need to authorize an
applicant to operate in this manner if sharing was not possible, no party specifically requested
operating in a reverse band working mode.  Therefore, we are not adopting any specific
criteria at this time for reverse band working and will examine any requests for such
operations on a case-by-case basis in the future.  Further, Motorola will be limited to
operating its feeder links within this 150 MHz band, since Motorola indicates it will be
unable to share with GSO/FSS systems in the adjoining band.  The following text summarizes
the sharing principles to which TRW and Motorola have agreed and which, we conclude,
facilitate an equitable sharing environment in the band.  The specific sharing rules we adopt
are set forth in Appendix B of this Report and Order.
       64.      The parties agreed that in order to facilitate an appropriate sharing atmosphere,
Motorola would operate using right-hand circular polarization and TRW would operate using
left-hand circular polarization.  Both systems will use power control.  The parties also
concluded that geographical separation of feeder link earth stations and coordination, when
the stations are separated by 800 km or less, is also required.   Both operators agreed to
cooperate fully in identifying mutually acceptable locations for their feeder link earth stations
and coordinating these stations.
       65.      Motorola and TRW agreed that in the shared band segment, TRW will have a
maximum of two operational feeder link earth stations in the United States and Motorola will
have a maximum of six operational feeder link earth stations in the United States.  Further, in
the western United States, Motorola will implement a feeder link earth station in the
immediate vicinity of Phoenix, AZ and TRW will have a feeder link earth station in the
immediate vicinity of San Luis Obispo, CA.  In the eastern United States, Motorola will have
a feeder link earth station in the immediate vicinity of Montpelier, VT.  The location of an
additional Iridium feeder link earth station in the eastern United States, will not be specified
until an Odyssey feeder link earth station site in the eastern United States, separated from the
Iridium Montpelier site by a mutually acceptable distance, is chosen.  Accordingly, any
additional Iridium feeder link earth stations shall be separated from the Odyssey sites by a
mutually acceptable distance.  The parties will determine this mutually acceptable distance
during the coordination process.
       66.      Although both parties indicate that use of this band should be exclusive for
these two NGSO/MSS systems, at this time we do not believe feeder links from a third
NGSO/MSS system should be precluded from operating in the band.  However, any
NGSO/MSS system requesting use of this band for NGSO/MSS feeder link earth stations will
be required to coordinate its proposed site and frequency usage with existing licensees as well
as with previously filed applicants in the band prior to filing an earth station application.
       2.  Sharing in the 29.1-29.25 GHz band between NGSO/MSS feeder link
       earth stations and LMDS (150 MHz)
       67.      In the Third NPRM we proposed sharing rules between LMDS hub-to-
subscriber transmissions and NGSO/MSS feeder links in the 29.1-29.25 GHz band.  These
rules were based on rules agreed to at the NRMC.  We proposed to limit NGSO/MSS feeder
uplinks in this 150 MHz to eight "feeder link earth station complexes," and identified a
number of geographical and procedural restrictions.  These rules also anticipated that only one
NGSO/MSS system, Motorola, would operate feeder links in this band segment.
       68.      TRW and Motorola both commented on these rules.  TRW believes that the
accommodation of a second NGSO/MSS system provides a need for slight revisions to our
proposed rules.  In its comments, Motorola claims that these rules originally intended that
only one NGSO/MSS operator would use feeder links in this 150 MHz.  It states that if
sharing were feasible, it still needs the flexibility of choosing eight locations as earth station
complexes before the licensing of LMDS service providers and suggests the Commission
allow two additional sites.
       69.      We adopt the rules proposed in the Third NPRM with some modifications as a
result of the comments.  Specifically, we add two additional sites for feeder link earth station
complexes because it appears that at least two NGSO/MSS systems will operate in this band
segment and will require the flexibility of additional sites.  We believe that this addition
should not entail any excessive burden on LMDS parties.  The following text summarizes
these sharing rules.  The specific rules are set forth in Appendix B of this Report and Order.
       70.       Under the sharing rules adopted today, NGSO/MSS licensees can operate
feeder link earth stations in up to ten designated metropolitan statistical areas (MSAs) without
further coordination.   We require the feeder link earth station complexes to be identified no
more than 15 days after the release of a public notice announcing the commencement of
LMDS auctions.  LMDS receive stations must accept any interference caused to them by
these MSS feeder link earth stations, within the specified MSA, and up to 75 nautical miles
from the earth station geographical coordinates.   If these sites are not identified within this
15 days, then they will have to coordinate.  These sites must be chosen in accordance with
the following requirements:   no feeder link earth station complex may be located in the top
eight (8) MSAs, ranked by population, as defined by the Office of Management and Budget
as of June 1993, using estimated populations as of December 1992; two (2) complexes may
be located in MSAs 9 - 25, one of which must be Phoenix; two (2) complexes may be located
in MSAs 26-50; three (3) complexes may be located in MSAs 51-100, one of which must be
Honolulu, Hawaii; and the three (3) remaining complexes must be located at least 75 nautical
miles from the borders of the 100 largest MSAs or in any MSA not included in the 100
largest MSAs.  Any location allotted for one range of MSAs may be taken from an MSA
below that range.
       71.      We adopt a prohibition on transmission of LMDS subscriber transceivers in
this shared 150 MHz band segment.  As previously discussed, the LMDS and NGSO/MSS
interested parties were unable to reach a consensus on sharing criteria for MSS feeder links
and LMDS subscriber-to-hub transmissions, supra  37.  At this time we find it necessary to
restrict LMDS use of this band segment to hub-to-subscriber transmissions.  However, as
indicated earlier, should the LMDS proponents in the future be able to demonstrate
definitively that they can technically operate subscriber-to-hub links on a non-interference
basis to the NGSO/MSS feeder links, particularly the satellite constellation, we would revisit
the restriction we adopt today.
       3.  Sharing between NGSO/MSS feeder link earth stations and GSO/FSS systems
       in the 29.25 - 29.5 GHz Band  (250 MHz)
       72.      The proposal in the Third NPRM designated co-primary usage of 250 MHz for
NGSO/MSS feeder links and GSO/FSS systems.  We stated that any coordination between
the GSO/FSS systems and the NGSO/MSS feeder link earth stations would be "on a first-
come-first served" basis.  Since the adoption of the Third NPRM, TRW and Hughes have
negotiated mutually acceptable sharing principles.  Although these sharing principles were
worked out between TRW and Hughes, other GSO/FSS applicants, GE Americom, AT&T and
Lockheed Martin, support the principles.  Therefore, we conclude that the "first-come-first
served" coordination proposal is no longer necessary.  Instead, we endorse the spectrum
sharing principles developed by TRW and Hughes and supported by other GSO/FSS
applicants, for their systems in the 29.25-29.5 GHz band.  In the following text, we
describe these principles.  The specific technical sharing rules we adopt are provided in
Appendix B of this Report and Order.
       73.       Specifically, TRW and Hughes agreed that the system causing unacceptable
interference has primary responsibility to mitigate the interference, but that neither system
would be required to disrupt or alter its transmissions.  Moreover, TRW will provide the
locations of its two feeder link earth stations in the United States.   All GSO/FSS
proponents will implement frequency and polarization selection techniques in the area of
TRW's earth station complexes in order to minimize instances of unacceptable interference.
       74.      Furthermore, use of the band 29.25 - 29.5 GHz by another NGSO/MSS system
for feeder link earth station uplinks will be subject to coordination agreements with existing
GSO/FSS parties.
F.  Downlink 17.7-20.2 GHz Frequency Band Segmentation
     75.  In the Third NPRM, we asked commenters to address issues concerning
satellite system use of the 17.7-20.2 GHz band.  Specifically, we sought comment on possible
methods of accommodating NGSO/MSS feeder links operating on a reverse band working
basis in the 19.4-19.7 GHz band.  We also sought comment on the related issue of whether,
in order to facilitate reverse band working, GSO/FSS downlinks should be designated on a
non-conventional paired basis at 18.3-18.55 GHz or on a conventional basis at 19.3-19.425
GHz and 19.575-19.7 GHz  for pairing with the 29.25-29.5 GHz uplink band.  We also
sought comment on any other issues concerning downlinks that might affect the band
segmentation plan.
     76.  Several parties commented on this issue.  TRW urges the Commission to
designate the 18.3-18.55 GHz band as the paired downlink for the 29.25-29.5 GHz GSO/FSS
uplink band, regardless of whether reverse band working is used at 19.4-19.7 GHz.  It
argues that doing so would facilitate deployment of NGSO/MSS feeder links.  Motorola also
supports providing GSO/FSS applicants flexibility regarding selection of downlink frequencies
below 19.2 GHz to be paired with uplinks at frequencies below 29.5 GHz.  Hughes
suggests that GSO/FSS systems should be allowed to use frequencies not only in the 18.3-
18.55 GHz band for downlinks, but also in the 17.7-18.3 GHz band.  It notes that, particularly
in the 19.45-19.7 GHz band, NGSO/MSS feeder links are likely to impose significant
constraints, such as exclusion and coordination zones, on GSO/FSS operations. It suggests
that, in order to solve this problem, applicants should be provided the additional flexibility
that operations in these other frequency bands will allow.  Teledesic, on the other hand,
opposes designating any frequencies below 18.55 GHz for GSO/FSS uses.  It argues that
doing so would reduce the frequencies available for pairing with its gateways and high data
rate (gigalink) terminal uplinks in the 27.5-28.35 GHz bands.  In response, TRW argues that
Teledesic's request for sole use of frequencies in the 17.7-18.55 GHz range is unjustified.
Hughes notes that the uses for which Teledesic seeks protection are secondary uses.   Several
commenters also observed that, in the 18.6-18.8 GHz band, power limitations imposed by the
ITU Radio Regulations and U.S. domestic allocations to support Space Research and Earth
Exploration Satellite Service may render the band difficult to use for GSO/FSS systems, and
thus flexibility is required in the pairing of uplink and downlink frequencies.
      77.   The 17.7-20.2 GHz band segmentation plan can be depicted as follows:
                       Downlink Band 17.7 - 20.2 GHz
GSO/FSS
FIXED
NGSO/FSS
FIXED
MSS F.L.
FIXED
GSO/FSS
ngso/fss
gso/fss
gso/fss
ngso/fss
1100 MHz
500 MHz
400 MHz
500 MHz
17.7       18.80  19.30  19.70         20.20 GHz
This plan specifically designates downlinks in the 17.7-18.8 GHz band for GSO/FSS uses, the
18.8-19.3 GHz band for NGSO/FSS uses, the 19.3-19.7 GHz band for NGSO/MSS feeder
links, and the 19.7-20.2 GHz band for GSO/FSS uses.  These designations do not preclude the
authorized use of these bands by other satellite applications on a secondary basis to the
primary satellite application designated in the band.
   78.    With respect to GSO/FSS uses, we have designated the 19.7-20.20 GHz
GSO/FSS band segment for a "conventional" downlink pairing with GSO/FSS uplinks at 29.5-
30.0 GHz.  In order to provide flexibility for GSO/FSS applicants, we are also designating the
17.7-18.8 GHz band for GSO/FSS uses.  Although there are several restrictions on the use of
this band, including the need to protect feeder links for the Broadcast Satellite Service in the
17.7-17.8 GHz band segment, power flux density limits to protect the Earth Exploration
Satellite Service in the 18.6-18.8 GHz band, and the need to coordinate with Fixed Services
in the 17.7-19.7 GHz band, we conclude that the flexibility afforded by 1.1 GHz of spectrum
should provide sufficient downlink capacity to correspond with the 1000 MHz of uplink
spectrum designated for GSO/FSS in the 27.5-30.0 GHz range.  We decline to limit
GSO/FSS use of the bands below 18.55 GHz as requested by Teledesic.  The use of these
bands by GSO/FSS should not preclude their use by Teledesic on the secondary basis vis-a-
vis GSO/FSS which Teledesic has proposed.
    79.      With respect to the NGSO/FSS uses, we designate the 18.8-19.3 GHz band
segment for paired downlinks with the 500 MHz of NGSO/FSS uplinks at 28.6-29.1 GHz.
As discussed supra, we conclude that an unconditional designation of 500 MHz for domestic
NGSO/FSS use is warranted.  Furthermore, while there will be constraints imposed on
NGSO/FSS subscriber terminals by fixed services in the 18.8-19.3 GHz band, there is no
indication on the record that the single NGSO/FSS system proposed lacks sufficient flexibility
to provide downlink capacity to correspond with the designated 500 MHz of uplink
spectrum.  Therefore, we are not designating any additional downlink spectrum for primary
NGSO/FSS uses.
    80.      We designate the 19.3-19.7 GHz band segment for downlink NGSO/MSS
feeder links.  This band should be able to accommodate the systems proposed by two current
licensees and could potentially accommodate additional systems, either for downlinks, or, if
the system operates on a reverse band working basis, for uplinks.  The record establishes
that sharing between all currently proposed GSO/FSS systems and NGSO/MSS feeder links is
generally not feasible without imposing unacceptable constraints on the deployment of several
of the proposed systems.
    1.  Coordination Procedures
    81.      GSO/FSS, NGSO/MSS feeder links and NGSO/FSS systems are all fixed
satellite services.  Under current rules, such services share the 17.7-19.7 GHz band with fixed
services on a coequal basis.  Current rules require coordination of these services pursuant to
the requirements in Section 25.130(b) of the rules, and under the procedures outlined in
Section 101.103 of the Rules.   These coordination rules will continue to be applied in these
bands; however, should the affected parties wish to propose slightly modified procedures to
facilitate the deployment of these services, we would consider such a proposal in the future.
The record does not indicate that other requirements for coordination between non-
government satellite systems are necessary at this time.
G.  Allocation at 29.5-30.0 GHz
     82.     As we mentioned in the Third NPRM, the 29.5-30.0 GHz frequency band is
allocated on a co-primary basis to both the MSS and FSS.  Currently there are no MSS
systems in the band.  Because we tentatively concluded that MSS and FSS systems cannot
share the same frequencies, and our proposed band plan designated GSO/FSS systems in this
500 MHz of the band, we requested comment on whether to eliminate the allocation for MSS
at 29.5-30.0 GHz or possibly modify the MSS allocation as a secondary allocation to FSS
systems at 29.5-30.0 GHz.
    83.      Teledesic opposes any decision to eliminate, or relegate to secondary status, the
MSS allocation at 29.5-30.0 GHz, asserting that such a reallocation would conflict with the
1992 WARC decision allocating the 29.9-30.0 GHz band for GSO MSS/FSS uses.
Teledesic also expressed concern that this is the only portion of the Ka-band presently
available for MSS use and any change in the existing MSS allocation would adversely affect
NGSO satellite system applicants proposing MSS use in the 28 GHz band.
    84.      Initially, Hughes supported either deletion in the U.S. allocation table of MSS
at 29.5-30.0 GHz or a modification of this allocation to define it as secondary.  Hughes
argued that absent interference mitigation techniques, "it is unlikely that MSS service links
and FSS systems can share that 500 MHz due to the ubiquitous nature of both MSS and FSS
receive and transmit equipment."  However, in its reply comments, Hughes "refined" its
initial recommendations and now asserts that it may be possible for MSS and FSS to coexist
in the future if appropriate sharing criteria are adopted.  Thus, rather than change the
current MSS allocation in the 29.5-30.0 GHz band, Hughes believes the Commission should
decline to license any MSS use of the band unless and until MSS use is made compatible
with FSS use through the development of appropriate sharing criteria.  Motorola in contrast,
supports the elimination of the MSS allocation in the 29.5-30.0 GHz band.  It asserts that
there are significant difficulties for FSS and MSS sharing in this segment of the band.
Motorola believes the removal of the MSS allocation would provide assurance to GSO/FSS
proponents that service can be developed without the need for ever coordinating with an MSS
system.
    85.      We believe that the development of technology may enable these two different
types of systems to co-exist in the same frequencies in the future.  Therefore, we believe that
maintaining the co-primary MSS/FSS allocation is in the public interest.  This will facilitate
the development and introduction of such technology.  We explicitly decline to license any
MSS system at 29.5-30.0 GHz, and the downlink 19.7-20.2 GHz band, however, until the
applicant proposing an MSS service establishes that it can co-exist and share the frequency
band with GSO/FSS systems.  MSS applicants must demonstrate in their applications that
their service is compatible with and will not cause harmful interference to GSO/FSS systems.
MSS service rules will be appropriately addressed at the time that such an MSS application is
received.
H.  Point-to-Point Microwave
    86.      We noted in the Third NPRM that Harris Corporation-Farinon Division (Harris)
and Digital Microwave Corporation (Digital) filed a Petition for Rulemaking, requesting
that the Commission channelize the 28 GHz band for point-to-point microwave radio station
use, and make the band available under Part 94 of our rules for private operational fixed
services.  In the disposition of a similar petition filed by the companies in the initial NPRM in
this Rulemaking Proceeding we declined to dedicate any part of the 28 GHz band solely to
fixed point-to-point microwave (FS) services.  We expressed the view that the public interest
would be better served by providing terrestrial licensees in the 28 GHz band with the
flexibility to offer a variety of services and to develop innovative new point-to-multipoint
services.  In the Third NPRM, we also said that parties interested in providing point-to-point
services may apply for LMDS spectrum, seek geographic partitioning or spectrum
disaggregation opportunities, or lease spectrum from LMDS operators.
    87.      TIA takes exception to the Commission's characterization of the record in the
Third NPRM, citing the history of support in this docket for FS services.  TIA notes that
Harris' channelization request was not for exclusive allocation of the 28 GHz band to FS
services, or a restriction on the co-primary rights of satellite users in the band.  TIA also
alleges that the Commission has based its decision to remove point-to-point FS service from
the 28 GHz band allocation substantially on the ground that this band has not been used and
no point-to-point demand has been shown.  But, according to TIA,  Harris and Digital have
each made showings that demand exists.  Moreover, it notes that "the spectrum available for
short-haul microwave services has steadily diminished over the past four years just as the
critical need for such services has climbed."
    88.      According to TIA, our proposal for FS service in the 28 GHz band will not
work.  First, it contends, the proposal will not work because there are no service rules for FS
services and because applications for intermediate microwave links are not subject to
auction.  Second, it claims that for LMDS and point-to-point microwave to coexist, the
Commission must redefine the spectrum allocation to specify part of the spectrum for LMDS
backbone links (spectrum used to interconnect cells), which TIA believes could be shared
with traditional point-to-point uses.
    89.      TIA also argues that our suggestion that geographic partitioning or spectrum
disaggregation would work for point-to-point uses is flawed because LMDS providers are free
to hoard unused frequencies, or to charge exorbitant rates for the use of such frequencies.
Besides, TIA claims, there is no evidence that LMDS's point-to-multipoint feature and point-
to-point services are compatible.
    90.      To resolve this dilemma, TIA recommends that the Commission dedicate 500
MHz of the 28 GHz band ( 28.35 -28.6 GHz and 29.25 - 29.5 GHz) to FS services on a
shared, co-primary basis with FSS and MSS services and 300 MHz (28.2 - 28.35 GHz and
29.1 - 29.25 GHz) on a shared, co-primary basis with LMDS backbone links.  The second
part of this proposal would require us to designate a portion of the proposed LMDS
assignment to backbone usages.
    91.      Hughes and CTA urge the Commission to dismiss the claim of FS service
proponents that the Commission has failed to address their spectrum needs.  Hughes notes
that the Commission has preliminarily determined that the spectrum needs of FS licensees can
be satisfied in other bands.
    92.      Hughes strongly opposes allowing FS services to operate on a co-primary basis
in that portion of the band now designated for FSS.  Hughes contends that the proposed band
plan requires it to share spectrum with MSS feeder links, and to lose access to 1.5 GHz of
previously available spectrum to assist in resolving terrestrial coordination problems.  If
FSS operators are required to also coordinate with terrestrial services, use of the FSS 1 GHz
of remaining spectrum would be further constrained.  CTA also notes FS operations are
incompatible with those proposed for LMDS, FSS, and MSS feeder links in the 28 GHz
band.  The introduction of another incompatible assignment at this time would only serve to
further delay the resolution of the band plan and delay or preclude the implementation of
many of the proposed advanced services.   Similarly, CellularVision argues that the TIA
proposal is inconsistent with the needs of LMDS operators.   In its view, LMDS licensees
should have the discretion to use any portion of their spectrum for backbone links, because
such decisions will depend on the technology deployed, the number of LMDS operators per
service area, the location of MSS feeder link stations, and a number of other factors.   CTA
contends that there is sufficient alternate spectrum available for FS operations, particularly in
the 39 GHz band.
    93.      We decline to designate any portion of the 28 GHz band as primary for point-
to-point microwave use.  As we have noted, the proponents for fixed microwave services (FS)
have not provided persuasive information to support such action.  The claim that there is
insufficient point-to-point microwave spectrum allocated for FS lacks merit.  We acknowledge
that the potential number of users for the 4, 6, and 11 GHz bands has increased as a result of
other Commission actions and that numerous requests are filed in the 6 and 11 GHz bands.
However, the fact that all new FS applications filed in these bands have been granted,
suggests that there is ample spectrum available to meet FS service demands.  Moreover, for
short haul routes, there are assignments available in the 18, 23, and 39 GHz bands.  These
bands represent almost 8 GHz of spectrum for FS.  In addition, in ET Docket No. 92-9, the
Commission redesignated the 10 GHz band for point-to-point microwave use, and in ET
Docket No. 95-183, the Commission proposed to provide another 1.6 GHz of FS spectrum
in the 37.0-38.6 GHz band.  We also note that there is a trend among major long haul carriers
to rely less on point-to-point microwave facilities to render their services, suggesting that
more spectrum will become available in the 4, 6, and 11 GHz bands, particularly in
metropolitan areas.  Given the capability of FS networks to make effective and efficient reuse
of spectrum, we conclude, based on the current record, that sufficient spectrum is available to
meet FS requirements for the foreseeable future.
    94.      We have noted in this proceeding that the 28 GHz band had been fallow for a
significant period of time.  TIA argues that the FS industry failed to use the spectrum because
of the lack of a frequency channelization plan.  This argument is not persuasive given the
history of developments in other FS bands, which the point-to-point microwave industry
performed extremely well for years without codified channel plans.  We further note that,
although no formal 28 GHz channel plan exists, FS operators were not precluded from
applying for channel assignments, and manufacturers were not precluded from developing and
marketing such equipment.  For these reasons, we believe TIA's argument lacks merit.
IV.          FOURTH NOTICE OF PROPOSED RULEMAKING
A.  Proposal to designate the 31.0-31.3 GHz band for LMDS
1.  Introduction
    95.   By this action, we propose to designate, on a primary protected basis, the 31.0-
31.3 GHz (31 GHz) band to LMDS.  We propose to designate this band for both hub-to-
subscriber and subscriber-to-hub transmissions.  This action stems from efforts to
accommodate a variety of LMDS system designs, services and transmission media in the
adjacent 28 GHz band, and is being taken on our own motion.  This proposed designation
of spectrum for LMDS would provide consumers access to more choices in service providers,
new services, and innovative technologies, while accommodating those LMDS system designs
requiring a wide separation between the transmit and receive frequencies when operated in a
two-way mode.
2. Background
   96.   Currently, the 31 GHz band is allocated on a primary basis to non-Government
fixed and mobile services and on a secondary basis to both the Government and non-
Government standard frequency and time signal satellite downlink operations.  Our current
rules pertaining to this band do not provide interference protection to any operations in this
band.
   97.  In the attached Report and Order, we adopt a frequency band segmentation
plan which designates 1000 MHz of spectrum in the 28 GHz frequency band for LMDS.  One
segment of that, 150 MHz, is to be shared by LMDS on a co-primary basis with NGSO/MSS
feeder links in the 29.1-29.25 GHz segment of the band and is limited to LMDS hub-to-
subscriber transmissions.  The other 850 MHz is located in the 27.5-28.35 GHz band,
where  LMDS is the primary designation with FSS designated secondary licensing priority.
The  record developed in this proceeding indicates potential LMDS operators contemplate
offering two-way services between hubs and subscribers.  Our 28 GHz band plan does not
permit, at this time, two-way LMDS communications in the 29.1-29.25 GHz band.  Thus,
without additional unencumbered spectrum, some proposed LMDS systems would not be able
to provide the full panoply of two-way services anticipated.  In this proceeding, we have
recognized the potential value of LMDS in enabling real competition in the local telephony
and MVPD markets, and we seek to enable a variety of LMDS technologies to be offered.
    98.    In the Third NPRM, we proposed to designate the 29.1-29.25 GHz band segment
for assignment to NGSO/MSS feeder links and LMDS systems on a co-primary basis.  In this
150 MHz, we based our proposed sharing criteria on an agreement on frequency sharing
reached by Motorola, CellularVision, and Texas Instruments during the LMDS/FSS 28 GHz
band Negotiated Rulemaking.  As a result, we proposed specific sharing rules for hub-to-
subscriber transmission.   Although this agreement provided that subscriber transceivers
would not be permitted to transmit in this shared band, we did suggest in the Third NPRM
that it may be possible to permit LMDS subscriber-to-hub transmissions in the 150 MHz of
the shared spectrum under certain sharing criteria.  After numerous comments, and meetings
and discussions with LMDS and NGSO/MSS feeder link proponents, it appears that
undesirable sharing constraints would need to be placed on either Motorola's Iridium uplink
receivers or LMDS transmitters in order to enable sharing in the subscriber-to-hub direction.
Other attempts to accommodate LMDS subscriber-to-hub transmissions have been
unsuccessful as well.  Nevertheless, we consider it important to accommodate those LMDS
proponents who note that a non-contiguous segment of the band would actually be desirable
for isolating at least some of the inbound subscriber channels from the outbound channels.
Thus, in the attached Report and Order we do not permit LMDS subscriber-to-hub
transmissions in the 29.1-29.25 GHz band, but indicate we would revisit this limitation should
LMDS providers or LMDS equipment manufacturers be able to demonstrate that LMDS can
share, through mutually agreed upon criteria, on a non-interference basis with MSS feeder
links in this band segment.
    99.   In a rulemaking proceeding, Gen. Docket No. 82-334, we adopted a plan
designed to satisfy various types of short range, fixed and mobile communications
requirements in the 31 GHz band.  For example, a common carrier could utilize this band to
establish a temporary radio link to bypass an existing cable facility which had been disrupted.
A broadcaster or cablecaster needing to establish a radio link between a television camera and
a mobile relay station could find this band equally valuable.  According to our databases and
ex parte comments, existing use of  the 31 GHz band is relatively light and is concentrated
in only a few areas of the country.  The majority of licensees in this band are local
governments using the band to monitor and control traffic light facilities.  In addition, it
appears that a few licensees are using this spectrum for local area networks (LANs).
3.  Discussion
    100.  In order to ensure that there is adequate two-way interactive capacity for the
various proposed LMDS systems, we recognize the need to designate additional spectrum for
LMDS.  There is significant consumer demand for alternate providers of local exchange
services, internet access, LANs and video teleconferencing.  The LMDS proponents note that
this demand can be more immediately satisfied, in an economically and technically efficient
manner, by LMDS than by many of the alternate transmission media, thus making these
services more accessible rapidly to a wider segment of the population.  The proposed
designation of 300 MHz of spectrum would ensure consumers access to new and competitive
services and technologies.  Further, through written ex parte comments, several LMDS
proponents highlighted some technical difficulties with using the 31 GHz band, e.g., need for
two antennas to deliver the desired service, effects on performance level, and increased
system costs.  We request that parties address our proposal to make the LMDS service a
primary protected use in the 31.0-31.3 GHz band, the technical issues LMDS operators might
encounter in using this band, and possible measures that may be used in overcoming such
technical issues.
    101.   While we do not address generally those issues relating to LMDS service rules,
licensing policies, or technical requirements raised in the Third NPRM, we seek comment on
how to assign this additional spectrum to LMDS entities.  Should it be treated as a separate
block and assigned independently of other LMDS spectrum?  Or should it be combined with
spectrum assigned in the attached Report and Order for LMDS operations and assigned as a
single block?  We propose that the 31 GHz spectrum and the 1000 MHz designated in the
attached Report and Order, be assigned as a single block.  We believe it is vital to the LMDS
industry to commence the licensing process as soon as possible, and thus intend to resolve all
remaining issues on an expedited timeframe.
    102.   As noted in paragraph 101, there are existing licensees operating in this band,
some of which are engaged in traffic signal communications, i.e., traffic light monitoring and
control.  As stated earlier, existing usage appears to be relatively light and geographically
concentrated.  Overlaying LMDS operations in those areas where there are such uses raises
the potential for interference problems which could degrade the utility of such systems and
perhaps adversely affect LMDS operations.  We point out, however, that our current rules
explicitly provide that authorized operations at 31 GHz are not afforded any rights or
obligations with respect to interference with other licensed operations.  This means that a
licensee choosing to place its operations in this band is not entitled to protection from
interference by any other licensee regardless of whether the interfering licensee was
authorized prior or subsequent to the licensee receiving interference.  Thus, we believe that
any operations that an entity believes are critical in nature and should otherwise warrant
interference protection should be operated in a frequency band where such necessary
protection is provided for in our rules.   One band where these types of operations are
permitted is the 23 GHz band.  However, because systems in the 23 GHz band receive
interference protection, new systems are subject to the prior coordination requirements of
Section 101.103(d).  We ask what effect these requirements will have on 31 GHz systems
moving to the 23 GHz band.  We also note that mobile operations are permitted in the 31
GHz band but are not permitted in the 23 GHz band.  We are not aware of any existing
mobile operations in the 31 GHz band but ask what effect, if any, this will have in moving
current fixed operations to the 23 GHz band.  Given that incumbents are only authorized to
operate on a non-interference basis, should they be entitled to any recovery for reasonable
relocation costs?  If so, should any of the 28 GHz band applicants be required to contribute to
the recovery of such reasonable costs?
    103.    Our proposal to make LMDS a protected service in this band presupposes that
incumbent licensees continue to operate on a unprotected basis, in this instance, "secondary"
to LMDS.  In the event one of the unprotected operations interferes with, or receives
interference from, an LMDS system, the unprotected licensees must take steps to remedy the
problem, or accept the resulting interference if it is operating the affected receiver or
transmitter.  Although the incumbent licensees have assumed all the risks of receiving
interference, given the nature of some of these operations, we seek comment on whether there
are any methods by which their operations could be accommodated without delaying, causing
interference to, or limiting the usefulness of LMDS services in this band.  In light of the
proposed "secondary" nature of the non-LMDS fixed services in this band, we believe it is
also appropriate to seek comment on whether we should accept any new applications,
modifications, or renewal applications in the 31 GHz band.
    104.    Consistent with our intent to allow the rapid deployment of LMDS, we
encourage cooperation among the LMDS providers and existing licensees in exploring any
methods which would allow the services to coexist, but that would not impose any economic
or technical burdens on the LMDS providers.  For example, would the LMDS licensees have
sufficient capacity to accommodate the existing licensees as customers of their services?  Or
are there existing mechanisms that will permit all of these services to share the entire band
without imposing any economic burdens on LMDS?  Or are there other options we should
consider?  In commenting on this request, we ask that any recommendation advocating
sharing include the supporting technical analysis.
B.  LMDS Eligibility
 1.     Introduction; Executive Summary
 105. We also seek comment on eligibility of LECs and cable operators to obtain
LMDS licenses in the geographic areas they serve.  Throughout this proceeding we have
examined the relationship between ownership and control of LMDS licenses and competition
in the local exchange and multichannel video programming markets. Commenters have had
opportunities to address whether open eligibility for LMDS licenses would be likely to
impede or hasten competition.  The current record of this proceeding, however, was
developed prior to enactment of the Telecommunications Act of 1996 (1996 Act).  One of the
key objectives of the 1996 Act is to expedite the introduction of competition to incumbent
LECs and cable companies.  In carrying out this statutory mandate, we consider it important
to obtain specific comment on how our policies towards LMDS eligibility would best promote
the competitive objectives of the 1996 Act.  In addition, the number of ex parte comments
received on this issue after the close of the comment period convince us that further comment
is warranted.
 106.   We continue to view LMDS as an important potential source of competition in
both the local exchange and multichannel video programming markets.  Unlike the Direct
Broadcast Satellite Service, where our rules seek to ensure that there will be independent
providers at each of the three orbital locations that serve the continental United States, our
proposed rules contemplate only a single LMDS licensee in each service area.  Accordingly,
in the same market, there will be no competition among multiple LMDS licensees, although
some competition may develop among providers of similar services via alternative
transmission technologies.  It therefore is appropriate to consider measures to ensure that the
unprecedented amount of spectrum assigned to each LMDS license will be used to enhance
the competitive provision of services in these highly concentrated markets.  In this regard we
seek comment on whether we should temporarily restrict eligibility for incumbent LECs and
cable companies that seek to obtain LMDS licenses in their geographic service areas.
2. Background
   a. Notice
   107.   In the Notice of Proposed Rulemaking that initiated this proceeding, we
proposed to license two equal competitors in every LMDS service area and not to restrict the
ability of specific types of telecommunications providers to obtain LMDS licenses.  In the
Third NPRM, we proposed only a single LMDS license for each service area and sought
additional comment on the eligibility issue.  We requested comment on whether
Commercial Mobile Radio Service (CMRS) providers and MMDS licensees should be eligible
to acquire LMDS licenses.  We also sought comment on LEC and cable participation in
LMDS.
   108.   With respect to the eligibility of LECs to obtain the single LMDS license in
their service area, we tentatively concluded that the Communications Act did not prohibit a
LEC from acquiring an LMDS license.  We sought comment, however, on whether
allowing a LEC to acquire the LMDS license in its service area would eliminate an important
source of new competition in the local exchange market.  We also asked whether the LECs
would be likely to acquire LMDS spectrum as a means of forestalling competitive entry into
the local exchange market by warehousing spectrum or diverting it to less competitive uses.
We also sought comment on competitive issues raised by LEC plans to offer video services to
the telephone subscribers of their wired plant.  As an alternative approach to eligibility
restrictions, we asked whether our proposed build-out requirements would mitigate these
competitive concerns, and what other actions we might take to address them.
   109.   In analyzing the possible competitive impact of cable television ownership of
LMDS within its cable franchise area, we tentatively concluded that there are no statutory or
regulatory restrictions that prohibit a cable operator from holding an interest in an LMDS
licensee.  We asked for comment on whether cable operators acquiring LMDS within their
cable franchise area would have the incentive and ability to inhibit the full deployment of
LMDS facilities that compete with their wired cable facilities, for example, by warehousing
spectrum or diverting it to less optimal uses.  Conversely, we also asked for comment on
whether LMDS spectrum might enable cable companies to provide a new competitive source
of local exchange service.
   b.     Comments
   110.  Comments regarding eligibility center on the competitive implications of
telephone companies or cable television companies obtaining the LMDS license in their
current service areas.  Most parties addressing this issue support unrestricted eligibility for
LECs and cable operators.  Two parties, however, argue for eligibility restrictions barring
LEC and cable participation in areas of current operations, and some parties take intermediate
positions.  No party argues that there are existing legal restrictions on a LEC or cable
operator acquiring a LMDS license in their service area.
   111. Most commenting parties, particularly the incumbent LECs, argue that there is no
policy-based reason to restrict LECs from holding the LMDS licenses in their service area
and that LEC participation is in the public interest. All but one commenter agree with our
tentative finding that no existing statutory or regulatory restrictions prohibit a cable company
from acquiring an interest in an LMDS license in its existing service area.  Both the Joint
Parties and NCTA, for example, note that Congress could have, but did not, create a cable-
LMDS ban when it passed the 1992 cable-MMDS cross-ownership ban.  GTE, however,
believes that Section 613(a) of the Communications Act does apply to LMDS licenses.
   112.  BellSouth argues, for example, that given the combinations of services that may
be provided using LMDS, and the Commission's stated intent to foster diversity of services
and technology in the provision of LMDS, no class of potential providers should be excluded
from eligibility.  NYNEX argues that the ability to use this spectrum to provide video,
telephony, and other services favors competition from all prospective providers.  The parties
supporting unrestricted eligibility also argue generally that restrictions would stifle
competition, prevent competitors from using an efficient mix of technologies and discourage
investment by the very entities best equipped to become viable competitors through the use of
LMDS spectrum.   In addition, they claim that opposition to eligibility restrictions is
supported by Congress' decision in the Cable Act not to impose a cable-DBS cross-ownership
restriction; that because the LMDS licenses will be auctioned, there will be no incentive for
license winners to warehouse the spectrum; and, that most LEC service areas are smaller than
the license areas being considered here, so that LECs could legitimately use LMDS to extend
their current service.
   113.  As is the case for LEC eligibility, most commenting parties also argue that there
is no policy reason to restrict cable operator participation in LMDS auctions, and that such
participation is in the public interest.  Many parties make the same arguments for cable
eligibility that they made for LEC eligibility.  In addition, the Joint Parties and NCTA argue
that the considerations which led Congress to the cable-MMDS ban are not present today
because the increase in competition faced by cable operators since the 1992 ban was enacted
has entirely changed the market faced by cable operators.  These parties conclude that cable
firms have no market power, and thus no incentive to attempt to quash LMDS as a market
alternative.  These parties further assert that upon a comparison of the average BTA and the
average cable franchise, cable operators will have de minimis overlap, and de minimis market
power for any one service throughout a BTA.  They argue that the prospect of a cable-LMDS
combination does not raise the concerns present with cellular-PCS cross ownership.  They
contend that the Commission decided not to preclude LECs from owning and operating PCS
facilities in their service area, despite the fact that PCS offerings constitute potential
competition to LECs, because LEC participation in PCS would produce significant economies
between wireline and PCS networks and promote rapid development of PCS services.
BellSouth and Summit argue that if the Commission does impose a cable television eligibility
ban, it should apply only to the dominant cable company in each service area.
   114.  Two parties oppose allowing LECs and  cable operators to bid on LMDS
licenses in the areas where they currently provide service.  M3ITC states that telephone
companies currently provide all forms of telephony, including video teleconferencing, and that
they have been granted authority to provide video programming as well.  If such companies
are permitted to be LMDS licensees, M3ITC argues, there is less likelihood that these
services will be competitive, and development of the fiber optic telecommunications highway
envisioned by the Commission may be threatened.  M3ITC claims that failure to adopt an
ownership restriction could result in "[a]llowing the telephone companies to own a second
delivery system that might otherwise provide healthy competition to its telecommunications
and video dialtone services."  Further, M3ITC argues that open eligibility would harm the
public interest by preventing small business entrepreneurs from participating in LMDS in a
meaningful way.
   115.  Emc3 notes that residential markets are currently dominated by LECs, and asserts
that because of this dominance it generally would be anticompetitive to allow these firms to
hold LMDS licenses in the same service areas, and that obtaining such licenses would enable
LECs to deter the introduction of competition.  Instead of a complete ban on LEC
participation in LMDS, Emc3 proposes that LECs should be eligible to hold a single 50 MHz
license, which would allow them to supplement their existing systems with interactive
capability or other features.  Emc3 claims that this restriction would be consistent with past
Commission decisions prohibiting cable firms from holding MMDS licenses within their
franchise areas and prohibiting cellular firms from holding PCS licenses within their service
areas.
   116.  CTA does not believe that any particular industry should be precluded from
acquiring a LMDS license.  CTA argues that the presence of established telecommunications
companies will help lower equipment costs and raise the acceptability of LMDS in the
marketplace.  To guard against anticompetitive consequences, CTA recommends that LECs
that win LMDS licenses "that cover any part of or any area immediately adjacent to their
existing territory" be subject to more stringent build-out requirements.  Specifically, CTA
proposes that these incumbent service providers must make service available to 40 percent of
the population within three years, and 70 percent of the population within six years.  CTA
argues that this proposal is consistent with the Commission's goal when developing rules for
PCS auctions and service to foster entry and competition to the maximum degree possible.
   117.  CellularVision makes the general statement that the Commission should promote
maximum competition among service providers and that it should encourage new entrants and
diversity in the telephone industry.  In a letter to the Commission dated March 29, 1996,
CellularVision amends its position on eligibility.  It argues that the regional "Bell" operating
companies (plus affiliates) and the ten largest cable systems (plus affiliates) should each be
limited to acquiring a single LMDS license that is not within its current service area.
Similarly, RioVision asks that the Commission weigh carefully implementation of cross-
ownership restrictions for telephony providers to enable entrepreneurial LMDS licensees the
maximum opportunity to furnish competition to those firms.  Titan also requests generally
that the Commission adopt rules which will foster long-term competition within the
multichannel television distribution markets served by LMDS operators.
   118.  BellSouth responds to M3ITC's argument that eligibility restrictions should
encourage entry of smaller firms by noting that there are a number of technologies available
besides LMDS that smaller firms could use to provide multichannel video programming, and
that no bottlenecks exist preventing entry using these technologies.  BellSouth also claims that
a large capital investment will be required to construct an LMDS system for a BTA, which
small firms might find difficult to finance. Finally, BellSouth argues that M3ITC ignores the
fact that telephony will be only a secondary use of LMDS spectrum.
   c.     1996 Act
   119.   The 1996 Act contains a number of provisions designed to facilitate the entry of
LECs and cable operators into each others' markets.  The cable-telephone cross-ownership ban
was eliminated.  Local franchise authorities were prohibited from imposing a franchise
requirement or otherwise prohibiting, restricting, or limiting the ability of a cable operator to
provide telecommunications services.  The video dialtone regulations, which previously
governed LEC provision of video programming by means of cable systems in their telephone
service areas, were also eliminated, and replaced by the "open video system" regime.  With
respect to incumbent LECs, the 1996 Act creates a number of positive incentives for the rapid
introduction of new, facilities-based providers of local exchange service.  Finally, to ensure
future competition between telephone and cable operators, these entities with certain limited
exceptions were prohibited from acquiring more than a 10 percent ownership interest in each
other, and from engaging in joint ventures or partnerships to provide either telephony or video
distribution.  The overall statutory scheme contemplates vigorous competition between
LECs and cable operators, with appropriate safeguards to avoid elimination of potential
sources of competition.  Another important purpose of the 1996 Act is to facilitate the entry
of new players in competition with both LECs and cable operators.
   120.  After the enactment of the Telecommunications Act a number of parties filed ex
parte comments in which they argue that incumbent LECs and cable companies should not be
eligible to bid for the single LMDS license in their service areas.  MCI Telecommunications
Corp. (MCI) and  WebCel Communications, Inc. argue that LECs and major cable television
Multiple System Operators ("MSOs") have substantial economic incentives to forestall
deployment of LMDS as a direct substitute for their facilities-based, monopoly networks.
Specifically, WebCel argues that the Telecommunications Act clarifies Congressional intent
that monopolies should not have power to exclude competitors from access to subscribers
through discriminatory interconnection (citing Section 251), or by buying facilities-based
competitors to prevent competition in that manner (citing Section 652).  Accordingly, WebCel
proposes that LMDS regulations require:
   (a)    Auction eligibility rules precluding LECs and MSOs from bidding for LMDS
          spectrum until there is effective, facilities-based competition for each within
          each of their local service areas.
   (b)    License transfer and assignment prohibition for LECs and MSOs until effective,
          facilities-based competition exists.
   (c)    Licensing regulations that limit LEC and MSO investment in designated
          entities or other preferred auction participants, who bid for LMDS spectrum
          within the same monopoly service areas.
   121.  WebCel goes on to argue that a number of facts make LMDS a unique and
valuable resource for creating the type of telecommunications capabilities promoted by the
Telecommunications Act.  It states that first, LMDS is truly broadband, capable of "massive
voice and data throughput; second, that because service is fixed, it is better positioned than
mobile services such as PCS and cellular to offer a viable alternative to cable and fiber
networks; third, LMDS is a local application for which the licensees will stand on their own
without the need for roaming agreements or national standards; and fourth, LMDS is
positioned to be a full-service substitute for core LEC and MSO services.
   122.  Finally, WebCel argues that relying on auction competition will not ensure a fair
outcome if monopoly carriers are allowed to participate, because monopoly carriers will value
their auction process based on the opportunity cost of lost monopoly profits and market share.
It charges that the record does not contain evidence that LECs or MSOs could attain
economies of scope using LMDS spectrum, and it argues that build-out requirements are
insufficient to ensure that the monopoly carriers will not effectively warehouse spectrum by
ensuring that it is not used for facilities-based local competition.
   123.  Similarly, MCI advocates a complete ban on LEC and MSO participation in
auctions for LMDS spectrum or on the holding of an attributable interest, in any license area
which overlaps any of their local telephone or cable franchise area.   MCI also suggests
that they be prohibited for the initial LMDS license term, or at a minimum until effective
competition exists as determined by the Commission, from the post-auction acquisition of any
attributable interest in an LMDS operator in an overlapping service area.
   124.  Comments filed by the Attorneys General of Pennsylvania, Minnesota and
Wisconsin discussed their efforts to enforce anti-trust provisions against the cable industry
vis-a-vis DBS.  They argue that this experience has made them "sensitive to situations in
which incumbent monopolists have an incentive to stifle competition."  The Attorneys
General argue that the Telecommunications Act clearly intends to facilitate and promote local
competitive entry, and that LMDS is an excellent way to promote this competition.  They
state that they have seen many merger and buy-out cases where a monopolist is "all too
willing to pay or bid premium prices for the last remaining competitor to assure itself of
future monopoly profits."  These comments were supported by a subsequent letter from
Attorneys General of Delaware, Florida, Idaho, Iowa, Massachusetts, Missouri, Oklahoma,
Virginia, and West Virginia.
3. Discussion
   125.   In determining whether it would be in the public interest to restrict LEC or
cable eligibility to obtain a LMDS license within their respective service areas, we consider
whether LMDS will provide a unique and important new source of competition to incumbent
cable and telephone companies.  The record of this proceeding strongly supports the
conclusion that LMDS is a potentially important source of competition to both LECs and
cable operators.  28 GHz LMDS licenses will permit use of up to 1.3 GHz of spectrum by a
single provider, and equipment is relatively close to marketability.  While it is not possible to
identify all potential uses of LMDS, licensees could use this unparalleled amount of spectrum
to construct sophisticated networks that will incorporate aspects of many current
telecommunications offerings.  It also appears that LMDS is uniquely positioned to provide
competitive telecommunications services and video program delivery because of its large
potential for two-way broadband capabilities.  In considering eligibility for LECs and cable
operators within their geographic service areas one must weigh the potential for competition
presented by open entry against the possibility that this spectrum may be used to forestall
rather than promote competition.  Open eligibility may delay or eliminate an opportunity to
increase the number of competitors in the local exchange telephony and multichannel video
programming markets.  On the other hand, a bar on eligibility could prevent LECs and cable
operators from using LMDS to compete against each other more effectively and rapidly or to
provide new services not now offered by any firm.  It also is possible that by restricting
eligibility we prevent some potential providers from realizing efficiencies of scale and scope
that could be realized if, for example, a LEC could use LMDS to expand the area it serves
and to expand the range of services it offers.  As a deregulatory principle, this Commission
does not seek to interfere in or distort decisions based on sound business judgment by
imposing unnecessary regulation.  We seek comment on these issues.
   126.   We ask parties to comment with specificity on projected uses of LMDS
spectrum, including the degree to which LMDS is uniquely suited to entry into the local
exchange and multichannel video programming markets.  Do LMDS licenses represent a
unique and necessary resource for de-concentrating the market power of incumbent LECs and
cable operators?  If an LMDS license is such a resource, can it have a deconcentrating effect
if it is held by an incumbent LEC or cable operator, given the range of services that can be
provided using LMDS?   For example, would a LEC's use of an LMDS license to provide
video services reduce the market power of the incumbent cable operator?  Are there other
realistic means of entry into these markets?  In addressing this point, we ask parties to discuss
other realistic means of entry in terms of (1) the availability of similar spectrum-based
services; (2) technological factors; (3) economic cost; and (4) timing.
   127.   We also ask for comment on whether there are any inherent cost advantages
possessed by incumbent LECs or cable operators in holding LMDS licenses to provide service
within their geographic service areas.  Are there any economies of scope, or other
efficiencies, such as efficiencies in billing and marketing of the services?  Are any of these
efficiencies unique to LMDS or could a LEC or cable operator realize them using above 40
GHz band, MMDS, OVS or other wireless or wireline facilities? Are there cost advantages in
use of LMDS spectrum outside the markets served by incumbents?  Can these cost
advantages be quantified?
   128.   Are there any other advantages that incumbent LECs and cable operators have
in providing LMDS service?  For example, does their size, experience in that
telecommunications market or financial status make incumbent LECs, or more specifically the
RBOCs, uniquely positioned to be strong LMDS providers?  If so, will limiting incumbent
LEC and cable operators from bidding on LMDS licenses only in their current service areas
discourage investment in LMDS or the development of LMDS technology?   Excluding
incumbent LECs and cable operators, are there a sufficient number of other providers with the
necessary resources and expertise to construct and operate LMDS systems?   Will incumbent
eligibility restrictions have any negative effects on competition in the multichannel video
programming and local exchange markets -- for example by making it more difficult for
incumbent LECs to compete with cable operators for the provision of video services?
   129.   We also ask for comment on whether an incumbent LEC or cable operator
offering LMDS services within its respective geographic service area would be likely to offer
it at a higher price than new entrants.  Would this depend on whether the LMDS service
offered by the incumbents is substitutable for the services they currently offer? Commenters
are also asked to address whether it would be more cost-effective for incumbents to acquire
LMDS spectrum to supplement their own existing services rather than to face immediate
competition by allowing LMDS spectrum to be acquired by a potential competitor.
   130.   Finally, we seek comment on how the auction process can be expected to
influence the concerns prompting our consideration of incumbent eligibility.  Will an auction
ensure the highest and best use of the spectrum -- even if an incumbent wins the license?  Or,
is there an economic incentive for an incumbent to bid successfully at auction and to
warehouse the spectrum? Or divert it to less competitive uses?  Does this economic incentive
exist when the spectrum can be used for services other than those provided by the incumbent?
In any case, would payment of a winning auction bid and the cost of compliance with the
build-out rules proposed in the Second Further Notice prove a sufficient check against such
warehousing?
   131.  If we determine that the benefits of open entry are outweighed by our desire to
encourage alternative sources of competition, should we adopt any restrictions, and if so, how
should they be structured?  One option is to prohibit incumbent LECs and cable companies
from bidding on or acquiring licenses, each within its geographic service area.  Alternatively,
we could limit incumbent LECs and cable companies' use of the LMDS spectrum.  For
example, LEC participation in LMDS could be limited to the provision of no more than a
certain percentage of non-video programming, and cable participation in LMDS could be
limited to the provision of no more than a certain percentage of video services.  The
advantage to this approach is that it is narrower than a complete eligibility restriction, and it
would allow incumbent providers to use the spectrum to provide competing services, as well
as supplemental incumbent services.   The disadvantage to this approach is that it may impair
the deployment of LMDS as a market-driven flexible broadband service and is inconsistent
with the Commission's flexible spectrum policy.  We seek comment on these and any other
alternatives.
   132.  If we were to adopt any restrictions on incumbent cable and LEC participation,
we need to define "incumbent" since LATA lines and cable franchise areas are not coincident
with BTA boundaries.   One possibility would be to use the cellular/PCS cross-ownership
rule, which implicates similar competitive concerns.  Consistent with this rule, an incumbent
LEC or cable operator would be considered "in-region'' if 20 percent or more of the
population of a BTA is within a LEC's telephone service area or a cable company's franchised
service area.  We ask for comment on this option and on any alternative.  We also seek
comment on whether the same definition should be applied to both types of incumbents.
   133.   We also seek comment on what should constitute an attributable interest in an
incumbent LEC or cable operator.  In the past, the Commission has used several different
formulations of attribution in different contexts.  For these purposes, we propose to consider a
10 percent or more interest, when factored through a multiplier, to be attributable.  We also
propose to consider a 10 percent or more interest in an affiliate of an incumbent, when
factored through a multiplier, to be considered attributable.  This attribution level tracks
Section 652 of the 1996 Act, 47 U.S.C.  572, and it has the same goals as we do in this
proceeding.
   134.  In addition, if we limit the eligibility of incumbent LECs and cable operators, we
seek comment on how these restrictions should be addressed in the context of our proposal in
the Third NPRM to allow partitioning and disaggregation.  We request comment on whether
competitive harm would result from a LMDS licensee disaggregating its license and assigning
any excess spectrum to an incumbent LEC or cable operator within their geographic service
areas.  Similarly, we request comment on whether any competitive harm would result from a
LMDS licensee partitioning some of its service area to an incumbent LEC or MSO within
their geographic service area.
   135.   Finally, if we were to propose any restrictions, we believe that they should
continue only until there is increased competition in the video and  telephony markets.  In the
cable context, Section 623(l) of the Communications Act sets forth a four pronged test for
determining when a cable operator faces effective competition.  We seek comment on whether
this effective competition test is a reliable indicator of appropriate levels of multichannel
video programming competition for these purposes.  We focus especially on Section 623 L(1),
which can be relatively easy to satisfy in rural areas.  For LECs, there is no standard test for
effective competition in the local exchange market.  The "Competitive Checklist," set forth in
Section 271(c)(2)(B) of the 1996 Act, is one part of the mechanism used to determine when
the Regional Bell Operating Companies (RBOCs) may enter the in-region long distance
market.   We ask for comment on whether the Competitive Checklist or all the prerequisites
for BOC in-region entry serves as a reliable indicator of appropriate levels of local exchange
competition for determining when LECs should be allowed to hold LMDS licenses.  In
addition, since the "Competitive Checklist" does not apply to LECs which are not RBOCs, we
seek comment on how it could be used with other LECs.  We also seek comment on
alternative sunset provision.  For example, we could limit eligibility for such entities to a
fixed period of time (such as, 3 or 5 years) with automatic sunset and optional renewal of
these restrictions.  We request that commenters provide information on the following
questions: what alternative criteria should we use to sunset these restrictions? Should we
consider the number of facilities-based competitors? Are there local competitors throughout
the service area?  If we do not use the "Competitive Checklist", does it suggest factors that
we should incorporate into any sunset criteria we may adopt?
   136.  Because we plan to begin the LMDS licensing process this year, we realize that
the imposition of any eligibility restrictions now, even if they sunset at some future point,
may effectively preclude incumbent LECs and cable operators from participation in that initial
licensing process.  However, incumbents could offer LMDS services at a future date by
acquiring all or part of the LMDS spectrum in a BTA in a post-auction transaction, if we
adopt our competitive bidding rules proposed in the Third NPRM.  We request comment on
these issues.
                              IV.  CONCLUSION
   137.   We conclude that adoption of this Report & Order segments the 28 GHz band
in a manner designed to allow all proposed services to move forward expeditiously, bringing
new innovative services to consumers.  Further, we conclude that our proposal to designate
additional spectrum at 31 GHz for LMDS serves the public interest by ensuring the greatest
technological flexibility in two-way interactive LMDS systems.  Finally, we conclude that it
is in the public interest to seek additional comment on whether we should adopt eligibility of
use restrictions for incumbent LECs and cable operators seeking to obtain LMDS spectrum
within their geographical service areas.
              VI.  PROCEDURAL MATTERS - Regarding Fourth NPRM
A.  Regulatory Flexibility Act
   138. With respect to the Final Report and Order, a Final Regulatory Flexibility
Analysis is contained in Appendix C.
   139.   With respect to this Fourth Notice of Proposed Rule Making, an Initial
Regulatory Flexibility Analysis (IRFA) is also contained in Appendix C.  As required by
Section 603 of the Regulatory Flexibility Act, the Commission has prepared an IRFA of the
expected impact on small entities of the proposals suggested in this document.  Written public
comments are requested on the IRFA.  These comments must be filed in accordance with the
same filing deadlines as comments on the Fourth Notice of Proposed Rulemaking, but they
must have a separate and distinct heading designating them as responses to the Initial
Regulatory Flexibility Act Analysis.  The Secretary shall send a copy of this Fourth Notice of
Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration in accordance with paragraph
603(a) of the Regulatory Flexibility Act.  Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C.  601
et seq. (1981).
B.  Ex Parte Rules -- Non-Restricted Proceeding
   140.   This is a non-restricted notice and comment rulemaking proceeding.  Ex parte
presentations are permitted except during the Sunshine Agenda period, provided they are
disclosed as provided in Commission rules.  See generally 47 C.F.R.  1.1201, 1.1203, and
1.1206(a).
C.  Comment Dates
   141.   Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the
Commission's rules, 47 C.F.R.  1.415 and 1.419, interested parties may file comments on or
before August 12, 1996, and reply comments on or before August 22, 1996.  To file formally
in this proceeding, you must file an original and four copies of all comments, reply comments
and supporting comments.  If you want each Commissioner to receive a personal copy of
your comments, you must file an original plus eight copies.  You should send comments and
reply comments to Office of the Secretary, Federal Communications Commission,
Washington, D.C. 20554.  Comments and reply comments will be available for public
inspection during regular business hours in the FCC Reference Center of the Federal
Communications Commission, Room 239, 1919 M Street, N.W., Washington, D.C. 20554.
E.  Initial Paperwork Reduction Act of 1995 Analysis
   142.   This Fourth Notice of Proposed Rulemaking does not contain a proposed or
modified information collection.
F.  Further Information
   143. For further information concerning the 31 GHz proceeding, contact Bob James
at (202) 418-0798 (Wireless Telecommunications Bureau).  For further information
concerning the eligibility issues, contact Nancy Boocker or Walter D. Strack at (202) 418-
1310 (Policy Division, Wireless Telecommunications Bureau).
                          VII.  Ordering Clauses
   144. Authority for issuance of this Fourth Notice of Proposed Rulemaking is
contained in Sections 4(i),303(r) and 309(j) of the Communications Act of 1934, as amended,
47 U.S.C.  154(i), 303(r) and 309(j).
   145. Accordingly, IT IS ORDERED that Part 25 and Part 101 of the Commission's
rules are amended as specified in Appendix B, effective sixty (60) days after publication in
the Federal Register.
        FEDERAL COMMUNICATIONS COMMISSION
        William F. Caton
        Acting Secretary                                 Appendix A
                     List of Parties Filing Comments
                           CC Docket No. 92-297
Comments: (Filed September 7, 1995)
1.   Airtouch Communications, Inc.
2.   Alcatel Network Systems, Inc.
3.   Ameritech Operating Company
4.    Andrew Corporation
5.    Association of America's Public Television Stations and Public Broadcasting Service
6.    Bell Atlantic
7.    BellSouth Corporation, BellSouth Telecommunications, Inc., BellSouth Enterprises, Inc.
8.    Boeing Defense & Space Group (VP James P. Nobitt letter to Chairman Reed Hundt)
9.    CellularVision
10.  Comtech Associates, Inc.
11.  Constellation Communications
12.  Cox Enterprises Inc., Comcast Corporation, and Jones Intercable, Inc.
13.  Digital Microwave Corporation
14.  Duncan, Weinbert, Miller & Pembroke, P.C. (for state and local government entities)
15.  Dwyre, Douglas  (Globalstar)(President L/Q Partnership, L.P., letter to Chairman)
16.  Endgate Corporation
17.  Entertainment Made Convenient (Emc3) International, Inc.
18.  GE American Communication, Inc.
19.  GHz Equipment Company, Inc.
20.  GTE
21.  Harris Corporation-Farinon Division
22.  Hewlett-Packard Company
23.  Hughes Communications Galaxy
24.  Lockheed Martin Corporation
25.  Loral Aerospace Holdings, Inc.
26.  Loral/QUALCOMM Partnership, L.P.
27.  M3 Illinois Telecommunications
28.  Motorola Satellite Communications, Inc. and Iridium, Inc.
29.  National Aeronautics and Space Administration
30.  National Cable Television Association, Inc.
31.  Northern Telecom
32.  NYNEX Corporation
33.  Orion Network Systems, Inc.
34.  Pacific Telesis Wireless Broadband Services
35.  PanAmSat Corporation
36.  RioVision, Incorporated
37.  Satellite Industry Association
38.  Telecommunications Industry Association (+corrigendum)
39.  Teledesic Corporation (+correction)
40.  Telephone & Data Systems, Inc.
41.  Texas Instruments, Inc.
42.  Titan Information Systems Corporation
43.  TRW  Inc.
44.  Wireless Cable Association International
Reply Comments (filed October 10, 1995)
1.  Bell Atlantic Corporation
2.  BellSouth Corp., BellSouth Telecommunications, Inc. & BellSouth Enterprise, .
3.  CellularVision
4.  ComTech Associates
5.  Entertainment Made Convenient  (Emc3)
6.  GE American Communications, Inc.
7.  GHz Equipment Company, Inc.
8.  Hughes Communications, Inc.
9.  Loral Aerospace Holdings, Inc.
10. Loral/Qualcomm Partnership, L.P.
11. Motorola Satellite Communications, Inc. & Iridium, Inc.
12. NetSat 28 Company, Inc.
13. Nynex Corporation
14. Orion Network Systems, Inc.
15. Pacific Telesis
16. Telecommunications Industry Association
17. Teledesic Corporation
18. Texas Instruments, Inc.
19. TRW Inc.                                Appendix B
Rule Amendments to 47 C.F.R. Part 25 and Part 101 of the Commission's rules
Part 25 of the Commission's Rules and Regulations (Chapter I of Title 47 of the Code of
Federal Regulations) is amended as follows:
1.    Section 25.203 is amended by adding paragraph (h), to read as follows:
 25.203
* * * * *
(h)  Sites and frequencies for GSO and NGSO earth stations, operating in a frequency band
where both have a co-primary allocation, shall be selected to avoid earth station antenna
mainlobe-to-satellite antenna mainlobe coupling, between NGSO systems and between NGSO
and GSO systems, in order to minimize the possibility of harmful interference between these
services.
(1) Prior to filing an earth station application, in bands with co-primary allocations to NGSO
and GSO earth stations, the applicant shall coordinate the proposed site and frequency usage
with existing earth station licensees and with current earth station authorization applicants.
2.    A new Section 25.250 is proposed to read as follows:
   25.250 Sharing between NGSO MSS Feeder links Earth Stations in the 19.3 -19.7 GHz
    and 29.1 - 29.5 GHz Bands
(a)  NGSO MSS applicants shall be licensed to operate in the 29.1 - 29.5 GHz band for
Earth-to-space transmissions and 19.3-19.7 GHz for space-to-Earth transmissions from feeder
link earth station complexes.  A "feeder link earth station complex" may include up to three
(3) earth station groups, with each earth station group having up to four (4) antennas, located
within a radius of 75 km of a given set of geographic coordinates provided by NGSO-MSS
licensees or applicants.
(b)  Licensees of NGSO MSS feeder link earth stations separated by 800 km or less are
required to coordinate their operations, see 25.203.  The results of the coordination shall be
reported to the Commission.
3.     A new Section 25.257 is added to read as follows:
 25.257 Special requirements for operations in the band 29.1 - 29.25 GHz
(a)      Special requirements for operations in the band 29.1 - 29.25 GHz between NGSO
MSS and LMDS:
(1)   Non-geostationary mobile satellite service (NGSO MSS) operators shall be licensed to
use the 29.1 - 29.25 GHz band for Earth-to-space transmissions from feeder link earth station
complexes.  A "feeder link earth station complex" may include up to three (3) earth station
groups, with each earth station group having up to four (4) antennas, located within a radius
of 75 km of a given set of geographic coordinates provided by a NGSO MSS licensees or
applicants pursuant to 101.147.
(2)   A maximum of seven (7) feeder link earth station complexes in the contiguous United
States, Alaska and Hawaii may be placed into operation, in the largest 100 MSAs, in the band
29.1 - 29.25 GHz in accordance with 25.203 and 101.147.
(3)  One of the NGSO MSS operators licensed to use the 29.1- 29.25 GHz band may specify
geographic coordinates for a maximum of eight feeder link earth station complexes that
transmit in the 29.1 - 29.25 GHz band.  The other NGSO MSS operator licensed to use the
29.1 - 29.25 GHz band may specify geographic coordinates for a maximum of two feeder link
earth station complexes that transmit in the 29.1 - 29.25 GHz band.
(4)  Additional NGSO MSS operators may be licensed in this band if the additional NGSO
MSS operator shows that its system can share with the exsisting NGSO MSS systems.
(5) All NGSO MSS operators shall cooperate fully and make reasonable efforts to identify
mutually acceptable locations for feeder link earth station complexes.  In this connection, any
single NGSO MSS operator shall only identify one feeder link earth station complex
protection zone in each category identified in 101.147(c)(2) until the other NGSO MSS
operator has been given an opportunity to select a location from the same category.
4.   A new Section 25.258 is added to read as follows:
 25.258 Sharing between NGSO MSS Feeder links Stations and GSO FSS services in the
29.25- 29.5 GHz Bands
(a)   Operators of NGSO MSS feeder link earth stations and GSO FSS earth stations in the
band 29.25 to 29.5 GHz where both services have a co-primary allocation shall cooperate
fully in order  to coordinate their systems.  During the coordination process both service
operators shall exchange the necessary technical parameters required for coordination.
(b)  Licensed GSO FSS systems shall, to the maximum extent possible, operate with
frequency/polarization selections, in the vicinity of operational or planned NGSO MSS feeder
link earth station complexes, that will minimize instances of unacceptable interference to the
GSO FSS space stations.
(c)  NGSO MSS satellites operating in this frequency band shall compensate for nodal
regression due to the oblate shape of the Earth, and thus maintain constant successive sub-
satellite ground tracks on the surface of the Earth.
(d)  NGSO MSS systems applying to use the 29.25 - 29.5 GHz band, for feeder link earth
station uplink, will have to demonstrate that their system can share with the authorized U.S.
GSO/FSS systems operating in this band.
Part 101 of the Commission's Rules and Regulations (Chapter I of Title 47 of the Code of
Federal Regulations) is amended as follows:
5.           Amend rule section 101.3 by adding new paragraphs, in alphabetical order, to read
as follows:
*****
Local Multipoint Distribution Service Hub Station. A fixed point-to-multipoint radio station in
a Local Multipoint Service System that provides one-way or two-way communication with
Local Multipoint Distribution Service Subscriber Stations.
*****
Local Multipoint Distribution Service System. A fixed point to-multipoint radio system
consisting of Local Multipoint Distribution Service Hub Stations and their associated Local
Multipoint Distribution Service Subscriber Stations.
*****
Local Multipoint Distribution Service Subscriber Station. Any one of the fixed microwave
radio stations located at users' premises, lying within the coverage area of a Local Multipoint
Distribution Service Hub Station, capable of receiving one-way communications from or
providing two-way communications with the Local Multipoint Distribution Service Hub
Station.
*****
Local Multipoint Distribution Service Backbone Link. A point-to-point radio service link in a
Local Multipoint Distribution Service System that is used to interconnect Local Multipoint
Distribution Service Hub Stations with each other or with the public switched telephone
network.
6.                                                                                         Section 101.109 is amended by revising the Table entry for the band 27,500 MHz to
29,500 MHz line to reads as follows:
 101.109  Bandwidth.
                                * * * * *
Frequency Band Maximum (MHz) Authorized
                                                                                           Bandwidth
27,500 to 28,350 MHz                                 850 MHz
29,100 to 29,250 MHz                                 150 MHz
7.    Amend rule Section 101.113 by adding new subsection (c) as follows:
 101.113 LMDS Single Station EIRP Limit:  (c)(1) Transmitter power limitations:
Point-to-point stations in the 29.1-29.25 GHz band for the LMDS backbone between LMDS
hubs shall be limited to a maximum allowable e.i.r.p. density per carrier of 23 dBW/MHz in
any one megahertz in clear air, and may exceed this limit by employment of adaptive power
control in cases where link propagation attenuation exceeds the clear air value due to
precipitation and only to the extent that the link is impaired.
(c)(2)  Hub Transmitter EIRP Spectral Area, Density Limit:   LMDS applicants shall
demonstrate that, under clear air operating conditions, the maximum aggregate of LMDS
transmitting hub stations in a Basic Trading Area in the 29.1-29.25 GHz band will not
transmit a co-frequency hub-to-subscriber e.i.r.p. spectral area density in any azimuthal
direction in excess of X dBW/(MHz-km2) when averaged over any 4.375 MHz band, where
X is defined in Table 1. Individual hub stations may exceed their clear air e.i.r.p.s by
employment of adaptive power control in cases where link propagation attenuation exceeds
the clear air value and only to the extent that the link is impaired.
(i)  The e.i.r.p. aggregate spectral area density is calculated as follows:
          N
10log10 1/A      pigi     dBW/MHz-km2
                      i=1
where:
N = number of co-frequency hubs in BTA
A = Area of BTA in km2
pi = spectral power density into antenna of i-th hub (in W/MHz)
gi = gain of i-th hub antenna at zero degree elevation angle
Each pi and gi are in the same 1 MHz within the designated frequency band.
(ii)  The climate zones in Table 1 are defined for different geographic locations within the US
as shown in Appendix 28 of the ITU Radio Regulations.
                                 Table 1*
Climate Zone
e.i.r.p. Spectral Density (Clear Air)
(dBW/MHz-km2)**
            1
-23
2
-25
3,4,5
-26
* LMDS system licensees in two or more BTAs may individually or collectively deviate
from the spectral area density computed above by averaging the power over any 200 km
by 400 km area, provided that the aggregate interference to the satellite receiver is no
greater than if the spectral area density were as specified in Table 1. A showing to the
Commission comparing both methods of computation is required and copies shall be
served on any affected non-GSO 20/30 GHz MSS providers.
 ** See Section 21.1007(c)(i) for the population density of the BTA
(c)(3) Hub Transmitter e.i.r.p. Spectral Area Density Limit at
Elevation Angles Above the Horizon:
LMDS applicants shall demonstrate that, under clear air operating conditions,
the maximum aggregate of LMDS transmitting hub stations in a Basic Trading
Area in the 29.1-29.25 GHz band will not transmit a co-frequency hub-to--
subscriber e.i.r.p. spectral area density in any azimuthal direction in excess of
X dBW/(MHz-km2) when averaged over any 4.375 MHz band where X is
defined in Table 2. Individual hub stations may exceed their clear air e.i.r.p.s
by employment of adaptive power control in cases where link propagation
attenuation exceeds the clear air value and only to the extent that the link is
impaired.
(i)  The e.i.r.p. aggregate spectral area density is calculated as follows:
  N
lOlog10  1/A      e.i.r.p.(ai)      dBW/MHz-km2
                       i=1
where:
N = number of co-frequency hubs in BTA
A= Area of BTA in km2
e.i.r.p. (ai) = equivalent isotropic radiated spectral power density of the i-th hub (in W/MHz)
at elevation angle a
                                  Table 2
                      Elevation Angle (a)
Relative e.i.r.p. Density (dBW/MHz-km2)
0   a  4.0
e.i.r.p.(a) = e.i.r.p.(0 ) + 20 log
(sin x)(1/ x) where x = (a + 1)/7.5
4.0 < a  7.7
e.i.r.p.(a) = e.i.r.p.(0 ) - 3.85a + 7.7
a > 7.7
e.i.r.p.(a) = e.i.r.p.(0 ) - 22
where a is the angle in degrees of elevation above horizon. e.i.r.p.(0) is the hub e.i.r.p. area
density at the horizon used in Section 101.113c(2). The nominal antenna pattern will be used
for elevation angles between 0 and 8, and average levels will be used for angles beyond 8,
where average levels will be calculated by sampling the antenna patterns in each 1 interval
between 8 and 90, dividing by 83.
(ii)   LMDS system licensees in two or more BTAs may individually or collectively deviate
from the spectral area density computed above by averaging the power over any 200 km by
400 km area, provided that the aggregate interference to the satellite receiver is no greater
than if the spectral area density were as specified in Table 1. A showing to the Commission
comparing both methods of computation is required and copies shall be served on any
affected non-GSO MSS providers.
(c)(4)  Power Reduction Techniques:   LMDS hub transmitters shall employ methods to
reduce average power levels received by non-geostationary mobile satellite receivers, to the
extent necessary to comply with SubSections (c)(1) and (c)(2), by employing the methods set
forth below:
(i) Alternate Polarizations. LMDS hub transmitters in the LMDS service area may employ
both vertical and horizontal linear polarizations such that 50 percent (plus or minus 10
percent) of the hub transmitters shall employ vertical polarization and 50 percent (plus or
minus 10 percent) shall employ horizontal polarization.
(ii) Frequency Interleaving. LMDS hub transmitters in the LMDS service area may employ
frequency interleaving such that 50 percent (plus or minus 10 percent) of the hub transmitters
shall employ channel center frequencies which are different by one-half the channel
bandwidth of the other 50 percent (plus or minus 10 percent) of the hub transmitters.
(iii) Alternative Methods. As alternatives to (i) and (ii) above, LMDS operators may employ
such other methods as may be shown to achieve equivalent reductions in average power
density received by non-GSO MSS satellite receivers.
8.       Rule Section 101.133 is amended by adding subsection (d) to read as follows:
 101.133(d)
LMDS Subscriber Transmissions:  LMDS licensees shall not operate transmitters from
subscriber locations in the 29.1-29.25 GHz band.
9.                Amend rule section 101.147 by adding new subsection (x) as follows:
 101.147   Frequency Assignments
* * * * *
(x)  Special requirements for operations in the band 29.1-29.25 GHz:
(1)(i) LMDS receive stations operating on frequencies in the 29.1- 29.25 GHz band within a
radius of 75 nautical miles of the geographic coordinates provided by a non-GSO MSS
licensee pursuant to subsections (c)(2) or (c)(3)(i) (the "feeder link earth station complex
protection zone") shall accept any interference caused to them by such earth station
complexes and shall not claim protection from such earth station complexes.
(ii) LMDS licensees operating on frequencies in the 29.1-29.25 GHz band outside a feeder
link earth station complex protection zone shall cooperate fully and make reasonable efforts to
resolve technical problems with the non-GSO MSS licensee to the extent that transmissions
from the non-GSO MSS operator's feeder link earth station complex interfere with an LMDS
receive station.
(2) No more than 15 days after the release of a public notice announcing the commencement
of LMDS auctions, feeder link earth station complexes to be licensed pursuant to Section
25.257 shall be specified by a set of geographic coordinates in accordance with the following
requirements: no feeder link earth station complex may be located in the top eight (8)
metropolitan statistical areas ("MSAs"), ranked by population, as defined by the Office of
Management and Budget as of June 1993, using estimated populations as of December 1992;
two (2) complexes may be located in MSAs 9 through 25, one of which must be Phoenix, AZ
(for a complex at Chandler, AZ); two (2) complexes may be located in MSAs 26 to 50; three
(3) complexes may be located in MSAs 51 to 100, one of which must be Honolulu, Hawaii
(for a complex at Waimea); and the three (3) remaining complexes must be located at least 75
nautical miles from the borders of the 100 largest MSAs or in any MSA not included in the
100 largest MSAs.  Any location allotted for one range of MSAs may be taken from an MSA
below that range.
(3)(i) Any non-GSO MSS licensee may at any time specify sets of geographic coordinates for
feeder link earth station complexes with each earth station contained therein to be located at
least 75 nautical miles from the borders of the 100 largest MSAs.
(ii) For purposes of subsection (c)(3)(i), non-GSO MSS feeder link earth station complexes
shall be entitled to accommodation only if the affected non-GSO MSS licensee preapplies to
the Commission for a feeder link earth station complex or certifies to the Commission within
sixty days of receiving a copy of an LMDS application that it intends to file an application
for a feeder link earth station complex within six months of the date of receipt of the LMDS
application.
(iii) If said non-GSO MSS licensee application is filed later than six months after certification
to the Commission, the LMDS and non-GSO MSS entities shall still cooperate fully and make
reasonable efforts to resolve technical problems, but the LMDS licensee shall not be obligated
to re-engineer its proposal or make changes to its system.
(4) LMDS licensees or applicants proposing to operate hub stations on frequencies in the
29.1-29.25 GHz band at locations outside of the 100 largest MSAs or within a distance of
150 nautical miles from a set of geographic coordinates specified under subsection (c)(2) or
(c)(3)(i) shall serve copies of their applications on all non-GSO MSS applicants, permitees or
licensees meeting the criteria specified in  25.257(a).  Non-GSO MSS licensees or
applicants shall serve copies of their feeder link earth station applications,
after the LMDS auction, on any LMDS applicant or licensee within a distance
of 150 nautical miles from the geographic coordinates that it specified under
subsection (c)(2) or (c)(3)(i). Any necessary coordination shall commence upon notification
by the party receiving an application to the party who filed the application.  The results of
any such coordination shall be reported to the Commission within sixty days. The non-GSO
MSS earth station licensee shall also provide all such LMDS licensees with a copy of its
channel plan.
10.     Section 101.113 is amended by revising paragraph (a) by deleting the Table entry for
the 27,500 to 29,500 MHz frequency band and adding new lines to the Table to read as
follows:
 101.113  Transmitter power limitations.
(a)  * * *
                           Frequency Band (MHz)
Maximum allowable
EIRP  (1)*
Fixed
(dBW)
Mobile
(dBW)
27,500 to 28,350
55
29,100 to 29,250
(7)
         * * *
         (7)   See  101.113(c)
                                * * * * *
                                                                     APPENDIX C
A.    Final Regulatory Flexibility Analysis of First Report and Order
 As required by Section 603 of the Regulatory Flexibility Act, 5 U.S.C.  603 (RFA),
an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Third Notice of
Proposed Rulemaking in this proceeding (Third NPRM).  The Commission sought written
public comments on the proposals in the Third NPRM, including on the IRFA.  The
Commission's Final Regulatory Flexibility Analysis (FRFA) in this First Report and Order
conforms to the RFA, as amended by the Contract With America Advancement Act of 1996,
(CWAAA), Pub. L. No. 104-121, 110 Stat. 847 (1996).
 I.     Need for and Purpose of this Action:
 In this decision, the Commission, adopts a band plan designating discrete spectrum
segments for the Local Multipoint Distribution Systems ("LMDS"), Fixed Satellite Service
(FSS) systems, and feeder links for certain Mobile Satellite Service ("MSS") systems in the
27.5-30.0 GHz band ("28 GHz band").  The Commission also adopts rules and procedures
intended to facilitate the efficient use of this large spectrum segment among these three
different types of services.  The purposes of this action are to help launch two new broadband
industries well-suited to compete in the domestic and global marketplace.
 II.    Summary of Issues Raised by the Public Comments in Response to the
        Initial Regulatory Flexibility Analysis:
 No comments were filed in direct response to the IRFA.  In general comments on the
Third NPRM, however, the only licensee in the band, CellularVision, an LMDS small entity,
see infra, believed that the plan proposed in the Third NPRM accommodated all competing
interests for spectrum in the band.  Furthermore, our proposal to grandfather CellularVision's
existing system in the New York Primary Metropolitan Statistical Area, see attached Report
and Order at  51-56, was supported by CellularVision as a reasonable plan to facilitate its
existing operations as it phases into licensing under the new band segmentation scheme.
 III.   Description and Estimate of the Small Entities Subject to the Rules:
 The Commission has not developed a definition of small entities applicable to
GSO/FSS licensees.  Therefore, the applicable definition of small entity is the definition under
the Small Business Administration (SBA) rules applicable to Communications Services, Not
Elsewhere Classified.  This definition provides that a small entity is expressed as one with
$11.0 million in annual receipts.
 Estimates for GSO/FSS Satellite System Applicants for the 28 GHz Band
 At present there are no GSO/FSS satellite licensees in the band and the Commission
has not adopted any final service rules for satellite systems proposing to operate in the 28
GHz band.  Therefore, there are no small businesses currently providing these types of
broadband interactive services in the band.  However, we have had a cut-off date for
applications to be considered in the first GSO/FSS processing round.  There are a total of
thirteen applications currently on file proposing to provide GSO/FSS services in the band.
Eight of these systems propose global systems.  Five systems propose regional coverage.  We
acknowledge that couple of these applications are start-up companies and we assume, that
there may be the development of new satellite systems in this frequency band that may
qualify as small entities pursuant to the SBA's definition.
 Estimates for NGSO/FSS System Applicant in the Band
 At present there are no NGSO/FSS satellite licensees in the 28 GHz band and we have
not adopted any final service rules for such satellite systems proposing to operate in the band.
Therefore, there are no small businesses currently providing these services in the band.
However, we have had a cut-off date for applications to be considered in the first GSO/FSS
processing round.   Currently there is only one NGSO/FSS application on file.  We assume,
that there may be the development of new satellite systems in this frequency band that may
qualify as small entities pursuant to the SBA's definition.
    Estimates for NGSO/MSS Systems with feeder links in the 28 GHz Band
 At present there are two licensed NGSO/MSS systems proposing feeder links for their
systems, see infra Report and Order  21, in the 28 GHz band. We assume, that there may be
the development of new satellite systems in this frequency band that may qualify as small
entities pursuant to the SBA's definition.
 Estimates for LMDS
 The rules adopted in this Report and Order will apply to any company which chooses
to apply for a license in the new services.  In addition, the new rules impact fixed microwave
licensees, some of whom requested that the Commission institute a channeling plan in the 28
GHz band to set standards for point-to-point microwave equipment manufacturers.  With
regard to both the traditional point-to-point entities and the Local Multipoint Distribution
Service (LMDS), the Commission has not developed a definition of small entities applicable
to such licensees.  The SBA definitions of small entity for LMDS are the definitions
applicable to radiotelephone companies and to pay television services.  The definition of
radiotelephone companies provides that a small entity is a radiotelephone company employing
fewer than 1,500 persons.   The definition of a pay television service is one which has
annual receipts of less than $11 million.   Since the Regulatory Flexibility Act amendments
were not in effect until the record in this proceeding was closed, the Commission was unable
to request information regarding the potential number of small businesses interested in LMDS
and is unable at this time to determine the precise number of potential applicants which are
small businesses.
 The size data provided by the SBA does not enable us to make a meaningful estimate
of the number of telecommunications providers which are small entities because it combines
all radiotelephone companies with 500 or more employees.  We therefore used the 1992
Census of Transportation, Communications, and Utilities, conducted by the Bureau of the
Census, which is the most recent information available.  This document shows that only 12
radiotelephone firms out of a total of 1,178 such firms which operated during 1992 had 1,000
or more employees.  Therefore, a majority of LMDS entities providing radiotelephone
services could be small businesses under the SBA's definition.  Likewise, the size data
provided by the SBA does not enable us to make a meaningful estimate of the number of
cable and pay television providers which are small entities because it combines all such
providers with revenues of less than $11 million.  We therefore used the 1992 Census of
Transportation, Communications, and Utilities, (Table 2D), conducted by the Bureau of the
Census, which is the most recent information available. This document shows that only 36 of
1,788 firms providing cable and pay television service have a revenue of greater than $10
million.  Therefore, the vast majority of LMDS entities providing video distribution could be
small businesses under the SBA's definition.
 However, in the Third NPRM, we proposed to define a small business as an entity
that, together with affiliates and attributable investors, has average gross revenues for the
three preceding years of less than $40 million.  We have not yet received approval by the
SBA for this definition because the service rules for LMDS have not been finalized.  A
definition of small point-to-point entities have not yet received approval by the SBA because
such entities have not as yet been subject to competitive bidding procedures.
 We assume, for purposes of our evaluations and conclusions in this FRFA, that nearly
all of the LMDS licensees will be small entities, as that term is defined by the SBA.  We
note that in the accompanying Fourth Notice of Proposed Rulemaking, we ask whether
eligibility of LECs and cable companies, who enjoy a monopoly or near-monopoly in their
service areas, be restricted with regard to the LMDS license in their area, in order to
encourage competition.  Many of the competitors using LMDS to compete with LECs or
cable companies could be small businesses.
 With regard to traditional point-to-point microwave entities, the same analysis for
small radiotelephone entities as made above applies to these entities.  In the Report and
Order, the Commission declines to specify a channeling plan for point-to-point entities.  It
is the Commission's opinion that retaining maximum system design flexibility for LMDS
licensees within their service areas precludes our specifying a point-to-point channeling plan.
Entities interested in providing point-to-point service may seek other spectrum or may become
LMDS licensees and configure their systems as they choose.  In addition, such entities may
lease spectrum, or seek partitioning or disaggregation opportunities from LMDS licensees.
Moreover, the traditional point-to-point microwave equipment manufacturing industry could
seek to establish standards for its members to use in the 28 GHz band.  Accordingly, this
Report and Order does not provide direct relief requested by, e.g., the Telecommunications
Industry Association, which represents fixed microwave entities, the majority of whom may
be small businesses.
 Another category of small entities affected by this Report and Order are those
operating in the 17.5-19.5 GHz frequency band.  These entities are fixed point-to-point
microwave entities of many subcategories.  The same analysis for these entities as made for
traditional fixed microwave entities made above applies to these entities (a definition of small
point-to-point entities has not been submitted for approval by the SBA because such entities
have not as yet been subject to competitive bidding procedures).  The Report and Order does
not change the Commission's treatment of these entities, but it adds potential additional
satellite operators in the band with which the entities will have to coordinate in the future.
The Commission has coordination procedures in effect; should they prove inadequate in the
future, we will reconsider the issue at that time.
 IV.   Summary of Projected Reporting, Recordkeeping and Other Compliance
       Requirements:
 There are some reporting requirements imposed by the Report and Order.  In some
instances, it is likely that the entities filing the reports will require no professional skills for
the preparation of such requests.  In other cases, the services of persons with technical or
engineering expertise may be required to prepare the reports.   First, in one band segment, a
satellite licensee is required to notify the one existing licensed LMDS operator,
CellularVision, of its launch date six months prior to the satellite's launch date.  It is also
required to provide, upon CellularVision's request, updates on the satellite's status.  Such a
request is reasonable of CellularVision.  At this time, it is not clear how many potential
GSO/FSS licensees this will effect.  Second, in another shared band segment, we require
LMDS licensees to serve copies of their application on all NGSO/MSS applicants.  At this
time, it is not clear how many LMDS entities will be participating.  Currently there are only
two NGSO/MSS licensees who will be using this band for feeder links.  Feeder links for a
third NGSO/MSS system could possibly also be accommodated in this band.  Fourth, we
require NGSO/MSS feeder link earth stations to specify a set of geographic coordinates for
the location of these earth stations, 15 days after the release of a public notice announcing the
commencement of LMDS auctions. Finally, we require one NGSO/MSS licensee to provide
their feeder link earth station locations to the GSO/FSS licensees.  At this time, it is not clear
how many potential GSO/FSS licensees this will effect.
 V.     Steps Taken to Minimize the Economic Impact on Small Entities:
 The Commission adopts a band plan that facilitates the accommodation of all proposed
systems in the 28 GHz band.  We believe this plan is a reasonable accommodation of all
competing interests in this new band segment, including small entities.  The band plan along
with the Fourth Notice of Proposed Rulemaking for the 31 GHz band, infra IRFA, provides
both small entities and larger businesses the same opportunity to develop and operate viable
systems within the band, and initiate competitive services.  Our band plan also accords,
CellularVision, the only licensee in the band, flexibility during the implementation phase of
the band plan.
 VI.    Significant Alternatives Considered and Rejected:
 The Commission considered and rejected several alternatives to the band plan we
adopted.  The Commission considered various band segmentation plans over the last several
months with the goal of accommodating the various divergent proposals made in response to
the band plan proposed in the Third NPRM.  For example, we considered plans which
ultimately proved to require difficult inter-service sharing rules and to not completely support
interactivity of LMDS systems.  We also considered a band plan that designated 1000 MHz
each for GSO/FSS and LMDS service. That plan, however, would have divided LMDS
among three non-contiguous spectrum segments.  This option was not acceptable to the
potential LMDS service providers, including small providers, because, they argued, it would
have significantly decreased spectrum efficiency for LMDS, resulting in increased cost and
delay in offering both subscriber and hub equipment.   We also considered two band plans
that designated GSO/FSS systems with less than 1000 MHz.   These options were
unacceptable to the GSO/FSS applicants because, they argued, any of these plans would result
in a significant loss of system capacity and revenue.  Such loss and capacity could affect
potential small entities.   Another plan, resulting from a GSO/FSS applicant's proposal, was
also considered.  It would have designated a total of 1010 MHz to GSO/FSS applicants and
985 MHz to LMDS, but required sharing of 135 MHz between GSO/FSS and LMDS.
However, the mutually acceptable sharing principles required to implement this plan were not
developed by the LMDS and GSO/FSS parties.  We were also unable to successfully
propose sharing criteria.
       In March 1996, NASA was also asked to undertake an immediate study to assess
whether its space services and LMDS could share spectrum below 27.5 GHz.  NASA
concluded three weeks later that no rules acceptable to all parties could be drafted which
would guarantee protection of NASA space services from harmful interference.   NASA
also concluded that coordination with other space service systems in the band from other
administrations would make this a difficult option to implement effectively.
       One alternative of not adopting a band segmentation plan for this spectrum is the
preclusion of LMDS service or satellite service in the 28 GHz band.  In the Third NPRM we
tentatively concluded that denying one or the other of the proposed services for the band was
not in the public interest and that both proposed services bring the promise of competition
and innovative services to the nation's infrastructure.  Moreover, preclusion of either service
potentially affects small businesses on both the satellite side and the LMDS side.
       VIII.  Report to Congress
       The Commission shall send a copy of this Final Regulatory Flexibility Analysis, along
with this Report and Order, in a report to Congress pursuant to the Small Business
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  801(a)(1)(A).  A copy of this
FRFA will also be published in the Federal Register.
B.                Initial Regulatory Flexibility Analysis
       As required by Section 603 of the Regulatory Flexibility Act, the Commission has
prepared an Initial Flexibility Analysis (IRFA) of the expected significant economic impact on
small entities by the policies and rules proposed in this Fourth Notice of Proposed
Rulemaking. Written public comments are requested on the IRFA. Comments must be
identified as responses to the IRFA and must be filed by the deadlines for comments on the
Fourth NPRM provided in section (VI)(C).
I.    Reason for Action
      This Fourth Notice of Proposed Rulemaking (4th NPRM) requests comment on two
issues:  (1) whether the Commission should designate, on a primary protected basis, the 31.0-
31.3 GHz (31 GHz) band to Local Multipoint Distribution Service (LMDS);  and (2) whether
the Commission should restrict eligibility of local exchange carriers (LEC) and cable
operators to hold LMDS licenses in the geographic areas they serve.
      With regard to the first issue, the Commission determines that a further NPRM is
necessary to accommodate a variety of LMDS system designs, services, and transmission
media in the adjacent 28 GHz band.   The additional spectrum would facilitate interactive
systems, thus providing new and innovative communications services for residential and
business users, including small businesses.  Moreover, the additional spectrum potentially
could benefit small businesses unable to participate in competitive bidding for licenses
because additional spectrum not needed by a LMDS licensee could potentially be leased to
smaller businesses.  The 31 GHz band currently is licensed only on a secondary basis, and
has few incumbents.  Nevertheless, the Commission requests comment on whether there are
any methods of accommodating these services.
      With regard to the second issue, the current record of this proceeding was developed
prior to the enactment of the Telecommunications Act of 1996.  One of the key objectives of
the Act is to expedite the introduction of competition to incumbent LECs and cable
companies.  In carrying out this mandate, the Commission believes it important to obtain
specific comment on how its policies towards LMDS eligibility would best promote the
competitive objectives of the Act.  In addition, the comments received after the close of the
record in this proceeding, including comments from small entities such as WebCel, convince
us that further comment is warranted.
II.   Objectives
      The objective of this Notice is to request public comment on the proposals made herein
for the efficient licensing of LMDS services, for the development and implementation of a
new technology to provide innovative telecommunications services to the public.
III.  Legal Basis for Proposed Rules
      The authority for this action is the Administrative Procedure Act, 5 U.S.C.  553; and
sections 4(i), 4(j), 301, 303(r) of the  Communications Act of 1934 as amended, 47 U.S.C. 
145, 301, and 303(r).
IV.   Description and Estimate of Small Entities Subject to the Rules
      The regulations on which the Commission seeks comment, if adopted, would apply to
any small entity seeking a LMDS license.   In addition, the regulations would impact small
entities who are incumbent licensees in the 31.0-31.3 GHz frequency band.
       The SBA definitions of small entity for LMDS are the definitions applicable to
radiotelephone companies and to pay television services.  The definition of radiotelephone
companies provides that a small entity is a radiotelephone company employing fewer than
1,500 persons.   The definition of a small pay television service is one which has annual
receipts of less than $11 million.  In the Final Regulatory Flexibility Analysis for the
Report and Order, supra, we were unable to make a meaningful estimate based on the 1992
Census Bureau data.
   Likewise, we believe that the entities who are incumbent licensees in the 31.0-31.3 GHz
frequency band may also be comprised of a majority of small entities.  Such licensees are
public safety entities, the majority of whom are municipalities or other local governmental
entities.  The SBA data base does not include governmental entities.  We are required to
estimate the number of such entities with populations of less than 50,000 that would be
affected by our new rules.   There are 85,006 governmental entities in the nation.  This
number includes such entities as states, counties, cities, utility districts and school districts.
There are no figures available on what portion of this number has populations of fewer than
50,000.  However, this number includes 38,978 counties, cities and towns, and of those,
37,566, or 96 percent, have populations of fewer than 50,000.  The Census Bureau
estimates that this ratio is approximately accurate for all governmental entities.   There are
twenty-seven (27) incumbent licensees in the 31.0-31.3 GHz band.  Accordingly, we estimate
that 96 percent, or 25 to 26 of these licensees, are small entities.
   We request comment on the description and the number of small entities that are
significantly impacted by this proposed rule.
V. Reporting, Recordkeeping, and Other Compliance Requirements
   The proposals under consideration in this NPRM would not involve any reporting or
recordkeeping requirements.
   Incumbent licensees in the 31.0-31.3 GHz band would have new compliance
requirements vis-a-vis LMDS licensees.  Our rules provide that licensees therein operate on a
non-interference basis, meaning that they have no rights to protection from interference, nor
any obligations to not interfere with other similar incumbent operations.  The Fourth NPRM
proposes that LMDS be designated as a primary protected use of the band, ensuring that
LMDS licensees would have interference protection from other authorized users of the band.
VI.       Significant Alternatives Considered and Rejected
   The Commission considered and rejected the alternative of placing all LMDS spectrum
in the 28 GHz band, rather than placing a portion of the available spectrum in the 31 GHz
band.   The Commission concluded that LMDS requires additional spectrum to successfully
deploy the variety of services proposed.  It also concluded that these proposed services could
be successfully implemented with non-contiguous bands of spectrum, whereas the satellite
services could not.  To the extent LMDS entities are small businesses, as discussed in the
Final Regulatory Flexibility Analysis, infra, such entities are affected by this decision.
However, some small entities commenting on the final band plan concurred with this
approach (e.g., CellularVision, RioVision).
   In addition, the Commission considered and rejected the alternative of proceeding with
open eligibility in licensing, for the reasons stated herein.  This action is responsive to the
many small entities commenting in this proceeding who requested that restrictions be placed
upon, or considered for, local exchange carriers and major cable companies, e.g., WebCel.
VII.     Federal Rules That Overlap, Duplicate, or Conflict with These Proposed Rules
   None.